Allegiant Air shores up liquidity as new aircraft deliveries cause a spike in 2017 capex

The US ULCC Allegiant Air takes a significant step in its evolution to an all Airbus fleet in 2017 when Airbus A320 family narrowbodies will make up more than 50% of its fleet composition. By the beginning of 2019 the company has set a course to shed its MD-80s, which were the backbone of its fleet during Allegiant’s rise as a unique niche ultra low cost player.

Allegiant also begins taking delivery of new build A320s in 2017, which is helping to drive a marked uptick in capital expenditures for the company this year. Allegiant is working to bolster its liquidity to support the increase in capex for 2017, and believes the new aircraft should be cash accretive upon delivery. The primary source of financing for Allegiant’s new aircraft is secured debt market backed by its existing fleet of used A320s.

Operationally, except for two of its bases, Allegiant expects to have transitioned all of its bases to Airbus operations by the end of 2017, which will help the airline drive higher levels of efficiency in its network.

This CAPA Premium Analysis article is 1,261 words.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com