Allegiant Reports First Quarter 2008 Financial Results

[chperplt]

Sorry for the formatting...



Allegiant Travel Company Reports First Quarter 2008 Financial Results


LAS VEGAS, April 28, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Allegiant Travel Company (Nasdaq: ALGT), parent company of Allegiant Air and Allegiant Vacations, today reported the following first quarter 2008 results, and comparisons to prior year equivalents:

....................................Unaudited 1Q08 1Q07 Change
Total operating revenue (millions) ...$133.1 $84.3 57.8%
Operating income (millions) ...........$14.4 $14.3 0.4%
Operating margin .....................10.8% 17.0% -6.2p
Net income (millions) .................$9.7 $9.7 (0.8)%
Diluted earnings per share .........$0.47 $0.48 (2.1)%
Diluted non-GAAP earnings per share
adjusted by excluding
non-cash mark-to-market loss/gain
on fuel derivatives (reconciled to GAAP on pg. 7)
.............................................$0.47 $0.38 23.7%

Scheduled Service:
Average fare - ancillary ..........$25.75 $18.98 35.7%
Total revenue per ASM (cents) ...10.61 9.14 16.1%
Average stage length (miles) .......907 926 (2.1)%
Total System*:
Operating expense per ASM (CASM)(cents)9.35 7.51 24.5%
CASM, excluding fuel (cents) ....4.35 4.17 4.3%
Average stage length (miles) ...............854 930 (8.1)%

 

[suupah]

http://biz.yahoo.com/prnews/080428/lam539.html?.v=4
glad to see someone is doing well

 

[shroomwell]

They hedged their fuel well, otherwise it would have been a small loss or breakeven. All in all pretty darn good when runny a fleet of old Mad Dogs.

 

[crxpilot]

They hedged their fuel well, otherwise it would have been a small loss or breakeven. All in all pretty darn good when runny a fleet of old Mad Dogs.

Allegiant doesnt hedge fuel.

 

[anewunion]

It's all about the beef Jerky...

 

[Daytonaflyer]

Glad we made a profit. Sad knowing that Exxon Mobil made our entire 1Q profit in less than 5 minutes...those A-Holes!

 

[NEDude]

Could it be that they pay next to nothing for their airplanes and it doesn't cost them to sit them for a day or two if the market doesn't call for a flight?

Compare that to an airline that buys/leases a relatively new fleet of high demand aircraft and has to pay huge monthly lease fees.

 

[Daytonaflyer]

I'm sure that's a big part of it.

 

[chperplt]

Could it be that they pay next to nothing for their airplanes and it doesn't cost them to sit them for a day or two if the market doesn't call for a flight?

Compare that to an airline that buys/leases a relatively new fleet of high demand aircraft and has to pay huge monthly lease fees.

That's absolutely a part of our success... We have good management and a good business plan.

 

[Caveman]

That's absolutely a part of our success... We have good management and a good business plan.

I agree, but they also have unusually low pilot labor costs. Consider the following:

Roughly 255 pilots
Current CA pay yrs 1-5: $61,$85,$90,$96,$101
Current FO pay yrs 1-5: $41,$51,$53,$56,$56
Give CA a $30 per hr raise & FO a $10 per hr raise
If you do the math it works out to $1.4M per quarter

IOW, part of Allegiant's success is because their pilots are severely underpaid compared to other MD80 pilots. I understand it's necessary to keep costs under control when an airline is just starting. However, once an airline is comfortably established they need to start paying their pilots a more industry standard wage. It's time for Allegiant management to pay up. If they can make money in this environment they can afford a decent raise for the pilots.

 

[Desert1]

Taking a look back 3 years, (in addition to work rules), we have improved our compensation package by almost 40%. We're very proud of this accomplishment, particularly considering the state of this industry. This was due to an open-door, very positive working relationship and negotiation between the pilot group and our management team. The emphasis was on the welfare of the pilot group, while simultaneously considering the financial health of the company.

As to our compensation, you'll forgive me if I take exception with the term "severely underpaid". For the sake of comparison, consider the current 3-yr plan negotiated by our in-house pilot group: Allegiant pay for 10-yr captain will exceed narrow-body 10-yr captain pay at NWA, UAL and US Air East. Keep in mind, that figure does not include the Allegiant bonus ($5K-$10K in '07)

Considering the average upgrade to be 1-2 years, there are few places in this industry where you have the ability to earn over $100K in your 2nd-3rd year of employment. Your post lists 1-2 year captain pay: I don't know of many MD-80 operators with 1-2 year captains. Although we have room for improvement in our senior FO pay, we have very few over 2 years. Once things stabilize and those numbers grow, our in-house will take another look at the FO pay scales. Until then, I can assure you there are few, if any, complaining about the pay around here.

Yes, we are a very new company and, as you put it, still in the process of 'stabilizing'. That said, our mid-term pay exceeds that of much larger, more seasoned airlines with union contracts that have been negotiated for decades.

D1

P.s., Semper Fi...

 

[chperplt]

I agree, but they also have unusually low pilot labor costs. Consider the following:

Roughly 255 pilots
Current CA pay yrs 1-5: $61,$85,$90,$96,$101
Current FO pay yrs 1-5: $41,$51,$53,$56,$56
Give CA a $30 per hr raise & FO a $10 per hr raise
If you do the math it works out to $1.4M per quarter

IOW, part of Allegiant's success is because their pilots are severely underpaid compared to other MD80 pilots. I understand it's necessary to keep costs under control when an airline is just starting. However, once an airline is comfortably established they need to start paying their pilots a more industry standard wage. It's time for Allegiant management to pay up. If they can make money in this environment they can afford a decent raise for the pilots.

IMO you have a very old and tired argument....

What is industry standard wage? The wage that people get before their companies go into CH11? Is it the wage that they get before they show up to work to find the doors padlocked?

There is no such thing as industry standard anymore when companies are folding left and right. As D1 stated, we've made great strides in pay and work rules over the past few years. We have 3rd and 4th year Captains here making low to mid 6 figures, while having the opportunity to spend every night at home.

I'd be curious to know how much more my counterpart at Midwest is making at year 3; how many nights a month and year they're spending away from home, and how secure they feel in their positions right now.

Not a kick in the pants to anyone working at Midwest, but right now I enjoy spending every night at home and having as much security in this industry as can be had.

 

[fly4surf]

Caveman,
You won't win the fight with these guys on 'payscale.'

Try retirement.

PS: Just happy to have a job after this month.

 

[Correcting]

Allegiant doesnt hedge fuel.

Looks like they hedge fuel to me.

non-cash mark-to-market loss/gain on fuel derivatives (reconciled to GAAP on pg. 7)
...................................$0.47 $0.38 23.7%

And it looks like they had a profit of $0.47 per share off the derivatives, which exactly matches their earnings per share for the quarter. So yes, it appears that without the fuel hedges, Allegiant would have broke even or been slightly in the red. Even that would have been a good quarter in this environment.

 

[chperplt]

Caveman,
You won't win the fight with these guys on 'payscale.'

Try retirement.

PS: Just happy to have a job after this month.

Retirement here sucks..... plain and simple.