Allegiant Air warns of potential for severely impacted liquidity in the future

Allegiant Air reported (27-Apr-2020) capacity will be cut 80% to 90% year-on-year for Apr-2020 and May-2020. Revenue was down 36% in Mar-2020, and the company is continuing to work on cost cutting measures. Labour costs form the largest of Allegiant's expenses, and it could be subject to labour disruptions that will affect its business, operating results and financial condition in the long term unless it is able to reach an agreement with unions on the terms of any arrangements relating to paid leave, time off or other measures. Allegiant's working capital is currently sufficient to meet obligations, but it noted that future liquidity could be severely impacted by the coronavirus. The carrier may need to seek significant amounts of additional liquidity in the short term, including via the issuance of additional debt securities, equity securities, equity linked securities and credit facilities, though it is yet to be seen whether current existing debt agreements will permit it to pursue these measures. [more - original PR]