Allegiant Reports December 2023 Traffic
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Insights
An analysis of Allegiant Travel Company's reported traffic results reveals a mixed performance with both positive and negative trends. On the positive side, the company witnessed an annual increase in passengers, revenue passenger miles and available seat miles for both the fourth quarter and the full year of 2023. These growth indicators, especially the 3.2% year-over-year rise in passengers for the full year, suggest an expanding operational scale, which could be indicative of a recovering demand in the travel industry post-pandemic.
However, the decline in load factor by 2.0 percentage points in the fourth quarter and a more pronounced 2.2 percentage point decrease in December 2023 year-over-year comparison could be a cause for concern. The load factor, a measure of how efficiently an airline fills seats and generates fare revenue, reflects the company's ability to optimize capacity. The decline suggests that while capacity is expanding, it may not be fully matched by demand, potentially impacting revenue efficiency.
From a financial perspective, the estimated average fuel cost per gallon presents a significant factor in the airline's cost structure. The reported fuel cost per gallon for December 2023, the fourth quarter and the full year shows an increase in fuel expenses, which could squeeze profit margins if not offset by higher revenues or cost management strategies. The cost of fuel is a volatile expense that can significantly influence an airline's profitability and investors often watch this metric closely as it can be a bellwether for earnings performance.
Given the operational statistics and the fuel cost trend, it is essential to consider the potential impact on Allegiant's future earnings. Investors and analysts would benefit from monitoring subsequent earnings reports and management commentary to assess how these factors are affecting the company's financial health and its ability to maintain profitability amidst rising costs and fluctuating demand.
Understanding Allegiant's operational metrics requires a grasp of industry-specific terms such as revenue passenger miles (RPMs) and available seat miles (ASMs). RPMs indicate the total number of miles flown by paying passengers, while ASMs measure the total passenger carrying capacity. These metrics are crucial for evaluating an airline's efficiency and market reach. Allegiant's increase in RPMs and ASMs suggests growth, but the effectiveness of this growth is partially undermined by the declining load factor.
Moreover, the airline's strategy of serving small-to-medium cities with nonstop flights to vacation destinations typically results in a unique market position that may insulate it from competition but also exposes it to market-specific risks. The average stage length, which remained relatively stable, indicates that Allegiant is maintaining its focus on short to medium-haul routes, a segment that may be more sensitive to economic fluctuations and discretionary spending.
Scheduled Service – Year Over Year Comparison
December 2023 | December 2022 | Change | |
Passengers | 1,356,025 | 1,450,978 | (6.5 %) |
Revenue passenger miles (000) | 1,255,868 | 1,348,142 | (6.8 %) |
Available seat miles (000) | 1,521,846 | 1,591,240 | (4.4 %) |
Load factor | 82.5 % | 84.7 % | (2.2) pts |
Departures | 9,527 | 10,024 | (5.0 %) |
Average stage length (miles) | 903 | 901 | 0.2 % |
4th Quarter 2023 | 4th Quarter 2022 | Change | |
Passengers | 4,067,855 | 3,893,870 | 4.5 % |
Revenue passenger miles (000) | 3,691,343 | 3,578,134 | 3.2 % |
Available seat miles (000) | 4,429,826 | 4,192,352 | 5.7 % |
Load factor | 83.3 % | 85.3 % | (2.0) pts |
Departures | 28,244 | 26,591 | 6.2 % |
Average stage length (miles) | 887 | 893 | (0.7 %) |
Full Year 2023 | Full Year 2022 | Change | |
Passengers | 17,143,870 | 16,630,138 | 3.1 % |
Revenue passenger miles (000) | 15,639,329 | 15,224,346 | 2.7 % |
Available seat miles (000) | 18,208,820 | 17,909,190 | 1.7 % |
Load factor | 85.9 % | 85.0 % | 0.9 pts |
Departures | 116,044 | 114,066 | 1.7 % |
Average stage length (miles) | 888 | 890 | (0.2 %) |
Total System* - Year Over Year Comparison
December 2023 | December 2022 | Change | |
Passengers | 1,369,293 | 1,461,523 | (6.3 %) |
Available seat miles (000) | 1,566,296 | 1,626,795 | (3.7 %) |
Departures | 9,868 | 10,292 | (4.1 %) |
Average stage length (miles) | 897 | 897 | 0.0 % |
4th Quarter 2023 | 4th Quarter 2022 | Change | |
Passengers | 4,145,771 | 3,962,466 | 4.6 % |
Available seat miles (000) | 4,607,174 | 4,358,220 | 5.7 % |
Departures | 29,733 | 28,005 | 6.2 % |
Average stage length (miles) | 876 | 881 | (0.6 %) |
Full Year 2023 | Full Year 2022 | Change | |
Passengers | 17,342,236 | 16,796,544 | 3.2 % |
Available seat miles (000) | 18,772,110 | 18,419,045 | 1.9 % |
Departures | 120,525 | 118,069 | 2.1 % |
Average stage length (miles) | 882 | 884 | (0.2 %) |
*Total system includes scheduled service and fixed fee contract. System revenue passenger miles and system load factor are not useful statistics as system available seat miles include both ASMs flown by fixed fee flying as well as non-revenue producing repositioning flights used for operational needs. Fixed fee flying is better measured through dollar contribution versus operational statistics.
Preliminary Financial Results
$ per gallon | |
December 2023 estimated average fuel cost per gallon – system | |
$ per gallon | |
4th quarter 2023 estimated average fuel cost per gallon – system | |
$ per gallon | |
Full year 2023 estimated average fuel cost per gallon – system |
Allegiant Travel Company
ALGT/G
Note: This news release was accurate at the date of issuance. However, information contained in the release may have changed. If you plan to use the information contained herein for any purpose, verification of its continued accuracy is your responsibility.
For further information please visit the company's investor website: http://ir.allegiantair.com
Reference to the Company's website above does not constitute incorporation of any of the information thereon into this news release.
Allegiant Media Contact: | Investor Inquiries: | |
Sonya Padgett | Sherry Wilson | |
email: ir@allegiantair.com |
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SOURCE Allegiant Travel Company
FAQ
What are the preliminary passenger traffic results reported by Allegiant Travel Company for December 2023?
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What are the estimated average fuel costs per gallon for December 2023, 4th quarter 2023, and full year 2023?
