Allegiant to purchase six B757 aircraft to support Hawaii expansion

Allegiant Travel Company signed (05-Mar-2010) a forward purchase agreement to acquire six B757-200 aircraft. The introduction of the B757 aircraft will enable Allegiant to expand its leisure travel strategy into Hawaii (which it cannot serve with its existing MD-80 fleet), with flights to be operated by Allegiant Air. Allegiant plans to take delivery of these aircraft and place them in service on the following schedule:

• Two aircraft delivered within the next two months to be placed into service in 4Q2010;
• One aircraft delivered in Nov-2010 and another in Jan-2011 to be placed into service in 1H2011;
• Two aircraft delivered in the 4Q2011 with planned in-service dates in 1H2012.

The aircraft have been in service with a single European operator since original delivery from Boeing. Allegiant expects to invest between USD75 million and USD90 million through to 2012 acquiring and preparing this fleet for service. While Allegiant is able to acquire and prepare the aircraft for cash, it believes it will finance some portion of the purchase. Allegiant Air currently operates 46 MD-80 aircraft and expects to have 54 aircraft in service by the end of 2010: 52 MD-80s and two B757s. [more]

Allegiant: "Hawaii is the most prominent US leisure destination currently un-served by Allegiant and our small city customers have been requesting this service. We are very optimistic about our ability to exploit the large third party ancillary revenue opportunity we believe exists in Hawaii. We expect the sale of hotels, rental cars, and many attraction and activities popular with Hawaii visitors will provide a very meaningful contribution to the success of the service," Maurice J Gallagher Jr, CEO and Chairman. Source: Company Statement, 05-Mar-2010.