Allegiant Air reported a profit of $88.5 million for second quarter (Q2) of 2023 citing robust leisure demand and network expansions. The Group reported a revenue of $683.8 million while its operating profits increased by 411.1% to $133.4 million from last year's second quarter profits of $26.1 million.
Going ahead, the airline is optimistic for further improvements as network expansions are steadily underway through the remainder of this year to ensure its capacities offered meets the demand.
Despite the high fuel prices, the airline's expenditures including fuel and operating expenses were down to 550.4 million, an 8.8% improvement from last year's $603.7 million.
John Redmond, chief executive, Allegiant said: “These outstanding results are attributable to the hard work of our team members during this peak summer travel period. I could not be happier with the success the team delivered this quarter. Achieving industry-leading operational performance of 99.7% in the backdrop of a challenging operational environment is admirable. This operational success has catalyzed the strong financial performance delivered year-to-date.”
He also emphasized two points making progress on outstanding labor contracts and continuing to deliver solid operations for the passengers. On the employee front, Allegiant Air has been rewriting new tentative agreements and negotiating with the respective employees and represented unions.
On the operations front, the airline the airline recently added six new routes to its network last month and has previously hinted that more new destinations are scheduled to be launched later this year most likely coinciding with the arrival of its first Boeing 737 MAX, as the delivery was delayed.
Despite the delivery delay, Allegiant Air emphasizes its capacity plans for this year will not be impacted in the slightest. A second of the new generation Boeing narrowbody is anticipated to be delivered in early 2024.
The airline is also awaiting a response from US Department of Transportation (DOT) on its application for the proposed joint venture with Viva Aerobus. The JV will see both airlines sharing revenue and reaping mutual benefits concerning flight schedules and sales.
Allegiant Air also proposed buying a $50 million stake in Viva Aerobus. However, due to alleged differences over bilateral agreements between the US and Mexico, as previously cited by DOT, the initial review of the proposal was suspended and postponed.