UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, ~~2022~~2023

or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to_______

Commission File Number 001-33166

Allegiant Travel Company

(Exact Name of Registrant as Specified in Its Charter)


Nevada		20-4745737

(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

1201 North Town Center Drive
Las Vegas,	Nevada	89144
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (702) 851-7300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $0.001

ALGT

NASDAQ ~~Stock~~Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October ~~24, 2022,~~23, 2023, the registrant had ~~18,398,569~~18,401,180 shares of common stock, $0.001 par value per share, outstanding.

ALLEGIANT TRAVEL COMPANY

FORM 10-Q

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION

ITEM 1.	Consolidated Financial Statements	3

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2022

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3335

ITEM 4.	Controls and Procedures	3335

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	3436

ITEM 1A.	Risk Factors	3436

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3436

ITEM 3.	Defaults Upon Senior Securities	3436

ITEM 4.	Mine Safety Disclosures	3436

ITEM 5.	Other Information	3436

ITEM 6.	Exhibits	3537

	Signatures	3638

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED BALANCE SHEETS

(in thousands)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	240,528	$	363,378	Cash and cash equivalents	$	284,213	$	229,989
Restricted cash	Restricted cash	30,671		37,323		Restricted cash	22,475		15,457
Short-term investments	Short-term investments	761,362		819,478		Short-term investments	651,213		725,063
Accounts receivable	Accounts receivable	79,150		62,659		Accounts receivable	43,957		106,578
Expendable parts, supplies and fuel, net	Expendable parts, supplies and fuel, net	39,070		27,500		Expendable parts, supplies and fuel, net	38,381		35,546

Prepaid expenses and other current assets	Prepaid expenses and other current assets	46,772		28,073		Prepaid expenses and other current assets	103,253		161,636

TOTAL CURRENT ASSETS	TOTAL CURRENT ASSETS	1,197,553		1,338,411		TOTAL CURRENT ASSETS	1,143,492		1,274,269
Property and equipment, net	Property and equipment, net	2,738,516		2,259,507		Property and equipment, net	3,328,122		2,810,693
Long-term investments	Long-term investments	—		2,231		Long-term investments	71,582		63,318
Deferred major maintenance, net	Deferred major maintenance, net	148,719		146,850		Deferred major maintenance, net	166,086		157,410
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	116,471		130,087		Operating lease right-of-use assets, net	105,663		111,679
Deposits and other assets	Deposits and other assets	209,705		113,987		Deposits and other assets	97,391		93,928
TOTAL ASSETS:	TOTAL ASSETS:	$	4,410,964	$	3,991,073	TOTAL ASSETS:	$	4,912,336	$	4,511,297
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Accounts payable	Accounts payable	$	51,394	$	43,566	Accounts payable	55,476		58,335
Accrued liabilities	Accrued liabilities	256,429		162,892		Accrued liabilities	272,719		226,276
Current operating lease liabilities	Current operating lease liabilities	19,792		19,081		Current operating lease liabilities	20,663		19,973
Air traffic liability	Air traffic liability	429,924		307,453		Air traffic liability	395,836		379,459
Loyalty program liability						Loyalty program liability	39,022		32,888
Current maturities of long-term debt and finance lease obligations, net of related costs	Current maturities of long-term debt and finance lease obligations, net of related costs	152,550		130,053		Current maturities of long-term debt and finance lease obligations, net of related costs	265,979		152,900
TOTAL CURRENT LIABILITIES	TOTAL CURRENT LIABILITIES	910,089		663,045		TOTAL CURRENT LIABILITIES	1,049,695		869,831
Long-term debt and finance lease obligations, net of current maturities and related costs	Long-term debt and finance lease obligations, net of current maturities and related costs	1,840,000		1,612,486		Long-term debt and finance lease obligations, net of current maturities and related costs	2,020,019		1,944,078
Deferred income taxes	Deferred income taxes	332,506		346,137		Deferred income taxes	366,641		346,388
Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	100,111		115,067		Noncurrent operating lease liabilities	87,689		94,972
Loyalty program liability						Loyalty program liability	32,786		23,612
Other noncurrent liabilities	Other noncurrent liabilities	39,285		30,786		Other noncurrent liabilities	12,361		11,718
TOTAL LIABILITIES:	TOTAL LIABILITIES:	3,221,991		2,767,521		TOTAL LIABILITIES:	$	3,569,191	$	3,290,599
SHAREHOLDERS' EQUITY	SHAREHOLDERS' EQUITY					SHAREHOLDERS' EQUITY
Common stock, par value $0.001	Common stock, par value $0.001	25		25		Common stock, par value $0.001	26		25
Treasury shares	Treasury shares	(633,332)		(638,057)		Treasury shares	(672,644)		(660,023)
Additional paid in capital	Additional paid in capital	703,633		692,053		Additional paid in capital	734,132		709,471
Accumulated other comprehensive income, net	Accumulated other comprehensive income, net	1,154		2,056		Accumulated other comprehensive income, net	3,195		1,257
Retained earnings	Retained earnings	1,117,493		1,167,475		Retained earnings	1,278,436		1,169,968
TOTAL EQUITY:	TOTAL EQUITY:	1,188,973		1,223,552		TOTAL EQUITY:	1,343,145		$	1,220,698
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:	$	4,410,964	$	3,991,073	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:	$	4,912,336	$	4,511,297

The accompanying notes are an integral part of these consolidated financial statements.

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
OPERATING REVENUES:	OPERATING REVENUES:									OPERATING REVENUES:
Passenger	Passenger	$	516,476	$	423,796	$	1,573,041	$	1,124,237	Passenger	$	516,251	$	516,476	$	1,768,274	$	1,573,041
Third party products	Third party products	27,132		24,541		77,399		61,164		Third party products	30,944		27,132		85,886		77,399
Fixed fee contracts	Fixed fee contracts	15,881		11,117		38,186		23,943		Fixed fee contracts	17,741		15,881		43,599		38,186
Other	Other	836		15		1,654		1,682		Other	423		836		1,096		1,654
Total operating revenues	Total operating revenues	560,325		459,469		1,690,280		1,211,026		Total operating revenues	565,359		560,325		1,898,855		1,690,280
OPERATING EXPENSES:	OPERATING EXPENSES:									OPERATING EXPENSES:
Aircraft fuel	Aircraft fuel	208,175		118,370		629,600		310,674		Aircraft fuel	167,861		208,175		520,018		629,600
Salaries and benefits	Salaries and benefits	137,336		125,799		411,027		365,655		Salaries and benefits	163,004		137,336		499,798		411,027
Station operations	Station operations	66,302		70,943		198,954		171,246		Station operations	64,630		66,302		192,864		198,954
Depreciation and amortization	Depreciation and amortization	50,092		46,399		145,618		134,095		Depreciation and amortization	55,816		50,092		164,430		145,618
Maintenance and repairs	Maintenance and repairs	32,177		30,451		91,120		76,419		Maintenance and repairs	35,477		32,177		95,553		91,120
Sales and marketing	Sales and marketing	25,815		22,047		75,462		51,288		Sales and marketing	28,468		25,815		85,265		75,462
Aircraft lease rental		5,905		5,670		17,489		15,507
Aircraft lease rentals										Aircraft lease rentals	5,906		5,905		18,973		17,489
Other	Other	30,292		22,379		83,137		55,655		Other	29,432		30,292		91,757		83,137
Payroll Support Programs grant recognition		—		(49,210)		—		(202,181)
Special charges		35,142		332		35,426		2,924

Special charges, net of recoveries										Special charges, net of recoveries	32,648		35,142		19,828		35,426
Total operating expenses	Total operating expenses	591,236		393,180		1,687,833		981,282		Total operating expenses	583,242		591,236		1,688,486		1,687,833
OPERATING INCOME (LOSS)	OPERATING INCOME (LOSS)	(30,911)		66,289		2,447		229,744		OPERATING INCOME (LOSS)	(17,883)		(30,911)		210,369		2,447
OTHER (INCOME) EXPENSES:	OTHER (INCOME) EXPENSES:									OTHER (INCOME) EXPENSES:
Interest expense	Interest expense	34,242		16,595		78,530		50,174		Interest expense	39,233		34,242		112,707		78,530
Capitalized interest	Capitalized interest	(4,296)		(401)		(7,594)		(401)		Capitalized interest	(14,888)		(4,296)		(28,949)		(7,594)
Interest income	Interest income	(4,918)		(375)		(7,909)		(1,338)		Interest income	(12,444)		(4,918)		(34,418)		(7,909)

Other, net	Other, net	223		239		318		(164)		Other, net	135		223		185		318
Total other expenses	Total other expenses	25,251		16,058		63,345		48,271		Total other expenses	12,036		25,251		49,525		63,345
INCOME (LOSS) BEFORE INCOME TAXES	INCOME (LOSS) BEFORE INCOME TAXES	(56,162)		50,231		(60,898)		181,473		INCOME (LOSS) BEFORE INCOME TAXES	(29,919)		(56,162)		160,844		(60,898)
INCOME TAX PROVISION (BENEFIT)	INCOME TAX PROVISION (BENEFIT)	(9,703)		10,977		(10,916)		40,323		INCOME TAX PROVISION (BENEFIT)	(4,853)		(9,703)		41,292		(10,916)
NET INCOME (LOSS)	NET INCOME (LOSS)	$	(46,459)	$	39,254	$	(49,982)	$	141,150	NET INCOME (LOSS)	$	(25,066)	$	(46,459)	$	119,552	$	(49,982)
Earnings (loss) per share to common shareholders:	Earnings (loss) per share to common shareholders:									Earnings (loss) per share to common shareholders:
Basic	Basic	$	(2.58)	$	2.18	$	(2.78)	$	8.18	Basic	$	(1.44)	$	(2.58)	$	6.44	$	(2.78)
Diluted	Diluted	$	(2.58)	$	2.18	$	(2.78)	$	8.18	Diluted	$	(1.44)	$	(2.58)	$	6.43	$	(2.78)
Shares used for computation:	Shares used for computation:									Shares used for computation:
Basic	Basic	18,014		17,766		17,985		17,005		Basic	17,721		18,014		17,879		17,985
Diluted	Diluted	18,014		17,767		17,985		17,015		Diluted	17,721		18,014		17,913		17,985

Cash dividends declared per share:		$	—	$	—	$	—	$	—

The accompanying notes are an integral part of these consolidated financial statements.

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
NET INCOME (LOSS)	NET INCOME (LOSS)	$	(46,459)	$	39,254	$	(49,982)	$	141,150	NET INCOME (LOSS)	$	(25,066)	$	(46,459)	$	119,552	$	(49,982)
Other comprehensive income:	Other comprehensive income:									Other comprehensive income:
Change in available for sale securities, net of tax	Change in available for sale securities, net of tax	(1,590)		774		(902)		676		Change in available for sale securities, net of tax	556		(1,590)		1,938		(902)

Total other comprehensive income (loss)	Total other comprehensive income (loss)	(1,590)		774		(902)		676		Total other comprehensive income (loss)	556		(1,590)		1,938		(902)
TOTAL COMPREHENSIVE INCOME (LOSS)	TOTAL COMPREHENSIVE INCOME (LOSS)	$	(48,049)	$	40,028	$	(50,884)	$	141,826	TOTAL COMPREHENSIVE INCOME (LOSS)	$	(24,510)	$	(48,049)	$	121,490	$	(50,884)

The accompanying notes are an integral part of these consolidated financial statements.

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)

Three Months Ended September 30, 2022
Common stock outstanding Par value Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Treasury shares Total shareholders' equity
Balance at June 30, 2022 18,180 $ 25 $ 698,982 $ 2,744 $ 1,163,952 $ (633,332) $ 1,232,371
Share-based compensation 122 — 4,651 — — — 4,651
Other comprehensive (loss) — — — (1,590) — — (1,590)
Net (loss) — — — — (46,459) — (46,459)
Balance at September 30, 2022 18,302 $ 25 $ 703,633 $ 1,154 $ 1,117,493 $ (633,332) $ 1,188,973


	Three Months Ended September 30, 2023
	Common stock outstanding	Par value		Additional paid-in capital		Accumulated other comprehensive income		Retained earnings		Treasury shares		Total shareholders' equity
Balance at June 30, 2023	18,450	$	26	$	727,534	$	2,639	$	1,314,586	$	(671,224)	$	1,373,561
Share-based compensation	(23)	—		6,598		—		—		—		6,598
Shares repurchased by the Company and held as treasury shares	(16)	—		—		—		—		(1,420)		(1,420)

Cash dividends, $0.60 per share	—	—		—		—		(11,084)		—		(11,084)

Other comprehensive income	—	—		—		556		—		—		556

Net loss	—	—		—		—		(25,066)		—		(25,066)
Balance at September 30, 2023	18,411	$	26	$	734,132	$	3,195	$	1,278,436	$	(672,644)	$	1,343,145


		Nine Months Ended September 30, 2022														Nine Months Ended September 30, 2023
		Common stock outstanding	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Treasury shares		Total shareholders' equity			Common stock outstanding	Par value		Additional paid-in capital		Accumulated other comprehensive income		Retained earnings		Treasury shares		Total shareholders' equity
Balance at December 31, 2021		18,111	$	25	$	692,053	$	2,056	$	1,167,475	$	(638,057)	$	1,223,552
Balance at December 31, 2022															Balance at December 31, 2022	18,128	$	25	$	709,471	$	1,257	$	1,169,968	$	(660,023)	$	1,220,698
Share-based compensation	Share-based compensation	161	—		11,580		—		—		—		11,580		Share-based compensation	415	1		24,661		—		—		—		24,662
Shares repurchased by the Company and held as treasury shares															Shares repurchased by the Company and held as treasury shares	(173)	—		—		—		—		(16,853)		(16,853)

Stock issued under employee stock purchase plan	Stock issued under employee stock purchase plan	30	—		—		—		—		4,725		4,725		Stock issued under employee stock purchase plan	41	—		—		—		—		4,232		4,232
Cash dividends, $0.60 per share															Cash dividends, $0.60 per share	—	—		—		—		(11,084)		—		(11,084)
Other comprehensive income	Other comprehensive income	—	—		—		(902)		—		—		(902)		Other comprehensive income	—	—		—		1,938		—		—		1,938

Net (loss)		—	—		—		—		(49,982)		—		(49,982)
Balance at September 30, 2022		18,302	$	25	$	703,633	$	1,154	$	1,117,493	$	(633,332)	$	1,188,973
Net income															Net income	—	—		—		—		119,552		—		119,552
Balance at September 30, 2023															Balance at September 30, 2023	18,411	$	26	$	734,132	$	3,195	$	1,278,436	$	(672,644)	$	1,343,145

Three Months Ended September 30, 2021
Common stock outstanding Par value Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Treasury shares Total shareholders' equity
Balance at June 30, 2021 17,986 $ 25 $ 671,893 $ (125) $ 1,117,518 $ (642,177) $ 1,147,134
Share-based compensation 59 — 3,902 — — — 3,902
Other comprehensive income — — — 774 — — 774
Net income — — — — 39,254 — 39,254
Balance at September 30, 2021 18,045 $ 25 $ 675,795 $ 649 $ 1,156,772 $ (642,177) $ 1,191,064

Nine Months Ended September 30, 2021
Common stock outstanding Par value Additional paid-in capital Accumulated other comprehensive income Retained earnings Treasury shares Total shareholders' equity
Balance at December 31, 2020 16,405 $ 23 $ 329,753 $ (27) $ 1,015,622 $ (646,008) $ 699,363
Share-based compensation 71 — 10,800 — — — 10,800
Issuance of common stock, net of forfeitures 1,553 2 335,137 — — — 335,139
Stock issued under employee stock purchase plan 16 — — — — 3,831 3,831
Other comprehensive income — — — 676 — — 676
Payroll Support Programs warrant issuance — — 105 — — — 105
Net income — — — — 141,150 — 141,150
Balance at September 30, 2021 18,045 $ 25 $ 675,795 $ 649 $ 1,156,772 $ (642,177) $ 1,191,064


	Three Months Ended September 30, 2022
	Common stock outstanding	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Treasury shares		Total shareholders' equity
Balance at June 30, 2022	18,180	$	25	$	698,982	$	2,744	$	1,163,952	$	(633,332)	$	1,232,371
Share-based compensation	122	—		4,651		—		—		—		4,651



Other comprehensive loss	—	—		—		(1,590)		—		—		(1,590)

Net loss	—	—		—		—		(46,459)		—		(46,459)
Balance at September 30, 2022	18,302	$	25	$	703,633	$	1,154	$	1,117,493	$	(633,332)	$	1,188,973


	Nine Months Ended September 30, 2022
	Common stock outstanding	Par value		Additional paid-in capital		Accumulated other comprehensive income (loss)		Retained earnings		Treasury shares		Total shareholders' equity
Balance at December 31, 2021	18,111	$	25	$	692,053	$	2,056	$	1,167,475	$	(638,057)	$	1,223,552
Share-based compensation	161	—		11,580		—		—		—		11,580

Stock issued under employee stock purchase plan	30	—		—		—		—		4,725		4,725

Other comprehensive loss	—	—		—		(902)		—		—		(902)

Net loss	—	—		—		—		(49,982)		—		(49,982)
Balance at September 30, 2022	18,302	$	25	$	703,633	$	1,154	$	1,117,493	$	(633,332)	$	1,188,973

ALLEGIANT TRAVEL COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	(49,982)	$	141,150	Net income (loss)	$	119,552	$	(49,982)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	Adjustments to reconcile net income (loss) to net cash provided by operating activities:					Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	145,618		134,095		Depreciation and amortization	164,430		145,618
Special charges		35,426		2,924
Special charges, net of recoveries						Special charges, net of recoveries	19,400		35,426
Other adjustments	Other adjustments	9,206		26,778		Other adjustments	31,281		9,206
Changes in certain assets and liabilities:	Changes in certain assets and liabilities:					Changes in certain assets and liabilities:
Air traffic liability	Air traffic liability	122,471		44,014		Air traffic liability	16,377		122,471

Other - net	Other - net	(40,917)		24,634		Other - net	18,418		(40,917)
Net cash provided by operating activities	Net cash provided by operating activities	221,822		373,595		Net cash provided by operating activities	369,458		221,822
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of investment securities	Purchase of investment securities	(968,064)		(1,028,481)		Purchase of investment securities	(668,234)		(968,064)
Proceeds from maturities of investment securities	Proceeds from maturities of investment securities	1,024,861		679,588		Proceeds from maturities of investment securities	753,094		1,024,861
Aircraft pre-delivery deposits	Aircraft pre-delivery deposits	(88,500)		(3,300)		Aircraft pre-delivery deposits	(255,195)		(88,500)
Purchase of property and equipment	Purchase of property and equipment	(304,956)		(163,202)		Purchase of property and equipment	(407,225)		(304,956)

Other investing activities	Other investing activities	1,037		2,062		Other investing activities	40,123		1,037
Net cash (used in) investing activities		(335,622)		(513,333)
Net cash used in investing activities						Net cash used in investing activities	(537,437)		(335,622)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Cash dividends paid to shareholders						Cash dividends paid to shareholders	(11,084)		—
Proceeds from the issuance of debt and finance lease obligations	Proceeds from the issuance of debt and finance lease obligations	745,800		106,657		Proceeds from the issuance of debt and finance lease obligations	480,875		745,800

Repurchase of common stock						Repurchase of common stock	(16,853)		—
Principal payments on debt and finance lease obligations	Principal payments on debt and finance lease obligations	(666,046)		(239,644)		Principal payments on debt and finance lease obligations	(292,890)		(666,046)
Debt issuance costs	Debt issuance costs	(12,681)		(705)		Debt issuance costs	(4,929)		(12,681)
Proceeds from issuance of common stock		—		335,139

Sunseeker construction financing disbursements (deposits)						Sunseeker construction financing disbursements (deposits)	69,869		(87,500)
Other financing activities	Other financing activities	(82,775)		3,936		Other financing activities	4,233		4,725
Net cash provided by (used in) by financing activities		(15,702)		205,383
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	229,221		(15,702)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(129,502)		65,645		NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	61,242		(129,502)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	400,701		170,319		CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD	245,446		400,701
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	271,199	$	235,964	CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	306,688	$	271,199

CASH PAYMENTS (RECEIPTS) FOR:
CASH PAYMENTS FOR:						CASH PAYMENTS FOR:
Interest paid, net of amount capitalized	Interest paid, net of amount capitalized	$	60,452	$	30,739	Interest paid, net of amount capitalized	$	113,977	$	60,452
Income tax payments (refunds)		36		(12,762)
Income tax payments						Income tax payments	359		36
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:	SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:					SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Right-of-use (ROU) assets acquired	Right-of-use (ROU) assets acquired	$	—	$	23,157	Right-of-use (ROU) assets acquired	$	8,320	$	—
Flight equipment acquired under finance leases	Flight equipment acquired under finance leases	172,507		40,826		Flight equipment acquired under finance leases	—		172,507
Purchases of property and equipment in accrued liabilities	Purchases of property and equipment in accrued liabilities	82,359		12,727		Purchases of property and equipment in accrued liabilities	75,001		82,359

The accompanying notes are an integral part of these consolidated financial statements.

ALLEGIANT TRAVEL COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Allegiant Travel Company (the “Company”) and its majority-owned operating subsidiaries. The Company's investments in unconsolidated affiliates, which are 50 percent or less owned, are accounted for under the equity or cost method, and are insignificant to the consolidated financial statements. All intercompany balances and transactions have been eliminated.

These unaudited consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto included in the annual report of the Company on Form 10-K for the year ended December 31, ~~2021~~2022 and filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

The Company has reclassified certain prior period amounts to conform to the current period presentation. ~~Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.~~

Note 2 — ~~Hurricane Ian~~Special Charges

As a result of Hurricane Ian's direct hit on the southwest coast of Florida on September 28, 2022, the construction site of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") was damaged. Additionally in the fourth quarter of 2022, there was another weather-related event and a fire that caused additional damage. Based on the Company’s assessment of these damages and the anticipated future restoration costs, an estimated loss of $52.1 million was recorded as a special charge in 2022, which was offset by $18.1 million of recorded insurance recoveries during 2022. The Company recorded an additional $4.1 million and $4.4 million of estimated loss related to Hurricane Ian during the three and nine months ended September 30, 2023.

~~Within days after~~During third quarter 2023, the ~~hurricane,~~Sunseeker Resort construction site incurred additional damages related to Hurricane Idalia. Based on the ~~Company began to assess the damage to the Resort. Insurance claim adjustors representing the Company and the insurance carriers are assessing the extent~~Company’s assessment of ~~the~~these damages and the anticipated future restoration costs, ~~to restore the Resort to its condition prior to the hurricane and determining the extent~~an estimated loss of ~~construction interruption.~~

The Company has significant levels of insurance in place to cover the losses resulting from Hurricane Ian including for physical damage due to a named windstorm or flood (storm surge), business interruption and an OCIP (owner-controlled insurance program).

~~The Company recognized~~$13.8 million was recorded as a special charge ~~of $35.0 million during the~~in third quarter ~~associated with the estimated loss incurred from Hurricane Ian, which charge also reduced the carrying amount of the Resort.~~2023. The estimate is preliminary and subject to change as the damage assessment by the Company and the insurance providers continues.

During the three and nine months ended September 30, 2023, the Company recorded$0.5 million and $13.6 million of insurance recoveries respectively. The ~~amount~~recoveries are offset by $17.9 million and $18.2 million of additional losses recorded during the ~~loss~~three and nine months ended September 30, 2023 respectively, resulting in special charges net of recoveries of $17.4 million and $4.6 million, respectively. To date, the Company has recorded insurance recoveries of $31.7 million related to Hurricane Ian and subsequent insurance events. We anticipate that additional insurance recoveries related to the losses incurred in third and fourth quarters 2022 and in third quarter 2023 will be ~~offset~~recorded in future ~~periods by amounts~~periods.

Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors, the Company reevaluated its fleet plan and identified 21 airframes for early retirement to coincide with 737 MAX aircraft deliveries as scheduled under an amendment to the Company's agreement with The Boeing Company signed in September 2023. Two airframes were fully retired in September 2023 and the remaining airframes are to be ~~recovered~~retired between January 2024 and September 2025. The accelerated depreciation on these airframes resulting from a change in the ~~Company’s insurance policies.~~estimated useful life is recorded as a special charge of $15.2 million during third quarter 2023.

Special Charges

The table below summarizes special charges recorded during the three and nine months ended September 30, 2023, and 2022.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Sunseeker weather and related events	$	17,915	$	35,000	$	18,232	$	35,000
Sunseeker weather and related events, insurance recoveries	(483)		—		(13,634)		—
Accelerated depreciation on airframes identified for early retirement	15,216		142		15,230		426
Total special charges	$	32,648	$	35,142	$	19,828	$	35,426

910

Note 3 — Revenue Recognition

Passenger Revenue

Passenger revenue is the most significant category in the Company's reported operating revenues, as outlined below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Scheduled service	Scheduled service	$	254,545	$	195,225	$	775,740	$	552,765	Scheduled service	$	231,757	$	254,545	$	862,823	$	775,740
Ancillary air-related charges	Ancillary air-related charges	252,080		224,170		765,096		558,687		Ancillary air-related charges	273,091		252,080		866,728		765,096
Loyalty redemptions	Loyalty redemptions	9,851		4,401		32,205		12,785		Loyalty redemptions	11,403		9,851		38,723		32,205
Total passenger revenue	Total passenger revenue	$	516,476	$	423,796	$	1,573,041	$	1,124,237	Total passenger revenue	$	516,251	$	516,476	$	1,768,274	$	1,573,041

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when ~~transportation~~the underlying service is provided. As of September 30, ~~2022,~~2023, the air traffic liability balance was ~~$429.9~~$395.8 million, of which approximately ~~$367.8~~$347.1 million was related to forward bookings, with the remaining ~~$62.1~~$48.7 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. Of the ~~$307.5~~$379.5 million that was recorded in the air traffic liability balance as of December 31, ~~2021,~~2022, approximately ~~75.1~~87.2 percent was recognized into passenger revenue during the nine months ended September 30, ~~2022.~~

In 2020, the Company announced that credit vouchers issued for canceled travel beginning in January 2020 would have an extended expiration date of two years from the original booking date. This policy continued for vouchers issued through June 30, 2021. Effective July 1, 2021, vouchers issued have an expiration date of one year from the original booking date.2023.

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete. Estimates of passenger revenue to be recognized from air traffic liability for credit voucher breakage may be subject to variability and differ from historical experience due to the change in contract duration (for vouchers issued in 2020 and in the first half of 2021) and uncertainty regarding demand for future air travel.

Loyalty redemptions

In relation to the travel component of the Allways® Allegiant ~~World Mastercard®~~co-branded credit card contract with Bank of America, the Company has a performance obligation to provide cardholders with points to be used for future travel award redemptions. Therefore, consideration received from Bank of America related to the travel component is deferred based on its relative selling price and is recognized into passenger revenue when the points are redeemed and the ~~transportation~~underlying service is provided. Similarly, in relation to the Allways Rewards program, points earned through the program are deferred based on the stand-alone selling price and recognized into passenger revenue when the points are redeemed and the underlying service ~~has been~~is provided.

The following table presents the activity of the point liability for the periods indicated:


		Nine Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Points balance at January 1	Points balance at January 1	$	40,490	$	21,841	Points balance at January 1	$	56,500	$	40,490
Points awarded (deferral of revenue)	Points awarded (deferral of revenue)	54,678		23,319		Points awarded (deferral of revenue)	54,031		54,678
Points redeemed (recognition of revenue)	Points redeemed (recognition of revenue)	(32,205)		(12,785)		Points redeemed (recognition of revenue)	(38,723)		(32,205)
Points balance at September 30	Points balance at September 30	$	62,963	$	32,375	Points balance at September 30	$	71,808	$	62,963

~~As of September 30, 2022 and 2021, $34.0 million and $15.9 million, respectively,~~The current portion of the ~~current points~~loyalty program liability ~~is reflected in accrued liabilities and~~ represents the ~~current~~ estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in ~~other~~ noncurrent liabilities expected to be recognized into revenue in periods thereafter.

1011

Note 4 — Property and Equipment

The following table summarizes the Company's property and equipment as of the dates indicated:


(in thousands)	(in thousands)	September 30, 2022		December 31, 2021		(in thousands)	September 30, 2023		December 31, 2022
Flight equipment, including pre-delivery deposits	Flight equipment, including pre-delivery deposits	$	2,892,277	$	2,573,657	Flight equipment, including pre-delivery deposits	$	3,268,840	$	2,937,767
Computer hardware and software	Computer hardware and software	194,983		160,237		Computer hardware and software	264,002		209,808
Land and buildings/leasehold improvements	Land and buildings/leasehold improvements	60,036		59,735		Land and buildings/leasehold improvements	62,197		62,227
Other property and equipment	Other property and equipment	91,199		78,192		Other property and equipment	105,988		95,156
Sunseeker Resort	Sunseeker Resort	277,315		83,864		Sunseeker Resort	563,716		320,572
Total property and equipment	Total property and equipment	3,515,810		2,955,685		Total property and equipment	4,264,743		3,625,530
Less accumulated depreciation and amortization	Less accumulated depreciation and amortization	(777,294)		(696,178)		Less accumulated depreciation and amortization	(936,621)		(814,837)
Property and equipment, net	Property and equipment, net	$	2,738,516	$	2,259,507	Property and equipment, net	$	3,328,122	$	2,810,693

Accrued capital expenditures as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 were ~~$82.4~~$75.0 million and ~~$17.7~~$54.6 million, respectively.

1112

Note 5 — Long-Term Debt

The following table summarizes the Company's long-term debt and finance lease obligations, net of related costs, as of the dates indicated:


(in thousands)	(in thousands)	September 30, 2022		December 31, 2021		(in thousands)	September 30, 2023		December 31, 2022
Fixed-rate debt and finance lease obligations due through 2032	Fixed-rate debt and finance lease obligations due through 2032	$	1,624,432	$	827,382	Fixed-rate debt and finance lease obligations due through 2032	$	1,971,579	$	1,720,998
Variable-rate debt due through 2029	Variable-rate debt due through 2029	368,118		915,157		Variable-rate debt due through 2029	314,419		375,980
Total debt and finance lease obligations, net of related costs		1,992,550		1,742,539
Less current maturities, net of related costs		152,550		130,053
Long-term debt and finance lease obligations, net of current maturities and related costs		$	1,840,000	$	1,612,486
Total debt and finance lease obligations						Total debt and finance lease obligations	2,285,998		2,096,978
Less current maturities						Less current maturities	265,979		152,900
Long-term debt and finance lease obligations, net of current maturities						Long-term debt and finance lease obligations, net of current maturities	$	2,020,019	$	1,944,078

Weighted average fixed-interest rate on debt	Weighted average fixed-interest rate on debt	6.5%		5.8%		Weighted average fixed-interest rate on debt	6.6%		6.5%
Weighted average variable-interest rate on debt	Weighted average variable-interest rate on debt	4.5%		2.5%		Weighted average variable-interest rate on debt	7.7%		6.1%


				Interest Rate(s) Per Annum at				As of
(in thousands)	Maturity Dates			September 30, 2023				September 30, 2023		December 31, 2022
Senior secured notes	2024	—	2027	7.25	%	—	8.50%	$	700,000	$	700,000
Consolidated variable interest entities	2024	—	2029	2.92	%	—	4.09%	98,198		79,453
Revolving credit facilities	2024	—	2027	7.93%				195,098		30,327
Debt secured by aircraft, engines, other equipment and real estate	2025	—	2031	1.87	%	—	8.11%	503,731		466,335
Finance leases	2028	—	2032	4.44	%	—	7.01%	461,364		494,328
Construction loan agreement	2028			5.75%				350,000		350,000

Total debt								$	2,308,391	$	2,120,443
Related costs								(22,393)		(23,465)
Total debt net of related costs								$	2,285,998	$	2,096,978

Maturities of ~~long-term~~long term debt ~~and finance lease obligations for the remainder~~as of ~~2022 and~~September 30, 2023, for the next ~~four~~five years and thereafter, in the aggregate, are: ~~remaining in 2022 - $34.2 million; 2023 - $152.5 million; 2024 - $299.8 million; 2025 - $145.2 million; 2026 - $138.8 million; and $1,222.0 million thereafter.~~


(in thousands)	As of September 30, 2023
Remaining in 2023	$	28,587
2024	469,017
2025	176,767
2026	171,890
2027	704,870
2028	309,815
Thereafter	425,052
Total debt and finance lease obligations, net of related costs	$	2,285,998

~~Senior~~ Secured ~~Notes~~Term Loan

~~In August, 2022,~~On September 27, 2023, the Company, issued $550.0 million in aggregate principal amount of its 7.250% Senior Secured Notes due 2027 (the “Notes”) pursuant to an Indenture, dated as of August 17, 2022. The Notes are secured by first priority security interests in, subject to permitted liens, substantially all of the propertythrough a wholly owned subsidiary, entered into a Credit Agreement with BNP Paribas and ~~assets of~~JSA International U.S. Holdings, LLC, under which the Company ~~and its subsidiaries (other than Sunseeker Resort and its subsidiaries) (excluding aircraft, aircraft engines, real property and certain other assets).~~ is entitled to borrow up to $412.1 million. On September 29, 2023, the Company received funding of $196.4 million under the facility, which is collateralized by seven Airbus A320 aircraft. The ~~collateral also secures~~proceeds were used in part to pay off $112.8 million of existing debt previously collateralized by the ~~Company’s existing $150.0~~same aircraft. The $196.4 million ~~8.500% Senior Secured Notes due 2024 and the Company’s new revolving credit facility through Barclays Bank, PLC (described below),~~loans funded on a ~~pari passu~~ ~~basis.~~ ~~The Notes~~September 29, 2023 bear interest at a fixed rate, are to be paid in quarterly installments of ~~7.25 percent per annum, payable in cash on February 15~~principal and ~~August 15 of each year, beginning February 15, 2023. The Notes will~~interest, and mature on ~~August 15, 2027.~~September 29, 2031. The remaining undrawn balance of the facility will be funded upon delivery of, and collateralized by, four 737 MAX aircraft currently on order from Boeing. Future draws collateralized by 737 MAX aircraft will bear interest at a rate determined at the time of drawdown, and will have a term of twelve years.

The Notes contain certain covenants that limit the ability of the Company to, among other things: (i) make restricted payments; (ii) incur indebtedness or issue preferred stock; (iii) create or incur certain liens; (iv) dispose of loyalty program or brand intellectual property collateral; (v) merge, consolidate or sell all or substantially all assets and (vi) enter into certain transactions with affiliates.

The Notes also require the Company to comply with certain affirmative covenants, including to maintain a minimum aggregate amount of liquidity of $300.0 million. If the Company fails to satisfy the minimum liquidity requirement, then the Company will be required to pay additional interest on all outstanding Notes in an amount equal to 2.0% per annum of the principal amount of such Notes until the Company demonstrates compliance with the liquidity requirement.

The Company used the net proceeds from the sale of the Notes to repay the Company’s Term Loan B, which had an outstanding principal amount of $533.0 million, and to pay costs and expenses of the transaction.

~~Senior Secured~~ Revolving Credit Facilities

In ~~August, 2022,~~February 2023, the Company, through a wholly owned subsidiary, entered into a credit agreement with ~~MUFG~~Credit Agricole Corporate and Investment Bank, ~~Ltd~~ under which the Company is entitled to borrow up to $100.0 million. This revolving credit facility replaced a revolving credit facility with the same lender which was to expire in March 2023. The revolving credit facility has a ~~term~~maturity date of ~~24 months~~March 31, 2026 and the borrowing ability is based on the value of aircraft and engines placed into the collateral pool. The notes under the facility bear interest at a floating rate based on SOFR. As of September 30, ~~2022,~~2023, the facility remains undrawn.

~~In August, 2022,~~During the nine months ended September 30, 2023, the Company ~~entered into~~received $164.8 million in advances on a pre-delivery payment (PDP) credit ~~agreement with certain lenders and Barclays Bank PLC as administrative agent and lead arranger that provides a senior secured revolving loan~~ facility ~~of $75.0 million. The facility is~~ secured by the ~~same collateral that secures the Notes, has a term of 57 months and~~Company's Boeing aircraft purchase rights. The notes under the facility bear interest at a floating ~~rate based on SOFR. As of September 30, 2022, the facility remains undrawn.~~

In September, 2022, the Company entered into a credit agreement with Norddeutsche Landesbank Girozentrale (acting through its New York branch) and Landesbank Hessen-Thüringen Girozentrale (the "Lenders") under which the Company is entitled to borrow up to $300.0 million. The revolving credit facility has a term of 24 months and the borrowing ability is based on the amount of pre-delivery deposits paid with respect to up to twenty (20) 737-MAX aircraft, the purchase rights for which the Company may choose to place in the collateral pool. The Facility is secured by the purchase rights for the applicable aircraft. The commitment amount at the time of signing is $200.0 million and the facility may be increased to $300.0 million subject to agreement between the Company and the Lenders. Any notes under the Facility will bear interest ~~at a floating~~ rate based on SOFR and ~~all borrowings will be due no later than~~mature on December 31, 2024 or upon delivery of the applicable aircraft. As

Consolidated Variable Interest Entities

In February 2023, the Company, through a wholly owned subsidiary, entered into agreements with a trust to borrow $27.0 million secured by one Airbus A320 series aircraft. The trust was funded on inception. The borrowing bears interest at a fixed rate and is payable in monthly installments through February 2029, at which time the Company will have a purchase option at a fixed amount.

Other Secured Debt

In May 2023, the Company borrowed $92.7 million under a loan agreement secured by six Airbus A320 series aircraft. The notes bear interest at a fixed rate, payable in quarterly installments maturing in May 2028.

Debt Extinguishment

In June 2023, the Company made a $61.0 million prepayment to extinguish an aircraft-secured debt facility. The facility bore interest at a floating rate and had a maturity date of June 2024.

In September ~~30, 2022,~~2023, the ~~facility remains undrawn.~~Company made a payment of $112.8 million to voluntarily pay off several debt instruments collateralized by aircraft. These debt instruments were all floating rate instruments with original maturity dates between May and October 2027.

1214

Note 6 — Income Taxes

The Company recorded a ~~$9.7~~$4.9 million income tax benefit at an effective tax rate of ~~17.3~~16.3 percent and ~~an $11.0~~a $9.7 million income tax ~~expense~~benefit at a ~~21.9~~17.3 percent effective tax rate for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The effective tax rate for the three months ended September 30, ~~2022~~2023 differed from the statutory Federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences. While the Company expects its effective tax rate to be fairly consistent in the near term, it will vary depending on recurring items such as the amount of income earned in each state and the state tax rate applicable to such income. Discrete items during interim periods may also affect the Company's tax rates.

The Company recorded a $41.3 million income tax expense at an effective tax rate of 25.7 percent and a $10.9 million income tax benefit at ~~an effective tax rate of~~a 17.9 ~~percent and a $40.3 million income tax expense at a 22.2~~ percent effective tax rate for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The effective tax rate for the nine months ended September 30, ~~2022~~2023 differed from the statutory Federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences, none of which are individually significant.

1315

Note 7 — Fair Value Measurements

The Company utilizes the market approach to measure the fair value of its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The assets classified as Level 2 primarily utilize quoted market prices or alternative pricing sources including transactions involving identical or comparable assets and models utilizing market observable inputs for valuation of these securities. No changes in valuation techniques or inputs occurred during the nine months ended September 30, ~~2022.~~2023.

Financial instruments measured at fair value on a recurring basis:


		September 30, 2022						December 31, 2021							As of September 30, 2023						As of December 31, 2022
(in thousands)	(in thousands)	Total		Level 1		Level 2		Total		Level 1		Level 2		(in thousands)	Total		Level 1		Level 2		Total		Level 1		Level 2
Cash equivalents	Cash equivalents													Cash equivalents
Money market funds	Money market funds	$	49,106	$	49,106	$	—	$	25,019	$	25,019	$	—	Money market funds	$	165,196	$	165,196	$	—	$	88,073	$	88,073	$	—
Commercial Paper		70,450		—		70,450		179,455		—		179,455
Commercial paper														Commercial paper	9,940		—		9,940		50,791		—		50,791
Municipal debt securities	Municipal debt securities	16,398		—		16,398		63,875		—		63,875		Municipal debt securities	7,867		—		7,867		8,599		—		8,599

Total cash equivalents	Total cash equivalents	135,954		49,106		86,848		268,349		25,019		243,330		Total cash equivalents	183,003		165,196		17,807		147,463		88,073		59,390
Short-term	Short-term													Short-term
Commercial paper	Commercial paper	450,529		—		450,529		419,469		—		419,469		Commercial paper	266,653		—		266,653		421,279		—		421,279

Federal agency debt securities														Federal agency debt securities	196,634		—		196,634		107,222		—		107,222
Corporate debt securities	Corporate debt securities	196,962		—		196,962		234,436		—		234,436		Corporate debt securities	151,610		—		151,610		166,136		—		166,136
US Treasury Bonds														US Treasury Bonds	23,578		—		23,578		—		—		—
Municipal debt securities	Municipal debt securities	20,965		—		20,965		165,573		—		165,573		Municipal debt securities	12,738		—		12,738		30,426		—		30,426
Federal agency debt securities		92,906		—		92,906		—		—		—
Total short-term	Total short-term	761,362		—		761,362		819,478		—		819,478		Total short-term	651,213		—		651,213		725,063		—		725,063
Long-term	Long-term													Long-term

Federal agency debt securities														Federal agency debt securities	30,994		—		30,994		20,050		—		20,050
Corporate debt securities														Corporate debt securities	27,093		—		27,093		35,688		—		35,688

Municipal debt securities	Municipal debt securities	—		—		—		2,231		—		2,231		Municipal debt securities	13,495		—		13,495		7,580		—		7,580

Total long-term	Total long-term	—		—		—		2,231		—		2,231		Total long-term	71,582		—		71,582		63,318		—		63,318
Total financial instruments	Total financial instruments	$	897,316	$	49,106	$	848,210	$	1,090,058	$	25,019	$	1,065,039	Total financial instruments	$	905,798	$	165,196	$	740,602	$	935,844	$	88,073	$	847,771

None of the Company's debt is publicly held and as a result, the Company has determined the estimated fair value of these notes to be Level 3. Certain inputs used to determine fair value are unobservable and, therefore, could be sensitive to changes in inputs. The Company utilizes the discounted cash flow method to estimate the fair value of Level 3 debt.

Carrying value and estimated fair value of long-term debt, excluding finance leases, including current maturities and without reduction for related costs, are as follows:


		September 30, 2022				December 31, 2021						As of September 30, 2023				As of December 31, 2022
(in thousands)	(in thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Hierarchy Level	(in thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Hierarchy Level
Non-publicly held debt		$	1,538,638	$	1,457,343	$	1,447,462	$	1,261,170	3
Fair Value of Notes Payable											Fair Value of Notes Payable	$	1,847,028	$	1,747,427	$	1,626,114	$	1,561,939	3

Due to their short-term nature, the carrying amounts of cash, restricted cash, accounts receivable and accounts payable approximate fair value.

1416

Note 8 — Earnings (Loss) per Share

Basic and diluted earnings (loss) per share are computed pursuant to the two-class method. Under this method, the Company attributes net income (loss) to two classes: common stock and unvested restricted stock. Unvested restricted stock awards granted to employees under the Company’s Long-Term Incentive Plan are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock.

Diluted net income per share is calculated using the more dilutive of the two methods. Under both methods, the exercise of employee stock options is assumed using the treasury stock method. The assumption of vesting of restricted stock, however, differs:

1.Assume vesting of restricted stock using the treasury stock method.

2.Assume unvested restricted stock awards are not vested, and allocate earnings to common shares and unvested restricted stock awards using the two-class method.

For ~~the three months and nine months ended September 30, 2022,~~certain periods presented, basic and diluted ~~income (loss)~~loss per share are the same because of the ~~(loss)~~loss position.

The following table sets forth the computation of net income (loss) per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in the table are in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Basic:	Basic:									Basic:
Net income (loss)	Net income (loss)	$	(46,459)	$	39,254	$	(49,982)	$	141,150	Net income (loss)	$	(25,066)	$	(46,459)	$	119,552	$	(49,982)
Less income allocated to participating securities	Less income allocated to participating securities	—		(573)		—		(2,028)		Less income allocated to participating securities	(452)		—		(4,397)		—
Net income (loss) attributable to common stock	Net income (loss) attributable to common stock	$	(46,459)	$	38,681	$	(49,982)	$	139,122	Net income (loss) attributable to common stock	$	(25,518)	$	(46,459)	$	115,155	$	(49,982)
Earnings (loss) per share, basic	Earnings (loss) per share, basic	$	(2.58)	$	2.18	$	(2.78)	$	8.18	Earnings (loss) per share, basic	$	(1.44)	$	(2.58)	$	6.44	$	(2.78)
Weighted-average shares outstanding	Weighted-average shares outstanding	18,014		17,766		17,985		17,005		Weighted-average shares outstanding	17,721		18,014		17,879		17,985
Diluted:	Diluted:									Diluted:
Net income (loss)	Net income (loss)	$	(46,459)	$	39,254	$	(49,982)	$	141,150	Net income (loss)	$	(25,066)	$	(46,459)	$	119,552	$	(49,982)
Less income allocated to participating securities	Less income allocated to participating securities	—		(573)		—		(2,027)		Less income allocated to participating securities	(452)		—		(4,389)		—
Net income (loss) attributable to common stock	Net income (loss) attributable to common stock	$	(46,459)	$	38,681	$	(49,982)	$	139,123	Net income (loss) attributable to common stock	$	(25,518)	$	(46,459)	$	115,163	$	(49,982)
Earnings (loss) per share, diluted	Earnings (loss) per share, diluted	$	(2.58)	$	2.18	$	(2.78)	$	8.18	Earnings (loss) per share, diluted	$	(1.44)	$	(2.58)	$	6.43	$	(2.78)
Weighted-average shares outstanding	Weighted-average shares outstanding	18,014		17,766		17,985		17,005		Weighted-average shares outstanding	17,721		18,014		17,879		17,985
Dilutive effect of stock options and restricted stock	Dilutive effect of stock options and restricted stock	—		103		—		121		Dilutive effect of stock options and restricted stock	—		—		238		—
Adjusted weighted-average shares outstanding under treasury stock method	Adjusted weighted-average shares outstanding under treasury stock method	18,014		17,869		17,985		17,126		Adjusted weighted-average shares outstanding under treasury stock method	17,721		18,014		18,117		17,985
Participating securities excluded under two-class method	Participating securities excluded under two-class method	—		(102)		—		(111)		Participating securities excluded under two-class method	—		—		(204)		—
Adjusted weighted-average shares outstanding under two-class method	Adjusted weighted-average shares outstanding under two-class method	18,014		17,767		17,985		17,015		Adjusted weighted-average shares outstanding under two-class method	17,721		18,014		17,913		17,985

1517

Note 9 — Contingencies

The Company is subject to certain legal and administrative actions it considers routine to its business activities. The Company believes the ultimate outcome of any potential and pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity or results of operations.

1618

Note 10 — Segments

Operating segments are components of a company for which separate financial and operating information is regularly evaluated and reported to the Chief Operating Decision Maker ("CODM"), and is used to allocate resources and analyze performance. The Company's CODM is the executive leadership team, which reviews information about the Company's two operating segments: Airline and Sunseeker Resort.

Airline Segment

The Airline segment operates as a single business unit and includes all scheduled service air transportation, ancillary air-related products and services, third party products and services, fixed fee contract air transportation and other airline-related revenue. The CODM evaluation includes, but is not limited to, route and flight profitability data, ancillary and third party product and service offering statistics, and fixed fee contract information when making resource allocation decisions with the goal of optimizing consolidated financial results.

Sunseeker Resort Segment

The Sunseeker Resort segment represents activity related to the development and construction of Sunseeker Resort in Southwest Florida, as well as the renovation of Aileron Golf Course (formerly known as Kingsway Golf Course). Plans for the resort include a 500-room hotel and two towers offering more than 180 one, two and three-bedroom suites, bar and restaurant options, and other amenities. The golf course is a short drive from the resort ~~site~~ and is considered, from a planning and strategic perspective, to be an additional resort amenity. The construction of Sunseeker Resort is an extension of the Company's leisure travel focus and it is expected that many customers flying to Southwest Florida on Allegiant will elect to stay at this resort and enjoy its amenities.

Selected information for the Company's segments and the reconciliation to the consolidated financial statement amounts are as follows:


(in thousands)	(in thousands)	Airline		Sunseeker Resort (1)		Consolidated		(in thousands)	Airline		Sunseeker Resort		Consolidated
Three Months Ended September 30, 2023								Three Months Ended September 30, 2023
Operating revenue:								Operating revenue:
Passenger								Passenger	$	516,251	$	—	$	516,251
Third party products								Third party products	30,944		—		30,944
Fixed fee contracts								Fixed fee contracts	17,741		—		17,741
Other								Other	419		4		423
Operating income (loss)								Operating income (loss)	5,814		(23,697)		(17,883)
Interest expense, net(1)								Interest expense, net(1)	20,654		5,535		26,189
Capitalized interest								Capitalized interest	(8,224)		(6,664)		(14,888)
Depreciation and amortization								Depreciation and amortization	55,730		86		55,816
Capital expenditures								Capital expenditures	157,579		78,254		235,833
Three Months Ended September 30, 2022	Three Months Ended September 30, 2022							Three Months Ended September 30, 2022
Operating revenue:	Operating revenue:							Operating revenue:
Passenger	Passenger	$	516,476	$	—	$	516,476	Passenger	$	516,476	$	—	$	516,476
Third party products	Third party products	27,132		—		27,132		Third party products	27,132		—		27,132
Fixed fee contract		15,881		—		15,881
Fixed fee contracts								Fixed fee contracts	15,881		—		15,881
Other	Other	836		—		836		Other	836		—		836
Operating income (loss)	Operating income (loss)	6,844		(37,755)		(30,911)		Operating income (loss)	6,844		(37,755)		(30,911)
Interest expense, net		18,882		1,134		20,016
Interest expense, net(1)								Interest expense, net(1)	20,197		4,115		24,312
Capitalized interest								Capitalized interest	(1,315)		(2,981)		(4,296)
Depreciation and amortization	Depreciation and amortization	50,064		28		50,092		Depreciation and amortization	50,064		28		50,092
Capital expenditures	Capital expenditures	165,814		91,076		256,890		Capital expenditures	165,814		91,076		256,890
Three Months Ended September 30, 2021
Operating revenue:
Passenger		$	423,796	$	—	$	423,796
Third party products		24,541		—		24,541
Fixed fee contract		11,117		—		11,117
Other		15		—		15
Operating income (loss)		68,641		(2,352)		66,289
Interest expense, net		16,220		(401)		15,819
Depreciation and amortization		46,363		36		46,399
Capital expenditures		54,032		12,622		66,654

~~(1)~~Includes $35.0 million special charge in the third quarter 2022 relating to Hurricane Ian damage to Sunseeker Resort.The amount of the loss will be offset in future periods by amounts to be recovered under the Company’s insurance policies.

1719


(in thousands)	(in thousands)	Airline		Sunseeker Resort (1)		Consolidated		(in thousands)	Airline		Sunseeker Resort		Consolidated
Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2023
Operating revenue:								Operating revenue:
Passenger								Passenger	$	1,768,274	$	—	$	1,768,274
Third party products								Third party products	85,886		—		85,886
Fixed fee contracts								Fixed fee contracts	43,599		—		43,599
Other								Other	1,088		8		1,096
Operating income (loss)								Operating income (loss)	230,894		(20,525)		210,369
Interest expense, net(1)								Interest expense, net(1)	61,157		16,326		77,483
Capitalized interest								Capitalized interest	(13,143)		(15,806)		(28,949)
Depreciation and amortization								Depreciation and amortization	164,196		234		164,430
Capital expenditures								Capital expenditures	425,996		260,892		686,888
Nine Months Ended September 30, 2022	Nine Months Ended September 30, 2022							Nine Months Ended September 30, 2022
Operating revenue:	Operating revenue:							Operating revenue:
Passenger	Passenger	$	1,573,041	$	—	$	1,573,041	Passenger	$	1,573,041	$	—	$	1,573,041
Third party products	Third party products	77,399		—		77,399		Third party products	77,399		—		77,399
Fixed fee contract		38,186		—		38,186
Fixed fee contracts								Fixed fee contracts	38,186		—		38,186
Other	Other	1,654		—		1,654		Other	1,654		—		1,654
Operating income (loss)	Operating income (loss)	44,902		(42,455)		2,447		Operating income (loss)	44,902		(42,455)		2,447
Interest expense, net		52,111		5,904		58,015
Interest expense, net(1)								Interest expense, net(1)	54,857		10,752		65,609
Capitalized interest								Capitalized interest	(2,746)		(4,848)		(7,594)
Depreciation and amortization	Depreciation and amortization	145,573		45		145,618		Depreciation and amortization	145,573		45		145,618
Capital expenditures	Capital expenditures	404,015		228,452		632,467		Capital expenditures	404,015		228,452		632,467
Nine Months Ended September 30, 2021
Operating revenue:
Passenger		$	1,124,237	$	—	$	1,124,237
Third party products		61,164		—		61,164
Fixed fee contract		23,943		—		23,943
Other		1,682		—		1,682
Operating income (loss)		235,340		(5,596)		229,744
Interest expense, net		48,765		(401)		48,364
Depreciation and amortization		133,984		111		134,095
Capital expenditures		192,747		12,622		205,369

(1)~~Includes $35.0 million special charge in~~Excludes losses (net of gains) on debt extinguishment of $600 thousand and $806 thousand for quarter-to-date and year-to-date 2023 respectively. During the third quarter 2022, ~~relating~~the Company recognized a loss on debt extinguishment of $5.0 million in relation to ~~Hurricane Ian damage to Sunseeker Resort.The amount~~the prepayment of ~~the loss will be offset in future periods by amounts to be recovered under the Company’s insurance policies.~~its Term Loan B.

Total assets were as follows as of the dates indicated:

(in thousands) As of September 30, 2022 As of December 31, 2021
Airline $ 4,012,922 $ 3,872,041
Sunseeker Resort 398,042 119,032
Consolidated $ 4,410,964 $ 3,991,073


(in thousands)	As of September 30, 2023		As of December 31, 2022
Airline	$	4,283,299	$	4,047,134
Sunseeker Resort	629,037		464,163

Consolidated	$	4,912,336	$	4,511,297

1820

Note 11 — Subsequent Events

~~In October 2022, the lender funded an additional $87.5 million into the construction disbursement account for the Sunseeker project and~~On November 2, 2023, the Company ~~received a disbursement of $87.5~~repaid all amounts due under its $150.0 million ~~from the account. After these transactions, the construction disbursement account has a balance of approximately $117.5 million, which is recorded as a deposit on the Company's balance sheet.~~senior secured notes due February 2024.

On October 25, 2023, the Company, through a wholly owned subsidiary, entered into agreements with a trust to borrow $9 million secured by one CFM engine. The trust was funded on inception and the borrowing bears interest at a fixed imputed rate and is payable in monthly installments through October 2028, at which time the Company ~~has~~will have a ~~$50.0~~purchase option at a fixed amount.

On October 31, 2023, the Company, through a wholly owned subsidiary, entered into agreements with a trust to borrow $27 million ~~loan~~secured by one Airbus A320 series aircraft. The trust was funded on inception and the borrowing bears interest at a fixed imputed rate and is payable in monthly installments through October 2028, at which time the Company will have a purchase option at a fixed amount.

On October 31, 2023, the Company, through a wholly owned subsidiary, extended the term of its August 2022 revolving credit facility with MUFG Bank by two years to ~~Viva Aerobus in deposits and~~August 2025. All other ~~assets on the balance sheet which is to convert to equity upon approval~~terms of the ~~joint alliance from~~agreement remain the ~~Mexican Federal Economic Competition Commission. This approval was obtained~~same and the facility remains undrawn as of September 30, 2023.

On November 1, 2023, the Company, through a variable interest entity, entered into agreements with Carlyle Aviation Group to borrow $158 million secured by the Company's purchase rights for eight Boeing 737 aircraft. The facility bears a floating interest rate based on ~~October 6, 2022.~~SOFR and is due upon delivery of each aircraft or no later than June 30, 2025.

1921

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents factors that had a material effect on our results of operations during the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022. Also discussed is our financial position as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022. You should read this discussion in conjunction with our unaudited consolidated financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q and our consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, ~~2021.~~2022. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Third Quarter ~~2022~~2023 Review

~~Highlights:~~Third quarter 2023 highlights include:

–•Total operating revenue was ~~$560.3~~$565.4 million, up ~~28.4~~0.9 percent over the prior year ~~over three-year~~and the highest third quarter total in company history

–•Total fixed fee contracts revenue of $17.7 million, up 11.7 percent year-over-year

•TRASM (total passenger revenue per scheduled service available seat mile) of 12.78 cents, up 1.4 percent year-over-year on scheduled service capacity decrease of 0.8 percent year-over-year

•Controllable completion factor of 99.7%

•Total average fare of ~~$125.95~~$129.23, up ~~15.5% from the third quarter 2019.~~2.6 percent year-over-year

–•~~Total average~~Average ancillary fare ~~- air-related~~of $64.50, up 10.4 percent year-over-year

•Airline special charges of ~~$58.40, up 16.7 percent~~$15.2 million from ~~2019, driven predominantly by strength in bundled ancillary~~accelerated depreciation on aircraft retirement plan

–•~~Total average fare - third party products of $6.29, up 29.7 percent year over three-year driven by~~ Allways ~~Allegiant World Mastercard strength~~

–~~Load factor of 88.5 percent, a 2.5 percentage point increase from the third quarter of 2019~~

–~~Acquired 38~~Rewards program enrolled 478 thousand new ~~Allways Allegiant World Mastercard holders~~members during the quarter, ~~the strongest third quarter acquisition since the program's inception~~bringing total members to 16.7 million

–•~~Allegiant World Mastercard® and Allegiant Allways Rewards® were voted as the No. 1 Best Airline Credit Card and Best Frequent Flyer Program~~$88 million in ~~USA Today's 10 Best 2022 Loyalty/Rewards Readers' Choice Awards~~remuneration received from our co-branded credit card year-to-date

–•~~In October, named to Newsweek's Top 100 Most Loved Workplaces® list for~~Announced a collaboration with global entertainment icon Carrie Underwood in support of the ~~second consecutive year~~company's Allways Rewards Visa® card and loyalty program

–•~~Donated $100,000~~Entered into $412.1 million financing arrangement and borrowed $196.4 million collateralized by seven A320 aircraft, with the remaining undrawn balance to ~~the American Red Cross for critical disaster relief~~be used in 2024 to ~~communities in the aftermath~~fund four 737 MAX aircraft

•Sunseeker Resort nears completion - announced December 15, 2023 opening date

•Sunseeker special charges of ~~Hurricane Ian~~$17.4 million, net of recoveries, from hurricane and other weather-related events

AIRCRAFT

The following table sets forth the aircraft in service and operated by us as of the dates indicated:


		September 30, 2022	December 31, 2021		September 30, 2023	December 31, 2022
A319	A319	35	35	A319	35	35
A320(1)	A320(1)	81	73	A320(1)	92	86
Total	Total	116	108	Total	127	121

(1)~~Does~~December 31, 2022 figure does not include ~~ten~~five aircraft of which we have taken delivery, ~~as of September 30, 2022,~~ but were not yet in service as of that date.

On September 29, 2023, we entered into agreements with The Boeing Company ("Boeing") to amend our 2021 agreement to acquire 50 newly manufactured Boeing 737 MAX aircraft. The amended agreements include a revised delivery schedule for the initial 50 aircraft to now extend through late 2025.

Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors constraining fleet utilization, we reevaluated our fleet plan and identified 21 aging airframes for early retirement to coincide with the delivery schedule for our 737 MAX aircraft provided in an amendment to our Boeing purchase agreement signed on September 29, 2023. Two airframes were retired in September 2023 and the remaining airframes are to be retired between January 2024 and September 2025. The retirements are coordinated with the revised delivery schedule for the 737 MAX aircraft to provide us with opportunities for fleet renewal and replacement. The accelerated depreciation on these airframes resulting from a change in the estimated useful life is recorded as a special charge of $15.2 million during third quarter 2023. We plan to retain the engines associated with these airframes in our spare engine pool and use the substantial remaining life on these engines to offset future overhaul costs.

As of September 30, ~~2022,~~2023, we ~~are~~were party to forward purchase agreements for 52 aircraft. One aircraft ~~with five aircraft scheduled for delivery in 2023 and the remainder under contract thereafter. Additionally, we are party to a finance lease for one aircraft which has now been~~was delivered in October ~~2022.~~2023 and one is expected to be delivered in December 2023. We currently expect deliveries of 24 737 MAX aircraft in 2024 and 26 thereafter.

NETWORK

As of September 30, ~~2022,~~2023, we were selling ~~583~~549 routes versus ~~598~~583 as of the same date in ~~2021~~2022. As discussed below, growth in overall capacity and ~~466~~the number of routes served have been reduced as a result of ~~September 30, 2019,~~efforts to balance the demand environment and prevailing fuel prices with system wide operational reliability. We expect route count to remain below 2022 levels throughout the rest of the year as we focus on our core markets during our busiest travel periods. We have identified as many as 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which ~~represents a 2.5 percent decrease and 25.1 percent increase, respectively.~~over 75% currently have no current non-stop service. Our total active number of origination cities and leisure destinations were 9491 and ~~32,~~33, respectively, as of September 30, ~~2022.~~2023.

Our unique model is predicated around expanding and contracting capacity to meet seasonal travel demands.

TRENDS

~~COVID-19~~

The COVID-19 pandemic significantly impacted our operating results in 2020 and 2021 and we suffered numerous cancellations due to the effect of the Omicron variant on flight crews into first quarter 2022. COVID-19 may continue to impact our operations into the future. We believe that demand in the foreseeable future could fluctuate in response to fluctuations in COVID-19 cases, variants of the virus, hospitalizations, deaths, treatment efficacy, the availability of vaccines, CDC recommendations, and government restrictions.

~~Strong~~ Demand Momentum

~~As concerns over COVID-19 have declined, we have seen significant increases~~We continue to see strong demand across both peak and off-peak periods relative to pre-pandemic. While peak period demand has persisted meaningfully higher, the performance of off-peak periods in ~~load factors and average total fare per passenger beginning in March and continuing through the year~~relation to ~~date.~~current peaks has normalized according to typical leisure seasonality.

Aircraft Fuel

The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict. Significant increases in fuel costs could materially affect our operating results and profitability. We have not sought to use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future.

~~The cost per gallon of fuel began to increase significantly~~Despite a 19.7 percent decrease in ~~2021 and the increases were exacerbated by the geopolitical impact of the war in Ukraine. As a result, the average~~ fuel cost per gallon ~~increased by 75.0 percent in~~during the third quarter 2023 compared to the same period in 2022, ~~over third quarter 2021~~attributable to lower crude oil prices and ~~78.2 percent over third quarter 2019. We expect high fuel~~refining margins, we anticipate that our overall costs and operating results will continue to be affected by persistently high and volatile fuel prices. This is primarily due to ongoing geopolitical and economic tensions in the Middle East and Ukraine, which continue to impact ~~our total costs and operating results.~~the global market.

Boeing Agreement

In ~~December 2021,~~September 2023, we signed an agreement with The Boeing Company to amend our 2021 agreement to purchase 50 newly manufactured ~~737MAX~~737 MAX aircraft. Under the amended agreements, the mix of 737 MAX-8200 and 737 MAX-7 aircraft ~~scheduled~~have been altered so that there will be more 737 MAX-8200 aircraft and fewer 737 MAX-7 aircraft. The amended agreements also reflect a revised delivery schedule for the initial 50 aircraft to ~~be delivered in 2023 to~~deliver through late 2025 ~~with~~and options to ~~purchase an~~acquire as many as 80 additional ~~50 737’s.~~737 MAX aircraft. We believe this new aircraft purchase is ~~complimentary~~complementary with our low cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, reduced maintenance costs in the early periods of ownership, expected fuel savings and operational reliability from the use of these new aircraft.

Operations

~~Staffing challenges~~Delays for aircraft in heavy maintenance, airport construction disruption, weather, and air traffic control delays in certain markets continue to impact our operations ~~and costs~~ and we have pulled back some of our ~~planned~~capacity growth ~~for fourth quarter 2022~~in 2023 and into ~~2023~~2024 as a result. We believe these issues are not unique to Allegiant nor do we believe they are systemic. ~~Our irregular operations costs are also impacted by our policy to compensate passengers for their inconvenience in addition to the ticket price, not generally done in the airline industry.~~

We are investing incrementally in our employee hiring and retention and our operations in an attempt to improve performance and this may put pressure on unit costs in the near term. However, if these problems persist, we may suffer reputational damage and incur higher costs for irregular operations.

Union Negotiations

The collective bargaining agreement with our pilots is currently ~~amendable~~amendable. We and the International Brotherhood of Teamsters ("IBT”) jointly requested the mediation services of the National Mediation Board ("NMB") in January 2023 to assist with the negotiations. The mediation process with the NMB is continuing, with dates for negotiation sessions currently scheduled through March of 2024.

Separately from the ongoing collective bargaining agreement negotiations, to begin to address retention and pilot pay issues, effective in May 2023, we began recognizing a retention bonus for pilots who continue employment with us until a new labor agreement is approved.The amount is 35 percent of current hourly pay rates, except for the first year first officers for whom the percentage is 82 percent, calculated at a minimum of 85 pay credit hours per month. IBT concurred with this approach. Since its inception, pilot attrition rates have declined and we are increasing the number of pilots employed.

For the three and nine months ended September 30, 2023, we recorded estimated pilot retention bonus accruals of $18.7 million and $30.4 million, respectively. The bonus will be paid to all pilots remaining employed with us upon ratification of a new collective bargaining agreement.

The collective bargaining agreement with our flight attendants is also currently amendable. We and the Transportation Workers Union (“TWU”) representing this group reached an initial tentative agreement in May 2023. That initial tentative agreement was not ratified by the flight attendant membership, and the parties have ~~begun to discuss the terms of a new labor agreement~~reengaged in negotiations for ~~this work group. We are also in the process of negotiating a new contract with the union representing our flight attendants.~~ an amended contract.

The terms of any new collective bargaining agreement will impact our costs over the term of the contract.

~~Pilot Scarcity~~

The supply of pilots necessary for airline industry growth may be a limiting factor. The pandemic resulted in more than 3,000 early pilot retirements across U.S. mainline and cargo carriers and the pipeline for new pilots does not appear at the present time to be sufficiently robust to replace retired pilots and to allow for projected industry growth. The ability to hire and retain pilots will be critical to our and the industry’s growth.

Engagement of Schneider Electric as ESG Consultant

We ~~have entered into a three-year~~are continuing our partnership with Schneider Electric to help us develop anour Environmental, Social and Governance (ESG) ~~program including:~~

–~~Identifying and prioritizing relevant ESG topics through a materiality assessment~~

–~~Establishing~~program. During 2023, we expect to establish ESG goals and environmental goal achievement plans

–~~Developing an inaugural ESG report referencing the Global Reporting Initiative (GRI)~~ and ~~Sustainability Accounting Standards Board (SASB) frameworks~~

–~~Providing ongoing~~will continue to provide carbon emissions reporting of Scope 1, 2, and 3 greenhouse gas (GHG) ~~emissions~~

–~~Supporting the communications efforts around our ESG program~~emissions.

VivaAerobus Alliance

In December 2021, we announced plans for a fully-integrated commercial alliance agreement with VivaAerobus, designed to expand options for nonstop leisure air travel on transborder flights between ~~our markets in the~~ United States and Mexico. We and VivaAerobus have submitted a joint application to the DOT requesting approval of and antitrust immunity for the alliance. ~~VivaAerobus~~Due to recent actions undertaken by Mexico affecting U.S. operations at Mexico City's Benito Juarez International Airport, our application's procedural schedule set by the DOT has ~~received~~been temporarily suspended. This will delay approval ~~from the Mexican Federal Economic Competition Commission to proceed with the alliance.~~for an undetermined period of time.

We and VivaAerobus ~~currently~~ expect to offer new routes under the alliance ~~beginning in the first half of 2023,~~ pending U.S. governmental approval of the applications. The approval of the applications ~~and~~was also subject to the return of Mexico to a Category 1.1 status under the FAA’s International Aviation Safety Assessment (“IASA”) program. The Category 1 status allows foreign airlines to expand their services to U.S. destinations and enter into codeshare partnerships with U.S. airlines. Mexico has now been approved for Category I status.

Sunseeker Resort

~~Near the end~~Construction of ~~September 2022, Hurricane Ian cut a destructive path through Florida and Charlotte County, in particular.~~ Sunseeker Resort ~~suffered damage~~Charlotte Harbor is nearing completion and we expect to open the Resort on December 15, 2023. The Resort is receiving bookings from ~~the Hurricane, to a large extent attributable to subcontractor cranes which fell onto the buildings.~~

~~We have begun~~transient customers and ~~will continue to evaluate damage caused by the Hurricane~~group sales and ~~have engaged outside specialists, including structural engineers, to evaluate the damage and advise as to the course of action to assure the safe completion~~has hired substantially all of the ~~Resort. We maintain robust insurance coverage against damage from hurricanes and business interruption insurance and are pursuing claims~~initial staff needed to ~~recover losses.~~

~~The Resort was previously selling rooms for as early as May 2023. Realizing there will be some delays caused by~~open the Hurricane, the Resort has now pushed back the selling date to September 2023. As the extent of the damage is not yet known nor can the Company predict how quickly resources will be available to complete the construction, it is too early to tell whether the delays will be longer or shorter.Resort.

2225

RESULTS OF OPERATIONS

Comparison of three months ended September 30, ~~2022~~2023 to three months ended September 30, ~~2021~~

~~As comparisons of our~~ 2022 results to periods during 2021 reflect disproportionate changes due to the continued impact of the pandemic on air travel during 2021, we have also provided analysis of certain revenue and expense line items to 2019 results where helpful to understand trends in our performance.

Operating Revenue

Passenger revenue. For ~~the~~ third quarter ~~2022,~~2023, passenger revenue ~~increased 21.9 percent~~remained consistent compared to the same period in ~~2021~~2022 on relatively flat capacity, as scheduled service ~~passengers were up 12.5~~available seat miles (ASMs) decreased by 0.8 percent. A 10.4 percent due to stronger passenger demand. In addition, stronger passenger demand resulted in a 17.7 percent increase in scheduled service average base fare. We reduced the number of departures year-over-year to support operational reliability. Capacity was flat year-over-year as an increase in the average stage length and a slight increase in average ~~seats per departure~~ancillary air-related fare, excluding third party products was offset ~~the reduction~~by a 6.3 percent decrease in ~~departures.~~average base fare and a 1.9% decrease in number of scheduled service passengers.

~~Passenger revenue for the third quarter 2022, as~~The increase in average ancillary air-related fare compared to third quarter 2019, increased by 32.0 percent, as passengers increased by 15.0 percent on a 17.0 percent increase in capacity and average stage length increased by 4.4 percent, resulting in a 2.5 percentage point increase in load factor. Average total fare per scheduled service passenger increased by 15.5 percent over the same period in 2019 as a result of a 16.7 percent increase in ancillary air-related revenue per passenger and a 29.7 percent increase in ancillary third party revenue per passenger.

~~The increase in ancillary air-related revenue per passenger over the same period in 2019~~2022 was primarily driven by ~~increased revenue from~~overall strength in core products and the ~~sale of~~ ~~bundled products as bundled products were not offered during the same period in 2019.~~Allegiant Extra rollout.

Third party products revenue. Third party products revenue for ~~the~~ third quarter ~~2022~~2023 increased ~~10.6~~14.0 percent compared to ~~the~~ third quarter ~~2021 and 49.0 percent compared to the third quarter 2019.~~2022. The increase from ~~2021~~2022 is primarily the result of ~~greater travel demand for hotels over~~a 41.5 percent increase in the ~~same period~~marketing component of co-branded credit card revenues, offset by a decrease in hotel and ~~increased Allways® Rewards Program revenues. Increased~~ rental car ~~and hotel rates also contributed to the increase over 2021.~~revenue.

~~The substantial increase from 2019 is attributable to increased rental car rates (which more than offset the impact of fewer rental car days) and growth in our Allways® Rewards Program revenues.~~

Fixed fee contract revenue. Fixed fee contract revenue for ~~the~~ third quarter ~~2022~~2023 increased ~~42.9~~11.7 percent compared to the same period in ~~2021~~2022 as a result of ~~an 8.1~~a 30 percent increase in fixed fee departures when compared to lower charter activity during the 2021 quarter impacted by the pandemic. In addition, fuel per gallon pass throughs (which are accounted for as fixed fee contract revenue) increased 75.0 percent as compared to 2021.departures.

Fixed fee contract revenue for the third quarter 2022, as compared to 2019, decreased by 19.8 percent as a result of a 28.5 percent decrease in fixed fee revenue departures partially offset by an increase in fuel pass throughs treated as revenue.

Operating Expenses

We primarily evaluate our expense management by comparing our costs per available seat mile (ASM) across different periods, which enables us to assess trends in each expense category. The following table presents unit costs on a per ASM basis, or CASM, for the indicated ~~periods, 2019 being included as a more representative pre-pandemic third quarter comparison.~~periods. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control.


		Three Months Ended September 30,						Percent Change					Three Months Ended September 30,				Percent Change
Unitized costs (in cents)	Unitized costs (in cents)	2022		2021		2019		YoY		Yo3Y		Unitized costs (in cents)	2023		2022			YoY
Aircraft fuel	Aircraft fuel	4.68	¢	2.67	¢	2.69	¢	75.3	%	74.0	%	Aircraft fuel	3.79	¢	4.68	¢		(19.0)	%
Salaries and benefits	Salaries and benefits	3.09		2.83		2.77		9.2		11.6		Salaries and benefits	3.68		3.09			19.1
Station operations	Station operations	1.49		1.60		1.12		(6.9)		33.0		Station operations	1.46		1.49			(2.0)
Depreciation and amortization	Depreciation and amortization	1.13		1.04		1.01		8.7		11.9		Depreciation and amortization	1.26		1.13			11.5
Maintenance and repairs	Maintenance and repairs	0.72		0.69		0.64		4.3		12.5		Maintenance and repairs	0.80		0.72			11.1
Sales and marketing	Sales and marketing	0.58		0.50		0.45		16.0		28.9		Sales and marketing	0.64		0.58			10.3
Aircraft lease rentals	Aircraft lease rentals	0.13		0.13		—		—		NM		Aircraft lease rentals	0.13		0.13			—
Other	Other	0.67		0.50		0.69		34.0		(2.9)		Other	0.65		0.67			(3.0)
Payroll Support Programs grant recognition		—		(1.12)		—		NM		NM
Special charges		0.79		0.01		—		NM		NM

Special charges, net of insurance recoveries												Special charges, net of insurance recoveries	0.74		0.79			(6.3)
CASM	CASM	13.28	¢	8.85	¢	9.37	¢	50.1		41.7		CASM	13.15		13.28			(1.0)
Operating CASM, excluding fuel	Operating CASM, excluding fuel	8.60	¢	6.18	¢	6.68	¢	39.2		28.7		Operating CASM, excluding fuel	9.36		8.60			8.8
Airline special charges CASM												Airline special charges CASM	0.34		—			NM
Sunseeker Resort CASM	Sunseeker Resort CASM	0.85		0.05		0.04		NM		NM		Sunseeker Resort CASM	0.53		0.85			(37.6)
Operating CASM, excluding fuel and Sunseeker Resort activity		7.75	¢	6.13	¢	6.64	¢	26.4		16.7
Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity												Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity	8.49	¢	7.75	¢		9.5

NM - Not meaningful

Operating CASM, excluding fuel, airline special charges, and Sunseeker Resort activity. Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity, increased by 9.5 percent to 8.49 ¢ for third quarter 2023 from 7.75 ¢ in third quarter 2022. The CASM-ex increase is attributable to an 18.7 percent increase in salaries and benefits and a 10.3% increase in sales and marketing expense in third quarter 2023 over third quarter 2022 (for the reasons described in the expense line item discussion below) with a 0.4 percent decrease in capacity as we intentionally reduced capacity growth in light of higher fuel costs and to protect operational integrity. This is reflected in the reduced utilization of our aircraft as average block hours per aircraft per day decreased by 9.4 percent in the quarter compared to third quarter 2022.

Aircraft fuel expense. Aircraft fuel expense ~~increased $89.8~~decreased $40.3 million, or ~~75.9~~19.4 percent, for ~~the~~ third quarter ~~2022~~2023 compared to third quarter ~~2021.~~2022. This is primarily due to a ~~75.0~~19.7 percent ~~increase~~decrease in average fuel cost per gallon.

~~When compared to the same period~~ The decrease in ~~2019, aircraft fuel expense increased by 99.1 percent as average~~ fuel cost ~~per gallon increased 78.2 percent and fuel gallons consumed increased 11.6 percent on~~was partially offset by a ~~14.5~~0.5 percent increase in ~~capacity.~~fuel gallons consumed.

Salaries and benefits expense. Salaries and benefits expense increased ~~$11.5~~$25.7 million, or ~~9.2~~18.7 percent, for ~~the~~ third quarter ~~2022~~2023 when compared to ~~the same period in 2021.~~third quarter 2022. The increase is ~~primarily~~ due in part to a ~~24.2~~10.5 percent increase in the average number of full time equivalent employees from ~~the~~ third quarter ~~2021.~~2022, which includes newly hired Sunseeker team members. Higher salaries and

~~When compared to the same period in 2019, salaries and~~ benefits expense ~~increased~~was also driven by ~~$29.8 million or 27.7 percent on a 24.1 percent increase in the number of full time equivalent employees year over three-year. On a per ASM basis, salaries and benefits expense~~ increased ~~11.6 percent. The cost increases primarily relate to increases in~~ crew pay, including an $18.7 million accrual for pilot retention bonuses, increased rates for maintenance technicians that took effect in August 2023, and ~~increased salaries and benefit costs associated with irregular operations.~~annual merit increases for team members not subject to a collective bargaining agreement.

Station operations expense. Station operations expense for ~~the~~third quarter 2023 decreased $1.7 million, or 2.5 percent compared to third quarter 2022, as scheduled service departures also decreased ~~$4.6 million, or 6.5 percent~~by 1.4 percent. A reduction in customer compensation for irregular operations, as compared to the same period in ~~2021 due to decreased departures of 4.0 percent.~~

~~As compared to the same period~~2022, was offset by inflationary pressure on costs in 2019, station operations expense increased by $22.8 million or 52.3 percent due to a 6.2 percent increase in departures, increased costs associated with irregular operations and increased airport fees.general.

Depreciation and amortization expense. Depreciation and amortization expense for ~~the~~ third quarter ~~2022~~2023 increased by ~~8.0~~11.4 percent as compared to ~~the~~ third quarter ~~2021 as~~2022 driven by an 11.1 percent increase in the average number of aircraft owned and in service and increased ~~6.6 percent year-over-year.~~

~~Compared to the same period in 2019, depreciation and amortization expense increased $10.7 million or 27.0 percent as the average number of aircraft owned and in service increased 17.3 percent and our~~ deferred ~~major~~heavy maintenance ~~balance increased 49.4 percent for the period ended September 30, 2022 as compared to September 30, 2019.~~expense.

Maintenance and repairs expense. Maintenance and repairs expense for ~~the~~third quarter 2023 increased $3.3 million, or 10.3 percent, compared to third quarter 2022, ~~increased $1.7 million, or 5.7 percent, compared to the same period in 2021. Routine maintenance costs increased~~ as the ~~average number of aircraft in service increased 9.0 percent year-over-year and as a~~ result of ~~increased costs related to outsourced labor in 2022 (largely attributable to our smaller bases and outstations).~~

~~Compared to the same period in 2019, maintenance and repairs expense increased by $7.4 million or 29.9 percent primarily due to~~ a ~~31.4~~10.2 percent increase in the average number of aircraft in ~~service and as a result of increased costs related to outsourced labor in 2022.~~service.

Sales and marketing expense. Sales and marketing expense for ~~the~~ third quarter ~~2022~~2023 increased by ~~17.1~~10.3 percent compared to the same period in ~~2021, due to an increase in net credit card fees as a result of a 21.9 percent increase in passenger revenue year-over-year.~~

~~Compared to the same period in 2019, sales and marketing expense increased by 46.8 percent~~2022, primarily due to ~~an increase in net credit card fees as~~ a ~~result of~~cobrand relaunch campaign and a ~~32.0 percent increase in passenger revenue compared to the same period in 2019 as well as our entrance into new marketing agreements.~~Sunseeker advertising campaign.

Other operating expense. Other operating expense ~~increased $7.9~~decreased $0.9 million or ~~35.4~~2.8 percent for ~~the~~third quarter 2023 compared to third quarter 2022 ~~compared to the third quarter 2021~~ attributable to incremental ~~increases~~decreases in ~~our employee training activity.~~

~~Payroll Support Programs grant recognition. During 2021, we received $203.9 million in funds through the payroll support programs~~legal affairs and recognized $49.2 million as an offset to operating expense on our statement of income during the third quarter of 2021. The funds were fully utilized in 2021. There were no such funds received in 2022.crew travel expense.

Special charges. ~~Special charges of $35.1 million were recorded within operating expenses for the~~During third quarter 2023, we recorded $32.6 million of special charges including $15.2 million in accelerated depreciation from planned early retirement of 21 airframes from 2023 through 2025 pursuant to a revised fleet plan. In addition, we recognized $17.9 million in additional losses related to 2023 and 2022 weather events in third quarter 2023 as compared to ~~$0.3~~$35.0 million ~~for the same period 2021. The~~of special charges in 2022 relate to an estimated loss incurred from the impact of Hurricane Ian. The amount of the loss will be offset in future periods by amounts to be recovered under our insurance policies. The charges in 2021 include accelerated depreciation on an airframe resulting from an accelerated retirement plan. See Note 2 of Notes to Consolidated Financial Statements (unaudited) for further information on the special charge recorded in 2022 related to Hurricane ~~Ian.~~Ian recorded in third quarter 2022.

Interest Expense and Income

Interest expense for the quarter ended September 30, ~~2022~~2023 increased by ~~$17.6~~$5.0 million, or ~~106.3~~14.6 percent over third quarter ~~2021, due~~2022, attributable primarily to ~~new fixed rate debt and finance lease transactions entered into since third quarter 2021 as well as~~ a ~~2.1~~3.2 percentage point increase in the weighted average variable interest rate year-over-year ~~as general~~due to increases in the indices.The increase in interest ~~rates have risen. During the~~expense was partially offset by a $7.5 million increase in interest income compared to third quarter 2022, ~~we recognized a loss~~due to higher yields on investments in debt ~~extinguishment of $5.0 million in relation to the prepayment of our Term Loan B.~~securities.

Income Tax Expense

We recorded a ~~$9.7~~$4.9 million income tax benefit at an effective tax rate of ~~17.3~~16.3 percent and ~~an $11.0~~a $9.7 million income tax ~~expense~~benefit at a ~~21.9~~17.3 percent effective tax rate for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The effective tax rate for the three months ended September 30, ~~2022~~2023 differed from the statutory Federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences.

2527

Comparison of nine months ended September 30, ~~2022~~2023 to nine months ended September 30, ~~2021~~2022

As comparisons of our ~~2022~~2023 results to ~~periods during 2021~~2022 reflect ~~disproportionate~~ changes due to the continued impact of the COVID-19 pandemic on air travel during ~~2021, we have also provided analysis~~the nine months ended September 30, 2022, and early in 2022 in particular, year-over-year comparisons below are not necessarily indicative of ~~certain revenue and expense line items to 2019 results where helpful to understand trends in our performance.~~expected full year-over-year results.

Operating Revenue

Passenger revenue. For the nine months ended September 30, ~~2022,~~2023, passenger revenue increased ~~39.9~~12.4 percent compared with the same period in ~~2021 as scheduled~~2022. Scheduled service passengers were up ~~29.5~~2.7 percent and the average scheduled service base fare increased by 8.7 percent due to stronger leisure demand. The increase in passenger ~~demand in general and when compared to lower passenger demand related to COVID-19 during the first nine months of 2021. In addition, stronger passenger demand resulted in~~revenue was also driven by a ~~10.4~~10.3 percent increase in ~~scheduled service~~ average ~~base fare.~~ancillary air-related fare, excluding third party products.

~~Passenger revenue for the first nine months of 2022, as compared to the first nine months of 2019 increased by 24.3 percent, as scheduled service passengers increased by 12.6 percent on a 16.2 percent~~The increase in ~~capacity and~~ average ~~stage length increased by 3.3 percent, resulting in a 0.5 percentage point increase in load factor. Average total~~ancillary air-related fare ~~per scheduled service passenger increased by 11.0 percent~~ over the same period in ~~2019 primarily driven by a 16.5 percent increase in ancillary air related revenue per passenger and a 28.3 percent increase in ancillary third party revenue per passenger.~~

~~The increase in ancillary air related revenue per passenger over the same period in 2019~~2022 was primarily driven by ~~increased revenue from~~overall strength in core products and the ~~sale of~~ ~~bundled products as bundled products were not offered in the 2019 period~~.Allegiant Extra rollout.

Third party products revenue. Third party products revenue for the nine months ended September 30, ~~2022~~2023 increased ~~26.5~~11.0 percent over the same period in ~~2021 and 44.5 percent when compared to 2019.~~ 2022.The increase from ~~2021~~2022 is primarily the result of ~~greater travel demand for rental cars and hotels and~~ increased Allways® Rewards Program revenues. ~~Increased rental car and hotel rates combined with a 11.0 percent increase in rental car days sold and a 13.7 percent increase in room nights sold contributed to the substantial increase over 2021.~~

The increase from 2019 is attributable to increased rental car and hotel room rates (which more than offset the impact of fewer rental car days and hotel room nights) and substantial growth in our Allways® Rewards Program revenues.

Fixed fee contract revenue. Fixed fee contract revenue for the nine months ended September 30, ~~2022~~2023 increased ~~59.5~~14.2 percent compared to the same period in ~~2021~~2022 as a result of ~~an 11.1~~a 24.6 percent increase in fixed fee departures largely due to lower charter activity during the pandemic in the same period of 2021. In addition, fuel per gallon pass throughs (which are accounted for as fixed fee contract revenue) increased 84.8 percent as compared to the same period in 2021.departures.

Fixed fee contract revenue for the nine months ended September 30, 2022, as compared to 2019, decreased by 10.9 percent as a result of a 22.7 percent decrease in fixed fee departures, partially offset by higher charter rates and higher fuel cost pass throughs.

Operating Expenses

The following table presents unit costs on a per ASM basis, defined as Operating CASM, for the indicated periods:


		Nine Months Ended September 30,						Percent Change					Nine Months Ended September 30,				Percent Change
Unitized costs (in cents)	Unitized costs (in cents)	2022		2021		2019		YoY		Yo3Y		Unitized costs (in cents)	2023		2022			YoY
Aircraft fuel	Aircraft fuel	4.48	¢	2.38	¢	2.65	¢	88.2	%	69.1	%	Aircraft fuel	3.67	¢	4.48	¢		(18.1)	%
Salaries and benefits	Salaries and benefits	2.92		2.80		2.78		4.3		5.0		Salaries and benefits	3.53		2.92			20.9
Station operations	Station operations	1.41		1.31		1.05		7.6		34.3		Station operations	1.36		1.41			(3.5)
Depreciation and amortization	Depreciation and amortization	1.04		1.03		0.93		1.0		11.8		Depreciation and amortization	1.16		1.04			11.5
Maintenance and repairs	Maintenance and repairs	0.65		0.59		0.56		10.2		16.1		Maintenance and repairs	0.67		0.65			3.1
Sales and marketing	Sales and marketing	0.54		0.39		0.48		38.5		12.5		Sales and marketing	0.60		0.54			11.1
Aircraft lease rentals	Aircraft lease rentals	0.12		0.12		—		—		NM		Aircraft lease rentals	0.13		0.12			8.3
Other	Other	0.59		0.43		0.60		37.2		(1.7)		Other	0.66		0.59			11.9
Payroll Support Programs grant recognition		—		(1.55)		—		NM		NM
Special charges		0.25		0.02		—		NM		NM

Special charges, net of insurance recoveries												Special charges, net of insurance recoveries	0.14		0.25			(44.0)
CASM	CASM	12.00	¢	7.52	¢	9.05	¢	59.6		32.6		CASM	11.92		12.00			(0.7)
Operating CASM, excluding fuel (2)	Operating CASM, excluding fuel (2)	7.52	¢	5.14	¢	6.40	¢	46.3		17.5		Operating CASM, excluding fuel (2)	8.25		7.52			9.7
Airline special charges CASM												Airline special charges CASM	0.11		—			NM
Sunseeker Resort CASM	Sunseeker Resort CASM	0.30		0.04		0.05		NM		NM		Sunseeker Resort CASM	0.14		0.30			(53.3)
Operating CASM, excluding fuel and Sunseeker Resort activity		7.22	¢	5.10	¢	6.35	¢	41.6		13.7
Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity												Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity	8.00	¢	7.22	¢		10.8

NM - Not meaningful

26Operating CASM, excluding fuel, airline special charges, and Sunseeker Resort activity.

Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity, increased by 10.8 percent to 8.00 ¢ for the nine months ended September 30, 2023 from 7.22 ¢ in the same period in 2022. The CASM-ex increase is attributable to an increase in non-fuel airline costs, in the first nine months of 2023 over the same period in 2022 (for the reasons described in the expense line item discussion below) with only a 0.7 percent increase in total system capacity as we intentionally reduced capacity growth to protect operational integrity. This is reflected in the reduced utilization of our aircraft as average block hours per aircraft per day decreased by 8.7 percent in the period compared to the first nine months of 2022.

Aircraft fuel expense. Aircraft fuel expense ~~increased $318.9~~decreased $109.6 million, or ~~102.7~~17.4 percent, for the nine months ended September 30, ~~2022~~2023 compared to the same period in ~~2021.~~2022. This is primarily driven by a ~~84.8~~19.1 percent ~~increase~~decrease in average fuel cost per gallon. ~~In addition, ASMs increased~~The decrease in fuel cost was partially offset by ~~7.7 percent contributing to~~ a ~~9.6~~1.9 percent increase in fuel gallons ~~consumed.~~

Aircraft fuel expense increased by $305.3 million or 94.2 percent for the nine months ended September 30, 2022 compared to the same period in 2019. This is primarily driven by an increase in average fuel cost per gallon of 72.9 percent in addition toconsumed on a ~~14.8~~0.7 percent increase in ~~ASMs resulting in a 12.1 percent increase in fuel gallons consumed.~~total available seat miles.

Salaries and benefits expense. Salaries and benefits expense increased ~~$45.4~~$88.8 million, or ~~12.4~~21.6 percent, for the nine months ended September 30, ~~2022~~2023 compared to the same period in ~~2021.~~2022. The increase is ~~primarily~~ due in part to a ~~24.2~~10.5 percent increase in the

average number of full time equivalent employees from the same period in ~~2021, offset by the employee retention tax credit recognized in the first quarter of 2022.~~2022, which increase includes newly hired Sunseeker team members.

Salaries and benefits expense for the nine months ended September 30, 2022 increased by $70.4 million or 20.7 percent as compared to the same period in 2019. The increase is primarily due to a 24.1 percent increase in the number of full time equivalent employees from same period in 2019, offset by the employee retention tax credit recognized in the first quarter of 2022. On a per ASM basis, salaries and benefits expense increased ~~5.0~~20.9 percent. The cost increases primarily relate to increases in crew pay, including a $30.4 million accrual for pilot retention bonuses, increased rates for maintenance technicians that took effect in August 2023, and ~~increased salaries and benefits costs associated with irregular operations.~~annual merit increases for team members not subject to a collective bargaining agreement.

Station operations expense. Station operations expense for the nine months ended September 30, ~~2022 increased $27.7~~2023 decreased $6.1 million or ~~16.2~~3.1 percent mostly due to ~~a 2.5 percent increase in departures, increased~~decreased costs associated with irregular operations ~~and increased airport and landing fees.~~

As compared to the ~~nine month period ended September 30, 2019, station operations expense increased by $70.6 million or 55.0 percent due to a 7.9 percent increase~~prior year period. Reductions in ~~departures, increased costs associated with irregular operations and increased airport fees.~~

Irregular operations costs in 2022 were significantly attributable to COVID absences due to the Omicron variant in January and February. These absences resulted in numerous flight cancellations. Higher than usual cancellations continued into the third quarter as a result of staffing challenges and other factors. The amount of irregular operations costs ~~is significantly impacted~~were offset by ~~our decision to compensate impacted passengers for their inconvenience~~inflationary pressure on costs in ~~addition to the ticket price.~~general.

Depreciation and amortization expense. Depreciation and amortization expense for the nine months ended September 30, ~~2022~~2023 increased ~~$11.5~~$18.8 million or ~~8.6~~12.9 percent as compared to the same period in ~~2021~~2022 due primarily to ~~a 7.6~~an 11.1 percent increase in the average number of aircraft owned and in ~~service.~~

~~When compared to the nine months ended September 30, 2019, depreciation~~service and increased amortization ~~expense increased 27.6 percent as the average number~~ of ~~aircraft owned and in service increased 20.3 percent and our~~ deferred ~~major maintenance balance increased 61.6 percent.~~heavy maintenance.

Maintenance and repairs expense. Maintenance and repairs expense for the nine months ended September 30, ~~2022~~2023 increased by ~~$14.7~~$4.4 million or ~~19.2~~4.9 percent compared to the same period in ~~2021. Routine maintenance costs increased as the~~2022. The increase was driven by a 10.6 percent increase in average ~~number of~~ aircraft in service ~~increased 10.9 percent year-over-year and as~~offset by a ~~result~~higher volume of ~~increased costs related to outsourced labor~~repairs in ~~2022.~~

Asthe prior year period compared to the nine months ended September 30, 2019, maintenance and repairs expense increased by $22.7 million or 33.1 percent as the number of aircraft in service increased by 34.0 percent and increased costs related to outsourced labor in 2022 (largely attributable to our smaller bases and outstations).current year.

Sales and marketing expense. Sales and marketing expense for the nine months ended September 30, ~~2022~~2023 increased ~~47.1~~13.0 percent compared to the same period in ~~2021,~~2022 due to an increase in net credit card fees as a result of a ~~39.9~~12.4 percent increase in passenger revenue ~~year-over-year.~~

~~Compared~~year-over-year and due to a fee paid to transition our cobrand credit card to the ~~nine months ended September 30, 2019, sales and marketing expense increased 27.8 percent due to an increase in net credit card fees as a result of a 24.3 percent increase in passenger revenue.~~Visa network.

Other operating expense. Other expense for the nine months ended September 30, ~~2022~~2023 increased by ~~$27.5~~$8.6 million, or ~~49.4~~10.4 percent year-over-year, due to ~~increased service,~~ incremental increases in ~~our employee training activity~~outsourced labor and ~~offset by decreased activity in our non-airline subsidiaries due to the sale of Teesnap in the second quarter of 2021.~~

~~Payroll Support Programs grant recognition.~~software support associated with ongoing IT initiatives, legal and governmental affairs, and crew transportation expense During 2021, we received $203.9 million in funds through the payroll support programs and recognized $202.2 million as an offset to operating expense on our income statement for the nine month period ending September 30, 2021. The funds were fully utilized in 2021. There were no such funds received in 2022..

Special charges. ~~Special~~During the nine months ended September 30, 2023, we recorded $15.2 million of special charges attributable to accelerated depreciation from the planned early retirement of ~~$35.4~~21 airframes per our revised fleet plan. In addition, we recognized $4.6 million ~~were recorded within operating expenses for~~of special charges net of recoveries related to 2023 and 2022 weather events as $18.2 million of additional special charges was offset by the recognition of $13.6 million of insurance recoveries on Sunseeker Resort damages. During the nine months ended September 30, 2022, ~~compared to $2.9~~we recorded $35.0 million ~~for the same period in 2021. The~~of special charges ~~in 2022 relate to the estimated~~

loss incurred from the impact of of Hurricane Ian. The amount of the loss will be offset in future periods by amounts to be recovered under our insurance policies. The charges in 2021 include accelerated retirements of five airframes and eight engines and an impairment loss on a building associated with the Allegiant Nonstop family entertainment line of business. See Note 2 of the Notes to Consolidated Financial Statement (unaudited) for further information on the special charge recorded in 2022 related to Hurricane Ian.

Income Tax Expense

We recorded a ~~$10.9~~$41.3 million income tax ~~benefit~~expense at an effective rate of ~~17.9~~25.7 percent compared to a ~~$40.3~~$10.9 million tax ~~expense~~benefit at a ~~22.2 percent effective tax rate for the nine months ended September 30, 2022 and 2021, respectively. The~~ 17.9 percent effective tax rate for the nine months ended September 30, 2023 and 2022, respectively. The 25.7 percent effective tax rate for the nine months ended September 30, 2023 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences. The 22.2 percent effective tax rate for the nine months ended September 30, 2021 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of ASU 2016-09 related to share-based payments.

2829

Comparative ~~Consolidated~~Airline-Only Operating Statistics

The following tables set forth our airline operating statistics for the periods indicated:


		Three Months Ended September 30,									Percent Change (1)					Three Months Ended September 30,						Percent Change (1)
		2022			2021			2019			YoY		Yo3Y			2023			2022				YoY
Operating statistics (unaudited):
Airline operating statistics (unaudited):															Airline operating statistics (unaudited):
Total system statistics:	Total system statistics:														Total system statistics:
Passengers	Passengers	4,359,417			3,872,651			3,806,369			12.6	%	14.5	%	Passengers	4,292,031			4,359,417				(1.5)	%
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	4,450,595			4,441,201			3,888,400			0.2		14.5		Available seat miles (ASMs) (thousands)	4,433,767			4,450,595				(0.4)
Airline operating expense per ASM (CASM) (cents)															Airline operating expense per ASM (CASM) (cents)	12.62		¢	12.43		¢		1.5

Operating expense per ASM (CASM) (cents)		13.28		¢	8.85		¢	9.37		¢	50.1		41.7
Fuel expense per ASM (cents)	Fuel expense per ASM (cents)	4.68		¢	2.67		¢	2.69		¢	75.3		74.0		Fuel expense per ASM (cents)	3.79		¢	4.68		¢		(19.0)
Airline special charges per ASM (cents)															Airline special charges per ASM (cents)	0.34		¢	—		¢		NM
Airline operating CASM, excluding fuel and special charges (cents)															Airline operating CASM, excluding fuel and special charges (cents)	8.49		¢	7.75		¢		9.5

Operating CASM, excluding fuel (cents)		8.60		¢	6.18		¢	6.68		¢	39.2		28.7
Sunseeker Resort CASM (cents)(2)		0.85		¢	0.05		¢	0.04		¢	NM		NM
Operating CASM, excluding fuel and Sunseeker Resort activity (cents)		7.75		¢	6.13		¢	6.64		¢	26.4		16.7
ASMs per gallon of fuel		82.4			82.5			80.3			(0.1)		2.6

Departures	Departures	29,432			30,663			27,707			(4.0)		6.2		Departures	29,251			29,432				(0.6)
Block hours	Block hours	67,277			67,398			59,678			(0.2)		12.7		Block hours	67,312			67,277				0.1
Average stage length (miles)	Average stage length (miles)	857			829			823			3.4		4.1		Average stage length (miles)	858			857				0.1
Average number of operating aircraft during period	Average number of operating aircraft during period	115.1			105.6			87.6			9.0		31.4		Average number of operating aircraft during period	126.8			115.1				10.2
Average block hours per aircraft per day	Average block hours per aircraft per day	6.4			7.0			7.4			(8.6)		(13.5)		Average block hours per aircraft per day	5.8			6.4				(9.4)
Full-time equivalent employees at end of period	Full-time equivalent employees at end of period	5,294			4,261			4,267			24.2		24.1		Full-time equivalent employees at end of period	5,578			5,285				5.5
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	54,044			53,850			48,443			0.4		11.6		Fuel gallons consumed (thousands)	54,320			54,044				0.5
ASMs per gallon of fuel															ASMs per gallon of fuel	81.6			82.4				(1.0)
Average fuel cost per gallon	Average fuel cost per gallon	$	3.85		$	2.20		$	2.16		75.0		78.2		Average fuel cost per gallon	$	3.09		$	3.85			(19.7)


Scheduled service statistics:	Scheduled service statistics:												Scheduled service statistics:
Passengers	Passengers	4,316,163			3,834,956			3,753,611			12.5	15.0	Passengers	4,234,196			4,316,163			(1.9)
Revenue passenger miles (RPMs) (thousands)	Revenue passenger miles (RPMs) (thousands)	3,820,339			3,302,519			3,170,826			15.7	20.5	Revenue passenger miles (RPMs) (thousands)	3,744,225			3,820,339			(2.0)
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	4,315,984			4,312,893			3,687,473			0.1	17.0	Available seat miles (ASMs) (thousands)	4,280,034			4,315,984			(0.8)
Load factor	Load factor	88.5		%	76.6		%	86.0		%	11.9	2.5	Load factor	87.5		%	88.5		%	(1.0)
Departures	Departures	28,436			29,593			26,238			(3.9)	8.4	Departures	28,040			28,436			(1.4)
Block hours	Block hours	65,182			65,296			56,576			(0.2)	15.2	Block hours	64,857			65,182			(0.5)
Average seats per departure	Average seats per departure	175.8			174.3			170.8			0.9	2.9	Average seats per departure	176.8			175.8			0.6
Yield (cents) ~~(3)~~(2)	Yield (cents) ~~(3)~~(2)	6.92		¢	6.04		¢	6.42		¢	14.6	7.8	Yield (cents) ~~(3)~~(2)	6.49		¢	6.92		¢	(6.2)
Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	12.60		¢	10.40		¢	11.10		¢	21.2	13.5	Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	12.78		¢	12.60		¢	1.4
Average fare - scheduled service~~(5)~~(4)	Average fare - scheduled service~~(5)~~(4)	$	61.26		$	52.05		$	54.20		17.7	13.0	Average fare - scheduled service~~(5)~~(4)	$	57.43		$	61.26		(6.3)
Average fare - air-related charges~~(5)~~(4)	Average fare - air-related charges~~(5)~~(4)	$	58.40		$	58.45		$	50.03		(0.1)	16.7	Average fare - air-related charges~~(5)~~(4)	$	64.50		$	58.40		10.4
Average fare - third party products	Average fare - third party products	$	6.29		$	6.40		$	4.85		(1.7)	29.7	Average fare - third party products	$	7.31		$	6.29		16.2
Average fare - total	Average fare - total	$	125.95		$	116.91		$	109.08		7.7	15.5	Average fare - total	$	129.23		$	125.95		2.6
Average stage length (miles)	Average stage length (miles)	860			834			824			3.1	4.4	Average stage length (miles)	864			860			0.5
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	52,491			52,249			46,038			0.5	14.0	Fuel gallons consumed (thousands)	52,491			52,491			—
Average fuel cost per gallon	Average fuel cost per gallon	$	3.84		$	2.19		$	2.17		75.3	77.0	Average fuel cost per gallon	$	3.07		$	3.84		(20.1)
Rental car days sold	Rental car days sold	364,481			366,407			482,944			(0.5)	(24.5)	Rental car days sold	335,542			364,481			(7.9)
Hotel room nights sold	Hotel room nights sold	71,205			66,626			99,991			6.9	(28.8)	Hotel room nights sold	54,447			71,205			(23.5)
Percent of sales through website during period	Percent of sales through website during period	96.1		%	95.4		%	93.1		%	0.7	3.0	Percent of sales through website during period	95.1		%	96.1		%	(1.0)

(1)Except load factor and percent of sales through website during period, which are presented as a percentage point change.

(2)Includes a $35.0 million special charge in the third quarter 2022 relating to Hurricane Ian damage to Sunseeker Resort.The amount of the loss will be offset in future periods by amounts to be recovered under our insurance policies.

~~(3)~~Defined as scheduled service revenue divided by revenue passenger miles.

~~(4)~~(3)Various components of this measure do not have a direct correlation to ASMs. This measure is provided on a per ASM basis so as to facilitate comparison with airlines reporting revenues on a per ASM basis.

~~(5)~~(4)Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.

NM Not Meaningful

Comparative Consolidated Operating Statistics

The following tables set forth our operating statistics for the periods indicated:


		Nine Months Ended September 30,									Percent Change (1)					Nine Months Ended September 30,						Percent Change (1)
		2022			2021			2019			YoY		Yo3Y			2023			2022				YoY
Operating statistics (unaudited):
Airline operating statistics (unaudited):															Airline operating statistics (unaudited):
Total system statistics:	Total system statistics:														Total system statistics:
Passengers	Passengers	12,834,078			9,906,371			11,426,183			29.6	%	12.3	%	Passengers	13,196,465			12,834,078				2.8	%
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	14,060,825			13,049,732			12,245,704			7.7		14.8		Available seat miles (ASMs) (thousands)	14,164,936			14,060,825				0.7
Operating expense per ASM (CASM) (cents)		12.00		¢	7.52		¢	9.05		¢	59.6		32.6
Airline operating expense per ASM (CASM) (cents)															Airline operating expense per ASM (CASM) (cents)	11.78		¢	11.70		¢		0.7
Fuel expense per ASM (cents)	Fuel expense per ASM (cents)	4.48		¢	2.38		¢	2.65		¢	88.2		69.1		Fuel expense per ASM (cents)	3.67		¢	4.48		¢		(18.1)
Operating CASM, excluding fuel (cents)		7.52		¢	5.14		¢	6.40		¢	46.3		17.5
Sunseeker Resort CASM (cents)(2)		0.30		¢	0.04		¢	0.05		¢	NM		NM
Operating CASM, excluding fuel and Sunseeker Resort activity (cents)		7.22		¢	5.10		¢	6.35		¢	41.6		13.7
ASMs per gallon of fuel		84.2			85.6			82.2			(1.6)		2.4
Airline special charges per ASM (cents)															Airline special charges per ASM (cents)	0.11		¢	—		¢		NM
Airline operating CASM, excluding fuel and special charges (cents)															Airline operating CASM, excluding fuel and special charges (cents)	8.00		¢	7.22		¢		10.8

Departures	Departures	90,064			87,854			83,454			2.5		7.9		Departures	90,792			90,064				0.8
Block hours	Block hours	212,403			197,581			187,829			7.5		13.1		Block hours	215,716			212,403				1.6
Average stage length (miles)	Average stage length (miles)	885			852			858			3.9		3.1		Average stage length (miles)	883			885				(0.2)
Average number of operating aircraft during period	Average number of operating aircraft during period	112.7			101.6			84.1			10.9		34.0		Average number of operating aircraft during period	124.7			112.7				10.6
Average block hours per aircraft per day	Average block hours per aircraft per day	6.9			7.1			8.2			(2.8)		(15.9)		Average block hours per aircraft per day	6.3			6.9				(8.7)
Full-time equivalent employees at end of period	Full-time equivalent employees at end of period	5,294			4,261			4,267			24.2		24.1		Full-time equivalent employees at end of period	5,578			5,285				5.5
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	167,070			152,464			148,980			9.6		12.1		Fuel gallons consumed (thousands)	170,271			167,070				1.9
ASMs per gallon of fuel															ASMs per gallon of fuel	83.2			84.2				(1.2)
Average fuel cost per gallon	Average fuel cost per gallon	$	3.77		$	2.04		$	2.18		84.8		72.9		Average fuel cost per gallon	$	3.05		$	3.77			(19.1)


Scheduled service statistics:	Scheduled service statistics:												Scheduled service statistics:
Passengers	Passengers	12,736,268			9,838,512			11,307,004			29.5	12.6	Passengers	13,076,015			12,736,268			2.7
Revenue passenger miles (RPMs) (thousands)	Revenue passenger miles (RPMs) (thousands)	11,646,212			8,657,151			9,964,948			34.5	16.9	Revenue passenger miles (RPMs) (thousands)	11,947,986			11,646,212			2.6
Available seat miles (ASMs) (thousands)	Available seat miles (ASMs) (thousands)	13,716,838			12,739,769			11,800,788			7.7	16.2	Available seat miles (ASMs) (thousands)	13,778,994			13,716,838			0.5
Load factor	Load factor	84.9		%	68.0		%	84.4		%	16.9	0.5	Load factor	86.7		%	84.9		%	1.8
Departures	Departures	87,475			85,303			80,149			2.5	9.1	Departures	87,800			87,475			0.4
Block hours	Block hours	206,868			192,481			180,674			7.5	14.5	Block hours	209,468			206,868			1.3
Average seats per departure	Average seats per departure	175.7			173.8			171.0			1.1	2.7	Average seats per departure	176.1			175.7			0.2
Yield (cents) ~~(3)~~(2)	Yield (cents) ~~(3)~~(2)	6.94		¢	6.53		¢	6.85		¢	6.3	1.3	Yield (cents) ~~(3)~~(2)	7.55		¢	6.94		¢	8.8
Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	12.03		¢	9.30		¢	11.18		¢	29.4	7.6	Total passenger revenue per ASM (TRASM) (cents)~~(4)~~(3)	13.46		¢	12.03		¢	11.9
Average fare - scheduled service~~(5)~~(4)	Average fare - scheduled service~~(5)~~(4)	$	63.44		$	57.48		$	60.40		10.4	5.0	Average fare - scheduled service~~(5)~~(4)	$	68.95		$	63.44		8.7
Average fare - air-related charges~~(5)~~(4)	Average fare - air-related charges~~(5)~~(4)	$	60.07		$	56.79		$	51.56		5.8	16.5	Average fare - air-related charges~~(5)~~(4)	$	66.28		$	60.07		10.3
Average fare - third party products	Average fare - third party products	$	6.08		$	6.22		$	4.74		(2.3)	28.3	Average fare - third party products	$	6.57		$	6.08		8.1
Average fare - total	Average fare - total	$	129.59		$	120.49		$	116.70		7.6	11.0	Average fare - total	$	141.80		$	129.59		9.4
Average stage length (miles)	Average stage length (miles)	889			857			861			3.7	3.3	Average stage length (miles)	889			889			—
Fuel gallons consumed (thousands)	Fuel gallons consumed (thousands)	162,933			148,578			143,433			9.7	13.6	Fuel gallons consumed (thousands)	165,599			162,933			1.6
Average fuel cost per gallon	Average fuel cost per gallon	$	3.77		$	2.03		$	2.17		85.7	73.7	Average fuel cost per gallon	$	3.05		$	3.77		(19.1)
Rental car days sold	Rental car days sold	1,161,579			1,046,751			1,495,502			11.0	(22.3)	Rental car days sold	1,081,483			1,161,579			(6.9)
Hotel room nights sold	Hotel room nights sold	222,334			195,535			319,197			13.7	(30.3)	Hotel room nights sold	193,643			222,334			(12.9)
Percent of sales through website during period	Percent of sales through website during period	96.2		%	94.3		%	93.4		%	1.9	2.8	Percent of sales through website during period	95.3		%	96.2		%	(0.9)

(1)Except load factor and percent of sales through website during period, which are presented as a percentage point change.

(2)Includes $35.0 million special charge in the third quarter 2022 relating to Hurricane Ian damage to Sunseeker Resort.The amount of the loss will be offset in future periods by amounts to be recovered under our insurance policies.

~~(3)~~Defined as scheduled service revenue divided by revenue passenger miles.

~~(5)~~(4)Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.

NM Not Meaningful

LIQUIDITY AND CAPITAL RESOURCES

Current liquidity

Cash, cash equivalents and investment securities (short-term and long-term) decreased slightly to ~~$1.00~~$1.01 billion at September 30, ~~2022,~~2023, from ~~$1.19~~$1.02 billion at December 31, ~~2021.~~2022. Investment securities represent highly liquid marketable securities which are available-for-sale.

Restricted cash represents escrowed funds under fixed fee contracts ~~escrowed airport project funds~~ and cash collateral against letters of credit required by hotel properties for guaranteed room availability, airports and certain other parties. Under our fixed fee flying contracts, we require our customers to prepay for flights to be provided by us. The prepayments are escrowed until the flight is completed and are recorded as restricted cash with a corresponding amount reflected as air traffic liability.

Our operating cash flows and long-term debt borrowings have allowed us to invest in our fleet transition, return capital to shareholders in the form of recurring regular quarterly dividends and share repurchases, and invest in Sunseeker Resort. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments, as well as planned capital outlay related to Sunseeker Resort.

We believe we have more than adequate liquidity resources through our cash balances, operating cash flows, availability under revolving credit facilities, PDP facilities, and borrowings to meet our future contractual obligations. We will continue to consider raising funds through debt financing ~~on an opportunistic basis.~~as needed to fund capital expenditures.

In addition to our recurring quarterly cash dividend, our current share repurchase authority is $88.2 million. There is no expiration to this program.

Debt

Our debt and finance lease obligations balance, without reduction for related issuance costs, increased slightly from ~~$1.77~~$2.12 billion as of December 31, ~~2021~~2022 to ~~$2.02~~$2.31 billion as of September 30, 2023. Net debt (total debt less unrestricted cash, cash equivalents, and investments) as of September 30, 2023 was $1.28 billion, an increase of $200.4 million from December 31, 2022. During the nine months ended September 30, ~~2022,~~2023, we exercised a$15.2 millionpurchase option on one Airbus A320 finance leased aircraft and subsequently refinanced the same aircraft for $27.0 million. We also entered into a revolving credit facility to borrow up to $100.0 million which remains undrawn. This revolving credit facility is in addition to existing undrawn revolving credit facilities totaling $279.9 million. In addition, we obtained a $92.7 million debt facility secured by Airbus A320 aircraft. For the nine months ended September 30, 2023, we made total principal payments on debt of $292.9 million, including the voluntary repayment of a $61.0 million debt facility secured by 23 Airbus aircraft.

Additionally, during the third quarter of 2023, we entered into ~~debt~~a credit facility in an amount of up to $412.1 million, of which $196.0 million was funded in September and a portion of the proceeds were used to voluntarily prepay $112.8 million in existing debt. Additionally, $76.3 million was drawn on an existing PDP financing facility during the same period to finance leases for $918.3 million including debt of $550.0 million to refinance our term loan due 2024. During this period, we made principal payments of $666.0 million, including a $531.7 million prepayment of our term loan due 2024, $24.7 million prepayment of our payroll support program loans and $1.7 million prepayment of debt secured by aircraft.Boeing pre-delivery deposits.

As of September 30, ~~2022,~~2023, approximately 8286.2 percent of our debt and finance lease obligations are fixed-rate.

Sources and Uses of Cash

Operating Activities. Operating cash inflows are primarily derived from providing air transportation and related ancillary products and services to customers. During the nine months ended September 30, ~~2022,~~2023, our operating activities provided ~~$221.8~~$369.5 million of cash compared to ~~$373.6~~$221.8 million during the same period ~~2021.~~2022. This change is ~~mostly~~primarily attributable to a ~~$191.1~~$169.5 million ~~decrease~~increase in net ~~income offset by changes in current assets and liability accounts.~~income.

Investing Activities. Cash used for investing activities was ~~$335.6~~$537.4 million during the nine months ended September 30, ~~2022~~2023 compared to ~~$513.3~~$335.6 million used for investing activities during the same period in ~~2021.~~2022. The change is ~~due~~primarily attributable to a ~~$405.7~~$102.3 million increase in proceeds from maturities, net of purchases, of investment securities during the nine months ended September 30, 2022 as proceeds from maturities exceeded purchases of investment securities in the nine months ended September 30, 2022 but not in the same period of 2021. This was offset by a $227.0 million increase in purchases of property and equipment, ~~including $88.5~~a $166.7 million ~~related to~~increase in aircraft pre-delivery deposits, ~~during~~and a $28.1 million increase in net of proceeds from maturities of investment securities net of purchases, compared to the nine months ended September 30, 2022.

Financing Activities. Cash ~~used for~~provided by financing activities for the nine months ended September 30, ~~2022~~2023 was ~~$15.7~~$229.2 million, compared to ~~$205.4~~$15.7 million of cash ~~provided by financing activities for~~used in the same period in ~~2021.~~2022. The change ~~resulted~~was the result of a $264.9 million decrease in proceeds from ~~$335.1~~issuance of debt offset by a $373.2 million decrease in principal payments on long term debt and finance lease obligations and by $69.9 million of cash disbursed to us from funds held in a construction loan deposit trust account during the nine months ended September 30, 2023, compared to $87.5 million of funds deposited into the construction deposit trust account (which are considered to be both cash proceeds from the issuance of ~~common stock in the first nine months of 2021 offset by an increase in proceeds from~~ debt ~~issuance in excess of principal payments~~ and ~~debt issuance costs of $200.8 million compared~~cash outflows to the ~~same period in 2021 as debt proceeds exceeded principal payments and debt issuance costs~~deposit trust account) in the nine months ended September 30, ~~2022 but not~~2022. The funds in the ~~same period~~construction deposit trust account consist of ~~2021.~~proceeds of the Sunseeker construction loan and insurance recoveries and are disbursed to us on approval of construction expenses submitted to the trustee. The ~~$82.8~~net cash provided by these factors in the first nine months of 2023 was offset by $11.1 million ~~in other financing activities is largely~~used to pay cash dividends and $16.9 million used for repurchases of common stock attributable to open market repurchases and tax withholding on restricted award vestings during the ~~deposit of $87.5 million of loan proceeds into a construction disbursement account and as such, is a direct offset~~nine months ended September 30, 2023, compared to ~~$87.5 million of proceeds from~~none in the ~~issuance of debt obligations for Sunseeker Resort.~~prior year.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding the number of contracted aircraft to be placed in service in the future, the timing of aircraft deliveries and retirements, the implementation of a joint alliance with VivaAerobus, the ~~development of~~opening date for our Sunseeker Resort, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate," “project,” “hope” or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the impact of Hurricane Ian on our Florida markets and on completion of Sunseeker Resort, the impact and duration of the COVID-19 pandemic on airline travel and the economy, ~~liquidity issues resulting from the effect of the COVID-19 pandemic on our business, restrictions imposed on us a result of accepting government grants under the government payroll support programs,~~ an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on third parties to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed, the effect of economic conditions on leisure travel, debt covenants and balances, the impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to implement the announced alliance with VivaAerobus and to otherwise prepare to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the impact of management changes and the possible loss of key personnel, economic and other conditions in markets in which we operate, the ability to successfully develop a resort in Southwest Florida, ~~governmental regulation,~~ increases in maintenance ~~costs and~~cost, cyclical and seasonal fluctuations in our operating ~~results.~~results and the perceived acceptability of our environmental, social, and governance efforts.

Any forward-looking statements are based on information available to us today and we undertake no obligation to publicly update any forward-looking statements, whether as a result of future events, new information or otherwise.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting estimates during the nine months ended September 30, ~~2022.~~2023. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our ~~2021~~2022 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited).

3234

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain market risks, including commodity prices (specifically aircraft fuel). The adverse effects of changes in these markets could pose potential losses as discussed below. The sensitivity analysis provided does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.

Aircraft Fuel

Our results of operations can be significantly impacted by changes in the price and availability of aircraft fuel. Aircraft fuel expense for the nine months ended September 30, ~~2022~~2023 represented ~~37.3~~30.8 percent of our total operating expenses. Increases in fuel prices, or a shortage of supply, could have a material impact on our operations and operating results. Based on our fuel consumption for the nine months ended September 30, ~~2022,~~2023, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately ~~$63.7~~$52.1 million. We have not hedged fuel price risk for many years.

Interest Rates

As of September 30, ~~2022,~~2023, we had ~~$371.7~~$317.5 million of variable-rate debt, including current maturities and without reduction for ~~$3.6~~$3.1 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately ~~$6.1~~$2.9 million for the nine months ended September 30, ~~2022 as the amount of our variable rate debt during the year was much higher prior to the prepayment of our term loan in August 2022.~~2023.

Item 4. Controls and Procedures

As of September 30, ~~2022,~~2023, under the supervision and with the participation of our management, including our chief executive officer ("CEO") and chief financial officer (“CFO”), we evaluated the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, management, including our CEO and CFO, has concluded that our disclosure controls and procedures are designed, and are effective, to give reasonable assurance that the information we are required to disclose is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ending September 30, ~~2022,~~2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3335

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to certain legal and administrative actions we consider routine to our business activities. We believe the ultimate outcome of any pending legal or administrative matters will not have a material adverse impact on our financial position, liquidity or results of operations.

Item 1A. Risk Factors

We have evaluated our risk factors and determined there are no changes to those set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 and filed with the Commission on ~~March 1, 2022 other than to include the following risk factor:~~

~~The damage caused by Hurricane Ian may impact air traffic to those areas of Florida impacted by the storm and the damage to our Sunseeker Resort may result in delays and additional costs.~~

Near the end of September 2022, Hurricane Ian struck Southwest Florida and moved across the State of Florida causing substantial damage in its wake. All airports in the affected areas were closed for a period of time, but have now reopened. Particular areas in Southwest Florida suffered damage which may take years to restore. These areas include the tourist destinations of Fort Myers Beach, Sanibel Island and Captiva Island among others, to which many of our customers travel when flying on our network. There is no assurance that passenger travel to our leisure destinations in Punta Gorda, Sarasota and Key West will not be impacted, or to what extent, as a result of the lingering effects of the damage and recovery from Hurricane Ian.

Hurricane Ian also caused significant damage to our Sunseeker Resort. We are in the process of evaluating the extent of the damage and our insurance coverages. While we do not at this time believe the delay to the completion of the Resort will be longer than a few months, this will depend on the availability of workers and materials and other factors which are beyond our control.February 27, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Our Repurchases of Equity Securities

~~(a)During~~The following table reflects the repurchases of our common stock during third quarter 2022, we issued 17,876 shares of restricted stock to Scott Sheldon, our president and chief operating Officer, 16,812 shares of restricted stock to Gregory Anderson, our president and chief financial officer, 9,949 shares to Scott DeAngelo, our executive vice president and chief marketing officer, and 11,244 shares to Rob Wilson, our executive vice president and chief information officer under their respective employment agreements. These shares of restricted stock represent the base equity grant for the period under their employment agreements and vest over three years. All of these shares were issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, on the basis that the issuance did not involve a public offering.2023:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of our Publicly Announced Plan	Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs (in thousands) (2)
July	1,339	$	129.46	None
August	2,527	$	121.53	None
September	11,976	$	78.84	None
Total	15,842	$	89.93	—	$	88,196

~~(b)~~(1)~~Not applicable~~Represents shares repurchased from employees who vested a portion of their restricted stock grants. These share repurchases were made at the election of each employee pursuant to an offer to repurchase by us. In each case, the shares repurchased constituted a portion of vested shares necessary to satisfy income tax withholding requirements.

~~(c)~~(2)~~We did not repurchase any~~Represents the remaining dollar amount of open market purchases of our common stock ~~during the third quarter 2022.~~which has been authorized by our board under a share repurchase program.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

~~None~~Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

3436

Item 6. Exhibits


3.1			Articles of Incorporation of Allegiant Travel Company. (Incorporated by reference to Exhibit 3.1 to Registration Statement No. 333-134145 filed with the Commission on July 6, 2006).
3.2			Bylaws of Allegiant Travel Company as amended on October 18, 2021. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the Commission on July 28, ~~2022.~~2022).
10.1			~~Employment~~Separation Agreement between Registrant and John Redmond dated ~~as of August 1, 2022 between the Company and Scott Sheldon.~~September 26, 2023
10.2			~~Employment~~Credit Agreement by and among Sunrise Asset Management, LLC, as Borrower, the Lenders party hereto, as Lenders, BNP Paribas, as Administrative Agent, Bank of Utah, as Security Trustee, BNP Paribas and JSA International U.S. Holdings ,LLC as Lead Arrangers, and BNP Paribas, as Sole Structuring Agent dated as of ~~August 1, 2022 between the Company and Gregory Anderson.~~September 27, 2023(1)
10.3			~~Employment~~Mortgage and Security Agreement by and among Sunrise Asset Management, LLC, as Mortgagor, Bank of Utah, as Account Bank, and Bank of Utah, not in its individual capacity but solely as Security Trustee, as Mortgagee, dated as of ~~August 1, 2022 between the Company and Scott DeAngelo.~~September 27, 2023(1)
10.4			~~Employment Agreement~~Lessee Consent from Sunrise Asset Management, LLC as Lessor, and Bank of Utah, as Security Trustee, to Allegiant Air, LLC, as Lessee dated ~~as of August 1, 2022 between the Company and Robert Wilson, III.~~September 29, 2023(1)
10.5			~~PDP Credit~~Lessee Guarantee Agreement ~~dated as of September 30, 2022 among~~by and between Allegiant Air, LLC, ~~Norddeutsche Landesbank Girozentrale (acting through its New York branch) and Landesbank Hessen-Thüringen Girozentrale~~ as ~~Original Lenders~~Guarantor, and Bank of Utah, as ~~security trustee. (1)~~Security Trustee dated as of September 27, 2023
10.6			~~Purchase~~Allegiant Guarantee Agreement ~~Assignment~~by and ~~Security Agreement dated as of September 30, 2022,~~ between Allegiant ~~Air, LLC~~Travel Company, as Guarantor, and Bank of Utah, as ~~security trustee. (1)~~Security Trustee dated as of September 27, 2023
10.7			~~Definitions Relating to the PDP Credit~~Table of Contents of Purchase Agreement No. 05130 between The Boeing Company and ~~the Security Agreement referenced in items 10.5 and 10.6.~~ Allegiant Air, LLC(1)
10.8			~~Allegiant Guarantee~~Supplemental Agreement ~~dated as of September 30, 2022~~No. 2 to Purchase Agreement No. 05130 between ~~the~~The Boeing Company and ~~Bank of Utah as security trustee.~~Allegiant Air, LLC(1)
10.9			Table 1A-R2 to Purchase Agreement No. PA-05130 - Aircraft Information Table 737-8 2 00(1)
10.10			Table 1B-R2 to Purchase Agreement No. PA-05130 - Aircraft Information Table Model 737-7(1)
10.11			Aircraft Configuration between The Boeing Company and Allegiant Air Exhibit A1-R1 to Purchase Agreement Number PA-05130(1)
10.12			Aircraft Configuration between The Boeing Company and Allegiant Air Exhibit A2-R1 to Purchase Agreement Number PA-05130(1)
10.13			Buyer Furnished Equipment Variables between The Boeing Company and Allegiant Air, LLC - Supplemental Exhibit BFE1 to Purchase Agreement Number PA-05130(1)
10.14			Letter Agreement WJE-PA-05130-LA-2101477R1 between The Boeing Company and Allegiant Air, LLC(1)
10.15			Attachment A to Letter Agreement No. WJE-PA-05130-LA-2101477(1)
10.16			Attachment B to Letter Agreement No. WJE-PA-05130-LA-2101477(1)
10.17			Letter Agreement WJE-PA-05130-LA-2101479R2 between The Boeing Company and Allegiant Air, LLC(1)
10.18			Letter Agreement WJE-PA-05130-LA-2101488R1 between The Boeing Company and Allegiant Air, LLC(1)
10.19			Letter Agreement WJE-PA-05130-LA-2104982R1 between The Boeing Company and Allegiant Air, LLC(1)
10.20			Letter Agreement WJE-PA-05130-LA-2103930R1 between The Boeing Company and Allegiant Air, LLC(1)
10.21			Letter Agreement WJE-PA-05130-LA-2101482R1 between The Boeing Company and Allegiant Air, LLC(1)
10.22			Letter Agreement WJE-PA-05130-LA-2103907R1 between The Boeing Company and Allegiant Air, LLC(1)
10.23			Letter Agreement WJE-PA-05130-LA-2103908R1 between The Boeing Company and Allegiant Air, LLC(1)
10.24			Attachment A to Letter Agreement No. WJE-PA-05130-LA-2103908R1(1)
31.1			Rule 13a - 14(a) / 15d - 14(a) Certification of Principal Executive Officer
31.2			Rule 13a - 14(a) / 15d - 14(a) Certification of Principal Financial Officer
32			Section 1350 Certifications
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Labels Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

(1)Certain confidential information in this agreement has been omitted because it (i) is not material and (ii) would be competitively harmful if publicly disclosed.

3537

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		ALLEGIANT TRAVEL COMPANY


Date:	November ~~3, 2022~~8, 2023	By:	/s/ ~~Gregory Anderson~~Robert J. Neal
		~~Gregory Anderson,~~Robert J. Neal, as duly authorized officer of the Company ~~(President~~(Senior Vice President and Chief Financial Officer) and as Principal Financial Officer

3638


(in thousands)	As of September 30, 2022		As of December 31, 2021
Airline	$	4,012,922	$	3,872,041
Sunseeker Resort	398,042		119,032

Consolidated	$	4,410,964	$	3,991,073