Allegiant Post 3Q Profit!!!

Ameriagle

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LAS VEGAS, Oct 21, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following third quarter results and comparisons to prior year equivalents:
Unaudited 3Q08 3Q07 Change Total operating revenue (millions) $116.9 $86.3 35.4% Operating income (millions) $8.1 $9.5 (14.9)% Operating margin 6.9% 11.1% -4.2pp Net income (millions) $4.9 $7.0 (30.3)% Diluted earnings per share $0.24 $0.34 (29.4)% Scheduled Service: Average fare - scheduled service $86.32 $83.02 4.0% Average fare - ancillary 32.28 21.31 51.5% Average fare - total $118.60 $104.33 13.7% Total revenue per ASM (cents) 12.75 9.59 33.0% Average stage length (miles) 856 920 (7.0)% Total System*: Operating expense per ASM (CASM) (cents) 11.49 8.41 36.6% CASM, excluding fuel (cents) 5.49 4.40 24.8% Average stage length (miles) 815 898 (9.2)% * Total system includes scheduled service, fixed fee contract and non-revenue flying"We are very proud of our third quarter financial performance," stated Maurice J. Gallagher, Jr., CEO and President of Allegiant Travel Company. "The efforts of our excellent employees enabled us to achieve a great deal in the third quarter. We almost doubled profits sequentially, despite our average fuel price being largely unchanged from the second quarter and in what is seasonally our weakest time of the year. The steps we have taken to adapt to record high fuel prices, namely reducing our long haul flying, trimming capacity in select markets and focusing on increased load factors, are clearly paying off. Capacity reductions allowed us to increase unit revenues substantially -- third quarter scheduled service total RASM increased 33% to 12.75 cents compared to the prior year. All our scheduled service revenue drivers improved versus the prior year: ancillary revenue per passenger was up $11 to over $32, average airfare was up $3 to $86 (despite a 7% decline in average stage length) and passengers per flight increased 10% from 125 to 137, increasing load factor to an industry leading 93.8%."
Gallagher continued, "Our strong balance sheet and solid cash position provide a great deal of flexibility in today's financial environment. Looking forward, we have acquired and paid for much of our 2009 growth with our purchase for cash of six aircraft earlier this year which will take us to 43 operating aircraft by the end of 2009. Additionally, our third quarter aircraft utilization was only five block hours per day versus six hours in the prior year due to our capacity management related to higher fuel prices. The recent drop in fuel makes the economics of higher utilization more plausible. Increasing our fleet utilization in the coming year could drive additional growth with minimal investment. Regardless, the recent moderation in the price of oil, should it continue, bodes well for the remainder of 2008 and 2009."
Andrew C. Levy, CFO & Managing Director - Planning, stated, "Our aggressive capacity management has enabled us to remain profitable these past several quarters in a very challenging fuel environment. Due to record high fuel prices this past summer, we designed a fourth quarter schedule with reductions in off-peak capacity which we believe will result in a significant increase in scheduled total RASM. Moreover, our fuel leverage outweighs any other profitability driver in our business and, therefore, we expect record results in the fourth quarter if fuel prices remain near current levels.
"Our costs increased across the board on a unit basis, mainly due to a combination of lower aircraft utilization and a shorter average stage length. Maintenance and repairs had the largest percentage increase year-over-year due to more airframe heavy maintenance events, more engine maintenance events, and higher repair expense.
"Our balance sheet and liquidity remain strong. We ended the quarter with $138.6 million in unrestricted cash and short-term investments, down from $153.8 million at the end of the second quarter. The decline is due principally to the purchase of $8.4 million for aircraft, engines, parts and aircraft leasehold improvements."
Network Summary* September 30, 2008 September 30, 2007 Major leisure destinations 5 3 Other leisure destinations 4 2 Small cities served 54 51 Total cities served 63 56 Routes to Las Vegas 38 42 Routes to Orlando 26 24 Routes to Tampa Bay/St. Petersburg 15 14 Routes to Phoenix-Mesa 9 0 Routes to Ft. Lauderdale 6 0 Other routes 4 2 Total routes 98 82 * includes cities served seasonallyDuring the third quarter, Allegiant Air initiated service on the following four Las Vegas routes: Appleton, WI (replacing Green Bay, WI), Casper, WY, Grand Forks, ND and Grand Island, NE (replacing Lincoln, NE). We have also announced 18 more routes to start in the fourth quarter (two to Las Vegas, six to Phoenix-Mesa and five each to Orlando-Sanford and St. Petersburg). These new routes include service to five small cities new to the Allegiant network: Bozeman, MT, Elmira, NY, Hagerstown, MD, Kalispell, MT and Lexington, KY. We expect to make further new service announcements shortly.
We are pleased to announce we were recently approved by the United States Department of Defense (DoD) to carry domestic military charter traffic. This enables us to access another important source of ad-hoc charter business. With no prior history with this important new customer, we are unable to reasonably predict how much additional charter business we will obtain from this program, but we believe it will result in a meaningful boost to our fixed-fee revenue.
MD-80 Aircraft in Service* September 30, 2008 September 30, 2007 Owned (including capital leases) 35 25 Leased 2 4 Total 37 29 * Does not include six owned MD-80 aircraft leased to a third partyDuring the third quarter, we exercised a previously-negotiated forward-purchase agreement to purchase, for cash, two previously-leased aircraft. Early in the fourth quarter we took delivery of the first of six aircraft we purchased earlier this year which have been on lease to a European carrier. We expect to place this aircraft into service late in the fourth quarter for a total of 38 aircraft in our operating fleet at year end.
We expect to place the remaining five aircraft into service in 2009, three in the first quarter and two in the fourth quarter, subsequent to their return from the lessee.
At this time, Allegiant Travel Company provides the following guidance to investors, which are subject to revision:
-- We expect fourth quarter 2008 year-over-year departures to be flat and we expect a decline in ASMs of approximately 3%. -- We expect first quarter 2009 year-over-year departure growth of approximately 5% and ASM growth of approximately 7%. -- By the end of 2008, Allegiant Air expects to operate 38 MD-80 aircraft. By the end of 2009, Allegiant Air expects to operate at least 43 MD-80 aircraft. -- We expect 4Q08 capital expenditure to be approximately $6 million, including the purchase of two spare engines and improvements to aircraft expected to be introduced to the fleet in the next two quarters. -- We expect 2009 capital expenditure of approximately $15-20 million, for improvements to aircraft owned but not yet operated, purchase of additional spare engines and other miscellaneous capital expenditure. At this time we have no fuel hedges in place.Allegiant Travel Company will host a conference call with analysts at 1 pm East Coast time tomorrow, October 22, 2008, to discuss its third quarter and nine-month 2008 financial results. A live broadcast of the conference call will be available via the Company's Investor Relations website homepage at http://ir.allegiantair.com. The webcast will also be archived in the "Events & Presentations" section of the website.
 

Ameriagle

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Good one. You must be one of those A-320 drivers getting paid what he is worth, right?
 

GuinessGuy

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A320 drivr might not be making what he's worth, but your rates are horrible.......Guys flying busted up Dc8's in South America are making more. Allegiant.....real classy outfit.........BUT YOU DID MAKE 3Q COIN.........
 

clickclickboom

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Good one. You must be one of those A-320 drivers getting paid what he is worth, right?
years 1-6 you are right he should be getting at least 75-100k more than he is currently

80 hrs/Month$9,392$10,085$10,310$10,537$10,771$10,879Per Year$112,700$121,023$123,716$126,449$129,254$130,550Blended Rt$117$126$129$132$135$136B-Fund/401K $11,270$12,102$12,372$12,645$12,925$13,055Yearly Comp$123,970$133,125$136,087$139,094$142,180$143,605 82 hrs/Month$9,723$10,441$10,674$10,909$11,151$11,263Per Year$116,677$125,294$128,082$130,912$133,816$135,157Blended Rt$119$127$130$133$136$137B-Fund/401K $11,668$12,529$12,808$13,091$13,382$13,516Yearly Comp$128,345$137,824$140,890$144,004$147,198$148,673 85 hrs/Month$10,220$10,975$11,219$11,467$11,722$11,839Per Year$122,644$131,702$134,632$137,607$140,659$142,069Blended Rt$120$129$132$135$138$139B-Fund/401K $12,264$13,170$13,463$13,761$14,066$14,207Yearly Comp$134,908$144,872$148,095$151,367$154,725$156,276 90 hrs/Month$11,049$11,865$12,129$12,397$12,672$12,799Per Year$132,588$142,380$145,548$148,764$152,064$153,588Blended Rt$123$132$135$138$141$142B-Fund/401K $13,259$14,238$14,555$14,876$15,206$15,359Yearly Comp$145,847$156,618$160,103$163,640$167,270$168,947 95 hrs/Month$11,878$12,755$13,039$13,327$13,622$13,759Per Year$142,532$153,059$156,464$159,921$163,469$165,107Blended Rt$125$134$137$140$143$145B-Fund/401K $14,253$15,306$15,646$15,992$16,347$16,511Yearly Comp$156,785$168,364$172,111$175,913$179,816$181,618
 

reepicheep

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If low pay and crummy contracts are the key why isn't usair making money?
 

Ameriagle

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A320 drivr might not be making what he's worth, but your rates are horrible.......Guys flying busted up Dc8's in South America are making more. Allegiant.....real classy outfit.........BUT YOU DID MAKE 3Q COIN.........
Ahhh I get it.....he's a hypocrite! His pay is bad but because mine isn't great we are somehow different? It's a tired argument that's not worth my time. If he wants to do something worthwhile maybe he can teach his ALPA brothers/sisters how to say NO....cause they have been saying YES longer than AAY has been an airline! Enjoy your DC-8 amigo!
 

Daytonaflyer

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What is it with these guys always trying to rain on our parade? Our pay is pretty similar to other companies with less than 45 airplanes. Sun Country, Spirit, Midwest, Virgin, and Allegiant all get paid about the same wages, give or take couple bucks. Some make a little more, some a little less. Plus Allegiant has 3 years of contractual pay raises coming up and profit sharing.
It's just a matter of time until our pay is as high or higher than a lot of the haters out there.
 
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bravodude

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What is it with these guys always trying to rain on our parade? Our pay is pretty similar to other companies with less than 45 airplanes. Sun Country, Spirit, Midwest, Virgin, and Allegiant all get paid about the same wages, give or take couple bucks. Some make a little more, some a little less. Plus Allegiant has 3 years of contractual pay raises coming up and profit sharing.
It's just a matter of time until our pay is as high or higher than a lot of the haters out there.
These are the same haters that talk smack about SWA just don't listen to them.
 

crxpilot

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There is lots of room for improvement in pay and retirement at Allegiant. I think in some respect we are selling ourselves short. Especially for an airline that is profitable. No excuses.



What is it with these guys always trying to rain on our parade? Our pay is pretty similar to other companies with less than 45 airplanes. Sun Country, Spirit, Midwest, Virgin, and Allegiant all get paid about the same wages, give or take couple bucks. Some make a little more, some a little less. Plus Allegiant has 3 years of contractual pay raises coming up and profit sharing.
It's just a matter of time until our pay is as high or higher than a lot of the haters out there.
 

BEECH-SLAPPED

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At your wages and bennies what did you expect?
Your argument is old and tired. Let's go ahead and give the roughly 250 Allegiant pilots an $70/hr raise for the 3rd quarter. This brings them up close to SWA's payscale. The average pilot flew about 80 hours per month. This equates to an added expense of $4.2M for the quarter. This would bring our profit down to only 700K or so. But it would still be a PROFIT. You guys just lost $4M for the quarter at your much higher payscales. If your snide remarks were true, Skybus would still be flourishing. For the last time, pilot salaries do not make or break an airline. You either have good management or you don't!

We are underpaid, no doubt about it. But we're working on it. But don't be so naive as to think that our profitiability is tied only to our pilot payscale.
 

The Victors

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What is it with these guys always trying to rain on our parade? Our pay is pretty similar to other companies with less than 45 airplanes. Sun Country, Spirit, Midwest, Virgin, and Allegiant all get paid about the same wages, give or take couple bucks. Some make a little more, some a little less. Plus Allegiant has 3 years of contractual pay raises coming up and profit sharing.
It's just a matter of time until our pay is as high or higher than a lot of the haters out there.
Parade? That's exactly the point. It's your attitude about accepting work while being grossly underpaid. You accept being a loser at the cost of the profession.
 

climbhappy

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When a guy starts a business, he never gets paid until it is profitable. maybe the pros at allegiant know what they're doing and just like LUV, when they get to a certain critical mass, the pay will come just as hiring will, longevity, and a good pension plan.

It looks like they know what they're doing.
 

Mr Wu

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When a guy starts a business, he never gets paid until it is profitable. maybe the pros at allegiant know what they're doing and just like LUV, when they get to a certain critical mass, the pay will come just as hiring will, longevity, and a good pension plan.

It looks like they know what they're doing.


How dare you compare us to SWA when they were around 10 years? Don't you know that they were always the best paid with the best benefits?
 

Daytonaflyer

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Parade? That's exactly the point. It's your attitude about accepting work while being grossly underpaid. You accept being a loser at the cost of the profession.
There is no such thing as bringing down the industry. The airlines pay based on their profitability and success, not what their competitor's pay. Look at any unprofitable company and you'll see that their pay decreases. Simultaneously look at any profitable company and you'll see that their pay increases. This is not rocket science, people. In general, a profitable company will not see a decrease in wages regardless of what's happening with their competitor's wages.
If an airline cannot maintain enough profitability to offset increased wages, they have more internal issues than just high pay.
If Allegiant remains profitable, someday our pay will probably be higher than yours. You might as well accept that.
 

learflyer

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The naysayers are just jealous of the out n' back lines you guys fly.
 

ualdriver

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Who is bringing down the industry? Us, whose pay is increasing every year, or you, who is now making 50% of what you made 8 years ago?
I guess I'll answer that question with a question. Why are airlines like UAL, NWA, DAL, etc., making 50% of what we were making 8 years ago? Did the "going rate" for pilot wages change during that time period? If they did, what exerted such downward pressure on pilot wages?
 
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