Allegiant Travel Company Reports Second Quarter, Half Year 2008 Financial Results
Tuesday July 22, 8:28 pm ET
LAS VEGAS, July 22 /PRNewswire-FirstCall/ -- Allegiant Travel Company (Nasdaq: ALGT - News), parent company of Allegiant Air and Allegiant Vacations, today reported the following second quarter and half year 2008 results, and comparisons to prior year equivalents:
Unaudited 2Q08 2Q07 Change 1H08 1H07 Change
Total operating revenue
(millions) $131.6 $88.9 47.9% $264.7 $173.3 52.7%
Operating income
(millions) $4.7 $14.2 (67.0)% $19.0 $28.5 (33.1)%
Operating margin 3.6% 15.9% -12.3pp 7.2% 16.4% -9.2pp
Net income (millions) $2.6 $10.0 (73.5)% $12.3 $19.7 (37.5)%
Diluted earnings per
share $0.13 $0.49 (73.5)% $0.60 $0.97 (38.1)%
Diluted non-GAAP earnings
per share adjusted by
excluding non-cash
mark-to-market loss/gain
on fuel derivatives
(reconciled to GAAP on
pgs. 7 and 11) $0.13 $0.51 (74.5)% $0.60 $0.90 (33.3)%
Scheduled Service:
Average fare --
ancillary $27.75 $20.94 32.5% $26.75 $20.02 33.6%
Total revenue per ASM
(cents) 11.27 9.77 15.4% 10.93 9.46 15.5%
Average stage length
(miles) 881 921 (4.4)% 894 924 (3.2)%
Total System*:
Operating expense per
ASM (CASM) (cents) 10.76 8.05 33.7% 10.03 7.78 28.9%
CASM, excluding fuel
(cents) 4.65 4.24 9.7% 4.49 4.20 6.9%
Average stage length
(miles) 838 901 (7.0)% 846 915 (7.5)%
* Total system includes scheduled service, fixed fee contract and
non-revenue flying
"We had very good results during our second quarter. In spite of exceptional headwinds from fuel, we are yet again one of the few companies in our space who were profitable," said Maurice J. Gallagher, Jr., Chairman, CEO and President of Allegiant Travel Company. "We grew revenues approximately 48% to $132 million on a 36.5% increase in departures. We continued our successful focus on achieving a higher scheduled load factor with 90.5% in the second quarter, a 5.5 percentage point increase over the second quarter of 2007. We believe this was the highest domestic load factor in the industry. Ancillary revenues increased almost $7 per passenger year over year to $27.75, critical to our 15% year-over-year increase in total scheduled RASM. In June we saw a 23% year-over-year increase in total scheduled RASM and a $3 increase in selling fare while our average stage length declined 5.3% to 867 miles compared to last June. This favorable trend has continued into the third quarter."
Gallagher continued, "The silver lining during the past three quarters of increasing fuel prices has been industry capacity cuts. There have been widely publicized capacity reductions in our destination markets, some as high as 15%, year-over-year. But there have also been capacity reductions in our small cities. Further, our markets remain strong as evidenced by June's 94% load factor and 23% increase in total scheduled RASM. Most of our small city markets appear to have missed the recent slow-down in consumer spending."
Andrew C. Levy, CFO & Managing Director -- Planning, stated, "Once again, the main story for the quarter is the rapid and significant rise in fuel prices and our ability to continue to produce profits. This is the third consecutive quarter where we have seen a sharp move in the price of jet fuel as measured from the beginning compared with the end of the quarter. Second quarter jet fuel prices increased at an accelerating rate relative to the previous two quarters and were $0.78 per gallon higher at the end of the second quarter than at the beginning, and our average price per gallon was up $1.29 per gallon compared with the second quarter of 2007.
"Maintenance and repair expense was up in the second quarter relative to the prior year primarily due to more scheduled airframe maintenance and engine overhaul events. On a unit cost basis, maintenance and repair expense was negatively impacted by a 7% decline in average stage length, which tends to increase all unit costs.
"Our balance sheet and liquidity remain strong. We ended the quarter with $153.8 million in unrestricted cash and short-term investments, down from $188.2 million at the end of the first quarter. The decline is due principally to the purchase of $25 million in aircraft to support 2009 growth."
During the second quarter, Allegiant Air initiated service on the following five routes: Bellingham, WA to both San Diego and San Francisco, Las Vegas to both Santa Barbara, CA and Monterey, CA and Orlando to Wilmington, NC. We have also announced service from Las Vegas to Grand Forks, ND, and Casper, WY to start in September, and in late August we are moving our Las Vegas to northeastern Wisconsin service from Green Bay to Appleton. We expect to make more new service announcements shortly.