Allegiant Travel Company Reports First Quarter 2009 Financial Results
NET INCOME INCREASES 191%, OPERATING MARGIN EXCEEDS 31%
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Unaudited 1Q09 1Q08 Change
Total operating revenue (millions) $142.1 $133.1 6.7 %
Operating income (millions) $44.5 $14.4 209.6 %
Operating margin 31.3% 10.8% 20.5pp
Net income (millions) $28.2 $9.7 191.2 %
Diluted earnings per share $1.37 $0.47 191.5 %
Scheduled Service:
Average fare - scheduled service $74.52 $87.00 (14.3)%
Average fare - ancillary 34.14 25.75 32.6 %
Average fare - total $108.66 $112.75 (3.6)%
Total revenue per ASM (cents) 10.83 10.61 2.1 %
Average passengers per departure 132 127 3.9 %
Load factor 90.8% 86.9% 3.9pp
Average stage length (miles) 887 907 (2.2)%
Total System*:
Operating expense per passenger $75.42 $102.86 (26.7)%
Operating expense per passenger, excluding
fuel $49.62 $47.87 3.7 %
Average departures per aircraft per day 3.00 3.19 (6.0)%
Average stage length (miles) 843 854 (1.3)%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying
Allegiant Travel Company also reported the following balance sheet information:
Unaudited ($millions) March 31, December 31, Dollar
2009 2008 Change
Unrestricted cash (including
short-term investments) 236.4 174.8 61.6
Unrestricted cash net of air
traffic liability 132.9 105.8 27.1
Total debt, including capital
leases 59.3 64.7 (5.4)
“The first quarter was superb, with an all-time high 31.3% operating margin,” stated
“Looking forward, we expect second quarter costs to be substantially lower than the prior year, both because of significantly lower fuel costs and increased utilization. Fuel cost per passenger for the first half of April was slightly more than
“In some respects, the most important event of the first quarter was our acquisition of key assets from our long-time IT provider, CMS Solutions, as previously disclosed in a SEC filing. CMS has provided the software that runs much of Allegiant, including our reservation system, and the flexibility of our reservation system has been critical to our successful ancillary revenue strategy. We now have a permanent exclusive license for all CMS airline applications and have brought in-house all related development and programming, under the leadership of our new Vice President of Information Systems,
“Our balance sheet metrics continue to lead the industry. We ended the quarter with unrestricted cash and short-term investments of
“During the quarter, we had
“Lastly, since our previous earnings announcement, we spent
MD-80 Aircraft in Service* March 31, March 31,
2009 2008
Owned (including capital leases) 39 32
Leased 2 4
Total 41 36
* Does not include five aircraft acquired but not yet placed in service,
three of which are currently leased to a third party
During the first quarter of 2009, we placed three owned aircraft in service, two of which were previously leased to a third party. During the first quarter we also entered into operating leases for two MD-80 aircraft which will be placed into service by the end of the second quarter. By the end of the year, we expect to place into service two additional owned aircraft, currently on lease to a third party. In addition, we also own one other aircraft on lease to a third party which we expect to place in service early in 2010. The MD-80 market continues to favor us, allowing us, if we so desire, to easily purchase MD-80s without the need for financing.
Allegiant Air initiated service on four new scheduled routes during the first quarter and announced service to another 18 routes to start during the second quarter, including 13 routes to our new major leisure destination of
Network Summary* March 31, March 31,
2009 2008
Major leisure destinations 5 5
Other leisure destinations 6 2
Small cities served 59 51
Total cities served 70 58
Routes to Las Vegas 39 34
Routes to Orlando 30 28
Routes to Tampa Bay/St. Petersburg 20 15
Routes to Phoenix-Mesa 15 13
Routes to Ft. Lauderdale 6 11
Other routes 6 2
Total routes 116 103
* includes cities served seasonally
In addition, Allegiant Air recently entered into fixed fee flying contracts with several different parties to provide charter service between
Lastly, we flew our first ad-hoc charters for the US Department of Defense earlier this month. To date, available DOD opportunities have exceeded our expectations.
At this time, Allegiant Travel Company provides the following guidance to investors. All items are subject to revision:
- Allegiant Air expects second quarter 2009 year-over-year departure growth of approximately 20% and ASM growth of approximately 22%.
- Allegiant Air expects third quarter 2009 year-over-year departure growth of approximately 35% and ASM growth of approximately 40%.
- Allegiant Air expects to operate 43 aircraft by the end of the second quarter of 2009 and at least 45 aircraft by the end of 2009, which is two more than prior guidance given during our fourth quarter 2008 earnings call in January.
- We expect full-year 2009 capital expenditure of approximately
$25-30 million (up from$20-25 million previously), for improvements to aircraft owned but not yet operated, purchase of additional spare engines and rotable parts and other miscellaneous capital expenditure.
At this time we have no fuel hedges in place.
Allegiant Travel Company will host a conference call with analysts at
About the Company
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future earnings, free cash flow, charter expansion opportunities, load factors, ASM growth, departure growth, fleet growth, fuel cost per passenger, non-fuel cost per passenger, increased aircraft utilization and expected capital expenditures, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate”, “project” or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the effect of the economic downturn on leisure travel, increases in fuel prices, terrorist attacks, risks inherent to airlines, demand for air services to our leisure destinations from the markets served by us, our ability to implement our growth strategy, our fixed obligations, our dependence on our leisure destination markets, our ability to add, renew or replace gate leases, our competitive environment, problems with our aircraft, dependence on fixed fee customers, our reliance on our automated systems, economic and other conditions in markets in which we operate, governmental regulation, increases in maintenance costs and insurance premiums and cyclical and seasonal fluctuations in our operating results.
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
Detailed financial information follows:
Allegiant Travel Company
Consolidated Statements of Income
Three Months Ended March 31, 2009 and 2008
(in thousands, except per share amounts)
(Unaudited)
Three months ended March 31, Percent
2009 2008 change
OPERATING REVENUE:
Scheduled service revenue $90,196 $91,736 (1.7)
Fixed fee contract revenue 10,127 14,257 (29.0)
Ancillary revenue 41,320 27,147 52.2
Other revenue 476 - N/M
Total operating revenue 142,119 133,140 6.7
OPERATING EXPENSES:
Aircraft fuel 33,398 63,494 (47.4)
Salary and benefits 23,409 17,126 36.7
Station operations 13,133 12,019 9.3
Maintenance and repairs 11,132 10,453 6.5
Sales and marketing 4,467 4,334 3.1
Aircraft lease rentals 405 1,008 (59.8)
Depreciation and amortization 6,882 5,015 37.2
Other 4,815 5,327 (9.6)
Total operating expenses 97,641 118,776 (17.8)
OPERATING INCOME 44,478 14,364 209.6
As a percent of total operating
revenue 31.3% 10.8%
OTHER (INCOME) EXPENSE:
Loss on fuel derivatives, net - 11 N/M
Loss (earnings) from joint N/M
venture, net 7 (10)
Interest income (701) (1,732) (59.5)
Interest expense 1,101 1,415 (22.2)
Total other (income) expense 407 (316) N/M
INCOME BEFORE INCOME TAXES 44,071 14,680 200.2
As a percent of total operating
revenue 31.0% 11.0%
PROVISION FOR INCOME TAXES 15,909 5,008 217.7
NET INCOME $28,162 $9,672 191.2
As a percent of total operating
revenue 19.8% 7.3%
Earnings per share:
Basic $1.39 $0.47 195.7
Diluted $1.37 $0.47 191.5
Weighted average shares
outstanding:
Basic 20,219 20,471 (1.2)
Diluted 20,512 20,710 (1.0)
Allegiant Travel Company
Operating Statistics
Three Months Ended March 31, 2009 and 2008
(Unaudited)
Three months ended March 31, Percent
2009 2008 change*
OPERATING STATISTICS
Total system statistics
Passengers 1,294,608 1,154,710 12.1
Revenue passenger miles (RPMs)
(thousands) 1,166,981 1,062,464 9.8
Available seat miles (ASMs)
(thousands) 1,331,957 1,270,247 4.9
Load factor 87.6% 83.6% 4.0
Operating revenue per ASM
(cents) 10.67 10.48 1.8
Operating expense per ASM
(CASM) (cents) 7.33 9.35 (21.6)
Fuel expense per ASM (cents) 2.51 5.00 (49.8)
CASM, excluding fuel (cents) 4.82 4.35 10.8
Operating expense per passenger $75.42 $102.86 (26.7)
Fuel expense per passenger $25.80 $54.99 (53.1)
Operating expense per
passenger, excluding fuel $49.62 $47.87 3.7
Departures 10,624 10,022 6.0
Block hours 24,408 23,413 4.2
Average stage length (miles) 843 854 (1.3)
Average number of operating
aircraft during period 39.4 34.5 14.2
Total aircraft in service end
of period 41 36 13.9
Average departures per
aircraft per day 3.00 3.19 (6.0)
Full-time equivalent employees
at end of period 1,419 1,280 10.9
Fuel gallons consumed (thousands) 22,783 22,028 3.4
Average fuel cost per gallon $1.47 $2.88 (49.0)
Scheduled service statistics
Passengers 1,210,325 1,054,398 14.8
Revenue passenger miles (RPMs)
(thousands) 1,102,470 973,248 13.3
Available seat miles (ASMs)
(thousands) 1,214,832 1,120,013 8.5
Load factor 90.8% 86.9% 3.9
Departures 9,141 8,291 10.3
Average passengers per departure 132 127 3.9
Block hours 21,867 20,346 7.5
Yield (cents) 8.18 9.43 (13.3)
Scheduled service revenue per
ASM (cents) 7.42 8.19 (9.4)
Ancillary revenue per ASM (cents) 3.40 2.42 40.5
---- ----
Total revenue per ASM (cents) 10.83 10.61 2.1
Average fare - scheduled service $74.52 $87.00 (14.3)
Average fare - ancillary 34.14 25.75 32.6
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Average fare - total $108.66 $112.75 (3.6)
Average stage length (miles) 887 907 (2.2)
Percent of sales through
website during period 87.4% 87.8% (0.4)
* except load factor and percent of sales through website, which is
percentage point change
SOURCE Allegiant Travel Company