Allegiant grows second quarter revenues and incomes

Allegiant Travel Company, parent company of Allegiant Air and Allegiant Vacations, has reported its results for the second quarter of 2009 with revenues and incomes all increasing.

The unaudited figures for 2Q09 show total operating revenue increasing by 12.5% to $148.0 million, compared with $131.6 million in 2Q08. With the operating margin rising by 21.9 percentage ponts to 25.5% from 3.6%, the operating income was up by 708.2% to $37.8 million in 2Q09 from 2Q08's figure of $4.7 million.

The 2Q09 net income came in at $23.9 million against $2.6 million, an increase of 801.4%

"We had another very good quarter, our third highly-profitable quarter in a row," stated Maurice Gallagher Jr, CEO and president of Allegiant Travel Company. "In these extremely difficult times when our industry has substantially reduced its operations and seen record declines in unit revenue, we are pleased to report these quality numbers. We increased scheduled departures and ASMs by 30% year-over-year and still posted a 25% operating and pre-tax margin. Once again our people have been critical to our success. Their enthusiasm and efforts continue to provide our customers with safe, reliable and inexpensive journeys.

"During the quarter we substantially increased the size of our nationwide footprint, including the successful start of 13 new routes to our new Southern California base in Los Angeles and an additional seven new routes across the network, ending the quarter at 134 routes between 71 cities. This further diversifies our exposure to regional economies and offers more protection to us in these uncertain times. Our Southern California routes are off to a great start, with July booked load factors now running ahead of our scheduled average.

"We achieved our second quarter results despite an almost 13% reduction in our average scheduled airfare from the first quarter of this year, a decline attributable to a softer economy, the introduction of new routes, and a 15% increase in year-over-year capacity on a 'same-store sales' basis in existing markets. Moreover, for the first time in a number of years, our ancillary revenue per passenger declined sequentially, albeit slightly, to $32.36. An additional challenge relative to the first quarter was a 13% sequential increase in the price per gallon of fuel.

Andrew Levy, CFO & managing director - planning, noted, "We had terrific cost management in the second quarter. Cost per passenger excluding fuel declined to $46.38 in the second quarter from $47.52 in the prior year and $49.62 in the first quarter. Moreover, these figures include bonus accrual, which has increased substantially in 2009 since it is tied to profitability and therefore disguises underlying cost improvement. Excluding bonus accrual, our cost per passenger excluding fuel declined to $43.84 in the second quarter from $47.26 a year ago and $46.23 in the first quarter.