ALGT - Earnings call transcript Q3 2017 | Allegiant Travel Company

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Operator

Good day ladies and gentlemen, and welcome to the Allegiant Travel Company Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Chris Allen, Investor Relations. begin. Please

Christopher Allen

to third Welcome call. XXXX Travel Allegiant you. quarter Company’s earnings Thank

company’s our the are Lukas and Executive handful and our today with Johnson, questions. Officer; answer any of Scott Gallagher, Redmond, On President me a Chairman our Maury Senior call of Interim Financial Chief Officer, our Vice company’s John others President; COO; help Sheldon, Commercial Chief to

then open move commentary into up will We and with questions. some

for final a CapEx we XXXX we plan in of As guidance costs capacity, call. and the now XXXX stage providing reminder, this be will the are on on

Day place our Thursday, venue Investor Resorts. well Las use November, XXXX provide Vegas Sunseeker information as Our on will take to at we XXth and the in

the Before are we company’s and forward-looking predictions will only begin, and they statements contain I today have uncertainties. that involve listeners comments risks and to remind

This may rebroadcast prevent references Relations the like other publicly are Forward-looking to among these could that events available whether comments statements on the and not call achieving underlying forward-looking may any today causing presentation cautions and assumptions of as a statements, statements our of statements the future undue any many differ as of Mauri. company Investor update the strategic about turn include, or to of made With undertaking Commission. plan. and based There place reliance forward-looking our results more well forward-looking risk to new users goals available statements disclosed or based are release those that would us earnings on filings company’s to to, are to I information and from forward-looking over performance it do future Exchange ir.allegiantair.com. statements. factors The be which actual our and otherwise. we These are implied on and obligation by today no others, result from risk as factors our forward-looking not events, at that, in this site information on materialize. fully Securities others expressed and with our materially are assumptions the Any us to

Maurice Gallagher

Thank commenting I calls. afternoon, our good you today. been haven’t and you, for everyone. Typically on us joining Chris, Thank

this, fleet personally some have ago year our - company had update to conference, I to a For going at by here. investor wanted XXXX. on on at told critical committed late you our we going MDA you we retiring were We the at

involved have the results told you Financial impacted. be operational impacted results difficult however this of as aircraft those would we very they available year. on, delivery our all Airbus excited thought and most has with during fly We been hats the change our in The XXXX them also financial that, happen as be being changeover and off making targets hitting on time. to this been period and would pilots to for about pleased spot training

to that the up year goal got sufficient find tie XXXX. need first As to additional areas, to to moved date this want this sure end the we we accomplish two concluded of we we had MD-XX have aircraft we into we have almost by retirement have retirement make to timeline, the year further down we end accelerate To left. a to

aircraft Our end by found which they Neil next aircraft in-service year. almost the be task Robert us acquisition group and in headed the to of delivered close by will additional XX

accelerative schedule. could Second Airbus inside from make we to transition MD-XXs we sure the needed this our pilots the to

accelerated transition. months I'm report past we for the training our upgraded have XX facilities happy to allow to substantially capacity, associated During and this

model. the as was into fleet well though our the fits perfect miss The fit Airbus our within will nicely moving model. for used we We it MD-XX, are

with up a Earlier was to leisure management our hand. this expressed customers as company about the A unique continue customer for provides to offering changes. will focused we of Allegiant low of this whether concerns many successfully job number come. leadership questioned expect at cost We year publicly call our our years which you

this demonstrated of a for exceptional extremely Since percentages of XX the has in consistent had team which operating we had number consecutive of results world. I have the and Over focus management believe the margin delivering quarters a years profitability, have XXXX stakeholders. for best proud all many I'm these

committed are tradition. We continuing this to

the veteran team, and management from about area, of our We have wise particular experienced expressed needed industry. you a the operations in expertise lack deep in operations line concerns we in a

to ourselves and I and in having to end to and generator. in have critical background disciplines. does terrific more dig organization top transferrable COO he Scott's patted to while take not and make operations, our is role Sheldon is around. a different And expertise late have changes bottom. necessary on that that importantly said the that to skill leadership is asked operational processes Scott expertise or and across he our Management change a John that an a in from the isn't management being departments he these knows turn that We many May, on start Scott's pedigree perhaps knows

make results progress will person this over knows operational that just have all company To changes we a inevitable. in I'm maintenance report to happy particularly the extraordinary change you our needs made important enough management long months definition is by he However, the run experienced who some management these just of in and the repair. Scott organization to four right successful around is All that is who take end in companies through moment. specifics to

So a have relates management. position I environment have it, rather fractured that’s focused all the you senior good this case I seen to consolidate All group, as to for positive development our but in as been. as company it so weakness is it and is a But been has what uniform a it leadership to instance, company us not of the as bit more might know particularly many us, allow want a into to a well. a in a is for leadership

Current We a our have is and world great team people. the are and Board team senior John, cost leisure our The In roles by low in management shared leadership depth. a with of vision exceeded travel members story. others operating Scott End class. and all of quality many have closing, only oriented company.

of airline to, the strategy. we Our We safe offer a is customers product. need backbone travel this reliable low-cost our on-time will

which to same allow In announced such a as offer addition, the we condo/hotel to resorts in recently sweet them our leisure project. stay of want products, are ecosystem customers Sunseeker

comments. But of add let to without leadership efforts John financial importantly, the it might finance adding additional these have the necessary more this we happen. turn me that risks. to With for We have make team capability to high entire level over his that,

John Redmond

Maury, you Thank afternoon, and much everyone. very good

expand the management bit to made. a So comment Maury little on

here process. are taken Scott appropriate I significant referred down But he that product personnel. well. we the functioning thought course [indiscernible] have up think Like chatting last with we we will that can he Operating continue see the hold have to it effort amount being in the title out are is all you in to to of I as still call. point that results spends Chief been role our and I and We doing, has was anything But that interim, away, as in looking he and the in in had CFO that conference Officer, we and been it that of think organization time on at he start a expand and that. personal title

the maintenance in throughout area. the end of and back been significant changes taken So that I we course number there because out, and place have a as done QX has QX in as QX. continuing of in of well have pointed

significant are days we the made and maintenance related best us, management have deep throughout giving down, Our ahead changes of these areas.

with. found carrier, the person ago several on of making out than there. the to demand individual ever, been always and place changes course, is move proud year. about to And there. what that significant any in We very that’s significant to find QX offers month into highest we have another lot industries start one. as do the I’m of into a still that going to have extended one an wonderful our chatted So QX on, impact that using had more A having that difficult we going in throughout are choose is really forward process probably or We out conversations We other this offer next about so candidate we is produce one and taking my of product more organizations. the various candidate, another far that CMO past. search those that one. have throughout table position And [indiscernible] and there difficult an in This another a will been of search. to offer conduct we

role, that. throughout to finding like set fleet What you it So are that hopefully guess to being takes year we a to to are we developing, brand. we are as the we confident about that a foundation, again, to referred we time of that will on we fill the And get going of changes, candidate. various materialize site the we foundational a want the will the talk I the just something company. always began, are But the that amount ops of appropriate have out are XXXX transition personnel starting outside. right development fill hospitality,

and been as exciting move has XXXX. year So it truly we a foundational into

us, XXXX know course continues execution the and areas probably as we transition I the efforts going into potential to are B.J. Without into that you largest of So what Maurice all - XXXX of the about, of it looked of risk. is one spoke team. due XXXX XXXX, at the that accelerating seen transition think of myself including his

the the the executed now the foundation it’s the gave MD-XX laid the transform now is of to will flawless transition XXXX, Maury the have us Everything as team pointed company his but that for to think fact that a out whole allows the process ends B.J. going becomes plan the not of that really so that about at only very in confidence we transition, accelerate and to. and year. throughout It if the But manner. have you end XXXX transformational forward. excited I

and that perspective website, IT on an up look everything else create very us to we on, are in everything of that issues agreements, give going strategic in what's period but a in of we I in that it beginning see is got of about year will are technical of XXXX talk to the a we on that XXth be are alluded the we transformational and the of the that interest when and investor out initiatives allow Sunseeker we more color that investor not expand taking lot success instance we from avoid I'm the we give efforts about of will course November. tremendous in place By XX. working purchase are presentation Sunseeker that that will what's that now we expression our I on an an in all have the But exciting that, enhance on give by that we give company with converting idea; detail see will very Sunseeker So, presented IT that again at all projects truly be we is right are November XXXX coming lot things the point. waiting we new not I greater color it, and All November, and we but mean and to portion bit to everything to will on been attracting along deck to just that the it happening. of and we for on debt able are in most until these little And not at. be opposed to, by else looking that's reservation to Day, trying that it, working here for - to have still the to doesn't that's any ROI IT projects see accountability in transformational of care the of of and these we that XXXX the had till of are of area me talked a entrants to just be on going on associated that out that's of alluded this because pushing can't until Maury going most to because the more excited all have data will debt. speed color November to of Sunseeker, trying and take working will start the previously questions ops XXXX And and take all of to construction with any that relatively area, are important in one of other start ones beginning were deposit going a those again just Sunseeker, truly forward, to that Investor so environment technical as that you the now we time transformational you have be short to of with an going course there in track,

of an open will So by that are buyers November down, those you process for a prospective just a our people, escrow start or I early November. and will part refundable, feel now reminder be up as XXth actually said the how to background account are those X,XXX by that our put individuals we able or in deposits operating and good are give way of again

give talk financing, we about construction construction mentioned will talk I information costs we you about timing. regarding as I Now will will before,

updates So philosophy change to in those ones get the meeting is going of we you is have all November course we XXth which no but will have that of started. forward is provided from not will and there be that the takeaway everyone should Day, this

Scott. not understood, to but we, that, XXth build everything, lot up pre-selling without will think forward so the should are regard, will November more a over looking moving I that's always not something that that In it will to We turn be of you color. give nor I to we

Scott Sheldon

Thanks, John everyone. and good afternoon

network the for to job tremendous I the First, all members team do across they the thank day. every want

past of As indicative direct we trends months results seeing and of five that’s are efforts positive the more our staff. over renewed a operational the

we at a We are form are really gaining to customer momentum starting within or perform expects us. and level new group operations

As expected. ops quarter you second as didn’t may recall, perform XXXX our

which of behind a of was XXX we cancellations, history and cancellations highest in were lagging of the number [indiscernible]. maintenance mid-quarter There the we of have that company. We targets internal experienced key departures maintenance over the were number the personnel on track many

almost the passengers. performance resulted about cost of core quarter, $XX.X year-over-year Our million impacted over in million and $X XXX,XXX up ops regular which is during

As particularly maintenance we group. the the within into we changes made XXXX, organization, substantial within moved XQ

key new and group Some Orlando. maintenance maintenance of management conducted in included heavy indications these changing underneath realigning in along within group maintenance bottoms and Pete, review meaningful. We reliability those the and areas process Sanford Restructured within We out leadership our teams maintenance showing organization introduced Vegas be here line our up procurement new and/or St. Early a well. leadership and them. introduce support realigned headquarters. of planning our induction these changes material Las strategy to are leadership with also as new

costs year-over-year. XX% factor X.X% XX.X%. which from nearly nearly decrease a experience I short this a excludes have million ops more indicated reduction This a controllable which reduction in such in in our are which per and regular our resulted year-over-year basis, we We completion These drive trends to points quarter. number services fairly of Hurricane and out increased decrease in multiple the fleet, a XX%, service amount of release, hours those in resulted allowed regular ops since Irma. importantly are both events even. MD-XX by and in A in factor importantly down And cancellations out in seeing costs encouraging the the airbus of of year-to-date controllable of to time. On reduction liability above $X.X sequential us June dramatic nearly both are second $XX million, averages. the on turnaround impact cancellations in controllable aircraft

And more expenses made to the with post be incredibly excluding run preliminary, team retirement. - $XX those call, ops regular expected trailing should Once touch operation costs to Irma. Hurricane proud As months to we approximately it’s reliable our XX we making, results expected impact comment to of a the of million in levels on these earnings of progress have operation. and me on are - again all our a the reduced a are the run let MD-XX release. reminder, lastly the are aircraft be members

our the retirement Directors a fleet. As indicates and MD-XX remaining this release just week aggressive for schedule approve Board of

fleet assets exposure fleet Our quarter at related million. MD-XX was value and approximately book end $XX for

conducting one-time our We to analysis may of impairment in a process KPMG, us non-cash with are impairment results it with the fourth that, which during turn and I will currently taking the auditors Lukas. in charge over quarter. And

Lukas Johnson

Scott. afternoon. Good Thanks

and of bit third guide year-over-year So how the give as for quarter like color quarter a unit turned results to revenue little out. fourth to

original we finished last major Hurricane third our it too over quarter pleased will did months. We not the the affect and from seasonally We a few speak or up. on did Irma commit the affect ended factor occurred TRASM, a that's the fourth are weak see impacts materially very how a earnings wide our of guidance above pricing with it bookings any aggressive slightly for third which the in mid-point quarter I TRASM. quarter didn’t landscape and period, last and minute during call

be We have this forecast flowing is our we and acquisition program our results. new extremely are positive and well, with our depth of was revenue with system results first the capacity And credit third year co-brand and so Day. pace at quarter of completed of lastly playing our showing Investor just system the management on our pleased in much will in we roughly rates continued very new placed upcoming the sharing one-third more I card to ahead and far,

our process, be and As again will more month. next a reminder this is details we going multi-year to sharing position much be testing

on and as is each in X% adjusted that Irma isolated mass seasonally that the X% big negative Vegas to will and in quarter. attempt of the X.X%, and our hurricane of that, the booking towards first each have to of down X.X%. XXXX, in headwind and we and recovered the And the the TRASM expect in that has now questions. project steadily volumes is the quarter, impact Vegas the the of fourth the turning fourth headwind since for much of effect impact revenue bookings highest capacity ASM negative quarter, that shooting, we don't Las pretty up between be industry by week to on about that So quarter percentage fourth year-over-year we X% of Florida been The fourth quarter the with One story. I an of open have

Operator

Instructions] Linenberg [Operator question Bank. you. is Thank first The Deutsche from Michael of

Your line is open.

Michael Linenberg

here, Good I - be depreciation next to questions to it color referred you like XXXX John this year, ex-fuel taking that accelerate or is what look had upfront year transitional how to as transitional a I costs these given I similar the year MD-XX's that? that we guess unit still in the two can saw afternoon. are last of do XXXX, some increase, think is going the I what your give guess to transformational about year, to costs some the lot you're occurring should think that in we fact and 'XX, have see company guess going us on going going fact are you and be a the to you we was year, a of costs

John Redmond

will a on closer Scott he I color to give it. let that, little you is

Michael Linenberg

great. Okay

Scott Sheldon

Yes.

ex-fuel MD-XX values point of all full cash assets which of gave non reaffirm would the we related see here guidance think related So in a remaining likely kind XX.XX. book and fourth about - mentioned, I to going it's as one-time hit at this just full-year of the you're I - quarter to

in the in assuming with the some CASM-ex trends this to or but Day, a so sort is to choppy and full-year but definitely likely see directionally XXXX excluding X.X couple want 'XX obviously write at a you're to reduction we do down that's XXXX. as to range. be you in that probably range million start going have of the year to the of Maury If most XX.XX Investor point should you at moving reduction how into you about include point mentioned the going of see was at weeks without left look that the XX transition, this it the

Michael Linenberg

going XXXX hear realize kind then move mean your of what That’s range, and capacity great we of could on early, into I to that be? you its I mean I scheduled are what have we to see sense underlying capacity a but as what for type

Lukas Johnson

Yes, we you at Lukas, be range the it’s in give going Day, Mike XXXX, will probably like but this XXXX, projected the somewhat not is but full XXXX. to Investor number more XX% saw

Michael Linenberg

if one then last is Scott. And know question, to don’t just this I

on start about, out figure the is estate thought of I are the that be of to that of side going the mean, financials. or to - side financials? the to mean, real business. more the you provide on you you going your As to to them. to is Sunseeker are I Have airline? trying are part think Day. when out, airline clearly financials the you are Next out tied break What build present to what it your going we detail you I are you Are going consolidate to Investor going type business? to the Sunseeker,

John Redmond

Redmond John again. is This

last more We I lot detail mentioned give think, in I the will But call you as well. definitely on that conference Day. Investor have a

is on you we no give to about to Sunseeker are to enhanced going definitely doubt on as it disclosure are a relates is what there going lot forward, and going have information more Sunseeker going We with it.

Gregory Anderson

John’s that that Greg will Okay. I would Michael, Sunseeker, segment Anderson, our broken on with is see airline, to out filings. reporting you point will it And course within so be my of all the add just the there this

Michael Linenberg

That’s great.

Okay thanks that’s great, guys.

Operator

next The Stanley. is from Lalwani Morgan question Rajeev of

Your line is open.

Rajeev Lalwani

are this much as that kind being like feel the do or year. far not risk after And de-risked next year. of going you does XXXX imply the a transition questions. you you it, for transformational fleet year, have with forward? of Two as thanks that One, Hi as time. dynamic What highlighted more just you comfortable

John Redmond

part that outlined are, And in we the that. on. it’s fleet transition we transformational of say I have of course when that XXXX of initiatives because was the that worked all Well,

I planning and done that and us B.J. As the of to and mentioned, job confidence transition tremendous go executing team XXXX. into his in this gave that a accelerate just have the transition rest ahead

it, as XXXX. the we because come into out So becomes that’s year, all of transformational as why move core we then an suite XXXX airbus of

going to So but When always hadn’t is course XXXX, like it that, that anytime were be degree significant have was of we at any the moving there XXXX, a level confidence XXXX and transitional doubt. given of comfortable buy miss moving involve done won’t into going to new challenge very we of excited we yourself risk XXXX we steps. now that feel that, that no for we you us. into a One and into significant success have

Rajeev Lalwani

Very then the you for along system? of talking and data new management maybe about they Lukas. helpful. bit are points why revenue little are give initiatives, a the And a I about couple think revenue Can talk coming you on

Lukas Johnson

Sure.

John’s to on point one answer. Just

on And quarter going at to will this fourth XX%, first finish next on be quarter airbus. XX% up airbus. year ASMs the our quarter are the We of flown XX% of

and kind confident. this through transition why a we risk mostly are we standpoint, So That’s standpoint. feel fairly and fleet of again from delivery

on the of XX%, XX% of guess the obviously above ASMs new better should is within XX% about quarter some were be going fourth be I The third the system be ASMs new price system terms or segments about is range. using that in flights first positive. system. on year revenue one third its in the closer flown quarter the that outperforming new the new system, on the a worse, some the we to we year next quarter, but of trend into will of old be is on will and first system somewhere some in the there In launch In will the flown management flown overall

both really that way are its up. ramped we encouraged again So by the

one had that. timing the itself, year live low impact about at the in percentage think of that start for to running get be system to needed the the we - guys Investor I to of and TRASM breakdown you much a we look and more what quantifying and as of ASMs as Day but the on the in-depth it can

Rajeev Lalwani

gentlemen. Thank you

Operator

you. is The next question Thank of Stifel. Joseph from DeNardi

Your is line open.

Joseph DeNardi

you. last terms this seeing the a a of little started right thank there Yes, you all out when like other stepped impact in now in played down, environment the seems fair when time airlines bit fares of and it just XXXX Lukas on lag when the back did. was

correct or me think about So weakness since to different is XXXX impact of the I'm wrong fares to talked less if other you impacted you're fare that's enough, I connecting there the once that low or have kind airlines the but down yet the see came July is than started and come? why June impact

Lukas Johnson

carriers environment to for us and you're because great as are now see question, throughout priced the we advanced around key months and a being in when That's also other industry some right right at. specific closing six purchase did There difference seem us does be specifically weakness XXXX and that hubs to pricing are that a there a lag in this pertains happened. the

or because as are a not don't be from exposed decline hurt one, more there be us that pricing in which away, the regular As we now some to hours are be would we know to away There some XXXX pricing seeing than pricing that competitive the to connecting so segments hubs fare for Denver first fare driving as you the in now. is O&D we fare as opposed of right sense couple far book we feel of makes I connecting terms feel the seen we no there to that in difference going of of of - pretty well larger no as a strategy which is in given And environment going second ton nothing certain is difference ton of carriers. a within the inflated XXXX. point, have virtually the

we right very now have had going as we little as to So what's feel impacted of on.

Joseph DeNardi

labor then Okay, and that or much expense next going get hit then and go all number the of the what of last year? some that And XX guess that’s things other that ops the helpful. irregular down benefit does XX Scott income line include does through the months, be just can And other I elsewhere that million number to how statement? to a eventually is that driver in might like CASM on

Scott Sheldon

and as all-in far it's to that's of that. you a specific one start number, in you every kind not cancel right the as expensive. gets there That and we it have is every financials, so to. in these to schedule point spot going time we how to an a a revenue that cancel it So, can flight, costs, so it seen be There see historically numbers there really some XX is so reflected cancellation it's being about is grand, impact of said [indiscernible] costs

point operation a start so less mid rolling see, of to effect one experienced and starting you you kind since eliminate saw August And have maintenance to week so kind per see you the are of really down as the than wood data cancellations we and calm of delays.

And year. what we of to I get to, last think, very I XQ so can would back taken surprised, down

what right of think that’s think And to trajectory was I going are we you the ops I that million. now. continues assuming XX regular seeing on about there are costs, see attraction

to November. and pretty bullish, numbers what where the are in guides will those And so think of is in a baked benefit or we not we our be lot

So we episodic. do as view that definitely

Joseph DeNardi

Thank Got you. it.

Operator

next ISI. the Duane from comes Evercore And Pfennigwerth question of

open. line is Your

Duane Pfennigwerth

thanks. Hey

for baked see speak you could and more you Is we respect are these plan with of And deals. that XXXX XXXs. we aircraft opportunistic to or XXXX, should also? booked to expect XXXX for sort to Just how your XXXs

B.J. Neal

Duane, this is B.J.

something to of during of see XXXX, got can, year. XXXX, fourth then it unlikely are still really kind And too it’s as aircraft at opportunistic be many think delivering this as about I [indiscernible] have coming lease in point. quarter think we this on we more airbus going have from of fast I data are on the we today the some which

March. So probably six those are there think more. or will be five I coming around And

Duane Pfennigwerth

to are wondered aggressive don’t are in you market of value softness it you in know I relates I in Okay. any But Europe? if the as seeing some the restructurings how now.

B.J. Neal

mean have I being trouble opportunities those there. opportunity that’s me. leased placing mostly it few is to a found Yes. soaked we That excuse though, they There bankruptcies. demand on a fleet is some and lease, But have to up from seem don’t definitely

Duane Pfennigwerth

to then respectful just than enticing and given to secrete. we CASM. John, it get be on Okay, no your about that comment and ask want so to RASM other But I some

So sell great? a deposits. all maybe and it you just what mean one add you sell does you build on would that until mean Any could until it tower a towers you mean you like, color elaborate does it conceptually, it what mean, could is or on it and does won’t Thanks you little specifically be it bit lot. the mean

John Redmond

here because, worries to become No I process the move fund appreciate Duane, the related it more the we and frankly talking will forward, it. development. going we and with about project continue about And ecstatic as design

with hotel condo/hotel As that by off basically I components managed the that’s project component mentioned, by component is the products hotel a be of Allegiant would and us sold has owned components, it call have the as that going two forward. idea Sunseeker a being would they

the condo that to assets not sell would build, of units structures. assets build Allegiant pay by sufficient the or towers costs of be owned the not number is Sunseeker. We would not a we those we that would for build So would until those idea

owned you now if purchase units XXX means then when a can have think is Day the the try again for so than agreements to entering a one with Investor how selling that will unit assets. on number people buying try is color XXX. and XXX, of came of our construction. then sell in whole focus can would right that that about pay And have to to into sell Sunseeker that there now happens because selling many is order project, little our fixation we provide more So units that sufficient right all I to up would I pass, to that would be to more to say But to Allegiant we course we and on start bit and people we cover

whether have efforts construction able execute sales, all other. are so whenever would et certainty we are to in lagging so So, one parallel our on finality the it cetera, is on we or nothing be the other, of tracks, moving

up, have going and to all have wait to we they sales all. are for not locked to if catch are is up So, for months moving instance for we because like very sufficient six it's which development good construction

Duane Pfennigwerth

that. appreciate I

some respect with now So, on to up this there as activity is going land, of bundle improvement the to sort parcel? one

John Redmond

Yes, streets go to and use that's what and more vacate legal you in have them nature where not. through for

that’s happy sure. is community for attorney the So

think in end for But down or be QX. of like of multitude the of which and and don't we site, structures and type that of how that take the is small for end more much would is to see that, terms is activity a the before of of will will when spending, transparency year, are part the to from least these change other Investor provide said minor we which start you the something color to just demolishing we previously to on any that. started this Day. we small not storey of XXth XX, again, on very - the some time November which the tremendous most parameters in no the a are But they everything eliminating we property in the year I amount provided are I reasons in The would the change to single else. structures squatters But between of safety aggregate try we and handful see

Duane Pfennigwerth

Thank Great. you.

John Redmond

You welcome. are

Operator

of Thank is next from Helane Becker question you. Cowen. The

Your line open. is

Helane Becker

much you for your Thanks so operator. Hi time. everybody, thank

kind of two talk three, repairs or for expense the year. couple you questions my least a of on on maintenance about page Just the on and the page here of today for rest handout at declining

about this, XXXs wondering that AXXXs about think should in, think aircraft, is how and cost would So I down I'm per we come well? maintenance the should as trend

Scott Sheldon

this MD-XX to method still right, maintenance start absolutely the we heavy will for so we wind currently and the expense Yes fleet, on maintenance activity Helane the direct suite sunset any on method, down hey account as the Airbus No it's fleet under is our heavy going really you Scott. deferral you're albeit that's see fleet. But release and and and we of right, per more XXX,XXX, we P&L, maintenance you're month. the through less per the guide which more will think think the real depreciated, full-year you to in expense had aircraft to have a Airbus I less roll see I capitalized and XXX,XXX begin relates time

the You should fleet dramatically down to see once start that entire sunset. is MD-XX come

timeframe. retirement are the next to targeted we heavy the related putting not of too is the the motors many lot shop, So a MD-XX schedule air to

minimize, so, aircraft. to a costs have that And to maintenance starting of are to continue lot the we you re-up the for would operate

Helane Becker

where just Okay. for account, you account And MD-XX account the for your the to make maintenance? major on the maintenance airbus the

Scott Sheldon

No.

Helane Becker

Alright. is because that guess… respect three, That’s question seems what prior right AXXXs down CapEx XXX versus sure because the of now. guess of up, the with additional I just I that’s good page to that And up I’m it’s to I about, that’s guide, It’s but making on source CapEx the to full-year other the XXX. related Okay. is be says to answer. fleet, further guidance AXXX And which a because you had manage it’s

Gregory Anderson

Greg Hi Helane, Anderson again. this is

You right. are absolutely

the aircraft. pertains on our to XXX aircraft So we and to additional guidance the five expect series those close in near-term increase in here

Helane Becker

those into it take Okay. And get will long to then how service?

Gregory Anderson

of So be payments in will service mainly be year and well into this the year. manage next the in XXXX flow next will mid part

Helane Becker

my those think you. of I are questions. well Okay most Thank

Operator

Wolfe question from next is Keay The you. Thank of Research. Hunter

open. is line Your

Hunter Keay

Hey guys doing. you are how

at next Thank fleet the maybe an of grow sort your And is that? mean and impacts to if flying about going what count ASMs? that how to you wanted peak that talk you. of TRASM, down how year. just the for are to you off-peak Can does going sort be the versus So get early look

Lukas Johnson

it’s Hunter, Lukas. Hey

is off-peak sure on concentrated priority. off-peak for to be to growth a a one growth have down is put really in of where example as bit day, off-peak in the will first grow are good that you where well, able of three We year growth going to days, peak of this had summer be condense this as again And absolutely going get fixed be for as still it’s the as the XXXX the where make And year, most ratio some from it’s days day. a going [indiscernible] day little we to peak the part an should question. of to quarter we that down for but to It growth. were we peak So a bad are I you think and annualizing and this the squeeze on slightly transition negative that at terms versus about fleet we part year.

Hunter Keay

Is components capabilities? incremental to range the stage there given the length a sense to data slight

Lukas Johnson

are We no. I further. But flying bit would little say, a

going You won’t end are in annualizing the XXXX. running I’d which of we still the [indiscernible] to be - be say

from expect I’d So the minor to increase side. well. gauge a XXX increased to seats page not go is to There as that you as

X% about is our planned to due to growth gauging. I ASM up increased So - in way that’s of ASMs the XXXX believe a

Hunter Keay

if has airline every don’t person all it, does. own marketing definition then thanks question their man. this And what or right I Got But a John. for of for Maury

has what role if that it at Officer Chief of is that an I here. get does unique you're But John, very Marketing you all. what don’t airline? from trying to might to on marketing that do know absolutely this it relates nothing elaborate sort Sometimes the search traditionally for with can as be to exactly

John Redmond

That’s good a point very Hunter.

objective me you guys someone not outset, the think did to in an all say I who airline have have from heard bring background that our is right.

database. more way and is in involved So, to database that with how to deal understands much monetize a the this significant analytics, someone in how to how get that data

databases, that monetize I how but airlines been they came board amazing have out since saying haven’t figured have on to We them. these

knows revenue additional going more credit just to bring an someone who that database through a a and than the to drive lot monetize or potentially card. seat in are extra we selling knows and So, how around way really an data

we when to would but already those are and did [indiscernible] least to it that something that increased happen throughout want more call a that's we we the sure at far so we and passenger understanding basis have will savings to within per to airlines, enhance individual least I that's by though unique depth our on are the what a make that's to Also be importance going come of we why pay at we the brands, marketing of been you we that we for will brand, about we comes even and focusing marketing double. to talented Scott and for people that up with average quarter-over-quarter, the a looking would warehouse very if be [indiscernible] on good already do branding looking are on talked So, have brand that. amount that try uniquely probably

means leverage experience, to been significantly a So the knows enhancing importance and different into of customer who have the are how higher, but through we because in come to the our want we someone here right but savings now lot realize would we brand. really of brand

us in of recent that are additional be past, most very and standalone out significant a at being I that's that Sunseeker one the be brands mean the hotel can brand, We most project created significant. been the will course help will all creating and tremendously obvious, that's of brand brands sub person

that responsibilities important those whole be part will of would be a program. other loyalty The thing is that

together initiatives don't of be the what we involve and per so of all have how card, and we have of a very across to put put outside in program strategic foresight program a significant that with lot programs. identified credit we together has becomes se loyalty to to all will someone continue and background so this ourselves that's we loyalty those have one So, how how identify, structurally would and encompassing structure

of. the thinking three just probably will these others, more what But and hope areas, on maybe of albeit like advertising all touching that I those things, are were you So, are answers significant those types but obvious. it most

Hunter Keay

Yes, that’s you I good. it. appreciate John, Thank

John Redmond

welcome. are You

Operator

The Thank is from McKenzie Buckingham next of question Research. you. Dan

is line Your open.

Daniel McKenzie

the splitting growing still here. questions means year, with exactly, rate in down or do cost mean what [indiscernible], down less down you non-fuel mean apologize the Hey I guys. than to A that the do Scott is but but simply respect afternoon. thanks growth absolute Good few sense? here and you for

Scott Sheldon

absolute an sense. In

Daniel McKenzie

just as last that at guess, clarify I and Okay Investor and the point. back million year. revenue initiatives to the outline then XXX go to incremental If Day in the costs can I

of are fleet if on purposes little get lot investors you XXX It can argument away. that a seems you better are think that of the we just I here. million, if start just costs a the competed the on for that But could and fuel initiatives productivity these these do the concluding ex-fuel with accelerating things.

getting So If envelope million. flaw none there Is competed something get to equal. else of all seem back just of sort XXX away are these any of to that the will like would logic? closer that

Scott Sheldon

provided one. I back Investor as well when. think the one we that the call that point we have In deck way made last is as this on

everything tracking point to are up comes out Day is. Investor it XX. the that deck. that We When we on coming I have committed one to to thing on wanted that the But

you and updates where go give item item-by-line will line on we We stand.

those this, intend we of to get a to these initiatives, when color the pacing only give is a like report, expected you Day. transparency of but around just numbers we little on are we the So nothing we details negative can all around we Investor give and about to more there bit lot each you of

Daniel McKenzie

stock wondering decision we there yet share that. about? could quarter that back, should is you the doesn’t it quarter guess I’m in Scott it can Then like about be you as but appreciate bought just in these ahead here. third more expensive. I be in Okay. what thinking or pretty cheap third if look things I perspective for are and possibly. what just or And I But Maury this squeeze will one look in the any was

Maurice Gallagher

about requirements basic we CapEx really well. heard like and capital. Well, have the Dan. year getting investment are ready the particular. in stock have of liquidity for it’s then on order in-time a and to CapEx company additional the of in we pecking Maury stock, purchases goes we maintaining We But as with excess - focus the big next you And our if in try that

so we to be the we hopefully take a I’m to in bought always definitely in be opportunistic, that quarter first the But previous business seems line. place end. we and was stock So mindful look but lot at look the the its low

Daniel McKenzie

Thanks Okay. guys.

Operator

The Thank of next question Citigroup. is Crissey from Kevin you.

Your open. is line

Kevin Crissey

Hey thank talk XXXX. you for it. about the CASM-ex time, for appreciate When I you

of be I going the make want airline the CASM-ex just Sunseeker it going airlines is sure I’m to costs Is Just it. that costs. or total whether costs. or the just company just wondering is understand inclusive forward to

Scott Sheldon

but out that’s umbrella trend. all-inclusive, everything downward haven’t would under we and recent will in a be of that anything yet, be It’s the included Yes. sort broke

John Redmond

Kevin, its Again not happening, well one lot would Redmond. of just going can this we more cap. little point you you that. Sunseeker again, in about to everything to add John part, But be most to be But is being everything, from that. is on relating to a what can color bit it’s at Sunseeker A XXXX capitalized. is big look give a

Kevin Crissey

talk of Okay what you plans? network that how thank implications like you. change your about And maybe MD-XXs, for Lukas. Can faster the the are might for retirement the

Lukas Johnson

Yes.

around little till the to you adjustment had cut flying But It's growth that off-peak making you shift we down opportunities off. again the as So consolidating, XXXX, beginning delaying plan. period, took hard the much expect. about of some originally would really slightly decisions to just the in a of of the forecasted been when bit hasn’t it some to and from

be that you operation minimal you focusing some we an nearly we as won't timed have will it growth impact would kind think disruption, of off-peak are with see as periods, team have much on exiting the otherwise. so I fleet of rapidly in as of so well

of year end of you lot lot it fleet difference types of make want a two ASM another number large X% extend were XXXX whole for X% of just XXXX between you're sense. to of that growth ASM difficulties to plan the if mean versus So a that you plan a of operating talking look of for and I end shelves. doesn't

everybody think at this onboard in I is point. So excited

Kevin Crissey

Thank you.

Operator

Sidoti Steve Company. Thank you. O'Hara The next question is and of from

line Your open. is

Steve O’Hara

that to Thank you progresses know you. XXX and the maybe then XXXX maybe could Difficulty]. how the in talk of I fuel for [Technical is and expectation was AXXX, just when wondering if Thanks. what about to you terms get burn the

Scott Sheldon

with to retirement XXXX. are current and AXXX XXXX moving for fuel we over XX our we So, accelerated ASMs will that significant gallon gallon. and XX between in to XX quarter will per about number increase a step burn be to the this ASMs In increased from make per is XX

Steve O’Hara

and will the year, it? down value that’s Okay depreciated way of just fourth be just the potential central mechanics the throughout the on quarter, taking then the in that that is the

Maurice Gallagher

fleet see and basically it's we in at couple of of a one-time would nailed expense have Yes, loss, other should basically line you down weeks. next to that really the the as here item, so it a disposition look so gain the

Steve O’Hara

Okay, alright much. perfect. Thanks very

Maurice Gallagher

Thanks.

Operator

you. Savi is Raymond Syth James. Thank question The from of next

Your open. line is

Matthew Roberts

this Hey down rebounding, could now afternoon little A quick on for Matt a that provide good down does are now Roberts that said Vegas, year-over-year demand is there on there? was still question here. bookings you you Savi less, mean color is but

Lukas Johnson

we the favor were slightly hand other impact are the already since declined the in certainly But baked October Lukas. This of about is be year-over-year, Yes this where Irma is Vegas each but on yields normal, most above we Matt have week, week with year. still towards bookings are and rebounded week recovered even pacing [indiscernible] have to where actually behind of were would Florida that bookings accurate. I first more would that’s be slightly almost there. we guess close last hurricane

Matthew Roberts

hotel similar what is and to activity inventory on go and on normal for could necessary of Okay great. assume lines Thank for? type to room that how long promotional that kind you. back is trend I a of get Vegas that

Lukas Johnson

if I in its in can't like-for-like. I properties. as similar of people volumes, - because in to we carry that expect similar terms to of speak through But would kind you similar be read

Matthew Roberts

Fair enough. you. Alright, thank

Operator

question last come the and you from Thank of Stifel. will Joseph DeNardi

is open. line Your

Joseph DeNardi

Hey prepared relative Maury your remarks. to just

you what take plan XX-year on mean the Would One under that? term? CEO decent two So over line your of updated as with years. just you get us are the the a is if maybe questions your on thought. your is I could provide amount I longer

Maurice Gallagher

a oversight big are of I’m going ago. the perhaps a doing right and I is not and a have now. believer couple the been team of great The I a still transition I’m some through any not stuff. a where sold stock in might much good job. I quite for big at in we as as outside provide years company the day-to-day The of service involved to some three is a have for while.

in and me desk there to a while. corner the for kept they So the for going I’m stay

Joseph DeNardi

you. Thank

Operator

questions in over to you. There queue. Gallagher the back will remarks. no further Thank are for the turn Maury closing I call

Maurice Gallagher

appreciate I your Thank will time in you you much. January. to we and all talk very

Operator

Thank you. Ladies conference. gentlemen, and this today’s concludes

disconnect. You may everyone. now Good day

Allegiant Travel (ALGT) 26 Oct 172017 Q3 Earnings call transcript