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  • Joe Breitfeller

Allegiant Travel Reports Third Quarter Adjusted Net Income of $12 Million on Revenue of $460 Million

Allegiant Travel Company has reported a third quarter 2021 adjusted net income of $11.9 million or $0.66 per diluted share on a 5.3 percent year-over-two increase in revenue to $459.5 million. Including special items, the carrier reported a net income of $39.3 million.


Allegiant Travel Company Reports Third Quarter 2021 Financial Results - Photo Credit: Airbus

On Wednesday (October 27, 2021), Allegiant Travel Company reported a third quarter adjusted net income of $11.9 million or $0.66 per share on a 5.3 percent year-over-two revenue increase to $459.5 million. When special items are included, primarily payroll and benefit support provided under the third extension of the U.S. Cares Act Payroll Support Program (PSP3) are included, the carrier reported a net income of $39.3 million or $2.18 per share. As of September 30, 2021, Allegiant had total cash and investments of $1.1 billion.


In Wednesday’s announcement, Allegiant Travel Company’s Chairman, Maurice J. Gallagher, Jr., said,

“We finished the quarter with earnings per share of $2.18, our second consecutive quarter of profitability since the onset of the pandemic. Third quarter total operating revenue was up 5.3 percent year over two-year making us one of the only domestic carriers to grow revenue from pre-pandemic levels. While demand was strong during our peak summer travel period, we experienced a slowdown as the delta variant spiked, but have since seen the demand curve ramp back up. Yields held up nicely, considering the effects of the delta variant, down less than six percent on scheduled service capacity increases of 17 percent. Third-party revenue continues to outperform, up 32.0 percent on a per passenger basis compared with 2019.


“Despite the favorable revenue environment, the operation continues to present challenges, as noted by several of our peers as well. Prior to COVID, the operation was a well-oiled machine - things ran smoothly. Fast forward to today, and we are operating in a different environment. The over-heated economy, continuing impacts of COVID, plus difficult labor environment created a perfect storm of challenges, including cancellations and delays over the past several months.

“We have a strong compensation approach for our interrupted passengers. We reimburse our customers for the inconvenience we have caused via prepaid credit cards or ACH deposits. Given the volume of our interruptions this past quarter, this was a meaningful amount. As a result, our third quarter adjusted CASM, excluding fuel, was 6.97 cents, 4.3 percent higher year over two-year. Excluding these costs for irregular operations, I was pleased that our adjusted CASM, excluding fuel was below the third quarter of 2019. As we head into the holiday season, job one is managing our operational integrity. We've scaled back on some peak day travel to mitigate the risk of cancellations. We now expect fourth quarter capacity to be up 12 percent from 2019.


“In regards to 2022 growth plans, it's too early to provide specific numbers. At a minimum, growth will mirror our historical low, double-digit rate. However, if fuel continues to increase, we will moderate capacity accordingly. Uncertainty around the labor market is another growth factor we are watching. In the coming months, we will closely monitor the operational environment and our personnel availability. The flexibility of our model will continue to be vital as we respond to these differing environmental factors. We will have more insights at our next call.


“Although we have faced recent operational challenges, the business is in great shape. The balance sheet is stronger than ever with total liquidity of $1.1 billion and net debt of roughly $500 million. We've proven the resiliency of the model in both good times and bad, including high fuel cost environments. I am optimistic about the future. Our runway of potential routes continues to exceed 1,000. We've identified untapped revenue potential within third-party sales and are pleased to see positive trends from our newly launched loyalty program, Allways Rewards - both will contribute bottom line results in the coming years. Additionally, we resumed construction on Sunseeker Resorts with an anticipated opening date during the first quarter of 2023 as well as closed on $350 million of construction financing. We are excited to see this project come to fruition.


“The last several months have been challenging for our team members. The operational environment has created added stress, yet they have continued to work hard, putting our customers’ needs and safety first. I cannot thank them enough for their efforts. Relief is on the horizon as we are aggressively hiring more frontline employees. The future for Allegiant is very bright. We would not be in the favorable position we find ourselves in today without our team members' hard work and dedication.”


Founded in 1999, Allegiant links passengers from small to medium cities to world-class leisure destinations with all non-stop flights and industry-low average fares. The company offers base airfares that are often half the price of a typical roundtrip ticket and operates an all-Airbus A320 Family fleet.


In trading on Wednesday (October 27, 2021), shares in Allegiant Travel Company (NASDAQ: ALGT) closed down 0.98% at $179.04/share.



Source: Allegia