Allegiant Travel Company has reported third quarter operating revenue of $459.5 million up by 5.3% over 2019 levels.
Allegiant has also continued sequential improvement in load factor, which came in at 76.6 percent, up 6 percentage points from the second quarter. With third quarter peak period load factor exceeded 80 percent.
"We finished the quarter with earnings per share of $2.18, our second consecutive quarter of profitability since the onset of the pandemic," stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant Travel Company. "Third quarter total operating revenue was up 5.3 percent year over two-year making us one of the only domestic carriers to grow revenue from pre-pandemic levels. While demand was strong during our peak summer travel period, we experienced a slowdown as the delta variant spiked, but have since seen the demand curve ramp back up. Yields held up nicely, considering the effects of the delta variant, down less than six percent on scheduled service capacity increases of 17 percent. Third-party revenue continues to outperform, up 32.0 percent on a per passenger basis compared with 2019.”
Allegiant’s third quarter adjusted CASM, excluding fuel, was 6.97 cents, 4.3 percent higher year over two-year. Excluding these costs for irregular operations, the adjusted CASM, excluding fuel was below the third quarter of 2019.
Allegiant now expects fourth quarter capacity to be up 12 percent from 2019.
"In regards to 2022 growth plans, it's too early to provide specific numbers. At a minimum, growth will mirror our historical low, double-digit rate,” said Gallagher. “However, if fuel continues to increase, we will moderate capacity accordingly. Uncertainty around the labour market is another growth factor we are watching. In the coming months, we will closely monitor the operational environment and our personnel availability. The flexibility of our model will continue to be vital as we respond to these differing environmental factors.”
Allegiant has total liquidity of $1.1 billion and net debt of roughly $500 million.
Third quarter capital expenditures related to aircraft, engines and induction costs were $9 million and $18 million in other airline capital expenditures - $9 million related primarily to aircraft induction costs. Third quarter expenditures related to deferred heavy maintenance were $15 million, confirmed the airline. By the end of the third quarter, Allegiant had 106 aircraft in its fleet and expects to take delivery of three more A320s by the end of 2021.
Meanwhile, Allegiant has also announced that maintenance technician and related employees represented by the International Brotherhood of Teamsters (IBT) have voted to ratify their first collective bargaining agreement with the company.
"The work of our maintenance team is central to the safe and seamless operations our customers depend upon," said Gallagher. "We appreciate the dedication, skill and professionalism they bring to our company each day, and with today's agreement look towards future growth and success together."
The contract is effective from the date of ratification - October 26, 2021 – for a five-year term. Allegiant currently employs 415 maintenance technician and related employees – a group which includes line and heavy maintenance technicians, as well as stores employees and some administrative maintenance staff.
The process of negotiating a first collective bargaining agreement for Allegiant maintenance technician and related employees began in January 2019. The parties had temporarily suspended negotiations due to the onset of the COVID-19 pandemic, and talks resumed in September 2020. The International Brotherhood of Teamsters was most recently certified as the group's exclusive representative on March 7, 2018.