On another note, did you folks see Allegiants first quarter results? They did very well.
Allegiant Travel Company Reports First Quarter 2008 Financial Results
Monday April 28, 9:17 pm ET
LAS VEGAS, April 28 /PRNewswire-FirstCall/ -- Allegiant Travel Company (Nasdaq:
ALGT -
News), 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)% *Total system includes scheduled service, fixed fee contract and non-revenue flying.
"Our first quarter was exceptional, particularly on the revenue side," said Maurice J. Gallagher, Jr., Chairman, CEO and President of Allegiant Travel Company. "We grew revenues almost 58% to $133.1 million on just a 48% increase in departures. Our focus on achieving higher loads was successful -- our scheduled system had the highest domestic load factor in the industry at 86.9%, a 4.4 percentage point increase from first quarter 2007. Ancillary revenues were again terrific performers, increasing almost $7 per passenger year over year to $25.75, generating an almost 7% year-over-year increase in our total average fare. Ancillary revenues are a key factor in our ability to produce good margins despite substantial increases in our cost of fuel."
Gallagher continued, "We diversified our operations considerably in the past year. Our two new destinations of Phoenix-Mesa and Ft. Lauderdale combined for 17% of our scheduled departures in the first quarter while Las Vegas accounted for 41%, compared to 57% in the same period of the prior year. Orlando accounted for 28% of our first quarter departures in both this year and last, while Tampa Bay/St. Petersburg dropped slightly from 14% to 12% year-over-year in its share of departures. This diversification has greatly improved our risk profile. Fuel expense in the quarter was up over 100% accounting for the reduction in our operating margin to 10.8% from 17% in the first quarter of last year. Once fuel prices stabilize, I am comfortable we will reverse this margin trend."
Andrew C. Levy, CFO & Managing Director - Planning, stated, "We are pleased with our first quarter financial performance. It is particularly gratifying that we posted a 24% increase in economic (excluding the effect of fuel derivatives) earnings per share, despite a 46% increase in fuel price per gallon. While fuel prices were high throughout the first quarter, increases accelerated in March and have continued into April. Should record fuel prices persist, our performance in the second quarter of this year will not match our performance in the second quarter of last year. Despite the challenges of managing our business in the face of record fuel prices, we believe we can remain profitable."
Levy continued, "Our balance sheet and liquidity remain outstanding. We ended the quarter with $188.2 million in cash and short-term investments, up from $171.4 million at year end. Total debt at quarter end stood at $71.0 million, all secured by aircraft."
In January 2008, the Board of Directors authorized a share repurchase program to acquire up to $25 million of the Company's common stock. As of March 31, 2008, the Company had repurchased 553,700 shares of the Company's common stock through open market purchases at an average cost of $28.55 per share for a total expenditure of $15.8 million. During the first quarter, Allegiant Air inaugurated only one new route (Huntington, WV to Tampa Bay/St Petersburg), as the Company concentrated on consolidating the large number of routes initiated in the fourth quarter of 2007.
Allegiant Travel Company provides the following guidance to investors, which is subject to revision in the event of changes in our operating environment, including, without limitation, changes in fuel prices:
-- We expect second quarter 2008 year-over-year departure growth of at least 33% (previously 35%) and ASM growth of at least 25%. -- By the end of 2008, Allegiant Air expects to operate at least 37 (previously 40) MD-80 aircraft. -- We expect 2008 capital expenditures of $45 million, with an estimated $36 million for six aircraft and $9 million for engines and other. Capex in the first quarter amounted to $8.0 million.We have no fuel hedges in place and our current policy is not to hedge fuel prices.
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