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Allegiant Air strongly profitable in tough third quarter

23-Oct-2008

A sound strategy and a little bit of good fortune have helped Las Vegas-based LCC, Allegiant Air, to rise above the pack. Allegiant Air is the only US mainline carrier to have posted profits in every quarter so far in 2008, with the consistently profitable LCC likely to be one of a handful of US carriers to have booked a net profit in the third quarter (three months ended 30-Sep-08). It is also set to report record profits in the final quarter. In this Perspective, we review the keys to its success. [1569 words]

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Subheadings:

  • Ancillary revenues success key to ability to maintain good margins
  • Balance sheet and liquidity remain strong
  • Fuel representing over 50% of total costs in 3Q08; maintenance and repair costs also on the rise
  • By far the fastest growing airline in North America; but capacity to slow going forward
  • Slows growth in 4Q08; to pick up again in 2009
  • Diversifying operations to improve risk profile
  • Fleet growth on track
  • 4Q08 and 2009 boding well for Allegiant in light of recent fuel reductions

Graphs and data:

  • Allegiant financial highlights for three months ended 30-Jun-08
  • Allegiant operating margin: 4Q06 to 3Q08
  • Allegiant ancillary revenue as a portion of total revenue: 1Q06 to 3Q08
  • Allegiant fuel cost as a portion of total operating expense: 1Q06 to 3Q08
  • Allegiant MD-80 aircraft ages
  • North American carrier's domestic passenger capacity growth (% change year-on-year): Nine months ended 30-Sep-08
  • Allegiant Capacity and Departure Growth: 4Q08 and 1Q09
  • Allegiant Network summary
  • Allegiant fleet summary
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