Allegiant Travel Company has reported an adjusted net loss of $37.7 million for the third quarter, but has raised its airline-only earnings per share (EPS) guidance for the full year.
The company’s “seasonally weakest” quarter of the year saw “steady booking improvements” but delivered an operating loss that was worse than analysts' expectations.
Total revenue was almost unchanged at $561.9 million, a miss against a forecasted $576.47 million.
Adjusted loss per share came in at $2.09, which was worse than the forecasted loss per share of $1.79 and 3.5% lower than the same period last year.
Allegiant’s airline-only adjusted loss per share came in at $1.64 for the quarter, but the company raised its full-year airline-only EPS guidance to $4.35.
Gregory Anderson, CEO of Allegiant, said its “focus on cost discipline” had limited its operating loss during the third quarter and positioned it for a more positive fourth quarter.
“Leisure booking momentum has continued, with holiday demand shaping up nicely,” he said.
During the third quarter, cost per average seat mile (CASM) excluding fuel fell 4.7%, producing a year-to-date adjusted CASM excluding fuel decrease of almost 7%.
Allegiant now expects a double-digit fourth-quarter operating margin, yielding a full-year airline-only operating margin of around 7%.
The company’s total available liquidity at the end of the third quarter was $1.2B, which includes $991.2 million in cash and investments and $175 million in undrawn revolving credit facilities.
Total debt at quarter-end was $2.1bn, which is unchanged from year-end 2024, and total net debt at quarter-end was $1.1bn, which was a 13.7% improvement on year-end 2024.
Debt principal payments of $214.6 million were made during the third quarter, including $181.3 million in voluntary prepayments.
During October, Allegiant repaid $120 million of senior secured notes due August 2027, under a call feature exercised on September 15, 2025.
During an investor call, analysts questioned the performance benefits of Allegiant's MAX aircraft, the integration of which is a “key initiative” in 2025.
“Bringing on this new fleet type has been a long time coming, and its integration this year has gone very well,” said Anderson.
“The MAX fleet continues to perform nicely both operationally and financially and is much improved from our older-gen A320s.
“In addition, owning our aircraft rather than leasing gives us important flexibility to respond to dynamic market conditions.”
By the end of the year, Allegiant hopes to have 16 MAX aircraft in service.
The CEO added that Allegiant is on track for the MAX fleet to comprise over 20% of ASMs in 2026 and earn “strong returns” on the company’s investment in the aircraft type.
Drew Wells, chief financial officer at Allegiant, said that the company should start to see cost savings from the transition of its Fort Lauderdale base solely to MAX aircraft in the fourth quarter.
Driven by the higher fuel efficiency of the MAX aircraft, Allegiant expects the differential between CASM and RASM to result in margin expansion next year.
Next year, Allegiant expects to take delivery of 11 737 MAX aircraft, all of which will replace A319s or A320s, resulting in a flat year-over-year fleet count.
Allegiant is currently working with Boeing to update 2027 and 2028 delivery schedules following the OEM’s recent approval for increased production rate.
Robert Neal, president and chief financial officer of Allegiant, suggested that by 2028 the MAX fleet will account for 50% of the company’s ASMs.