Allegiant Travel Company (Allegiant Air) today reported the following financial results for the first quarter 2023, as well as comparisons to the prior year:
| Consolidated | Three Months Ended March 31, | Percent Change | |||
| (unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
| Total operating revenue | $ 649.7 | $ 500.1 | 29.9 % | ||
| Total operating expense | 554.9 | 492.9 | 12.6 % | ||
| Operating income | 94.8 | 7.2 | 1,216.7 % | ||
| Income (loss) before income taxes | 74.4 | (10.6) | 801.9 % | ||
| Net income (loss) | 56.1 | (7.9) | 810.1 % | ||
| Diluted earnings (loss) per share | 3.09 | (0.44) | 802.3 % | ||
| Sunseeker special charges, net of recovery | (1.6) | — | N/A | ||
| Diluted earnings per share excluding recovery of Sunseeker special charges(1)(4) | 3.04 | (0.44) | 790.9 % | ||
| Airline only | Three Months Ended March 31, | Percent Change(2) | |||
| (unaudited) (in millions, except per share amounts) | 2023 | 2022 | YoY | ||
| Airline operating revenue (1) | $ 649.7 | $ 500.1 | 29.9 % | ||
| Airline operating expense (1) | 552.1 | 489.9 | 12.7 % | ||
| Airline operating income (1) | 97.6 | 10.2 | 856.9 % | ||
| Airline income (loss) before income taxes (1) | 78.9 | (5.6) | 1,508.9 % | ||
| Airline net income (loss) (1)(3) | 59.9 | (4.3) | 1,493.0 % | ||
| Airline operating margin | 15.0 % | 2.0 % | 13.0 % | ||
| Airline diluted earnings (loss) per share(1) | 3.30 | (0.24) | 1,475.0 % | ||
| (1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures |
| (2) | Except Airline Operating Margin, which is percentage point change |
| (3) | Utilizing an effective tax rate of 24.0% for 2023 and 23.6% for 2022 |
| (4) | Adjusted to exclude insurance recoveries from property damage to Sunseeker Resort |
“I am happy to report we delivered strong financial results during the first quarter with diluted earnings per share of $3.09,” stated John Redmond, CEO of Allegiant Travel Company. “The team worked tirelessly to ensure operational integrity, and our controllable completion of 99.9 percent for the quarter is a testament to their efforts. Running a safe, reliable operation is a critical component to our success, and I could not be prouder of the team’s performance.
“Demand remained strong throughout the quarter resulting in total operating revenue of $650 million, a 30 percent increase year-over-year. Notably, we see continued momentum in total ancillary per passenger, finishing the quarter at $75.19 per passenger, the highest quarterly result in our history. The Allways rewards credit card helped elevate this number with record new cardholder acquisitions and increased cardholder spend during the quarter. Enhanced technology, an expanded roll-out of Allegiant Extra in the fleet, and the opening of Sunseeker Resort later this year should act as tailwinds for this number in the coming years.
“Turning to our 2023 outlook, we have updated guidance and estimate a full-year, airline-only earnings per share of roughly $11. The increase is driven by a reduction in our estimated fuel cost per gallon offset slightly by a two-and-a-half point reduction in full-year capacity. The industry continues to experience challenges from supply chain delays to ATC constraints that present the most stress during peak, high demand periods. We are positioning our forward plan to achieve a full-year, controllable completion of at least 99.5 percent. And we will continue to monitor and respond as we see appropriate to achieve our goal. Despite the tweaks to capacity, booking data continues to reflect a strong demand environment, particularly during peak summer travel periods. We are closely monitoring macro-economic trends, but we have not observed a change in booking behavior or peak leisure demand.
“Finally, we remain on track to open Sunseeker Resort in mid-October. Although we are still working through insurance claims related to Hurricane Ian, we have better line of sight regarding completion and final budget. Given inflationary pressures and supply chain issues, we expect the final capital expenditure budget to be $695 million, which is inclusive of Aileron Golf Club. In early April, we unveiled the 20 original, world-class food and beverage offerings, which will be available on site. The team continues to attract high-quality group business with over $12 million in contracted future bookings. As we enter the final stages of construction, we could not be happier with how the property is progressing.”
First Quarter 2023 Results
- Income before income tax of $74.4 million, yielding a pre-tax margin of 11.5 percent
- Airline-only income before income tax(1) of $78.9 million, yielding a pre-tax margin of 12.1 percent
- Operating income of $94.8 million, yielding an operating margin of 14.6 percent
- Airline-only operating income(1) of $97.6 million, yielding an airline-only operating margin of 15.0 percent
- Consolidated EBITDA(1) of $149.5 million, yielding an EBITDA margin of 23.0 percent
- Airline-only EBITDA(1) of $152.2 million, a 23.4 percent margin
- Total operating revenue was $649.7 million, up 29.9 percent over prior year
- Total fixed fee contracts revenue of $14.1 million, the highest first-quarter total in company history
- TRASM of 13.89 cents, up 28.8 percent year-over-year
- Load factor of 85.8 percent, a 6.9 point improvement year-over-year, among the highest in the industry
- Total average fare of $154.12, up 17.5 percent year-over-year, the highest quarterly average fare in company history
- Total average ancillary fare of $75.19, up 10.7 percent as compared to 2022 driven by overall strength in core products and promising early results related to the Allegiant Extra rollout
- Acquired over 46 thousand new Allways rewards credit card holders during the quarter, the highest quarterly acquisition in program history
- Received $28 million in remuneration during the quarter
- Airline-only Operating CASM, excluding fuel, of 7.75 cents, up 9.8 percent year-over-year
- Allegiant recently named to the Forbes’ America’s Best Midsize Employers for 2023, Newsweek’s America’s Greatest Workplaces for Diversity 2023, and Fortune’s America’s Most Innovative Companies 2023 lists
| (1) | Denotes a non-GAAP financial measure. Refer to the Non-GAAP Presentation section within this document for further information and for calculation of per share figures |
Balance Sheet, Cash and Liquidity
- Total available liquidity at March 31, 2023 of $1.5 billion, which includes $1.1 billion in cash and investments, and $412.2 million in undrawn revolving credit facilities and PDP facilities
- Repurchased 118 thousand shares during the first quarter at an average share price of $100.33
- $215.4 million in cash from operations during first quarter 2023, the highest first quarter in company history
- Total debt at March 31, 2023 was $2.1 billion
- Net debt at March 31, 2023 was $1.0 billion
- Debt principal payments of $51.5 million during the first quarter
- Air traffic liability at March 31, 2023 was $479.5 million
Airline Capital Expenditures
- First quarter capital expenditures of $92 million, which includes $56 million for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $36 million in other airline capital expenditures
- First quarter deferred heavy maintenance spend was $15 million
Sunseeker Resort Charlotte Harbor
- Total capital expenditures(1) as of March 31, 2023 were $571 million
- First quarter capital expenditures(1) were $82 million
- Previously recorded special charges were reduced by $1.6 million for approved insurance net recoveries related to outstanding insurance claims at Sunseeker Resort
| (1) | Total capital expenditures is inclusive of Sunseeker Resort and Aileron Golf Club. This number excludes capitalized interest and operating expenses. This number also excludes impairments related to COVID and insurance events |
| Guidance, subject to revision | |||
| Full-year 2023 guidance | Previous | Current | |
| System ASMs – year over year change | 2 to 6% | 0 to 3% | |
| Scheduled service ASMs – year over year change | 2 to 6% | 0 to 3% | |
| Fuel cost per gallon | $ 3.60 | $ 3.00 | |
| Available seat miles (ASMs)/gallon | ~84 | ~84 | |
| Depreciation expense (millions) | $230 to $240 | $230 to $240 | |
| Interest expense (millions) | $150 to $160 | $150 to $160 | |
| Capitalized interest (1) (millions) | ($40) to ($50) | ($35) to ($45) | |
| Interest income (millions) | $30 – $40 | $35 to $45 | |
| Earnings per share – airline only(2) | $5.00 – $9.00 | $9.00 – $13.00 | |
| Loss per share – Sunseeker (3) | N/A | ~($1.25) | |
| Airline CAPEX | |||
| Aircraft, engines, induction costs, and pre-delivery deposits (millions)(4) | $550 to $570 | $550 to $570 | |
| Capitalized deferred heavy maintenance (millions) | $50 to $60 | $50 to $60 | |
| Other airline capital expenditures (millions) | $130 to $150 | $130 to $150 | |
| Recurring principal payments (millions) | $175 to $185 | $175 to $185 | |
| Sunseeker Resort Charlotte Harbor Project (millions) | |||
| Total projected capital expenditures (5) | $618 | $695 | |
| Capital expenditures funded or expected to be funded by Allegiant | $345 | ||
| Project debt incurred through March 31, 2023 | $350 | ||
| (1) | Includes capitalized interest related to Sunseeker as well as on pre-delivery deposits on new aircraft |
| (2) | Earnings per share calculation is airline only. It includes accruals for increases in pilot and flight attendant compensation beginning in May. Actual results will differ based on economic terms agreed upon and the timing of the collective bargaining agreements. These differences may be material |
| (3) | Excludes recoveries to be received related to business interruption insurance claim |
| (4) | Excludes capitalized interest related to pre-delivery deposits on new aircraft |
| (5) | Total projected capital expenditures does not reflect the impairment or special charges related to COVID or insurance claims. Previous budget of $618 million did not include expenditures related to Aileron Golf Club. Excludes amounts to remediate physical damage to the property resulting from Hurricane Ian, or other subsequent insurance events |
| Aircraft Fleet Plan by End of Period | ||||
| Aircraft – (seats per AC) | 1Q23 | 2Q23 | 3Q23 | YE23 |
| A319 (156 seats) | 35 | 35 | 35 | 35 |
| A320 (177 seats) | 19 | 19 | 19 | 19 |
| A320 (180-186 seats) | 70 | 72 | 73 | 73 |
| Total | 124 | 126 | 127 | 127 |
The table above is provided based on the company’s current plans and is subject to change. The numbers exclude aircraft expected to be delivered before the end of 2023 for revenue service beginning in 2024
Top Copyright Photo: Allegiant Air Airbus A320-214 WL N190NV (msn 6669) BOS (Fred Freketic). Image: 960463.
Allegiant Air aircraft photo gallery:
