Niche airline Allegiant's unit cost pressures soften as it makes a push into medium sized markets

US niche airline and travel company Allegiant capped off CY2014 by taking a USD43 million write down on its fleet of six Boeing 757s, which created additional noise in its results that were also affected by training expense that created cost headwinds throughout most of CY2014.

Despite those challenges, Allegiant recorded strong top-line revenue growth in 4Q2014 and CY2014 as unit costs were pressured by training expense during the year. But at the same time the company is keeping an eye toward shareholder returns by deciding to issue a recurring dividend for each quarter in CY2015, and still retains roughly USD86 million in share repurchase authority.

After facing continuing cost headwinds in 1Q2015, Allegiant's cost pressure should ease throughout the remainder of the year as it seems to be focussed on domestic expansion for the foreseeable future.