Allegiant Reports November 2024 Traffic

Rhea-AI Summary

Allegiant Travel Company (NASDAQ: ALGT) reported strong November 2024 traffic results, with booking trends exceeding initial expectations. Post-hurricane demand recovery has been faster than anticipated, and Thanksgiving week TRASM performed on par with the previous year. The company revised its Q4 TRASM forecast to -1.5% year-over-year (vs. initial -4.5%) on 1.8% capacity growth.

The company received two additional 737-MAX aircraft in November and expects to end 2024 with four MAX aircraft in service, bringing the total fleet to 125. A Q4 sale of underutilized CFM engines resulted in a $15 million gain. The company updated its Q4 guidance, projecting airline-only operating margin of 13-14% and consolidated earnings per share of $1.75-$2.25, excluding special charges.

Positive

• Q4 TRASM decline improved to -1.5% from initial -4.5% forecast
• Holiday bookings outpacing expectations
• $15 million gain from CFM engine sale
• Operating margin guidance increased to 13-14% from 6-8%
• Consolidated EPS guidance raised to $1.75-$2.25 from $0.00-$1.00
• Faster than expected hurricane-impacted destination recovery

Negative

• TRASM still expected to decline 1.5% year-over-year in Q4

Insights

Financial Analyst

The updated Q4 guidance reveals significant improvements in Allegiant's financial outlook. The airline has substantially raised its earnings expectations, with airline-only EPS guidance increasing from $0.50-$1.50 to $2.50-$3.00. Operating margins are projected to nearly double to 13.0-14.0% from the previous 6.0-8.0%. The $15 million gain from CFM engine sales and better-than-expected holiday demand are key drivers. TRASM decline has moderated to just -1.5% versus initial projections of -4.5%, despite capacity growth. The accelerated MAX aircraft deliveries also position the company well for future growth.

Market Research Analyst

Post-election booking trends and swift recovery in hurricane-affected markets demonstrate strong consumer resilience. The 17% year-over-year capacity increase planned for December, coupled with robust holiday bookings, suggests growing travel demand. The improved TRASM outlook indicates pricing power remains relatively stable despite capacity expansion. The accelerated fleet modernization with four MAX aircraft, versus the planned one, should enhance operational efficiency. These factors, combined with reduced unit costs (CASM down 3.5%), position Allegiant favorably in the competitive leisure travel market.

LAS VEGAS, Dec. 12, 2024 /PRNewswire/ -- Allegiant Travel Company (NASDAQ: ALGT) today reported preliminary passenger traffic results for November 2024.

"Booking trends following the election continue to outpace our initial expectations," stated Drew Wells, Chief Commercial Officer of Allegiant Travel Company. "Demand recovery to hurricane-impacted destinations has been faster than expected, with demand to most impacted regions returning to normal. Additionally, close-in holiday demand during November exceeded our expectations with TRASM performing on par with the prior year during the week of Thanksgiving. December capacity is expected to be up 17 percent year-over-year, and we are encouraged by the strength in bookings for the December holiday period, which are outpacing our initial expectations. Based on recent booking trends, we now expect fourth quarter TRASM to be down approximately 1.5 percent year-over-year on capacity growth of 1.8 percent for the quarter, versus our initial TRASM expectation of down 4.5 percent year-over-year." 

"We took delivery of two incremental 737-MAX aircraft in November," stated Robert Neal, Chief Financial Officer of Allegiant Travel Company. "We expect to end the year with four MAX aircraft in service, as compared with our initial expectation of one, bringing our total fleet count at year end to 125. With heightened confidence in 737 deliveries, we opportunistically executed a transaction during the fourth quarter to sell underutilized CFM engines, resulting in a $15 million gain. Considering these gains, we now expect fourth quarter CASM, excluding fuel and special charges, to be down 3.5 percent, year-over-year. Updated fourth quarter guidance is included in the table below."      

Updated Fourth Quarter Guidance – Subject to Revision1
	4Q24 - Updated	4Q24 – Prior
System ASMs – year-over-year change	~1.9%	~1.5%
Scheduled service ASMs – year-over-year change	~1.8%	~1.5%
Fuel cost per gallon	$2.50	$2.50
Airline-only operating margin	13.0% to 14.0%	6.0% to 8.0%
Airline-only earnings per share, excluding special charges1	$2.50 - $3.00	$0.50 - $1.50
Consolidated earnings per share, excluding special charges1	$1.75 - $2.25	$0.00 - $1.00

¹ Certain forward-looking financial information in the above table is not presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Non-GAAP financial figures may be useful to stakeholders, but should not be considered a substitute for GAAP figures. In reliance on the 'unreasonable efforts' exception in Item 10(e)(1)(i)(B) of SEC Regulation S-K, a reconciliation to the most comparable GAAP financial measure is not provided for airline-only earnings per share, excluding special charges, or consolidated earnings per share, excluding special charges. The Company is not able to reconcile these Non-GAAP financial figures without unreasonable effort because the special charge adjustments will not be known until the end of the indicated future period and any range of projected values would be too broad to be meaningful. As a result, this information would not be significant to investors.

Scheduled Service – Year Over Year Comparison
	November 2024	November 2023	Change
Passengers	1,214,205	1,303,894	(6.9 %)
Revenue passenger miles (000)	1,108,281	1,178,002	(5.9 %)
Available seat miles (000)	1,381,831	1,405,369	(1.7 %)
Load factor	80.2 %	83.8 %	(3.6pts)
Departures	8,821	9,001	(2.0 %)
Average stage length (miles)	898	885	1.5 %

 

Total System* – Year Over Year Comparison
	November 2024	November 2023	Change
Passengers	1,247,401	1,333,604	(6.5 %)
Available seat miles (000)	1,457,723	1,467,019	(0.6 %)
Departures	9,456	9,529	(0.8 %)
Average stage length (miles)	883	873	1.2 %

*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
November 2024 estimated average fuel cost per gallon - system	$2.52

Allegiant Travel Company

Las Vegas-based Allegiant (NASDAQ: ALGT) is an integrated travel company with an airline at its heart, focused on connecting customers with the people, places and experiences that matter most. Since 1999, Allegiant Air has linked travelers in small-to-medium cities to world-class vacation destinations with all-nonstop flights and industry-low average fares. Today, Allegiant's fleet serves communities across the nation, with base airfares less than half the cost of the average domestic roundtrip ticket. For more information, visit us at Allegiant.com. Media information, including photos, is available at gofly.us/iiFa303wrtF

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: 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
mediarelations@allegiantair.com		ir@allegiantair.com

 

 

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SOURCE Allegiant Travel Company

FAQ

What is Allegiant's (ALGT) revised Q4 2024 TRASM guidance?

Allegiant revised its Q4 2024 TRASM guidance to -1.5% year-over-year, improved from the initial expectation of -4.5% year-over-year.

How many 737-MAX aircraft will Allegiant (ALGT) have by end of 2024?

Allegiant expects to end 2024 with four 737-MAX aircraft in service, up from the initial expectation of one, bringing total fleet count to 125.

What is Allegiant's (ALGT) updated Q4 2024 operating margin guidance?

Allegiant updated its Q4 2024 airline-only operating margin guidance to 13.0% to 14.0%, up from the previous 6.0% to 8.0%.

How much did Allegiant (ALGT) gain from the CFM engine sale in Q4 2024?

Allegiant gained $15 million from the sale of underutilized CFM engines during Q4 2024.

What is Allegiant's (ALGT) projected capacity growth for Q4 2024?

Allegiant projects system capacity growth of approximately 1.9% year-over-year for Q4 2024.