Allegiant to 'most likely' reduce fleet by 25 aircraft, expects significant capacity cuts

Allegiant Travel Company reported (12-May-2020) capacity cuts of 87.4% in Apr-2020, with significant capacity cuts also anticipated in May/Jun-2020 based on leisure demand trends. "Near term is painful and will continue to be painful", warned Allegiant Travel Company chairman and CEO Maurice J Gallagher Jr, noting the carrier will "most likely" reduce its fleet by "as many as 25 aircraft". These aircraft "will 'seed'" the carrier's "near and long term ability to materially reduce planned engine overhauls, beginning in 2020 and for years thereafter", said Mr Gallagher. The future market "will favour buyers", and Allegiant will work to "purchase aircraft and associated parts at what we believe will be substantial discounts to recent prices". He noted these actions will allow the company to "'manage' planned overhauls via our balance sheet versus expensive overhaul shop visits", stating: "The combination of our retirements and the greatly reduced cost of used aircraft and their motors is a key part of both our near term liquidity benefit and long term - 2021 and beyond - reduced capital requirements for our growth". "I believe our model, given the current economic impact, is best suited to withstand the brutal impact from this pandemic", observed Mr Gallagher. [more - original PR]