Allegiant swings to net loss in first quarter as Boeing delivery delays continue

Allegiant has revealed a disappointing first quarter result with only a 1% year-on-year (YoY) increase in its total consolidated operating revenue, crawling to $656.4 million. More disappointing still, its net income of 56.1 million in the first quarter of 2023 had swung to a loss of nearly $1 million. Its diluted earnings per share, which was at $3.09 in last year's first quarter, was at a negative $0.07 per share this year. Its consolidated operating income showed an 83.8% decline to $15.4 million and its operating expenses up 15.5% to $641 million. The first quarter marked the first full quarter of operations of its new Sunseeker Resort in Florida. Allegiant Travel Company CEO and chairman Maurice Gallagher said: ""It will take time to build to financial maturity. We are still in the early stages, but our marketing efforts are now in full swing."" Looking at its airline results, its operating revenue for the first quarter was down 2.6% YoY to $632.5 million and operating expense up 10.2% to $608.3 million. Its operating income was down 75.2% to $24.2 million and net income was down 81% to $11.4 million. Allegiant Travel Company president Gregory Anderson said the airline's operating margin of 6.2%, down from 15% in the first quarter last year, was ""disappointing"". He added: ""These lower margins were largely driven by temporary headwinds such as Boeing's inability to meet its delivery schedule, delayed pricing functionality due to the integration of Navitaire, our new reservations and revenue system, and lower aircraft utilisation in our peak demand periods – we are fixing all three of these items."" In April, Allegiant's flight attendants had voted in favour of a new five-year agreement with immediate wage increases ranging from 20% to 41.2%. Anderson said: ""This new contract will not only provide well-deserved pay increases, but also comes with several quality-of-life improvements. Our pilot contract remains in federal mediation."" It ended the first quarter with a total available liquidity of $1.1bn, as well as $167.8 million in cash from operations. Its total debt at the end of the quarter was $2.2bn and its net debt at $1.4bn. For the year ahead, Allegiant expects to integrate its MAX aircraft into its fleet over the coming months. It consolidated guidance for the second quarter estimated its earnings per share to be $0.50-1.00.