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 March 31, 20232024
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
algtheaderq417a17.jpg
Allegiant Travel Company
(Exact Name of Registrant as Specified in Its Charter)
Nevada20-4745737
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification No.)
1201 North Town Center Drive
Las Vegas,Nevada89144
(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 classTrading SymbolName of each exchange on which registered
Common stock, par value $0.001ALGTNASDAQ 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 April 24, 2023,29, 2024, the registrant had 18,429,00418,232,284 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.
3
  
ITEM 2.
2115
  
ITEM 3.
2923
  
ITEM 4.
2923
  
PART II.OTHER INFORMATION
  
ITEM 1.
3024
  
ITEM 1A.
3024
  
ITEM 2.
3024
ITEM 3.
3024
ITEM 4.
3024
ITEM 5.
3024
  
ITEM 6.
3125
3226
2

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2023December 31, 2022
(unaudited)
March 31, 2024March 31, 2024December 31, 2023
(unaudited)
CURRENT ASSETSCURRENT ASSETS 
CURRENT ASSETS
CURRENT ASSETS
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$317,573 $229,989 
Restricted cashRestricted cash17,157 15,457 
Short-term investmentsShort-term investments690,593 725,063 
Accounts receivableAccounts receivable57,798 106,578 
Expendable parts, supplies and fuel, netExpendable parts, supplies and fuel, net35,086 35,546 
Prepaid expenses and other current assetsPrepaid expenses and other current assets181,893 161,636 
Prepaid expenses and other current assets
Prepaid expenses and other current assets
TOTAL CURRENT ASSETSTOTAL CURRENT ASSETS1,300,100 1,274,269 
Property and equipment, netProperty and equipment, net2,946,941 2,810,693 
Long-term investmentsLong-term investments68,801 63,318 
Deferred major maintenance, netDeferred major maintenance, net162,221 157,410 
Operating lease right-of-use assets, netOperating lease right-of-use assets, net106,999 111,679 
Deposits and other assetsDeposits and other assets95,359 93,928 
TOTAL ASSETS:TOTAL ASSETS:$4,680,421 $4,511,297 
CURRENT LIABILITIESCURRENT LIABILITIES
Accounts payableAccounts payable$65,936 $58,335 
Accounts payable
Accounts payable
Accrued liabilitiesAccrued liabilities225,510 226,276 
Current operating lease liabilitiesCurrent operating lease liabilities20,200 19,973 
Air traffic liabilityAir traffic liability479,530 379,459 
Loyalty program liability36,417 32,888 
Current loyalty program liability
Current maturities of long-term debt and finance lease obligations, net of related costsCurrent maturities of long-term debt and finance lease obligations, net of related costs289,669 152,900 
TOTAL CURRENT LIABILITIESTOTAL CURRENT LIABILITIES1,117,262 869,831 
Long-term debt and finance lease obligations, net of current maturities and related costsLong-term debt and finance lease obligations, net of current maturities and related costs1,816,151 1,944,078 
Deferred income taxesDeferred income taxes348,334 346,388 
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities89,903 94,972 
Loyalty program liability23,216 23,612 
Noncurrent loyalty program liability
Other noncurrent liabilitiesOther noncurrent liabilities14,158 11,718 
TOTAL LIABILITIES:TOTAL LIABILITIES:3,409,024 3,290,599 
SHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITY
Common stock, par value $0.001
Common stock, par value $0.001
Common stock, par value $0.001Common stock, par value $0.00125 25 
Treasury sharesTreasury shares(672,493)(660,023)
Additional paid in capitalAdditional paid in capital714,506 709,471 
Accumulated other comprehensive income, netAccumulated other comprehensive income, net3,242 1,257 
Retained earningsRetained earnings1,226,117 1,169,968 
TOTAL EQUITY:TOTAL EQUITY:1,271,397 1,220,698 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:$4,680,421 $4,511,297 
 
The accompanying notes are an integral part of these consolidated financial statements.
3

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 (unaudited)
Three Months Ended March 31,
20232022
OPERATING REVENUES:OPERATING REVENUES:
OPERATING REVENUES:
OPERATING REVENUES:
Passenger
Passenger
PassengerPassenger$609,277 $463,961 
Third party productsThird party products26,037 22,480 
Third party products
Third party products
Fixed fee contractsFixed fee contracts14,117 13,386 
Other256 282 
Fixed fee contracts
Fixed fee contracts
Resort and other
Resort and other
Resort and other
Total operating revenues
Total operating revenues
Total operating revenuesTotal operating revenues649,687 500,109 
OPERATING EXPENSES:OPERATING EXPENSES:
OPERATING EXPENSES:
OPERATING EXPENSES:
Salaries and benefits
Salaries and benefits
Salaries and benefits
Aircraft fuelAircraft fuel189,546 164,137 
Salaries and benefits159,623 134,010 
Aircraft fuel
Aircraft fuel
Station operations
Station operations
Station operationsStation operations61,520 65,744 
Depreciation and amortizationDepreciation and amortization54,680 46,343 
Depreciation and amortization
Depreciation and amortization
Sales and marketing
Sales and marketing
Sales and marketing
Maintenance and repairsMaintenance and repairs26,442 27,820 
Sales and marketing26,928 22,350 
Maintenance and repairs
Maintenance and repairs
Aircraft lease rentals
Aircraft lease rentals
Aircraft lease rentalsAircraft lease rentals7,092 6,132 
OtherOther30,643 26,202 
Other
Other
Special charges(1,612)142 
Special charges, net of recoveries
Special charges, net of recoveries
Special charges, net of recoveries
Total operating expenses
Total operating expenses
Total operating expensesTotal operating expenses554,862 492,880 
OPERATING INCOMEOPERATING INCOME94,825 7,229 
OPERATING INCOME
OPERATING INCOME
OTHER (INCOME) EXPENSES:OTHER (INCOME) EXPENSES:
OTHER (INCOME) EXPENSES:
OTHER (INCOME) EXPENSES:
Interest income
Interest income
Interest income
Interest expense
Interest expense
Interest expenseInterest expense35,708 19,791 
Capitalized interestCapitalized interest(5,180)(1,216)
Interest income(10,128)(773)
Capitalized interest
Capitalized interest
Other, net
Other, net
Other, netOther, net7 (6)
Total other expensesTotal other expenses20,407 17,796 
Total other expenses
Total other expenses
INCOME (LOSS) BEFORE INCOME TAXES
INCOME (LOSS) BEFORE INCOME TAXES
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES74,418 (10,567)
INCOME TAX PROVISION (BENEFIT)INCOME TAX PROVISION (BENEFIT)18,269 (2,686)
INCOME TAX PROVISION (BENEFIT)
INCOME TAX PROVISION (BENEFIT)
NET INCOME (LOSS)
NET INCOME (LOSS)
NET INCOME (LOSS)NET INCOME (LOSS)$56,149 $(7,881)
Earnings (loss) per share to common shareholders:Earnings (loss) per share to common shareholders:
Earnings (loss) per share to common shareholders:
Earnings (loss) per share to common shareholders:
Basic
Basic
BasicBasic$3.09 $(0.44)
DilutedDiluted$3.09 $(0.44)
Diluted
Diluted
Shares used for computation:
Shares used for computation:
Shares used for computation:Shares used for computation:
BasicBasic17,766 17,954 
Basic
Basic
Diluted
Diluted
DilutedDiluted17,769 17,954 
Cash dividends declared per share:Cash dividends declared per share:$— $— 
Cash dividends declared per share:
Cash dividends declared per share:

The accompanying notes are an integral part of these consolidated financial statements.
4

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended March 31,
20232022
NET INCOME (LOSS)NET INCOME (LOSS)$56,149 $(7,881)
NET INCOME (LOSS)
NET INCOME (LOSS)
Other comprehensive income: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
Change in available for sale securities, net of taxChange in available for sale securities, net of tax1,985 3,355 
Total other comprehensive income (loss)1,985 3,355 
TOTAL COMPREHENSIVE INCOME (LOSS)TOTAL COMPREHENSIVE INCOME (LOSS)$58,134 $(4,526)
TOTAL COMPREHENSIVE INCOME (LOSS)
TOTAL COMPREHENSIVE INCOME (LOSS)

The accompanying notes are an integral part of these consolidated financial statements.
5

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended March 31, 2023
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202218,128 $25 $709,471 $1,257 $1,169,968 $(660,023)$1,220,698 
Share-based compensation(5)— 5,035 — — — 5,035 
Shares repurchased by the Company and held as treasury shares(125)— — — — (12,470)(12,470)
Other comprehensive income— — — 1,985 — — 1,985 
Net income— — — — 56,149 — 56,149 
Balance at March 31, 202317,998 $25 $714,506 $3,242 $1,226,117 $(672,493)$1,271,397 
Three Months Ended March 31, 2024
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive incomeRetained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202318,269 $26 $741,055 $3,991 $1,265,420 $(681,932)$1,328,560 
Share-based compensation15 — 6,818 — — — 6,818 
Shares repurchased by the Company and held as treasury shares(2)— — — — (143)(143)
Cash dividends, $0.60 per share— — — — (10,952)— (10,952)
Other comprehensive loss— — — (1,208)— — (1,208)
Net loss— — — — (919)— (919)
Balance at March 31, 202418,282 $26 $747,873 $2,783 $1,253,549 $(682,075)$1,322,156 

Three Months Ended March 31, 2022
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202118,111 $25 $692,053 $2,056 $1,167,475 $(638,057)$1,223,552 
Share-based compensation8 — 3,270 — — — 3,270 
Other comprehensive income— — — 3,355 — — 3,355 
Net (loss)— — — — (7,881)— (7,881)
Balance at March 31, 202218,119 $25 $695,323 $5,411 $1,159,594 $(638,057)$1,222,296 
Three Months Ended March 31, 2023
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive incomeRetained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202218,128 $25 $709,471 $1,257 $1,169,968 $(660,023)$1,220,698 
Share-based compensation(5)— 5,035 — — — 5,035 
Shares repurchased by the Company and held as treasury shares(125)— — — — (12,470)(12,470)
Other comprehensive income— — — 1,985 — — 1,985 
Net income— — — — 56,149 — 56,149 
Balance at March 31, 202317,998 $25 $714,506 $3,242 $1,226,117 $(672,493)$1,271,397 

6

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31, Three Months Ended March 31,
20232022 20242023
Cash flows from operating activities:Cash flows from operating activities:
Net income (loss)Net income (loss)$56,149 $(7,881)
Net income (loss)
Net income (loss)
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 amortizationDepreciation and amortization54,680 46,343 
Special charges(1,835)142 
Depreciation and amortization
Depreciation and amortization
Special charges, net of recoveries
Other adjustmentsOther adjustments1,592 6,155 
Changes in certain assets and liabilities:Changes in certain assets and liabilities:
Air traffic liabilityAir traffic liability100,071 145,169 
Air traffic liability
Air traffic liability
Other - net
Other - net
Other - netOther - net4,743 (13,927)
Net cash provided by operating activitiesNet cash provided by operating activities215,400 176,001 
Cash flows from investing activities:Cash flows from investing activities:
Purchase of investment securities
Purchase of investment securities
Purchase of investment securitiesPurchase of investment securities(251,937)(302,161)
Proceeds from maturities of investment securitiesProceeds from maturities of investment securities288,591 311,332 
Aircraft pre-delivery depositsAircraft pre-delivery deposits(33,516)(46,694)
Purchase of property and equipmentPurchase of property and equipment(129,883)(71,659)
Other investing activitiesOther investing activities12,506 (572)
Net cash (used in) investing activities(114,239)(109,754)
Other investing activities
Other investing activities
Net cash used in investing activities
Cash flows from financing activities:Cash flows from financing activities:
Cash dividends paid to shareholders
Cash dividends paid to shareholders
Cash dividends paid to shareholders
Proceeds from the issuance of debt and finance lease obligationsProceeds from the issuance of debt and finance lease obligations59,516 — 
Repurchase of common stockRepurchase of common stock(12,470)— 
Principal payments on debt and finance lease obligationsPrincipal payments on debt and finance lease obligations(51,492)(37,335)
Debt issuance costsDebt issuance costs(877)(308)
Other financing activitiesOther financing activities(6,554)— 
Net cash (used in) financing activities(11,877)(37,643)
Other financing activities
Other financing activities
Net cash used in financing activities
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASHNET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH89,284 28,604 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIODCASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD245,446 400,701 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIODCASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$334,730 $429,305 
CASH PAYMENTS FOR:CASH PAYMENTS FOR:
CASH PAYMENTS FOR:
CASH PAYMENTS FOR:
Interest paid, net of amount capitalized
Interest paid, net of amount capitalized
Interest paid, net of amount capitalizedInterest paid, net of amount capitalized$41,645 $18,007 
Income tax paymentsIncome tax payments14 17 
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Right-of-use (ROU) assets acquired
Right-of-use (ROU) assets acquired
Right-of-use (ROU) assets acquired
Flight equipment acquired under finance leases— 68,211 
Purchases of property and equipment in accrued liabilities
Purchases of property and equipment in accrued liabilities
Purchases of property and equipment in accrued liabilitiesPurchases of property and equipment in accrued liabilities69,240 37,083 

The accompanying notes are an integral part of these consolidated financial statements.
7

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, 20222023 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.
8


Note 2 — Sunseeker 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, thereThere was anothera subsequent weather-related event and a fire that caused additional damage. Baseddamage in fourth quarter 2022. In addition, during third quarter 2023, the Sunseeker Resort construction site sustained additional damages related to Hurricane Idalia. The Company recorded estimated losses in 2022 and 2023 based on the Company’sits assessment of these damages and the anticipated future restoration costs, ancost. The estimated loss of $52.1 million waslosses were recorded as ato special charge in 2022.

During the quarter ended March 31, 2023, the Company recorded $1.8 million of insurance recoveries. The recoveriescharges and are offset by $0.2 million of additional losses recorded duringinsurance recoveries in the quarter, resulting in a special charge of $(1.6) million.period they are approved. To date, the Company has recorded $78.2 million in losses and $52.5 million in insurance recoveries. The Company has submitted additional insurance claims that remain outstanding at the date of this report.

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 retired in 2023 and two airframes were retired in first quarter 2024. The remaining airframes are to be retired between May 2024 and September 2025. The accelerated depreciation on these airframes resulting from a change in the estimated useful life is recorded as a special charge.

Special Charges

The table below summarizes special charges recorded during the three months ended March 31, 2024, and 2023.
Three Months Ended March 31,
(in thousands)20242023
Sunseeker weather and related events$100 $200 
Sunseeker weather and related events, insurance recoveries(1)
(1,916)(1,826)
Accelerated depreciation on airframes identified for early retirement14,915 14 
Total special charges$13,099 $(1,612)

(1) Includes $0.7 million of business interruption insurance recoveries of $19.9 million related to Hurricane Ian and subsequentfor the three months ended March 31, 2024. No business interruption insurance events.recoveries were recorded during the three months ended March 31, 2023.
98

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 March 31,
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
(in thousands)
(in thousands)
(in thousands)(in thousands)20232022
Scheduled serviceScheduled service$311,728 $223,854 
Scheduled service
Scheduled service
Ancillary air-related charges
Ancillary air-related charges
Ancillary air-related chargesAncillary air-related charges283,902 229,464 
Loyalty redemptionsLoyalty redemptions13,647 10,643 
Loyalty redemptions
Loyalty redemptions
Total passenger revenueTotal passenger revenue$609,277 $463,961 
Total passenger revenue
Total passenger revenue

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when transportationthe underlying service is provided. As of March 31, 2023,2024, the air traffic liability balance was $479.5$432.6 million, of which approximately $425.3$377.6 million was related to forward bookings, with the remaining $54.2$55.0 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 $379.5$353.5 million that was recorded in the air traffic liability balance as of December 31, 2022,2023, approximately 68.872.7 percent was recognized into passenger revenue during the three months ended March 31, 2023.

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.2024.

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 (which applied for vouchers issued in 2020 and in the first half of 2021) and uncertainty regarding demand for future air travel.

Resort Revenue

The Company's resort revenues for the three months ended March 31, 2024 are set forth in the table below:

Three Months Ended March 31,
(in thousands)20242023
Food and beverage10,772 — 
Rooms$9,957 $— 
Other3,158 5 
Total resort revenue$23,887 $5 

Revenue from banquets, golf, retail and spa services are included in other resort revenue. Resort revenue is recognized as the underlying services or goods have been provided. There is typically little to no lag between when the services are performed and when payment is remitted. Large group reservations, conventions, and other event bookings require advance deposits which are recorded as accrued liabilities in the Company's balance sheet until the related services and goods are provided. Guest receivables are recorded in accounts receivable on the Company's balance sheet for room nights stayed prior to payment at checkout. The amounts of advance deposit liabilities and guest ledger receivables were not material at March 31, 2024 and December 31, 2023.

Loyalty redemptions

In relation to the travel component of the Allways® Allegiant co-brandedAllways Rewards® co-brand 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.redemptions at the airline and resort. 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 and resort revenue when the points are redeemed and the underlying service is provided. Similarly, in relation to the Allways Rewards loyalty 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 beenis provided.


9

The following table presents the activity of the point liability for the periods indicated:
Three Months Ended March 31,
Three Months Ended March 31,Three Months Ended March 31,
(in thousands)(in thousands)20232022(in thousands)20242023
Points balance at January 1Points balance at January 1$56,541 $40,490 
Points awarded (deferral of revenue)Points awarded (deferral of revenue)16,739 16,957 
Points redeemed (recognition of revenue)Points redeemed (recognition of revenue)(13,647)(10,643)
Points balance at March 31Points balance at March 31$59,633 $46,804 

The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in noncurrent liabilities expected to be recognized into revenue in periods thereafter.
10


Note 4 — Property and Equipment

The following table summarizes the Company's property and equipment as of the dates indicated:
(in thousands)(in thousands)March 31, 2023December 31, 2022(in thousands)March 31, 2024December 31, 2023
Flight equipment, including pre-delivery deposits$3,000,824 $2,937,767 
Airline
Flight equipment
Flight equipment
Flight equipment
Computer hardware and softwareComputer hardware and software230,034 209,808 
Land and buildings/leasehold improvementsLand and buildings/leasehold improvements62,157 62,227 
Other property and equipmentOther property and equipment100,213 95,156 
Sunseeker ResortSunseeker Resort406,192 320,572 
Land and buildings/leasehold improvements
Land and buildings/leasehold improvements
Land and buildings/leasehold improvements
Other property and equipment
Construction in progress
Total property and equipmentTotal property and equipment3,799,420 3,625,530 
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(852,479)(814,837)
Property and equipment, netProperty and equipment, net$2,946,941 $2,810,693 

As of March 31, 2024, the Company had firm commitments to purchase 50 aircraft which are expected to begin delivering in 2024.

Accrued capital expenditures as of March 31, 20232024 and December 31, 20222023 were $69.2$40.9 million and $54.6$71.7 million,respectively.
11


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)March 31, 2023December 31, 2022(in thousands)March 31, 2024December 31, 2023
Fixed-rate debt and finance lease obligations due through 2032Fixed-rate debt and finance lease obligations due through 2032$1,719,077 $1,720,998 
Variable-rate debt due through 2029Variable-rate debt due through 2029386,743 375,980 
Total debt and finance lease obligations, net of related costs2,105,820 2,096,978 
Total long-term debt and finance lease obligations, net of related costs
Less current maturities, net of related costsLess current maturities, net of related costs289,669 152,900 
Long-term debt and finance lease obligations, net of current maturities and related costsLong-term debt and finance lease obligations, net of current maturities and related costs$1,816,151 $1,944,078 
Weighted average fixed-interest rate on debtWeighted average fixed-interest rate on debt6.4%6.5%
Weighted average fixed-interest rate on debt
Weighted average fixed-interest rate on debt6.3%6.3%
Weighted average variable-interest rate on debtWeighted average variable-interest rate on debt6.6%6.1%Weighted average variable-interest rate on debt7.9%7.9%

Interest Rate(s) Per Annum atMarch 31, 2023December 31, 2022
(in thousands)Maturity DatesMarch 31, 2023
Senior secured notes2024—20277.25 %—8.50%$700,000 $700,000 
Consolidated variable interest entities2024—20292.92 %—4.10%103,966 79,453 
Revolving credit facilities2024—20277.32%62,844 30,327 
Debt secured by aircraft, engines, other equipment and real estate2023—20291.87 %—7.45%438,282 466,335 
Finance leases2028—20324.44 %—7.00%473,339 494,328 
Construction loan agreement20285.75%350,000 350,000 
Total debt$2,128,431 $2,120,443 
Related costs(22,611)(23,465)
Total debt net of related costs$2,105,820 $2,096,978 
10

Interest Rate(s) Per Annum atBalance as of
(dollars in thousands)Maturity DatesMarch 31, 2024March 31, 2024December 31, 2023
Senior secured notes20277.25%$550,000 $550,000 
Consolidated variable interest entities2024-20292.92%-5.19%126,762 130,650 
Revolving credit facilities2024-20277.92%200,000 200,000 
Debt secured by aircraft, engines, other equipment and real estate2025-20311.87%-8.25%593,606 596,271 
Finance leases2028-20324.44%-7.01%449,044 455,248 
Construction loan agreement20285.75%350,000 350,000 
Total debt$2,269,412 $2,282,169 
Related costs(20,664)(22,515)
Total debt net of related costs$2,248,748 $2,259,654 

Maturities of long term debt as of March 31, 2023,2024, for the next five years and thereafter, in the aggregate, are:

(in thousands)(in thousands)As of March 31, 2023(in thousands)As of March 31, 2024
Remaining in 2023$104,631 
2024365,058 
Remaining in 2024
20252025161,775 
20262026155,579 
20272027709,921 
20282028278,929 
2029
ThereafterThereafter329,927 
Total debt and finance lease obligations, net of related costsTotal debt and finance lease obligations, net of related costs$2,105,820 

Debt Secured by Aircraft


Revolving Credit Facility

In February 2023,During the three months ended March 31, 2024, the Company throughreceived $18.8 million in advances on a wholly owned subsidiary, entered into a credit agreement with Credit Agricole Corporate and Investment Bank, under which the Company is entitled to borrow up to $100.0 million. This revolvingpre-delivery payment (PDP) credit facility replaced a revolving credit facility withsecured by certain of the same lender which was to expire in March 2023. The revolving credit facility has a maturity date of March 31, 2026 and the borrowing ability is based on the value ofCompany's Boeing aircraft and engines placed into the collateral pool.purchase rights. The notes under the facility bear interest at a floating interest rate based on SOFR. AsSOFR and mature on June 30, 2025 or upon delivery of the applicable aircraft.

Other Secured Debt

In March 31, 2023,2024, the facility remains undrawn.Company entered into credit agreements for up to $218.5 million which will be collateralized by new aircraft upon delivery. The loans will bear interest at a variable rate based on 3-month SOFR and are payable in quarterly installments for a term of 12 years. No draws have been made on these financing commitments to date.


Consolidated Variable Interest Entities

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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 rate of 2.92 percent and is payable in monthly installments through February 2029, at which time the Company will have a purchase option at a fixed amount.
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Note 6 — Income Taxes

The Company recorded an $18.3 million income tax expense at an effective tax rate of 24.5 percent and a $2.7$0.4 million income tax benefit at a 25.431.3 percent effective tax rate and an $18.3 million income tax provision at a 24.5 percent effective tax rate for the three months ended March 31, 20232024 and 2022,2023, respectively. The effective tax rate for the three months ended March 31, 20232024 differed from the statutory Federalfederal income tax rate of 21.0 percent primarily due to state income taxes, and the impact of permanent tax differences. differences, and discrete items. During the quarter, the Company recognized a $0.2 million income tax benefit for discrete items which were related to share based compensation and to an immaterial adjustment to a prior year uncertain tax benefit.

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.
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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
11

comparable assets and models utilizing market observable inputs for valuation of these securities. No changes in valuation techniques or inputs occurred during the three months ended March 31, 2023.2024.

Financial instruments measured at fair value on a recurring basis:
As of March 31, 2023As of December 31, 2022
As of March 31, 2024As of March 31, 2024As of December 31, 2023
(in thousands)(in thousands)TotalLevel 1Level 2TotalLevel 1Level 2(in thousands)TotalLevel 1Level 2TotalLevel 1Level 2
Cash equivalentsCash equivalents   
Commercial paper
Commercial paper
Commercial paper
Money market fundsMoney market funds$105,574 $105,574 $— $88,073 $88,073 $— 
US Treasury bonds
Municipal debt securities
Federal agency debt securities
Federal agency debt securities
Federal agency debt securities
Total cash equivalents
Short-termShort-term    
Corporate debt securities
Commercial paperCommercial paper70,727 — 70,727 50,791 — 50,791 
Federal agency debt securities
Municipal debt securitiesMunicipal debt securities7,593 — 7,593 8,599 — 8,599 
US Treasury Bonds
Certificate of deposit
Total short-term
Long-termLong-term  
Corporate debt securities
Federal agency debt securities
Total cash equivalents183,894 105,574 78,320 147,463 88,073 59,390 
Short-term     
Commercial paper373,285 — 373,285 421,279 — 421,279 
US Treasury Bonds23,457 — 23,457 — — — 
Corporate debt securities133,273 — 133,273 166,136 — 166,136 
Municipal debt securities12,157 — 12,157 30,426 — 30,426 
Federal agency debt securities148,421 — 148,421 107,222 — 107,222 
Total short-term690,593 — 690,593 725,063 — 725,063 
Long-term      
Federal agency debt securities38,261 — 38,261 20,050 — 20,050 
Corporate debt securities22,904 — 22,904 35,688 — 35,688 
Total long-term
Municipal debt securities7,636 — 7,636 7,580 — 7,580 
Total long-term
Total long-termTotal long-term68,801 — 68,801 63,318 — 63,318 
Total financial instrumentsTotal financial instruments$943,288 $105,574 $837,714 $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.

CarryingThe 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:
As of March 31, 2023As of December 31, 2022
As of March 31, 2024
(in thousands)(in thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair ValueHierarchy Level
Non-publicly held debt$1,655,092 $1,636,067 $1,626,114 $1,561,939 3
(in thousands)
(in thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair ValueHierarchy Level
Fair Value of Notes PayableFair Value of Notes Payable$1,820,368 $1,815,856 $1,826,921 $1,815,351 3

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

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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 ended March 31, 2022,2024, basic and diluted loss per share are the same because of the 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 March 31,
20232022
Basic:  
Net income (loss)$56,149 $(7,881)
Less income allocated to participating securities(1,254)— 
Net income (loss) attributable to common stock$54,895 $(7,881)
Earnings (loss) per share, basic$3.09 $(0.44)
Weighted-average shares outstanding17,766 17,954 
Diluted:  
Net income (loss)$56,149 $(7,881)
Less income allocated to participating securities(1,254)— 
Net income (loss) attributable to common stock$54,895 $(7,881)
Earnings (loss) per share, diluted$3.09 $(0.44)
Weighted-average shares outstanding17,766 17,954 
Dilutive effect of stock options and restricted stock104 — 
Adjusted weighted-average shares outstanding under treasury stock method17,870 17,954 
Participating securities excluded under two-class method(101)— 
Adjusted weighted-average shares outstanding under two-class method17,769 17,954 
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Three Months Ended March 31,
20242023
Basic:  
Net income (loss)$(919)$56,149 
Less income allocated to participating securities(354)(1,254)
Net income (loss) attributable to common stock$(1,273)$54,895 
Earnings (loss) per share, basic$(0.07)$3.09 
Weighted-average shares outstanding17,664 17,766 
Diluted:  
Net income (loss)$(919)$56,149 
Less income allocated to participating securities(354)(1,254)
Net income (loss) attributable to common stock$(1,273)$54,895 
Earnings (loss) per share, diluted$(0.07)$3.09 
Weighted-average shares outstanding17,664 17,766 
Dilutive effect of restricted stock— 104 
Adjusted weighted-average shares outstanding under treasury stock method17,664 17,870 
Participating securities excluded under two-class method— (101)
Adjusted weighted-average shares outstanding under two-class method17,664 17,769 


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.
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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 tooperates as a single business unit and includes hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, 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 Resort amenities. The golf courseCODM evaluation includes, but is a short drive fromnot limited to, demand for hospitality offerings, occupancy rates, room pricing, food and beverage offerings, other charge points at the resortResort and is considered, from a planning and strategic perspective, to be an additional resort amenity. The constructioncompetitive information when making resource allocation decisions with the goal 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.optimizing consolidated financial results.

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Selected information for the Company's segments and the reconciliation to the consolidated financial statement amounts are as follows:
(in thousands)AirlineSunseeker ResortConsolidated
Three Months Ended March 31, 2023
Operating revenue:
Passenger$609,277 $— $609,277 
Third party products26,037 — 26,037 
Fixed fee contracts14,117 — 14,117 
Other251 5 256 
Operating income (loss)97,574 (2,749)94,825 
Interest expense, net18,741 1,695 20,436 
Depreciation and amortization54,622 58 54,680 
Capital expenditures92,432 85,620 178,052 
Three Months Ended March 31, 2022
Operating revenue:
Passenger$463,961 $— $463,961 
Third party products22,480 — 22,480 
Fixed fee contracts13,386 — 13,386 
Other281 1 282 
Operating income (loss)10,176 (2,947)7,229 
Interest expense, net15,828 1,974 17,802 
Depreciation and amortization46,341 2 46,343 
Capital expenditures142,178 63,781 205,959 

 Three Months Ended March 31, 2024Three Months Ended March 31, 2023
 AirlineSunseekerConsolidatedAirlineSunseekerConsolidated
OPERATING REVENUES:  
Passenger$579,936 $— $579,936 $609,277 $— $609,277 
Third party products33,399 — 33,399 26,037 — 26,037 
Fixed fee contracts18,861 — 18,861 14,117 — 14,117 
Resort and other323 23,887 24,210 251 5 256 
Total operating revenues632,519 23,887 656,406 649,682 5 649,687 
OPERATING EXPENSES:
Salaries and benefits199,508 13,819 213,327 157,521 2,102 159,623 
Aircraft fuel170,087 — 170,087 189,546 — 189,546 
Station operations66,468 — 66,468 61,520 — 61,520 
Depreciation and amortization57,868 5,976 63,844 54,622 58 54,680 
Sales and marketing28,878 1,541 30,419 26,640 288 26,928 
Maintenance and repairs30,278 — 30,278 26,442 — 26,442 
Aircraft lease rentals5,985 — 5,985 7,092 — 7,092 
Other34,315 13,136 47,451 28,711 1,932 30,643 
Special charges, net of recoveries14,915 (1,816)13,099 14 (1,626)(1,612)
Total operating expenses608,302 32,656 640,958 552,108 2,754 554,862 
OPERATING INCOME (LOSS)24,217 (8,769)15,448 97,574 (2,749)94,825 
Interest income(12,241)— (12,241)(10,128)— (10,128)
Interest expense34,737 5,423 40,160 30,343 5,365 35,708 
Capitalized interest(10,859)(326)(11,185)(1,510)(3,670)(5,180)
Capital expenditures122,175 14,004 136,179 92,432 85,620 178,052 

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Total assets were as follows as of the dates indicated:
(in thousands)(in thousands)As of March 31, 2023As of December 31, 2022(in thousands)As of March 31, 2024As of December 31, 2023
AirlineAirline$4,130,023 $4,047,134 
Sunseeker ResortSunseeker Resort550,398 464,163 
ConsolidatedConsolidated$4,680,421 $4,511,297 
Consolidated
Consolidated
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Note 11 — Subsequent Events

InOn April 2023,15, 2024, the Company received advancesand the Transport Workers Union of $55.9 million under the $200 million credit facility used to fund pre-delivery deposits forAmerica, AFL-CIO Local 577, representing the Company's Boeing order.flight attendants, ratified a new five-year agreement which includes immediate wage increases ranging from 20 to 41.2 percent. In addition to pay increases, the new agreement includes a greater "duty rig," which will increase the amount of time Flight Attendants are paid for being on duty, an improved 401(k) match, and a cap on healthcare cost share increases. The Company will also pay a one-time $10.0 million lump sum signing bonus on May 8, 2024.
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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 months ended March 31, 20232024 and 2022.2023. Also discussed is our financial position as of March 31, 20232024 and December 31, 2022.2023. 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, 2022.2023. 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.

First Quarter 20232024 Review

First quarter 20232024 highlights include:

–Earnings per share of $3.09
–Operating income of $94.8 million, yielding an operating margin of 14.6 percent
–•Total operating revenue was $649.7of $656.4 million, up 29.91.0 percent over prior yearfirst quarter 2023
–•Total fixed fee contracts revenue of $14.1$18.9 million, the highest first-quarter total in company history
–Total revenue per available seat mile or TRASM of 13.89 cents, up 28.833.6 percent year-over-year
–•LoadControllable completion factor of 85.899.7 percent a 6.9 point improvement
•Operating income of $15.4 million, yielding an operating margin of 2.4 percent
•Airline operating incomeof $24.2 million, yielding an airline-only operating margin of 3.8 percent
•Airline special charges of $14.9 million from accelerated depreciation due to aircraft retirement plan
•Enrolled approximately 540,000 new Allways Rewards members during the first quarter 2024 bringing total members to 17.9 million
•$34.7 million in total cobrand credit card remuneration in first quarter 2024, up 23.7 percent from first quarter 2023
•Airline-only operating CASM excluding fuel and special charges of 8.87 ¢, up 14.5 percent year-over-year
–•Total average fareIncludes $20.4 million in incremental cost related to accrual of $154.12, up 17.5 percent year-over-year, the highest quarterly average fare in company historypilot retention bonuses
–•Total average ancillary revenue per passenger, including third party products,After the end of $75.19, up 10.7 percent as compared to firstthe quarter, 2022 driven by overall strength in core products andratified a new five-year agreement with the Allegiant Extra rolloutTransport Workers Union of America, representing Allegiant's flight attendants
–•Acquired over 46 thousand new Allways rewards credit card holders during the quarter, the highest quarterly acquisition in program history
–Received $28 million in remuneration from the co-branded credit card during the quarter
–Allegiant recently named to the Forbes' America's Best Midsize Employers for 2023, Newsweek's America's Greatest Workplaces for Diversity 2023, and Fortune's America's Most Innovative Companies 2023 listsAgreement includes immediate wage increases as well as certain quality-of-life improvements


AIRCRAFT

The following table sets forth the aircraft in service and operated by us as of the dates indicated:
March 31, 2023December 31, 2022
March 31, 2024
March 31, 2024
March 31, 2024
A320(1)(2)
A320(1)(2)
A320(1)(2)
A319(3)A319(3)35 35 
A320(1)
89 86 
A319(3)
A319(3)
TotalTotal124 121 
Total
Total
(1)Does not include twoone aircraft of which we have taken delivery as of March 31, 2024 and December 31, 2023 but wereand which was not yet in service as of that date.
(2)Includes 23 aircraft under finance lease and 13 aircraft under operating lease as of March 31, 2024, and December 31, 2023.
(3)Includes four aircraft under operating lease as of March 31, 2024, and December 31, 2023.

As of March 31, 2023,2024, we are a party to forward purchase agreements for 5350 aircraft with fivesix deliveries currently expected in 2023, 24 in 2024, and the remainder thereafter. Two of theremaining 44 aircraft scheduled for delivery in 2023 are the initial aircraft under our Boeing contract, which are scheduledexpected to be delivered in fourth quarter 2023.
2025 or later years. The timing of these deliveries is based on management's best estimates and differs from the contract in place. The delivery schedule has been and will continue to be impacted by delay notices from Boeing and continuing regulatory reviews of Boeing.

Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors, 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 2023 and two airframes were retired in first quarter 2024. The remaining airframes are to be retired between May 2024 and September 2025. The retirements were 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 $14.9 million during first quarter 2024. 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.

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NETWORK

As of March 31, 2023,2024, we were selling 574565 routes versus 617574 as of the same date in 2022. As discussed below, overall capacity2023. Growth of our network has been impacted by challenges created by delayed aircraft deliveries, the uncertainty of our pilot staffing levels and the number of routes served have been reduced to preserve systemwide operational reliability. We expect route count to remain below 2022 levels throughout the year as we focus on our core markets during our busiest travel periods.other factors. We have identified as many as 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 80%77 percent currently have no current non-stop service. Our total active number of origination cities and leisure destinations were 9390 and 32,33, respectively, as of March 31, 2023.2024.

Our unique model is predicated around expanding and contracting capacity to meet seasonal leisure 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. Although legislation has been passed to end the national emergency from the pandemic, future outbreaks of COVID-19 or other similar diseases may impact our operations into the future. We believe that demand in the foreseeable future could vary in response to fluctuations in COVID-19 cases, variants
21

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 in load factors and average total fare per passenger beginning in March 2022, and continuing to date.

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 in 2021, and the increases were exacerbated by the geopolitical impact of the war in Ukraine. As a result,Increases in refinery costs also added to our fuel cost. Although the average fuel cost per gallon increased by 11.4 percentdeclined in first quarter 2024 when compared to the same period in 2023, overthe average fuel cost per gallon in the first quarter 2022. Fuel prices reached a peak in the second quarter of 2022, and have declined by approximately 222024 remained 62.9 percent since that time as we have seen refinery costs decline by 15 percent year over year. Fuel costs remain significantly higher than prior periods. Wein first quarter 2021. Despite an 11.4 percent decrease in fuel cost per gallon during the first quarter 2024 compared to the same period in 2023, we expect high fuel costs will continue to impact our total costs and operating results.

Boeing Agreement

In December 2021, weWe have signed an agreement and amendments with The Boeing Company to purchase 50 newly manufactured 737MAX737 MAX aircraft scheduled to be delivered in 2023 to 2025 with options to purchase up to an additional 50 737’s.80 737 MAX aircraft. We believe this new aircraft purchase is complementary with our low cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, and expected fuel savings and operational reliability from the use of these new aircraft.

OperationsIn the interest of increased quality control at Boeing and its suppliers, the FAA has indicated aircraft production rates will be capped until they are fully satisfied with Boeing's quality practices. These factors and other Boeing delays in obtaining needed regulatory approvals could delay deliveries to us even further than management's current expectations.

Capacity Growth

Delays for new Boeing aircraft deliveries, aircraft in heavy maintenance, uncertainty as to pilot constraints,staffing levels and airport construction disruption and air traffic control delays in certain markets continue to impact our operations andability to schedule network growth. As a result, we have further pulled back some of our capacity growth in 2023 as a result.2024. We believe these issues are not unique to Allegiant nor do we believe they are systemic.Allegiant.

Union Negotiations

The collective bargaining agreement with our pilots is currently amendableamendable. We and the parties haveInternational Brotherhood of Teamsters ("IBT”) jointly requested the involvementmediation services of the National Mediation Board ("NMB") in January 2023 to assist with the negotiations. The mediation process with the NMB has begun. We are also inis continuing with new union negotiators and leadership, with dates for negotiation sessions currently scheduled through June 2024.

Separately from the process of negotiating a new contract with the union representing our flight attendants. Further, we have reached a tentative agreement with the union for our flight dispatchers which will increase pay rates and extend the term of thatongoing collective bargaining agreement by two years.negotiations, to address retention and pilot pay issues and increase pilot staffing levels, 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. The IBT concurred with this approach. Our implementation of the retention bonus has contributed to our ability to add pilots through hiring and slower attrition.

For the three months ended March 31, 2024, we recorded estimated pilot retention bonus accruals of $20.4 million bringing the total accrual to $70.6 million at period end. The termsbonus will be paid to all pilots remaining employed with us upon ratification of anya new collective bargaining agreement will impact our costs over the term of the contract.agreement.

Pilot ScarcityOn April 15, 2024, our flight attendants ratified a new five-year agreement we negotiated with the Transportation Workers Union (TWU). The new contract provides for immediate wage increases, improved pay overrides, an increased 401(k) match and the payment of a $10.0 million ratification bonus in May 2024. The agreement provides us with increased flexibility in scheduling flight attendants during irregular operations, which should increase productivity and reduce operational disruptions.

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.
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EngagementEstablishment of Schneider Electric as ESG ConsultantGoals

We are continuing our partnership with Schneider Electric to help us develop our Environmental, Social and Governance (ESG) program. During 2023, we expect to establishhave established ESG goals in the areas of environmental, social and environmental goal achievement plans andgovernance. We will continue to provide carbon emissions reporting of Scope 1, 2, and 3 greenhouse gas (GHG) emissions.report on our progress toward meeting those goals within our annual sustainability reports.

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. In January 2023,Although the DOT declaredprocess has progressed substantially, their review of our application substantially complete, but we have yet to receiveis currently suspended pending the outcome of diplomatic engagement on broader treaty issues and, as a final ruling fromresult, the DOT. Allegiant and VivaAerobus have received approval fromtiming of commencement of this service is uncertain as it will depend on when or if the Mexican Federal Economic Competition Commission to proceed withDOT will ultimately approve the alliance.

We and VivaAerobus currently expect to offer new routes under the alliance in late 2023, pending U.S. governmental approvalgrant of the applications and the return of Mexico to a Category 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. The FAA and Mexican Authorities currently anticipate an upgrade to Category 1 this summer pending successful completion of the final steps of the process.

22

antitrust immunity.

Sunseeker Resort

Construction of Sunseeker Resort at Charlotte Harbor opened in December 2023. While the Resort is continuingin the early stages of financial maturity, food and beverage revenues have exceeded our initial expectations and have accounted for nearly half of the Resort's first quarter revenue. As with any new hotel or resort, we expect occupancy and operating performance to openbuild in the resort in October 2023.coming years.
2317

RESULTS OF OPERATIONS

Comparison of three months ended March 31, 20232024 to three months ended March 31, 2022

As comparisons of our first quarter 2023 results to the first quarter of 2022 reflect changes due to the continued impact of the COVID-19 pandemic on air travel during the first quarter of 2022, year-over-year comparisons below are not necessarily indicative of expected full year-over-year results.

Operating Revenue

Passenger revenue. For the firstFirst quarter 2023,2024 passenger revenue increased 31.3 percentdecreased slightly compared to the same period in 20222023 on relatively flat capacity year over year, withcapacity. The decrease in passenger revenue was driven by lower average scheduled service available seat miles (ASMs) increasing by 1.4 percent. Stronger passenger demand drove a 24.8 percent increase in average base fare and lower average ancillary fare, which decreased 5.0 percent and 2.0 percent respectively, coupled with a 6.9 percentage point increase1.3 percent decrease in scheduled service load factor. An 11.3 percent increasepassengers flown, compared to first quarter 2023. The lower base fare is attributable to weaker demand in off-peak periods. The lower ancillary air-related revenue per passenger, excluding third party products, also contributedfare is due, in part, to issues faced in transitioning to the increase in passenger revenue.Navitaire system.

The increase in ancillary air-related revenue per passenger over the same period in 2022 was primarily driven by overall strength in core products and the Allegiant Extra rollout.

Third party products revenue. Third party products revenue for the first quarter 20232024 increased 15.828.3 percent compared to the first quarter 2022.2023. The increase from 20222023 is primarily the result of a $2.8 million, or 23.634.8 percent increase in the marketing component of co-brandedco-brand credit card revenues.

Fixed fee contract revenue. Fixed fee contract revenue for the first quarter 20232024 increased 5.533.6 percent compared to the same period in 20222023 on stronger than expecteda 48.3 percent increase in fixed fee departures as the result of strong performance during March Madness.The increase was also driven by increased fuel per gallon pass throughs, which are accounted for as fixed fee contract revenue. Fixed fee departures were relatively flat year over year.Madness and growth in corporate charters and other sports flying.

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. 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. Excluding special charges and Sunseeker operating costs allows management and investors to better compare our airline unit costs with those of other airlines.
Three Months Ended March 31,Percent Change
Unitized costs (in cents)20232022YoY
Aircraft fuel4.05  ¢3.55  ¢14.1 %
Salaries and benefits3.41 2.90 17.6 
Station operations1.32 1.42 (7.0)
Depreciation and amortization1.17 1.00 17.0 
Maintenance and repairs0.57 0.60 (5.0)
Sales and marketing0.58 0.48 20.8 
Aircraft lease rentals0.15 0.13 15.4 
Other0.64 0.59 8.5 
Special charges(0.03)— NM
CASM11.86  ¢10.67  ¢11.2 
Operating CASM, excluding fuel7.81  ¢7.12  ¢9.7 
Sunseeker Resort CASM0.06 0.06 —
Operating CASM, excluding fuel and Sunseeker Resort activity7.75  ¢7.06  ¢9.8 
Three Months Ended March 31,Percent Change
Unitized costs (in cents)
Salaries and benefits*
Salaries and benefits*
Salaries and benefits*
Aircraft fuel
Aircraft fuel
Aircraft fuel
Station operations
Station operations
Station operations
Depreciation and amortization*
Depreciation and amortization*
Depreciation and amortization*
Sales and marketing*
Sales and marketing*
Sales and marketing*
Maintenance and repairs
Maintenance and repairs
Maintenance and repairs
Aircraft lease rentals
Aircraft lease rentals
Aircraft lease rentals
Other*
Other*
Other*
Special charges, net of insurance recoveries*
Special charges, net of insurance recoveries*
Special charges, net of insurance recoveries*
CASM
CASM
CASM
Operating CASM, excluding fuel but including Sunseeker Resort
Operating CASM, excluding fuel but including Sunseeker Resort
Operating CASM, excluding fuel but including Sunseeker Resort
Airline special charges CASM
Airline special charges CASM
Airline special charges CASM
Sunseeker Resort CASM
Sunseeker Resort CASM
Sunseeker Resort CASM
Airline operating CASM, excluding fuel, special charges and Sunseeker Resort activity
Airline operating CASM, excluding fuel, special charges and Sunseeker Resort activity
Airline operating CASM, excluding fuel, special charges and Sunseeker Resort activity
* These expense line items include Sunseeker Resort activity
NM - Not meaningfulMeaningful

AircraftOperating CASM, excluding fuel, expense. airline special charges, and Sunseeker Resort activity.Aircraft Operating CASM, excluding fuel, airline special charges and Sunseeker Resort activity, increased by 14.5 percent to 8.87 ¢ for first quarter 2024 from 7.75 ¢ in first quarter 2023. The CASM-ex increase is primarily attributable to a 26.7 percent or $42.0 million increase in airline salaries and benefits expense increased $25.4 million, or 15.5 percent, for thein first quarter 2024 over first quarter 2023 compared to first quarter 2022.(for the reasons described in the expense line item discussion below). This is primarily due to an 11.4increase was on a relatively flat, approximately 2.0 percent, increase in average fuel cost per gallon and a 3.7 percent increase in gallons consumed.capacity as we continue to manage capacity to meet demand.

Salaries and benefits expense. Salaries and benefits expense increased $25.6$53.7 million, or 19.133.6 percent, for thein first quarter 2023 when2024 compared to the same periodfirst quarter 2023. Higher salaries and benefits expense was primarily driven by an 11.9 percent increase in 2022. The increase is primarily due to a 17.1airline full time equivalent employees (including an 18.9 percent increase in the number of full time equivalent employees frompilots employed since March 31, 2023) and increased crew pay, including the impact of a $20.4 million accrual for pilot retention bonuses during first quarter 2022.2024. The accrued pilot retention bonus is payable after completion of a new collective bargaining agreement with this work group. The grand opening of Sunseeker Resort in December 2023 further drove the increase by adding nearly 1,000 Resort team members and an increase of $11.7 million in salaries and benefits expense in first quarter 2024.

2418

Aircraft fuel expense. Aircraft fuel expense decreased $19.5 million, or 10.3 percent, for first quarter 2024 compared to first quarter 2023. This is primarily due to an 11.4 percent decrease in average fuel cost per gallon, offset by a 1.4 percent increase in fuel gallons consumed.

Station operations expense. Station operations expense for thefirst quarter 2024 increased $4.9 million, or 8.0 percent compared to first quarter 2023 decreased $4.2 million, or 6.4 percent compared to the same period in 2022 due to an 86.5 percent decrease in customer compensation related to irregular operations offset by a 2.3 percent increase in departures and continued inflationary pressures onincreased costs associated with airport fees, landing fees, ground handling, and other stations relatedstations-related expense.

Depreciation and amortization expense. Depreciation and amortization expense for thefirst quarter 2024 increased by 16.8 percent compared to first quarter 2023 increased by 18.0 percent as compareddue to a $2.1 million increase in heavy maintenance amortization, $6.0 million of depreciation expense related to the Sunseeker Resort, and other assets placed into service since first quarter 2022 driven by a 12.1 percent increase in the average number of aircraft owned and in service as well as an increase in the amortization of major maintenance costs.2023.

Maintenance and repairs expense. Maintenance and repairs expense for thefirst quarter 2024 increased $3.8 million, or 14.5 percent, compared to first quarter 2023, decreased $1.4 million, or 5.0as the result of a 2.5 percent compared to the same period in 2022, primarily due to a higher volume of repairsincrease in the prior year quarter.average number of aircraft in service and a $3.7 million increase in non-capitalized repair costs.

Sales and marketing expense. Sales and marketing expense for the first quarter 20232024 increased by 20.513.0 percent compared to the same period in 2022,2023, primarily due to an increase inincreased costs associated with advertising campaigns for our co-brand credit card fees as a result of a 31.3 percent increase in passenger revenue year-over-year.and for Sunseeker.

Other operating expense. Other operating expense increased $4.4$16.8 million or 16.954.9 percent for thein first quarter 20232024 compared to the first quarter 20222023. The increase is primarily attributable to incremental$13.1 million in Sunseeker Resort operating expenses consisting of $3.6 million cost of sales, $2.1 million insurance, $0.9 million property taxes, and other general and administrative expenses. Incremental increases in outsourcedcrew travel, training, and outside labor and software support associated with ongoing IT initiatives.expense also contributed to the increase in other operating expense.

Special charges. During first quarter 2023,2024, we recorded $(1.6)$13.1 million of special charges as recognition of $1.8including $14.9 million of accelerated depreciation from the early retirement of 21 airframes from 2023 through 2025 pursuant to a revised fleet plan, which was offset by net insurance recoveries were offset by $0.2 million of additional charges during the quarter.related to Sunseeker Resort hurricane damages.

Interest Expense and Income

Interest expense, net for the quarter ended March 31, 2023 increased2024 decreased by $15.9$3.7 million, or 80.418.0 percent over first quarter 2022, due2023. The decrease is primarily attributable to new fixed rate debt and finance lease transactions entered into since first quarter 2022 as well as a 3.5 percentage point$6.0 million increase in the weighted average variablecapitalized interest rate year-over-year due to increases in the indexes. The(which consists of a $9.3 million increase in capitalized interest expense was partiallyrelated to Boeing PDP deposits offset by a $9.4$3.3 million decrease in capitalized interest related to the Sunseeker Resort) and a $2.1 million increase in interest income compared to first quarter 2022, due to higher yields on investments in debt securities. These amounts were offset by an increase of $4.4 million in interest expense due to a year-over-year increase of $142.9 million of debt outstanding.

Income Tax Expense

We recorded an $18.3a $0.4 million income tax expensebenefit at an effective tax rate of 24.531.3 percent and a $2.7an $18.3 million provision for income tax benefit at a 25.424.5 percent effective tax rate for the three months ended March 31, 20232024 and 2022,2023, respectively. The effective tax rate for the three months ended March 31, 20232024 differed from the statutory Federalfederal income tax rate of 21.0 percent primarily due to state income taxes, and the impact of permanent tax differences.differences, and discrete items. During the quarter, we recognized a $0.2 million income tax benefit for discrete items which were related to share based compensation and to an immaterial adjustment to a prior year uncertain tax benefit.
2519

Comparative Airline-Only Operating Statistics

The following tables set forth our airline operating statistics for the periods indicated:
Three Months Ended March 31,
Three Months Ended March 31,
Three Months Ended March 31,
Percent Change (1)
2024
Airline operating statistics (unaudited):
Airline operating statistics (unaudited):
Airline operating statistics (unaudited):
Total system statistics:
Total system statistics:
Total system statistics:
Passengers
Passengers
Passengers
Available seat miles (ASMs) (thousands)
Available seat miles (ASMs) (thousands)
Available seat miles (ASMs) (thousands)
Airline operating expense per ASM (CASM) (cents)
Airline operating expense per ASM (CASM) (cents)
Airline operating expense per ASM (CASM) (cents)
Fuel expense per ASM (cents)
Fuel expense per ASM (cents)
Fuel expense per ASM (cents)
Airline special charges per ASM (cents)
Airline special charges per ASM (cents)
Airline special charges per ASM (cents)
Airline operating CASM, excluding fuel and special charges (cents)
Airline operating CASM, excluding fuel and special charges (cents)
Airline operating CASM, excluding fuel and special charges (cents)
Three Months Ended March 31,
Percent Change (1)
20232022YoY
Airline operating statistics (unaudited):  
Total system statistics:  
Passengers4,148,4533,734,262 11.1 %
Available seat miles (ASMs) (thousands)4,677,6224,620,144 1.2 
Airline operating expense per ASM (CASM) (cents)11.80  ¢10.61  ¢11.2 
Departures
Fuel expense per ASM (cents)4.05  ¢3.55  ¢14.1 
Airline operating CASM, excluding fuel (cents)7.75  ¢7.06  ¢9.8 
Departures
DeparturesDepartures29,14528,494 2.3 
Block hoursBlock hours71,79069,655 3.1 
Block hours
Block hours
Average stage length (miles)
Average stage length (miles)
Average stage length (miles)Average stage length (miles)908920 (1.3)
Average number of operating aircraft during periodAverage number of operating aircraft during period122.7109.5 12.1 
Average number of operating aircraft during period
Average number of operating aircraft during period
Average block hours per aircraft per day
Average block hours per aircraft per day
Average block hours per aircraft per dayAverage block hours per aircraft per day6.57.1 (8.5)
Full-time equivalent employees at end of periodFull-time equivalent employees at end of period5,3184,692 13.3 
Full-time equivalent employees at end of period
Full-time equivalent employees at end of period
Fuel gallons consumed (thousands)
Fuel gallons consumed (thousands)
Fuel gallons consumed (thousands)Fuel gallons consumed (thousands)55,43453,438 3.7 
ASMs per gallon of fuelASMs per gallon of fuel84.486.5 (2.4)
ASMs per gallon of fuel
ASMs per gallon of fuel
Average fuel cost per gallonAverage fuel cost per gallon$3.42$3.07 11.4 
Average fuel cost per gallon
Average fuel cost per gallon
Scheduled service statistics:Scheduled service statistics:  
Scheduled service statistics:
Scheduled service statistics:
Passengers
Passengers
PassengersPassengers4,122,196 3,709,104 11.1
Revenue passenger miles (RPMs) (thousands)Revenue passenger miles (RPMs) (thousands)3,925,3623,558,045 10.3
Revenue passenger miles (RPMs) (thousands)
Revenue passenger miles (RPMs) (thousands)
Available seat miles (ASMs) (thousands)
Available seat miles (ASMs) (thousands)
Available seat miles (ASMs) (thousands)Available seat miles (ASMs) (thousands)4,573,766 4,512,315 1.4
Load factorLoad factor85.8 %78.9 %6.9
Load factor
Load factor
Departures
Departures
DeparturesDepartures28,273 27,637 2.3
Block hoursBlock hours70,009 67,829 3.2
Block hours
Block hours
Average seats per departure
Average seats per departure
Average seats per departureAverage seats per departure176.0 175.6 0.2
Yield (cents) (2)
Yield (cents) (2)
8.29  ¢6.59  ¢25.8
Yield (cents) (2)
Yield (cents) (2)
Total passenger revenue per ASM (TRASM) (cents)(3)
Total passenger revenue per ASM (TRASM) (cents)(3)
Total passenger revenue per ASM (TRASM) (cents)(3)
Total passenger revenue per ASM (TRASM) (cents)(3)
13.89  ¢10.78  ¢28.8
Average fare - scheduled service(4)
Average fare - scheduled service(4)
$78.93 $63.22 24.8
Average fare - scheduled service(4)
Average fare - scheduled service(4)
Average fare - air-related charges(4)
Average fare - air-related charges(4)
Average fare - air-related charges(4)
Average fare - air-related charges(4)
$68.87 $61.87 11.3
Average fare - third party productsAverage fare - third party products$6.32 $6.06 4.3
Average fare - third party products
Average fare - third party products
Average fare - total
Average fare - total
Average fare - totalAverage fare - total$154.12 $131.15 17.5
Average stage length (miles)Average stage length (miles)915 926 (1.2)
Average stage length (miles)
Average stage length (miles)
Fuel gallons consumed (thousands)
Fuel gallons consumed (thousands)
Fuel gallons consumed (thousands)Fuel gallons consumed (thousands)54,145 52,110 3.9
Average fuel cost per gallonAverage fuel cost per gallon$3.42 $3.01 13.6
Average fuel cost per gallon
Average fuel cost per gallon
Percent of sales through website during period
Percent of sales through website during period
Percent of sales through website during period
Other data:
Other data:
Other data:
Rental car days sold
Rental car days sold
Rental car days soldRental car days sold354,426 367,094 (3.5)
Hotel room nights soldHotel room nights sold68,939 72,539 (5.0)
Percent of sales through website during period95.6 %96.0 %(0.4)
Hotel room nights sold
Hotel room nights sold
(1)Except load factor and percent of sales through website during period, which are presented as a percentage point change.
(2)Defined as scheduled service revenue divided by revenue passenger miles.
(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.
(4)Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.
NM Not Meaningful
26
20

LIQUIDITY AND CAPITAL RESOURCES

Current liquidity

Cash, cash equivalents and investment securities (short-term and long-term) increaseddecreased slightly to $1.08 billion$853.7 million at March 31, 2023,2024, from $1.02 billion$870.7 million at December 31, 2022.2023. 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 renewal. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments.

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 have also entered into several financing commitments that will fund upon delivery of our new Boeing aircraft. We will continue to consider raising funds through debt financing as needed to fund capital expenditures.

Our current share repurchase authority is $75.7 million. We have not repurchased shares on an opportunistic basis.the open market since December 2023.

Debt

Our debt and finance lease obligations balance, without reduction for related issuance costs, increaseddecreased slightly from $2.12$2.28 billion as of December 31, 20222023 to $2.13$2.27 billion as of March 31, 2023.2024. Net debt (total debt less unrestricted cash, cash equivalents, and investments) as of March 31, 20232024 was $1.03$1.40 billion, a decreasean increase of $49.8$6.1 million from December 31, 2022. 2023.

During the three months ended March 31, 2023,2024, we exercised a $15.2 million purchase 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 borrowagreements for up to $100$218.5 million which remains undrawn. During this period, wewill be collateralized by new aircraft deliveries. These commitments, along with commitments existing prior to first quarter 2024, are expected to refinance on a long term basis $121.0 million of our PDP loan balances which are presently classified as current maturities of long term debt. No draws have been made principal payments on debt of $51.5 million.these financing commitments to date as they will be funded when the aircraft to be pledged are delivered to us.

As of March 31, 2023,2024, approximately 8280.5 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 three months ended March 31, 2023,2024, our operating activities provided $215.4$167.8 million of cash compared to $176.0$215.4 million during the same period 2022.2023. This change is mostlyprimarily attributable to a $64.0$57.1 million increase decrease in net income offset by changes in current assets and liability accounts.compared to first quarter 2023.

Investing Activities. Cash used for investing activities was $114.2$93.6 million during the three months ended March 31, 20232024 compared to $109.8$114.2 million used for investing activities during the same period in 2022.2023. The change is dueprimarily attributable to a $58.2$33.9 million increase of proceeds from maturities of investment securities, net of purchases, offset by $10.8 million lower Sunseeker insurance proceeds during the quarter (included in the other investing activities line item) and a $3.5 million increase in purchasespurchase of property and equipment, offset by a decrease of $13.2 million inincluding aircraft pre-delivery deposits and a $27.5 million increase in proceeds from maturities, net of purchases, of investment securities compared to the three months ended March 31, 2022.PDPs.

Financing Activities. Cash used forin financing activities for the three months ended March 31, 20232024 was $11.9$23.5 million, compared to $37.6$11.9 million forof cash used in the same period in 2022.2023. The change was the result of $59.5primarily driven by a $40.8 million decrease in proceeds from issuance of debt, offset by a $20.0 million decrease in principal repayments on long term debt and finance lease obligations and a $6.9 million decrease in other financing activities primarily related to the three months ended March 31, 2023,disbursement of funds related to the Sunseeker construction loan. We also paid $11.0 million in cash dividends during the quarter, compared to none in the prior year quarter, which was offset by $12.5$12.3 million cash used for repurchases of common stock in the three months ended March 31, 2023, compared to none in the prior year quarter and by a $14.2 million increase in principal paymentssame period of debt and finance lease obligations.2023.
2721

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 number of possible future markets that may be served, the implementation of a joint alliance with VivaAerobus, the opening date foroperations of 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 Ianregulatory reviews of Boeing 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,its aircraft delivery schedule, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on Boeing and other 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,operate Sunseeker Resort at Charlotte Harbor, increases in maintenance cost,costs and the availability of outside maintenance contractors to perform needed work on our aircraft on a timely basis and at acceptable rates, cyclical and seasonal fluctuations in our operating 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 three months ended March 31, 2023.2024. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 20222023 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited).
2822

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 three months ended March 31, 20232024 represented 34.226.5 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 three months ended March 31, 2023,2024, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately$18.9 $17.1 million. We havedo not hedgedhedge fuel price risk for many years.risk.

Interest Rates

As of March 31, 2023,2024, we had $391.6$441.6 million of variable-rate debt, including current maturities, and without reduction for $4.9$4.0 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $0.9$1.1 million for the three months ended March 31, 2023.2024.

Item 4. Controls and Procedures

As of March 31, 2023,2024, 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.

ThereExcept as set forth below, there were no changes in our internal control over financial reporting that occurred during the quarter ending March 31, 2023,2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Sunseeker Resort opened on December 15, 2023, and first quarter 2024 was the Resort’s first full quarter of operations. Management has implemented internal controls over financial reporting related to Resort activities and continues to evaluate those controls and procedures.

29
23

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, 20222023 and filed with the Commission on February 27, 2023.29, 2024.

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

Our Repurchases of Equity Securities

The following table reflects the repurchases of our common stock during the first quarter 2023:2024:

PeriodPeriod
Total Number of Shares Purchased (1)
Average Price Paid per ShareTotal 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)
Period
Total Number of Shares Purchased (1)
Average Price Paid per ShareTotal 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)
JanuaryJanuary7,028 $86.02 None
FebruaryFebruary84,010 $98.94 83,973 
February
February
March
March
MarchMarch34,431 $103.29 33,681 
TotalTotal125,469 $99.41 117,654 $88,196 
Total
Total

(1)IncludesRepresents 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.
(2)Represents the remaining dollar amount of open market purchases of our common stock 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

NoneSecurities Trading Plans of Directors and Executive Officers

During the three months ended March 31, 2024, 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.”
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Item 6. Exhibits
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Labels Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document

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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:May 8, 20239, 2024By:/s/ Robert J. Neal
Robert J. Neal, as duly authorized officer of the Company (Senior Vice President and Chief Financial Officer) and as Principal Financial Officer
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