Allegiant Travel Company (Allegiant Air) reported the following financial results for the fourth quarter and full-year 2022, as well as comparisons to prior years:
| Consolidated | Three Months Ended December 31, | Percent Change | |||||||
| (unaudited) (in millions, except per share amounts) | 2022 | 2021 | 2019 | YoY | Yo3Y | ||||
| Total operating expense | 522.4 | 463.6 | 368.4 | 12.7 | 41.8 | ||||
| Operating income | 89.2 | 33.3 | 92.7 | 167.6 | (3.7) | ||||
| Income before income taxes | 65.9 | 15.1 | 78.6 | 334.7 | (16.3) | ||||
| Net income | 52.5 | 10.7 | 60.5 | 390.3 | (13.3) | ||||
| Diluted earnings per share | 2.87 | 0.59 | 3.72 | 386.4 | (22.8) |
| Twelve Months Ended December 31, | Percent Change | ||||||||
| (unaudited) (in millions, except per share amounts) | 2022 | 2021 | 2019 | YoY | Yo3Y | ||||
| Total operating revenue | $ 2,301.8 | $ 1,707.9 | $ 1,841.0 | 34.8 % | 25.0 % | ||||
| Total operating expense | 2,210.2 | 1,444.8 | 1,477.0 | 53.0 | 49.6 | ||||
| Operating income | 91.6 | 263.1 | 364.0 | (65.2) | (74.8) | ||||
| Income before income taxes | 5.0 | 196.6 | 301.2 | (97.5) | (98.4) | ||||
| Net income | 2.5 | 151.9 | 232.1 | (98.4) | (98.9) | ||||
| Diluted earnings per share | 0.14 | 8.68 | 14.26 | (98.4) | (99.0) | ||||
| Sunseeker special charges | 34.0 | — | — | NM | NM | ||||
| Diluted earnings per share excluding Sunseeker special charges (2) (3) | $ 1.65 | $ 8.68 | $ 14.26 | (81.0) | (88.4) |
| (1) | Recognition bonus awarded despite not meeting internal profit-sharing targets |
| (2) | 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 |
| (3) | Adjusted to exclude estimated loss from property damage to Sunseeker Resort related to Hurricane Ian and two subsequent insurance events that occurred during the quarter, offset by insurance recoveries recorded to date. The amount of the losses will continue to be offset in future periods by amounts to be recovered under the company’s insurance policies. In 2023, we expect to receive insurance proceeds approximating the losses accrued to date |
“We finished the quarter with an earnings per share, excluding employee recognition bonus and Sunseeker special charges of $3.17,” stated John Redmond, CEO of Allegiant Travel Company. “Despite an uptick in weather cancellations late in the quarter, our total operating revenue was up 32.6 percent year over three-year, more than five points above the mid-point of our guidance. The demand environment continues to surpass expectations. Fourth quarter TRASM(1) was 14.03 cents, the highest quarterly TRASM(1) in company history, on scheduled service growth of 11.9 percent. This revenue strength coupled with better than expected cost performance and a more favorable fuel environment resulted in an adjusted(2) operating margin of nearly 16 percent for the quarter.
“Due to a challenging operating environment at the onset of 2022, we committed to focusing on operational integrity and ensuring safe, reliable travel for our customers. We took action to more appropriately schedule the airline to meet the challenges of this environment. By doing this, we increased our controllable completion by over two points during the last six months of 2022 as compared with the first half of the year. This equated to more than $70 million in irregular operations savings during the back-half of the year, when factoring in lost revenue, passenger compensation, and other costs related to the cancellations. As we head into 2023, we are continuing to take a more conservative approach to growth. We anticipate growing capacity roughly four percent, with much of that happening in the fourth quarter. This slow and concerted growth profile should drive irregular operations costs out of the business and prioritize operational reliability, helping to deliver an estimated $7 in earnings per share during 2023.
“2023 will be transformational for the company. We will begin taking delivery of our Boeing MAX 737 fleet during the fourth quarter, with deliveries picking up in earnest, early 2024. The operating efficiency and reliability of this aircraft will help bolster profits for many years to come. Additionally, significant progress has been made towards the completion of Sunseeker Resort at Charlotte Harbor. After delays caused by Hurricane Ian, we have fully resumed construction activities at the property with most of the remediation related to the hurricane behind us. We continue to expect the property will open late 2023.
“To further support these strategic initiatives, we recently announced several senior leadership changes within the organization. These changes will bring vast experience to the respective roles. I am confident these leaders will contribute to the successful execution of these initiatives. Allegiant has prided itself over the years with having a standout management team, and these changes further support that notion.
“Lastly, I would like to thank our team members throughout the network for their efforts this past year. 2022 was fraught with challenges. Despite these challenges, our team members consistently put forth their best efforts to ensure our customers made it safely to their destinations. We truly have the best in the business. I’m excited for what is on the horizon in 2023.”
| (1) | Total passenger revenue per available seat mile |
| (2) | Adjusted operating margin excludes the 2022 employee recognition bonus and Sunseeker special charges |
Fourth Quarter 2022 Results
- Income before income tax (1)(2)(3) of $73.8 million, excluding 2022 employee recognition bonus and Sunseeker special charges, yielding a pre-tax margin of 12.1 percent
- Sunseeker special charges include $18 million of recorded insurance recoveries offset by $17 million in additional losses related to Hurricane Ian and subsequent insurance events during the fourth quarter
- Operating income, excluding 2022 recognition bonus and Sunseeker special charges (1)(2)(3), of $97.1 million, yielding an operating margin of 15.9 percent
- Consolidated EBITDA, excluding recognition bonus and Sunseeker special charges (1)(2)(3),of $149.3 million, yielding an EBITDA margin of 24.4 percent
- Total operating revenue was $611.5 million, up 32.6% percent year over three-year
- TRASM of 14.03 cents, the highest quarterly TRASM in company history, up 21.3 percent year over three-year on scheduled service capacity increases of 11.9 percent
- Load factor of 85.3 percent, a 3.2 percentage point increase from the fourth quarter of 2019
- December load factor of 84.7 percent, the highest December since 2014
- Total average fare of $151.08, up 22.6 percent from the fourth quarter of 2019
- Total average ancillary of $72.94, up 25.9 percent from 2019, driven predominantly by strength in bundled ancillary and the Allways Allegiant World Mastercard
- Acquired over 35 thousand new Allways Allegiant World Mastercard holders during the quarter
- Operating CASM, excluding fuel, 2022 employee recognition bonus, and Sunseeker special charges (1)(2)(3), of 7.56 cents, up 12.2 percent when compared with the fourth quarter of 2019
Full-Year 2022 Results
- Income before income tax (1)(2)(3) of $74.0 million, excluding 2022 recognition bonus and Sunseeker special charges, yielding a 3.2 percent pre-tax margin
- Total operating revenue of $2.3 billion, up 25.0 percent year over three-year, on a total system capacity increase of 13.9 percent
- Full-year TRASM was 12.50 cents, up 10.8 percent year over three-year on scheduled services capacity increases of 15.2 percent
- Acquired over 150 thousand new Allegiant World Mastercard® holders during the year, with over 410 thousand active cardholders at year end
- Full-year total remuneration of over $100 million
- Added over 2 million Allegiant Allways Rewards® members throughout 2022, with more than 15 million total members at year end
- Operating CASM, excluding fuel, 2022 employee recognition bonus, and Sunseeker special charges (1)(2)(3), of 7.20 cents, up 11.1 percent as compared with full-year 2019
- Published the company’s inaugural sustainability report
| (1) | Recognition bonus awarded despite not meeting internal profit-sharing targets |
| (2) | 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 |
| (3) | Adjusted to exclude estimated loss from property damage to Sunseeker Resort related to Hurricane Ian and two subsequent insurance events that occurred during the quarter, offset by insurance recoveries recorded to date. The amount of the losses will continue to be offset in future periods by amounts to be recovered under the company’s insurance policies. In 2023, we expect to receive insurance proceeds approximating the losses accrued to date |
Balance Sheet, Cash and Liquidity
- Total available liquidity at December 31, 2022 of $1.4 billion, which includes $1.0 billion in cash and investments, and $395 million in undrawn revolving credit facilities and PDP facilities
- Board of directors increased share repurchase authority to up to $100 million total
- Repurchased 378 thousand shares during the fourth quarter at an average share price of $78.94
- $303.1 million in cash from operations during 2022
- Total debt at December 31, 2022 was $2.1 billion
- Net debt at December 31, 2022 was $1.1 billion
- Debt principal payments of $165.7 million during 2022, which excludes $535.9 million related to refinancing the Term Loan B in August of 2022
- Air traffic liability at December 31, 2022 was $379.5 million
Airline Capital Expenditures
- Fourth quarter capital expenditures of $51 million, which includes $22 million for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $29 million in other airline capital expenditures
- Fourth quarter deferred heavy maintenance spend was $23 million
- Full-year 2022 capital expenditures are $283 million, which includes $164 million for aircraft purchases and inductions, pre-delivery deposits, and other related costs, and $119 million in other airline capital expenditures
- Full-year 2022 deferred heavy maintenance spend was $55 million
Sunseeker Resort Charlotte Harbor
- Total project spend excluding capitalized interest as of December 31, 2022 was $467 millionwith $279 million funded by debt and the remaining $188 million funded by Allegiant
- Fourth quarter capital expenditures were $44 million relating to Sunseeker Resort Charlotte Harbor, $8 million related to capitalized interest and $8 million related to other Sunseeker capital expenditures
- Recorded an additional $17 million special charge during the quarter related to estimated property damages at Sunseeker Resort resulting from Hurricane Ian and two subsequent events that occurred on the property during the fourth quarter
- The special charge was offset by $18 million in insurance recoveries recorded
Aircraft Fleet Plan by End of Period
| Aircraft – (seats per AC) | YE22 | 1Q23 | 2Q23 | 3Q23 | YE23 |
| A319 (156 seats) | 35 | 35 | 35 | 35 | 35 |
| A320 (177 seats) | 21 | 19 | 19 | 19 | 19 |
| A320 (180-186 seats) | 65 | 70 | 72 | 73 | 73 |
| Total | 121 | 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 during 2023 for revenue service beginning in 2024
Top Copyright Photo: Allegiant Air Airbus A319-111 N338NV (msn 2378) LAS (Jay Selman). Image: 404257.
Allegiant Air aircraft photo gallery:
