Allegiant Travel Company (Allegiant Air) reported the following financial results for the second quarter 2024, as well as comparisons to the prior year:
| Consolidated | Three Months Ended June 30, | Percent Change | |||
| (unaudited) (in millions, except per share amounts) | 2024 | 2023 | YoY | ||
| Total operating revenue | $ 666.3 | $ 683.8 | (2.6) % | ||
| Total operating expense | 631.4 | 550.4 | 14.7 % | ||
| Operating income | 34.9 | 133.4 | (73.8) % | ||
| Income before income taxes | 18.0 | 116.3 | (84.5) % | ||
| Net income | 13.7 | 88.5 | (84.5) % | ||
| Diluted earnings per share | 0.75 | 4.80 | (84.4) % | ||
| Sunseeker special charges, net of recoveries(3) | (2.0) | (11.2) | 82.1 % | ||
| Airline special charges(3) | 20.1 | — | NM | ||
| Net income, excluding special charges net of recoveries(1)(3) | 32.5 | 80.2 | (59.5) % | ||
| Diluted earnings per share excluding special charges net of recoveries(1)(3) | 1.77 | 4.35 | (59.3) % | ||
| Airline only | Three Months Ended June 30, | Percent Change(2) | |||
| (unaudited) (in millions, except per share amounts) | 2024 | 2023 | YoY | ||
| Airline operating revenue | $ 649.5 | $ 683.8 | (5.0) % | ||
| Airline operating expense | 602.5 | 556.3 | 8.3 % | ||
| Airline operating income | 47.0 | 127.5 | (63.1) % | ||
| Airline income before income taxes | 35.5 | 110.4 | (67.8) % | ||
| Airline special charges(3) | 20.1 | — | NM | ||
| Airline net income, excluding special charges(1)(3) | 41.0 | 84.2 | (51.3) % | ||
| Airline operating margin, excluding special charges(1)(3) | 10.3 % | 18.6 % | (8.3) | ||
| Airline diluted earnings per share, excluding special charges(1)(3) | 2.24 | 4.57 | (51.0) % | ||
| Consolidated | Six Months Ended June 30, | Percent Change | |||
| (unaudited) (in millions, except per share amounts) | 2024 | 2023 | YoY | ||
| Total operating revenue | $ 1,322.7 | $ 1,333.5 | (0.8) % | ||
| Total operating expense | 1,272.3 | 1,105.2 | 15.1 % | ||
| Operating income | 50.3 | 228.3 | (78.0) % | ||
| Income before income taxes | 16.7 | 190.8 | (91.2) % | ||
| Net income | 12.8 | 144.6 | (91.1) % | ||
| Diluted earnings per share | 0.68 | 7.84 | (91.3) % | ||
| Sunseeker special charges, net of recoveries(3) | (3.8) | (12.8) | 70.3 % | ||
| Airline special charges(3) | 35.0 | — | NM | ||
| Net income, excluding special charges net of recoveries(1)(3) | 42.9 | 135.6 | (68.4) % | ||
| Diluted earnings per share excluding special charges net of recoveries(1)(3) | 2.34 | 7.35 | (68.2) % | ||
| Airline only | Six Months Ended June 30, | Percent Change(2) | |||
| (unaudited) (in millions, except per share amounts) | 2024 | 2023 | YoY | ||
| Airline operating revenue | $ 1,282.0 | $ 1,333.5 | (3.9) % | ||
| Airline operating expense | 1,210.8 | 1,108.4 | 9.2 % | ||
| Airline operating income | 71.2 | 225.1 | (68.4) % | ||
| Airline income before income taxes | 48.0 | 189.2 | (74.6) % | ||
| Airline special charges(3) | 35.0 | — | NM | ||
| Airline net income, excluding special charges(1)(3) | 60.8 | 144.2 | (57.8) % | ||
| Airline operating margin, excluding special charges(1)(3) | 8.3 % | 16.9 % | (8.6) | ||
| Airline diluted earnings per share, excluding special charges(1)(3) | 3.31 | 7.81 | (57.6) % | ||
| (1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures. |
| (2) | Except Airline operating margin, excluding special charges, which is percentage point change. |
| (3) | In 2024 and 2023, we recognized as special charges the full amount of estimated property damage to Sunseeker Resort due to weather and other insured events less the amount of recognized insurance recoveries through the end of the applicable period (sometimes referred to as the Sunseeker special charges). In 2024, we also recognized special charges for aircraft accelerated depreciation related to our revised fleet plan and for a ratification bonus paid to flight attendants in connection with our new collective bargaining agreement. The accelerated depreciation and ratification bonus are sometimes referred to as the airline special charges. We sometimes refer to all special charges as “specials” in this earnings release. |
| NM | Not meaningful |
| * | Note that amounts may not recalculate due to rounding |
“We finished the quarter with diluted earnings per share, excluding special charges, of $1.77,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. “Peak period demand trends across our airline business remained strong during the quarter and notably, ancillary outperformed. We achieved $75.34 per passenger in total ancillary, a five percent increase over the prior year, driven by strength in seats, bags and cobrand. As we head into the third quarter, we expect a modest growth profile of just over one percent year-over-year with that growth coming in peak July and early August. Based on seasonal norms and consistent with how our model has historically operated, off-peak September capacity represents roughly half the capacity flown in July.
“As others have noted, this summer experienced increased capacity across the industry. While this has affected yields overall, our unique network structure has provided us with a layer of insulation. As I have mentioned before, we operate in our own swim lane with 75 percent of our routes facing no nonstop, direct competition. This number has remained virtually unchanged for over a decade and our expected growth profile maintains this non-competitive landscape.”
“I want to thank our team members for another quarter of strong operational performance, yielding a near-industry leading controllable completion of 99.7 percent for the quarter,” stated Gregory Anderson, president and incoming CEO of Allegiant Travel Company. “Financially, I am pleased with the progress we made during the second quarter, with the airline generating an adjusted operating margin of 10.3 percent for the quarter. Peak June utilization increased six percent from the prior year.
“We have two weeks remaining in our peak-summer period, and our operational performance has been terrific, with July utilization up roughly five percent over the prior year. Like many in the industry, we were challenged with a vendor technology outage that temporarily paused our flying. Full operations resumed less than 12 hours later. I am incredibly grateful with how Team Allegiant came together and quickly responded, ensuring the successful continuation of hundreds of flights on one of our highest scheduled flying days in our history. Since then we have run a 99.4 percent controllable completion factor – one of the best among impacted airlines. We expect the total financial impact from the outage will be approximately $15 million.
“Looking forward to 2025, we are on track to both return to pre-pandemic utilization levels and reduce operating inefficiencies related to Boeing’s delivery delays. We now expect to receive our first aircraft in September. Near-term increases in utilization are expected to be accomplished with roughly the same number of aircraft and same size infrastructure, which should have the dual benefit of increased revenues and lower unit costs. We also look forward to a full-year benefit from our recently installed Navitaire reservation system. We expect our enhanced Navitaire improvements to be a significant boost to the bottom line in 2025.
“Regarding Sunseeker, we continue to believe this one-of-a-kind resort holds greater value than currently reflected. To realize its full potential, however, we have engaged Prospect Hotel Advisors to conduct a strategic review of the property. Additionally, we now expect to receive up to $10 million of business interruption insurance for the full year 2024 due to delays in opening the resort. This will offset our expected full-year EBITDA loss of $25 million, reducing our cash loss estimate to approximately $15 million.
“The combination of increased utilization during our peak demand periods, the addition of our Boeing aircraft, the optimization of Navitaire and the benefits from Prospect Advisors should position us for a much-improved 2025 and beyond.”
Second Quarter 2024 Results and Highlights
- Total operating revenue of $666.3M, down 2.6 percent over the prior year
- Total fixed fee contract revenue of $17.7M, up 50.7 percent year-over-year
- Total average ancillary fare of $75.34, up 5.0 percent year-over-year driven by strength in seats, bags, and cobrand
- Operating income, excluding specials,(1)(2) of $53.0M, yielding an adjusted operating margin of 8.0 percent
- Airline-only operating income, excluding specials,(1)(2) of $67.0M, yielding an airline-only adjusted operating margin of 10.3 percent
- Income before income tax, excluding specials,(1)(2) of $36.1M, yielding an adjusted pre-tax margin of 5.4 percent
- Airline-only income before income tax, excluding specials,(1)(2) of $55.6M, yielding an adjusted pre-tax margin of 8.6 percent
- Consolidated EBITDA, excluding specials,(1)(2) of $118.3M, yielding an adjusted EBITDA margin of 17.8 percent
- Airline-only EBITDA, excluding specials,(1) of $126.3M, an adjusted 19.4 percent margin
- Airline-only operating CASM, excluding fuel and special charges,(2) of 8.23 ¢, up 5.6 percent year-over-year
- Includes $11.9M in incremental cost related to accrual of pilot retention bonuses
- $36.1M in total cobrand credit card remuneration received from Bank of America, up 24.6 percent from the prior year
- As of June 30, 2024, we had 525K total Allegiant Allways Rewards Visa cardholders
- Enrolled 552K new Allways Rewards members during the second quarter
- Named best low-cost carrier in North America by Skytrax, the international air transport rating organization
- During the third quarter announced eight new routes which will bring the total routes served to 558
| (1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures. |
| (2) | In 2024 and 2023, we recognized as special charges the full amount of estimated property damage to Sunseeker Resort due to weather and other insured events less the amount of recognized insurance recoveries through the end of the applicable period (sometimes referred to as the Sunseeker special charges). In 2024, we also recognized special charges for aircraft accelerated depreciation related to our revised fleet plan and for a ratification bonus paid to flight attendants in connection with our new collective bargaining agreement. The accelerated depreciation and ratification bonus are sometimes referred to as the airline special charges. We sometimes refer to all special charges as “specials” in this earnings release. |
Allegiant Air aircraft photo gallery:
