Allegiant Travel (ALGT) 31 Jan 182017 Q4 Earnings call transcript

Company Profile

Participants

Christopher Allen	Investor Relations
Maurice Gallagher	Chairman and Chief Executive Officer
John Redmond	President
Lukas Johnson	Senior Vice President of Commercial
Scott Sheldon	Chief Financial Officer and Chief Operating Officer
B.J. Neal	Vice President of Fleet Operations
Gregory Anderson	Senior Vice President, and Principal Accounting Officer
Trent Porter	Senior Vice President, Finance
Duane Pfennigwerth	Evercore ISI
Brandon Oglenski	Barclays
Savanthi Syth	Raymond James & Associates
Joseph DeNardi	Stifel
Michael Linenberg	Deutsche Bank
Hunter Keay	Wolfe Research
Helane Becker	Cowen & Company.
Daniel McKenzie	Buckingham
Kevin Crissey	Citigroup
Stephen O'Hara	Sidoti & Company

Call transcript

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Operator

Good day ladies and gentlemen, and welcome to the Q4 2017 Allegiant Travel Company 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 maybe recorded. I would like to introduce your host for today's conference, Chris Allen, Investor Relations.

begin. may You

Christopher Allen

to year Welcome Company’s quarter fourth Thank earnings Allegiant call. full XXXX and you. Travel

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

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

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

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

John Redmond

report course to continued to By example, and without continue prior XX perform I'm cancellation would Chris. has afternoon, expect. we to we prior much, as Thank you that Good we significantly gone of consecutive our better quarter-to-date everyone. maintenance and days. had of happy a have performance gone that XX days very year this way all than operations that

a know this we as to move speed So on want but a made a Also all, alignment, forward I moment testament the to the we employment, start efforts issues the to come all of of now you great was There to are on and this yet CMO some lot is. March project we structure based XX% urgency about I could you that Scott the very early by rest are excited going we've of some given financing we're can't X.X%. individual interest individual talk have company I in, these course how let who probably about base have is term and their been X, these and numerous had, and three regarding communicated touch I mention talks current take improvement the nothing the In who significance kicked since of And resort. to to is had say have thought definitely is noting. the worth very expressed I'd a anything have you and look great great the the years beyond couple being the early this of the conversations to XX% report Investor we've forward. a about presale XXXX shakeout. nonrecourse course in or debt. their indications. has team you'll of had this extensions give really accountability sense hired I'd early least sub with know like process, a quick rate leadership, been and We're with moving regarding but the I No of I'll restrictions of this requirements no optimistic type. but about parties impressive. thought and some in extremely significant will meaning know, in Again of are areas, questions interest of respective Sunseeker company. but what at this a all Day, like stages on points that

and development pretty to weeks and sales our efforts much we project. last our the roughly stopped five advanced capabilities for Regarding we of four design the sales, the out system while developed

hotel happy website. I'm posted Sunseeker All condo have have stage we plans the rooms floor hotel as hotel course and at the all which on hotels Of to the as completed for on and interiors the having close the the this condo been now which interiors we're completed completed. been done have well,

our two all also course and of potential that Of buyers our without effort plans critical also of Sunseeker saying our the in communication all that a postpaid floor for and we're renderings of well as way now CRM it course register we've to online we'll people sales forward. position have these and website. are with goes with of effort out sales And course going as [ph] built functionality who to have

have will sales want have mine people fact an effort know But and efforts we one stand we're parallel forward. all to a course using we start had So before since internally XXXX to going where the sell done we that ecstatic to out developed in with still no office. database that we that's those this there ever about product, monumental onsite has this and also with be of but that to we

of and a on we to construction You average day XX,XXX something amount know in know a tremendous will excitement attached that there's site begin the like we regard. as to start be cars there

sales will start a put that buyer of of guest along course of start actual office. create the that be that and go the arrival be idea then you that the all building would wall, that course the to will or wall the to place, sense perimeter if So would experience that inside with in landscaping wall to will

go this a So online that happening world long as to think a retail to to well bricks-and-mortar is to combining in to environment not the and as similar frankly. we units an what's selling these way going

So just we're think part. and we on dates, haven’t that excited for by and the they a for we update fortunately have May up most shooting Also moved can some you We're operating. center timeframe. sales the to

to notes, You're work start construction important our what the timeframe. including on June/July utilities going site to in and not start see meeting

shooting August/September timeframe. construction will the the the And coming vertical start see ground. of January/February course out that towers of actual You'll We're opening. target of XXXX the for

in We development also end complete and agreements the with the February place by all in then city in be we'll think a county all and a months. to agreements or have of position couple place, negotiations

that note, to is I'll over turn regard. looking in And it everything great on Lukas. that So

Lukas Johnson

John Thanks as everyone, and afternoon good well.

to shaking no like the ranges fighting like start I'd TRASM see first give about color for in while longer bit we as I'd formal up how fourth quarter, revenue and some forward we the So more little to a guidance we detail quarter our demand add on results for XXXX. in

are revenue quarter in X finished despite very we Hurricane line the and territory. headwind from with Las Vegas TRASM a positive ended point the pleased and for Irma fourth So how quarter it up shooting,

that with markets load our ramping number the priced system. by increase Now factors coincides in December an next November in driven us and on up generation being it's our RM and of

very to seeing the new close two ago hard this fruits last So since power and see outperformance see still system factor months couple about that XXXX we're years. this, I at quartile the of of quarterly and the the after load trending at down is And Day their glad to brain spends our spoke Investor continue that the consider first team on increase I we're and I'm seeing about work, improvements how to talking been the length dip our service numbers fixed of our plane transition to this capacity history, revenue those teams as fourth ability breaking quarter in network. highest by company the focusing entirety our load XXXX in of Even was as done bullish and out work well all our in record the and fixed quarter will delivering Also in our fee highlight can uniquely to quarter. I'll get long XXXX. fee term I that fleet those on throughout point combine hard all factors

day on I should basis only by later XX as Also of giving guidance already week, Turning be max we of peaks quarter, formal I'm X% helps well, again questions second the help things about won't equal we're Easter to quarter points. the early on Easter quarter be to can off a offer Easter capacity growing and first and some towards near for the capacity to first be getting. first XXX going in the TRASM quarter bump up to first in prefer it XX% and more prominent then All The more day quarter. the March tends peak going we're first flying the week growing the quarter. of shift,

share, this get lot to I that start noise, easing fleet about completed transition is finally, As you're there overlap, the out know headwind quarter. the see being as and should the nice It's least capacity, industry investor XXXX. all to going all wars we industry noise hub going of that that fare into excess exposure and had we soon a going to up closer questions as there. third that And

there out And best my always keep We is things the that, exist. whose we've doesn’t as going one defensible to it. off it network doing competitor kind will And robust with we're I have opinion hand to Scott. that of continue in most done

Scott Sheldon

Thanks, Lukas.

short comments into really into want We thank the virtually which third to I team John cycle have all since effort, performance every tremendous the nothing accelerated You year has our network, about of significant summer astounding. in know I members momentum quarter been wanted the first the area. has and [ph] January fourth the had across operation, to into this of who

[indiscernible] higher really completion late know, are down, as XX% particular You operating XX.XX ups costs at running metrics A November. and such are XX up been factor over since we've in

approach. providing we're a counting bit max a We've the [ph] and the target. Investor summer. to quarterly mentioned as communicated So year late guidance about I have full proud as our other we Day a I'm TRASM at EPS really a opposed real wanted November in going just Lukas changed of turnaround and difficult little organization touch to just to what from amongst that things

it's best street. think and interests our both align way the with investors the I to

it targets, months. for per of is are of the remained to due addition very to the here a We operator enough going Instructions] XX% some I But by this question they data changed us flexibility down, which of out with has many we lastly, And reform. in then has spread is and Evercore induction we that, expense XX know, year communicated of ISI. how a Pfennigwerth our So just schedule. that going think shrinking capital busy from We We November. the ASMs remains release definitely to enough to think area I and tried efficiency which see XXXX. growing you a [Operator have viewing we be the we an XX% slip, with If as per folks for tax went XXs basically is an remains to line you. over rate Those earnings their to do XX targets gave XX% XX triangulate give We points the unchanged. the EPS turning our per got we're hitting but help first of XX us schedules. to affirmed XX, XX% the the by from to same. costs you turn hitting are burn EPS, X Duane gallon questions. well. be fine. gallon head drive capital Thank me, the lot think be things XX within gave we're to that excuse Fuel in per Fuel may that the and in same. XXXX comes back maintenance remained XX. tax to we CapEx is to D&A did number, spread to the is we'll And amount our we now unchanged We unprecedented can interest expense

open. now is line Your

Duane Pfennigwerth

I know here that is know structure, non-fuel given thanks. you but if give the of far high give so do assume but of you your not comps level would on the second half growth on want any point the the of Hey, kind to high rates? any I trajectory you and year, level in cost commentary wonder the guidance color you've

Maurice Gallagher

million. harder comp, individual to quarter into quarter of we're the what's easier, what's know UPS getting mean part start you is get wanting the I to to Duane, guide quarter Yes not the trends out simply of

I talk area little because first you discontinued year. in bit remember as of January think, there one a is credit we the we maybe you about surcharge can card impacted last definitely individual quarter that know is our

So little bit an marketing that's – there's last fourth strictly specifically going XXXX. to a basically and to quarter, be the area related quarter quarter of the a a half increase to versus year in year this the surcharge

to I'd these the of into quarter rather see around but subtle directionally be costs general down. you Investor going we mentioned that some said will the but Day, trends. crew, in get not We ex-fuel You're corporate at know

Duane Pfennigwerth

talk strong what fourth Pixie it drove like Okay fair to that’s can to if continue? in then was enough. very and And you looked that the just quarter, likely

John Redmond

times, plain. certainly not highest that I months XXXX in mentioned in really about could for guess I expect there is the I quarter some that the last as all so XXXX do but dip bit, point, of to yes to a so couple going so fleet because little Duane, is was we focus transition, of our be Yes a get the all

capacity of scheduled we is kind what know, known spare have as You do service.

with The a good and as the specifically there, coming really developing and sports sales a up kind what it. ad a is much traffic hoc picking far it, out of defense strong of to has relationships some of the folks Airbus drove done into lot a the job As the announced they never team path us. restrictions reliability to the than MD-XX their want performance and product deal MD-XX MD-XX. up that going open on significant wouldn’t of plane to call better on best the because test call We're used some through some

Duane Pfennigwerth

just Scott to versus if have a Thank or about Thank if you difference you of looking you know taking are expect talk systems could if the you're the if or Allard questions. for looking versus of my in you transition off-the-shelf? bench your last I to buying don’t refer of wonder one the John, creating would and for Maury and thanks CIO sort backfill at philosophy recruiting in own it's new you, then but and I you the sort and for

John Redmond

and do this company Thank done we shop of talent some Maury you, in we Duane. May I'll job the be know talented in areas our all rest and aspects his IT stab great just fill take the like developing do. have in can you But very a a we throughout comments. all has after in the the personnel what company of

have come so that And we of these leverage we're able issues up. when to some

Rob very we So he an interim forward, evaluated talented is and in we've move as an Scott we individual will functioning have who his way. on but status relied be extremely role individual is a significant announced Wilson in who an

chops the all do has he So to this.

filled seeing just We've free already position. us. that him ability we're for doing. of works what and to So Scott how backfill to him him this to And more do up was the

a So us. we had for a contractor gentleman who was

are brought in a lot a in working. of employee lot as individual time Rob's us that time. that give free on horsepower of another lot up the to there of more contractors some We now where a see area world IT You a to full

then need will our we build And need is not be satisfies by and making I stay it that it's we to functionally something decision IT. that by the comes I or same. and we decision it that think users driven it. think unique and if mean the it. when easily always cheaply the I really is buy and acquired will process we we'll functionality enough, buy making think can If needs build, then

we because which uniqueness are and decision-making proprietary very unique both our So in others organization, lot strong of that lot we a date driven don't lot Maury that software mean install is if primarily, and these to it. have to up a as and that off-the-shelf buy gives of anything you marketing that and know, I requirements what our product change we us. that of does airline, else areas are focus it great you in that the hotel readily that's I there more do, unique a it's But because related and it any forward. to or as believers the time flexibility see I philosophy know well model the are is having free could going in of of on whether we do other aspect and

Duane Pfennigwerth

John. Thanks

John Redmond

welcome. are You

Operator

Brandon Thank from you. Oglenski And from comes the our next line of question Barclays.

open. is now line Your

Brandon Oglenski

[ph] reliable to take from for for how greater does that level, in few performance next flexibility and are managed actually fleet, more you this place of improving with kind operational And performance that and years as does we that take Matt if through the on manage as of can opportunities, I that talk and improves to a improves, or does going can talked to of how Thanks taking is high schedule? that kind wanted kind about my place a just Brandon. a schedules Hi it see operational XXXX change question. create the you is greater start that so thing? open look XXXX of performance the

John Redmond

simply and have side you contracts. have on Yes see what I of wood, off [ph] BQ the improved going in know should our the out fixed the you to some of Duane asked, so know better had terms commercial jump capability improved, winning operations mentioned as operations just first has having we

performance pop are as at opportunities have You to so the do people seen of need know high catch that you high our those improve product up. kind be performer and a so

and operation with just it but not is the In focus, sky I hear for XXXX to if this be and able goal. major we're the transition that's and going [indiscernible] again like think dry be in to do up we we're to terms tight, we're believe can limit It's of really keep doors. new of lot things going can timing that's transition year. fleet XXXX, A, to it's beyond terms at tight looking haven't, that be this again going a we the is commercially a we our some of to the we squeezing going do

Brandon Oglenski

all That's great. from Okay, me.

Maurice Gallagher

is this Matt, Yes, Maury.

in the go to we've we support arguably back. on general the system comment, a because primarily easiest Just got world

well we the airplanes past places your so the and same And place in execute better. done have all didn’t time, very should were in touching years areas candidly leadership people were and them we the in same in

as changeover, the and that are enhanced make not the as business around progressing to quickly that needed Scott So a the leadership there only of they out the And the levels own sparing domain when can leadership the a and just lot changes but airline this fundamental tribute to pattern most the team, my the our back, real comes expecting and remember it's I'm control the I'll and in be on break reliable to events. but country. schedules because the ourselves and of to it group

from So unreliable that's evidence talks we kind of other get of are see a these better all of operations number that, a and baseline But historical areas. bad all we the there just on and conversations.

So couldn’t at. where now exciting it more we're be

Brandon Oglenski

Okay, great, thank you.

Operator

you. line of from the question our from Thank Syth Raymond James. next comes And Savi

is now open. Your line

Savanthi Syth

guys. Hey, good afternoon

where the seats current adding Just potential there's for update wondering to an seats project fleet? the if on XXX

Maurice Gallagher

B.J. ahead Go

B.J. Neal

Yes, Investor hey is Day. B.J. we got what update Savi, this to after No on

November. to options you in moment ineligible, the aircraft just thought We but that the were showed explore we which on are at it's Airbus and to airplanes continuing the

Savanthi Syth

we Vegas of of and see the faster towards the like it. drag probably kind in if peak, comes off assume should then how back? the two, trends may Las the in of Okay, that out the just unit And of of year? as if the here the versus is [indiscernible] is know, much a come one just that talked now that got I is of we you kind could about end as kind that And is you on peak revenue the we growth get kind

John Redmond

I back What it's Hurricanes a just effect of we're expecting the Florida know recover recovered you for to in of too for the now remember our than in tried Vegas mean to you slower in the summer time terms But still off lower in in sparing going we quarter is than peak Las you're I'd It to with did than peak higher area. going actually the kind year the where an first actually days of cut, percentage peak in all do elevated kind terms third itself days, shouldn’t peak over. slightly to carriers. on be certain from we that going much to overhang winds kind Florida the the first XXXX. route we see first faster be Las negative XXXX be through normal. I much actually and yesterday past quantify network peak get other last Vegas will of full and quarters. pretty of if we're in than able taking more have and you in you back it's if growth flights so for off Vegas Sure, second flip that's know growth And be off years. going of the more, significantly in did quarter especially to to and year several one

right know with the years you mostly transition. a half end and MD-XX maybe think issue me of I very first So it's the complete

Savanthi Syth

XQ, I tax it Great on is a what's looks like of driving ask non-GAAP the curious your just housekeeping just that? rate, can EPS, a XX% that and question, of kind

Gregory Anderson

Hey Savi, Greg. is this

and threw is liability, then and of this with tax to rate, is our rate measured so you or out the due know this tax it re-measurement were in reduction XX%. originally XX% they XX low the we XX% reduction happened tax So year. We re-measure tax what had at to reform that deferred

there. the why that's saw you So reduction

Savanthi Syth

Okay, hi thanks.

Operator

DeNardi And the Joseph you. question our from comes from next Thank of line Stifel.

open. now is line Your

Joseph DeNardi

construction, those much. condo of the but board understand and needs right appreciate will process start depend you I your construction I the to approval just approve if on fair? provided for deposits, make get on to very I'm thank Sunseeker. to is want that sure dates John ability the Yes, I the still days and the you that

John Redmond

put on been and shovel we've and And mostly don’t that intend focused the obviously financing. what to project is a ground the know is Well, until we financed. targeting properly in we can't the

you Having you item pacing the area. these spending that that's move that, particular development and parallel we're this in said that's tracks So will work. when do if know, our lot a things of why in time you

So at now the all to just the production started figuring drawings, same project out on everything that a basically and that taking pretty we that all to time and pictures there see out have the you production the so like work converting that's gone into those we drawings.

already then which used that max on or actual able contractor go work to end April price. to what's when guaranteed actually GMP a firmed the will and May drawings the and which build we're hired of project around also drawings and the called the So you production get early is we've leads or to announced general completed to those up bids up if call starts now, are are it

we So a they into max a enter guarantee to intend what these contractors price. contract with

of documents we to those project. of the that So in we now and the running have Board the Allegiance evolve will parallel are as estimates construction with start November between review

to the up, those are know working are plans in is you where the because going conversations you So as point with along firmed reviewing Board architects to cost. are get a project and being out the it, developing then as much the all costs how is things the parallel as those financing

find we and terms that from have bid firm financing a to have us. acceptable You we a standpoint

to into that So issues at may. happen of the confluence April end moving of starts

So a more approval. more have the and and will start when time we'll about that lot certainty pricing a certainty we around lot getting Board have frame

in decisions managed not very then budgets over, a degree the sure make facing that. in in would position some then rush it and I'm on Now way. earlier, estimation not before But and year it be side, is any a there of with if understand We're we we're the Board to have to properly to probably well do would. obviously that and low the going

So say. we in of front don’t skis get our they as out

it's So happy the you're is about the numbers. around but knows all the has yet, that little that anything is approved and certainty a there not it Board more progress, expected the bit seeing until timing

Joseph DeNardi

imagine the I data financing side. that's yeah, as guess on pacing than I item fair. sales that's would point that equally Okay, just side important an the

So to to get you and you forward is a deposits get certain that the want that commit to that can you to project? going you're of with then there can't to level number or if go that not

John Redmond

They They have activity play they The there's the love it. of no have project And just, no equity to on would when percentage No, by obligation, lender one that's of it. XX%. lot too, talking only regarding opened come we and or financing whether that thing the of there, was a points be equity looking the sales would data to they committee be or sales, they offsets But have that they with. in requirements is none. community out it interest I'd it's were the up if the or your But shared I have we throw where requirements sales, equity sales have. is come any that It advanced the into zero that offset so we would presales again had no at. is deposits. side they on contracts would the amount XX% just or there's

that's to on and you're a you're are, to have the to these be timeframe May/June haven’t file a it these that bit going production I we we to do mentioned contracts drawings sales buyer with the had that only contracts what and to in you're April/May into are lagging how State were because has hoping go going in and of evolved. what So to Florida further order that probably little and gets build build to are These to you changed. early closer on dates

until So early a construction we of expect the May. can't I those at purchase go April, documents which evolved agreement as are end we further happen to to said that

you certainly time purchase going again around financing then and would when with know we is dealing So which is to timeframe start everything else. same actual the on contracts with that dealing at

comfortable where to So continue all if people data on office to with deposits. and get pacing. a get want and base the want additional project that they That's at so to we'll the look can we sales we're site mine

what is the not So but those do deposits we - they a requirement forward. offset are condition to again moving equity they

Joseph DeNardi

John. Thanks

Operator

next Mike And from you. comes Deutsche Thank of from question line our Bank. the Linenberg

Your is open. now line

Michael Linenberg

Oh, everybody. afternoon yes, thanks. Good hey

be of Just some with some that you of network the saw you fact the your and Lukas a that may capacity here, of additions couple nature we mentioned of intensive later part that the today the what about know of you know and head update at caught going of be city weren’t is to of questions the to pricing defensible that an you you Can on and the have in payers in just you are number payers the XXXX. number head give you present? earlier us competition city

Lukas Johnson

yes, Mike, the know hasn’t Hey you last over year. materially changed number the

for by number You around they were we market we're may or right a probably and you over looking know payers midsummer XXX and we slowly know are market Internet when were increase the into still not competition. the particularly the market so. payers XX% go

is be if or have that. You them. avoid most do know we know in markets something, you we're nature to something But first again in be in the particularly wouldn’t certainly not they'll controllable going and competitive going well it's that foremost else we we it's but

Michael Linenberg

I know fleet and some you to the have that carrying doing of look know XXX you they up your a in mean back gets be that are follow movement going there's fleet going going there the you're are to and you you lot and the XXs bit just excess where you rates little off-peak helpful. growth to period commentary when airplanes year. want where XX I and peak right Should at on But I capacity? through year you that And your know underutilized be the or and to to Scott, are and fleet capacity to assume the to start of quarters movement being I Okay, then through we numbers in gave are fleet. because and a are look at you okay, don’t the just what guide that's think the were around

Lukas Johnson

and you think yes. right in into out fleet think the that's I release, really Yes, plan get I press

so absolute know, up November. dramatically shrink, because average the the pump aircraft is in an units year-over-year you actually in we on many the So pretty but late period basis during

Michael Linenberg

Okay.

Lukas Johnson

You built in - in slack know, we do meaning expected the that. assumptions, honestly than the buffers if we schedule into build planes come if earlier out we for

So production. we’ve pretty ASM on view taken conservative a

Michael Linenberg

Okay.

Lukas Johnson

need So deliver cryptic talk but in is when about system. lot - kind period of a when are parts they in that order of hit delivering, know there peak to slack that’s but you there's shelves flying, how to I obviously the moving

if what normally a you're tail, than productivity would So otherwise look it it's have little lower looking by going at to been.

Maurice Gallagher

a by airplane how Mike, the X% is change last capacity to We'll periods. your XXs but with which of spares high back is steady. the see will year to in be running year, won’t. with so been XX% end you're think much, we you're of We've this Maury. XX% is anywhere to material airline numbers going that's particularly change why What the the kind in about peak scheduling/sparing used to the from

Michael Linenberg

and approach changing the or stopped liked the and little sufficient change at are a weren't on last that can sure clear? the the anything you people such that trajectory on somewhat sales to not that it's It's road. and off you're John. the sense in over you then you're your I'm the fact they the great not direction, you're not market four whether gaining traction bit, unclear leasing last a kind you maybe not your question provide customers offers the that that have you it listen and property trying direction sure that you to all had you're and pace if John, enough marketing I'm is - of the if talked after basically and to know, And but it's just initial was bricks-and-mortar side the and now to some you whether a of on, modify commentary about at the approach commentary when maybe online bring going sales we approach just of those or going the and both just Okay, you're how you because or you that sales back about answered going talked question, about weeks. five or beginning to marketing you know, just my where on maybe the

John Redmond

ever taking built. estate found the yourself and mean the and using in the the into bring or relies there sales way of agents on have units approach things, to out you position and with agreement. ever communication hotel and those builds put selling where condo as didn't Sunseeker project an developer units different people two I office be come to result, sudden the one selling We're anywhere. the states. can in we're is approach done that sign a meaning X,XXX and they has the we only have talking our a we that's that that’s type people from ground, have where have from and your and typically approach customers. things The been have fixes us shovel sales capabilities demand weren't that who to way market never have and an a We by database an started we in e-mail forth. there We which completely been back a ability Right? have all brokers a getting an goes done real people XX interest found come No didn't

hotel concerned were project fast comes far in to has we're anticipate exceeded it's want So week as everything that it. that do the a what with to just that like are we and are to getting we're built built every all as an where to didn't it the want now not again When whether frankly sell it wasn't our or something that one because just that that at and no for it that. need communicate two buyer else customer Allegiant we out to a capabilities our better And what we those I’m the that, and as needed CRM able that quick passes it's is out is, needed who get that But we to. we that new out system buyer developing customers a rooms. ultimately done way and non-Allegiant at expected we in customer. we response I position

is what want all customers the sell able sell so So to just all in available room units do Allegiant need we be Allegiant to put to have to those customer. the to I capacity rooms. I

to in units the doesn't Allegiant buys that it’s or non-Allegiant matter that customer whether customer me. So

Michael Linenberg

very Thanks helpful. Thanks now that's John. everybody. Okay,

Maurice Gallagher

welcome. You're

Operator

Thank of our you. question line Wolfe Research. Keay next And from comes the from Hunter

Your line is now open.

Hunter Keay

that or mentioned you. A to couple more thank isolated John, that Sunseeker pledging anything not entirely Sunseeker project? it’s by that is Hey, debt like aircraft you're Sunseeker on a collateralized any non-recourse is assets, you

John Redmond

correct That other is other collateral the no be Hunter. There than would exactly project.

Hunter Keay

just worth you effectively and have, risk going worst this other still so the I'm lenders work which that Okay, confused is by you're land a the like by sorry start the when correct, you case deposits. what repossessed you're you're okay to the XX% equity whatever is the down you be of saying by I'm have putting saying other and is XX% gradually of would you're portion is XX% the whatever correct? scenario where Right? So is effectively or lose at portion this, XX%, bit

John Redmond

Yes, exactly at That you right. looking correct. is it are

Hunter Keay

this Bill go reform you of that willingness changed And the of sort I do tax versus Tax that the thank has start build kind you. when how to Okay, and then game deposits? his forward maybe kind for does reform your Allegiant. compounds of guess all to impact

the a guys. the after than little something bit because You're a going tax used because was if little to bit reform really more I'm the bit maybe of of aircraft more may even for more allowed take might reform little off doesn't have cash there reform willingness yourself risk, to deal would be all it you once still tax on say Bill depreciate a to out you be this, tax for it's you to given point benefits? bonus of a like Is net what big a based net, out build work

John Redmond

driven it at the benefit, tax a regarding and almost depreciation for our it have it we've been we of with the comments it. bow around regarding tax who Well, have end and We're window five a you because bonus always by couldn't being go just already written to the any timing. day depreciation when know people a and I but helps was timing project well have that, the by unbelievable you that guess that better work us reform I out the basically us. bonus works every so take said cash aspect Having always how will tax. payer, it's benefited year decisions aren't mean to tax as of taxes benefits ready that's like being that

and makes it So project it's the interesting much look not but just changing It makes that more making. better. compelling much more it that decision our

Hunter Keay

appreciate I John. you thank it. Okay,

Operator

next the from our Cowen of line Helane Becker Company. And question from you. Thank & comes

Your is open. now line

Helane Becker

Thanks, operator. much you Thank time. for Hi everybody. the so

think wondering and I of before, with timeline what outlined you've couple when on if in a today hotels you're questions of and building you built seeing projects? us that I'm consistent just and John, other November a back out you Just kind have the actually track record to for seen is

John Redmond

larger you these do projects, need right of the you involved these sure, have to expertise when projects. in definitely Most make level you

that of announcing to there of can engineers in to realizing you imagine numerous So outside understand have of we've that the that everything been sure that is transparent gets regard you of like the consultants world early to underneath but involved people a them people and in types make this. the that project civil from quality we certain them, handful

and of an regarding is He's employee and a we has I expertise the PhD wide he's deep this I've comfortable stuff. mentioned literally done timeframes company of behalf before and gentleman and bench very have the a who overseen is on feel the life. the project these entire us. So of construction. his of very He has

isn’t vertical Florida. in a his in Naples that this these has Southwest been time and for years so long around they've XXX for entire here projects, been first condo either team been around doing the projects, and projects, the And over general contractors rodeo

from do we because have said expertise we're expertise get and that the we that comfort that project not right of degree the a from and we it's are go we the involved on get a Maury I have why have we expertise. we and have here the in taking we that that’s why get of go that's said opportunities didn't it’s out can risk a go these would bring if we level pursuing because So

I work operate we building to it. of a we want people to long that people the accommodate have it's world. are, that get would all whether it's operating forward, going involved I for line it whether in love us come to So can long mean it very hotel it's of list as now them a who

people we as have wait people to now excited we them a have interest. of with who of team build an we're with it can't it So we the list operate

Helane Becker

That's answer. great. you Thank for detailed that

question, for but to are some I older are questions with and companies, this their newer respect into the completely aircraft like oil rid that is there question is aircraft. the of you what of AXXXs. market asked aircraft And that first used are you have up if two with are Now know unrelated. the prices would I Hunter's other or more don't good have? you get happy because And swap I some want perhaps airlines as moved have that scouring

direction is training hiring, that of pilots in in aircraft. words the then going retirement and How so your is kind if wondering with many their of And is because other of the programs. level major I'm your going? thing So you're thinking more other carriers attrition how

Gregory Anderson

the it. Helane the Trent second tackle of this Hi then part Greg. maybe I or is question Scott and can first tackle

highlight have used to and as you're depreciation. we of forward far perspective have kind in right place I XXXX The As then that placed into and bonus have have depreciation aircraft September we we then for by a depreciation are aircraft aircraft qualified a fill service by for to far basically and from XX, as looking to you aircraft four so that us or or I factor XX looking as moving used that's are to that and use. XXXX would into plan requires tax a we and that will XX aircraft XXXX qualify want that bonus so law all that for and date to five mean agreement perspective we're new the XXX% now. as service future but put the we've binding for acquired we who, by about aircraft

Helane Becker

Right.

Trent Porter

and To our answer in Trent. where the question negotiation was Bargaining it we seen to finished attrition, our is Agreement pre pilots is decline it on the Collective This your of with pilot that August an XXXX we essentially attrition out area with to we are significantly always that highlights of we're things keep and its come happy there them. where levels About the and especially our eye given potential now about. on as right there down shortage back rumors attrition there but

Helane Becker

that Perfect squeeze in. can maybe just one I one and last then

update to in a loyalty in know you wondering million credit your if add want to, you XXXX $XX might program what I'm contributed any you said the and the there's program think just press release. I and anything to or card

Lukas Johnson

in to towards it'll Sure, is expectations jump Yes, we initially year year, growth course and update going to biggest you're as the programs the its kind on given and mid hey had from but credit an increase Helane maturity. program there first Lukas. card in exceeded of first of this we get going so slowly

number as about that And this grow. for thinking with the non growing we're you're and the we not total but going double the ways of through we of triple start know certainly should years passengers it. per growing, passenger. and on and [indiscernible] you to year when And be bullish will to number So we're future it course other in go so enhance

Helane Becker

Great. help. Thanks your I appreciate gentlemen.

Maurice Gallagher

No problem.

Operator

question from from And Buckingham Daniel next our McKenzie you. Research. Thank line comes the of

line is now Your open.

Daniel McKenzie

know going goes of by that comments training. temporary partly house a pilots XX% so of in year. this Couple just to end from lost impact can remind training, pilot maybe be kind sparing thanks. this XX% to Hey from then quick income you you back And questions, year having the so of the in ratio cost and revenue you, about if the operating what's just for factored would secondly, this cleaning Scott just bubbled us having pilot impact Maury's to the X%

my and if going XX feel that away? like that so in I'm year should operating kind have what's tailwind planes XXXX think wondering, math might I of that is you something just correct inefficiency from the impact

Maurice Gallagher

Yes airplanes, going not going Dan, to gThat it's we're Maury. not to just get we're spares. more we' fewer have

it numbers the to For stay a airplanes We'll what the smaller turns the about with be. operational much network over so airplanes, operational be the will same. spare

airplanes have to there, just I don’t, than more we're scheduling. skip to Lukas So not start can and XX going we

Lukas Johnson

them. and Follow find

Daniel McKenzie

operating The training? pilot income the helpful. that’s Well, from

Trent Porter

Yes, this is Trent.

much we'll pilots so still and and coming these as seeing the we XXXX and the guidance we pilots that levels. levels this be productivity back going XXXX get levels are looking and can productivity to gain be We’re would going XXXX, see to so extra and now be more as we're productivity in right we as some to during during saw carrying XXXX,

Daniel McKenzie

wondering year might Lukas, in management I you I see, benefit about XXXX, system think outlook the affect network quarter the okay the full fourth what the from wondering your just following and the benefit up at on for that Day. how talked revenue the Investor expanding you're side the revenue here was I'm I’m under just new just

Lukas Johnson

Dan. Thanks So. Yes

measure and system getting system had years it's what there. ago fair off that legacy built larger the since Investor days of forward peak we've is soon we're to you – it immediately the prior the Day do the couple came on see certainly have of especially a since got through think Day TRASM factor effect our to three in lot of little we're that increased load flying load and I the it I had guys we measure you factors been so in are and way, intact terms we Investor those got release of seven any of was how how questions we for the is years through environment the guidance traffic factor of not out out easiest the and impact didn't increased cities a system, And a load can at regional declining system, kind about it what

of and better and and need companies have process to times there. evolved evolved as technology systems kind the So we get

be fundamental XXs we in considering as high factor, the to there we XXs probably touching to XXs So but used run to for we're get going fight, how either. in low load we're going shifts not not

we're to And going much see so throughout a lot of year without load degradation as yield a that actually this hopefully. factor, reclaim of

and traffic show watch out So and unit to revenue to see the just up that's out there I'd you just guess how releases of I going with kind increasing for total guys we're that. coming

Daniel McKenzie

the earlier Okay, just back markets that Orlando that's in the from not some it dynamic potentially one Lauderdale and know helpful low pricing airlines on of and our I bit and a of growth is of competitive seems kind that out to Sanford revenue an question and your operate capacity. other view and if other Lukas can I environment on at some or pinch. whether you you were little question not you here. ultra competitive Orlando just then know Fort carriers elaborate really the I’m you're I cost feeling guess going remarks Florida for like having of but the final just effect how more on some the

Lukas Johnson

two our small a the if out and that's mid-sized Orlando clear and continue anybody attempt are de-flooded of announce focus We to New other market a with release only majority my any core, be or focusing The at more that’s we service years destinations destination reason. the complete Dan. on don't that when New places hub cities Florida carrier those Yes, and than almost going lot to a any it's were more to yes, vast network on. competitive York ago that's the like of kind became we're going to York to and search what major of didn’t certain in more carrier certainly

throughout the our top it Fort You performing capacity. a cities, of competition, It’s nine, increased even Lauderdale last the been there. XX it with had had one destination lot growth months know competitive the of even

that pretty insulated more the of we're think can hotspots is ignore the can we and less we're again go kind power out, why we that what doing industry. So got of we the throughout or and we've can specific network do here, that’s I

Daniel McKenzie

the for guys. time Thanks perfect. That's you

Lukas Johnson

you. Thank

Operator

Crissey the Thank our from of question you. And Citigroup. line comes next Kevin from

now line Your open. is

Kevin Crissey

thing the the Hi you expect will about that ask for person Can guys. just Thanks time. first the do? talk to CMO new what you

John Redmond

want absent opportunities is capacity There John. water we've been time, for this a a out to of is of primarily this I've involved long I get list but initiatives of fire drinking airline. a individual laundry hose. that have no we start But since the been this developing a, on, such doubt of through person there's Well, myriad to some focus will in be those embark with that for that always the

as channels as I've there been my a as track of that So, traveling planning of all and that's pace in there's lot leveraging to just a interim. people of and that we us and mean the to want first we actually just these initiatives foremost. you There's to going with be with many in content. many resorts companies look to mean always that with right been, many I data with CMO have sharing booking somehow going bases, myself market and a if a lot of kind to and course so relates I joint of know, means it airline so so But that. want responsibilities at on And don't even of opportunities we and role whether other a opportunities myriad now quasi aspect whether the synergies marketing I'm you I've every there's joint while part And of will. things so is opportunities lose our and many business. of means and take that want

those individuals So those opportunities. - very of and us have maintained contacts some

individual's individual be So findings. all going going you kinds I is to hit there first running. anything don't know that to the to comes of want month on this going they're ground them take imply to it's like But this

and all bringing because going there's the looking We'll to get here, they're on is like huge figure I've And we've their that some just, this much forward I've enough feet have ever for but to get saying that saying person out information think quickly, time involved someone wet, data I are having impact. that them we to and there since so organization. to take be been providing is I to this revenue know going on been been a opportunity. do

loyalty of credit We loyalty have card. marketing efforts program we are outside our ready to our don't getting start a

involvement be anything right? or this that goes loyalty that to embark it's into would all that that lines have and going business the of we can going in developing that. this we're without be and else Whether resort obviously airline So saying or person across all on, program person's that impact that's plays

a standpoint a from that or programming looking to. forward standpoint we're that's initiative So huge have marketing on coming we that bringing

Kevin Crissey

same impact is of being guidance but prior we've relatively seen related guidance your little you I and relatively the was Thanks two make for some if bit and comes on assume want your questions guidance that high? prior fuel John. just your And was, reflective guidance a down turning being sure guided the investor that is prices just because question have side, to don't quarter that of and high revenue about towards to weakness. that one fuel from means a into to tax, that being seeing generally weaker the into of And second The just correctly? out I to send you then recall message things, little kind I question shift are don't higher course, don't make small is that I cost want get know this a first the that of kind your kind you to adjusted you the sure have And just is I revenue more but for that want but is specifics of whether to then got talk the little bit and Easter that on first EPS you basically of bit a there quarter? may a you same

John Redmond

why but to be mean, don't in that individuals short I provide position want caught of questions your I is up insert other is movements. of term more we we're want specifically, the this some which some the we to these guidance interesting try at

it we quarter or over guidance the think provided to could happen long within So might fuel term and year minor it these be comes full a absorbed we when therefore a revenue that things course year. of

the we're enough until out data otherwise. why provided we've that there's to there report So full causes that's sticking to guidance that year us

Trent Porter

This is year sales Trent for adjustment and guidance long sense it us as far the is now. to as make and goes, make John's the right, the didn't

Lukas Johnson

Lukas. Hey Kevin, it's

be need the shifting year. things up didn’t and You three weeks to each this know a to was you we revenue terms to going and we always is clarify, this question common get to that wake just of today up in just realize it

are So the and our just there ago. year this is to two quarter. out quarter, quarter there how big There's in going first guidance shifting no then surprise we question months works is from the when all the people for and ask full it put at in second first there's no the weakness

Kevin Crissey

time. the for much very you Thank

Operator

next Steve Company. from Thank Sidoti of question our comes & And from O'Hara line the you.

is Your open. now line

Stephen O'Hara

afternoon. good question. taking Thanks for my Hi,

that it that things the does, ancillary, with going revenue change not the but report guide way unit and if on standards next would guidance, does recognition cetera that, does how year et how forward? Just impact the and revenue you

Gregory Anderson

up the service. us that is will footnotes likely require air what we face the guidance go so break would it would in the and put see could comparability it ancillary would Yes, the and is Hey that XXX take Steve we this new purposes. But out, of financials the back for you then on scheduled include Greg. so

Stephen O'Hara

card in some there ancillary? ancillary maybe credit card there other strong is then on mean uplift general ancillary. remind a there's you alleviating on then was ancillary kind of hit revenue where And and higher relatively the the the the than credit anything looked income hit me guess card, the and that or decent in and non-air just on statement? was going it of I in credit can fuel may be there the like I just on is pressure Okay

Gregory Anderson

Hey jump Steve, of part. the this is Lukas again. take and can the Greg on the then in first presentation maybe part second I

remaining That a it that goes financials will through component and third and the it might marketing So split party applying is party but revenue second revenue which under we upon part. then the again the the it majority rev probably though shows our we both look in which and goes through defer the is I'm the considered and to that. up quarter the in goes third have XXX points. And any support of deferred we component. in in to majority we the then up marketing is will marketing on then into service, breakage is, just scheduled our the that sorry, which see history which And travel aren’t we new component. add so at goes pop revenue the I with rate rate, enough or a breakage breakage taking third Currently, you'd and once the

Trent Porter

Just kicking quickly did of really started the up bump we for that of just ancillary just on second factor load ancillary total outlined the in sticky a in in, a initiatives our we hit looking air whole some Day on half at little if terms quarter bit. you're is pretty take have ancillary bump it which your how up to to And air up biggest that as the is fourth then way do Investor it passengers. the the

make passenger for You're inflexion and a going get not airfare. huge the to yields longer those

out an increase yes, So pie. we've got go there total to and opportunity the

Stephen O'Hara

much. you Okay, all Thank very right.

Operator

Thank you session Gallagher and and turn back that our over would question concludes remarks. I closing for call to answer Maurice today. to the like

Maurice Gallagher

all Thank I appreciate very interest. your input you your much. and

see you quarter. you. will We Thank next

Operator

may and now participation thank gentlemen, conference. and day. Everyone your concludes have you for a program the disconnect. in This you Ladies great today’s

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