Allegiant Travel (ALGT) 25 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Christopher Allen	Allegiant Travel Co.
Maurice J. Gallagher, Jr.	Allegiant Travel Co.
John T. Redmond	Allegiant Travel Co.
Lukas Johnson	Allegiant Travel Co.
D. Scott Sheldon	Allegiant Travel Co.
Gregory C. Anderson	Allegiant Travel Co.
Scott DeAngelo	Allegiant Travel Co.
Hunter K. Keay	Wolfe Research LLC
Duane Pfennigwerth	Evercore ISI
Joseph William DeNardi	Stifel, Nicolaus & Co., Inc.
Andrew G. Didora	Bank of America Merrill Lynch
Helane Becker	Cowen & Co. LLC
Savanthi N. Syth	Raymond James & Associates, Inc.
Michael J. Linenberg	Deutsche Bank Securities, Inc.
Dan J. McKenzie	The Buckingham Research Group, Inc.
Steve M. O'Hara	Sidoti & Co. LLC
Kevin Crissey	Citi
Rajeev Lalwani	Morgan Stanley & Co. LLC

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Q1 2018 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.

As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Chris Allen of Investor Relations.

begin. may You

Christopher Allen

to Call. Welcome Company Quarter First Thank Allegiant Earnings XXXX you. Travel

questions. On it Maury and We'll company's commentary today Chairman me our answer and the with call questions. Lukas Officer; are up of our Financial Executive then Johnson, and others John Chief help Operating Sheldon, of and Officer; some Gallagher, handful Redmond, start Scott the Commercial; to with President; SVP Chief open Officer a Chief company's the to

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

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

Maurice J. Gallagher, Jr.

everyone. you, Thank information Chris. going from a you're great Today, of Good to good us. afternoon, deal hear

As might of done the numbers, a the strategic the in a an middle we of I substantial been you end midst this, to business. our from have we company. excellent quarter number add, have makeover of of and the can see in XXXX, we Since enhancements changes, the of had

them, the which Let company me pertain or in to of airline. comment on the three particular

our XX challenge, MD-XXs, We fleet, First transition. aircraft with were Airbus. of four XXs them ended and aircraft in XX XX XXXX

the at Our an to plan three time down road. years the was to of XXXX, all-Airbus the transition by fleet end

XXXX, up our the as of updated by we this necessary area. was few it to you. our the timeframe, the we're have the transition end and Scott changeover a a moments significant all At ambitious we by wanted the year to the year. indeed XX mid-XXXX it had but However, namely, to Airbus done report time I'm MDs, happy we plans in have speed a this plan, to This onto arrange to have them more by to undertaking end is we color in certificate. aircraft year have of this on on track told for some the and induct finished will XX

challenge, Second operational improvement.

are have, and timely. parts the to the provide not support. processes, a fix on May on the Basically, we execute the this these months should about as control down in This nine months aircraft have the we the heard and pilots, team the to it we're not planning of in did were shows among nine financial leadership. past. When the stations requirements effort. last took results. doubled happy the in leadership Scott this year, organization, personnel mechanics, same same our factor the end past at well the quarter – We I'm best industry meant is started well focus operation airplanes, before what they've we the maintenance as in there ops done extraordinary. talk in we management we the issues as You've the senior and that flight way, us and done reliability same over operational report in By attendants, did and completion

and third fleet his XXXX, the next pass. and their next-gen years unit you he our Lukas forget. to are thank coming but the starting on of through I revenues Airbus XXXX, over to the of see week's ahead in year have last efforts we Johnson to year. the tools. finished cautiously some we executing about team being meeting revenue annual we year. XXXX conclusion, behind as after In talked enhancements. this are fleet the we transition all our moved you this this plan exception this the this few to particularly comments of fruits out to team's labor end won't the laid implementation from late let come development transition The optimistic we We're late improve John? up challenge, at with of In want efforts our the and look that the know team well have their are in where at the and will events to we in to end Lukas XXXX all to of I'm of end the rest he have this of them and about members of for effort. us,

John T. Redmond

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

inaccurate, by and misleading challenges old news. the XXXX those that's had reliability but was address XXXX, not XX and way The our culture or Minutes. manner challenges now. were misleading and to of then presented want inaccurate and and in We our practices reporting reflective I First, safety

We and a and safety have always have approach. to had strong culture best-practice very continue

XXXX. August proud best since completion We controllable the having U.S. of have of all of XX.X% airlines distinction the at

metrics year significantly We track. than better we reliability doing other are on airlines all prior and

these had a and focus safety always results reliability. We on demonstrate our of culture have

We state each the to in tied and Allegiant customers have the these me during men experienced the these trend of and We The have these norm. experiencing and reach in Sunday, of are starting The this focused, our and reporting showed most to Customer dedicated, any this performance and are we've Since results American just-released reflected a the are which significant cancellations year-over-year airline. the we area sector misleading customer Index, impact. improved third reduced to for service and American point a bookings cancellations efforts Satisfaction women as Kudos results in to fabulous comfort a inaccurate last team passionate degree gives in Delta. obviously whose team gain the major of booking. experienced whose new had with airline reduction a day normalcy. CELT have

a us is give we are forward. and as further changing As on our result, you won't quick Sunseeker, year behind be any commenting we not This a full guidance. we story EPS move financing. update

we've numerous in had project an extremely finances Of the express been impressive. which interest wanting has parties course,

no this Again, currently are I've and pre-sale the multiple in tracks XX% hook. project financing, no We non-recourse, change looking progress. with cost We're least negotiating past. communicated parties being requirements and no at other as at parallel making what to on great

QX. be financing expect we making, this in we're progress the sometime completed to Given

marketing. website XX agreements Having plans Regarding related and another to a completing the And that sales registration registering. said sell we to we but who an sales, X,XXX our center. point, to efforts one button floor on clicking impressive a time by Owner our still average people at averaging since impressive product. roughly We'll and have the be nothing we website of down content on opening we dime strong as and have a this necessary show peaks that, than around day, extremely signed plan. XXX have that we're have X,XXX a other slowed the level from users date we construction to a expressed up not and to about we Become spent other concentrate Sunseeker have in interest Again, range day time data on

be about in obvious, to to we brand more the sales product, cars, in also create of create sure We each to focus that the to obvious, of day, that center of year. would by the and intend know, hotel. so course, I'm most you There's location and every some XX,XXX expect open sell and interest drive use that timelines. you update this Give do to but also not on on which an September,

public Street which December. as numerous improvements street of the I start of completed Tamiami from first That'll the this be and down runs The said, in, Waterfront. course. Main of to in June, is June June in That year, start called will a in

the where us with Sunseeker here on in go the of the President, that and he put Scott that'll next start We site us in announcements June see joined started release with with will build and center, May make Resorts, just XX, to July. closures site today start also on we his He, and where will we'll vertical start August/September and work that that further A to us construction course, years we start creating the McKinsey and point month Officer we'll DeAngelo. press street still sitting with happens through May, sales from walls with and put the Chief you'll timeframe, that design, for career One hired he when Worldpay looking landscaping of in And and a have exciting date. gentleman, a brand changed a and we awareness Vice date. And Executive rhythm, perimeter of product, hires, not four data. started out, with we We're speaking have to at March individual Sunseeker. course, revenue new He XXXX last opening of early. started get XX. make us the course, led and with That want February start opening and on he date. to to on exposure, much May, and Operating that spent when

impact it's he the state I my upfront, us obvious, Chief as have look on to the course, to him board, great because and forget to our think don't he I at to make forward have. will joined guess, I And Officer. least Marketing didn't sure it mind, just Of of

So, Lukas. turn that. that note, And it again, very excited I'll to on by over

Lukas Johnson

Thanks, John. Good everyone. afternoon,

expect with just lot of know as booking one bookings. lot quickly in said all in this events So, and, of drop-off there's nature, days would reiterate ten a John there's I past trends of the as initial interest what our a

have day year-over-year day performance. other the no passengers positive safety is had us. those our that up is in majority held that little quarter better a know I'd been you over within so each no-show April a that the higher good detail the top than of this for first days ten revenue is have then since over last year close-in more XXXX, significant One and there's not first give as days that of sign terms forward which our quickly has quarter couple of stabilized for a the to we been guidance bit previous data into However, bookings rates, for previous point Cancellations in significantly a been was the all. provided vast change priority our well. results year, of like

first ended are how We the pleased up quarter extremely revenue-wise. with

largest this seen gain our As was decade. in this load releases, in factor our monthly traffic quarterly

found yielded load better Our basis lot extreme (XX:XX) markets with our point in TRASM result a And predict days, first comparison, testing, release, over revenue wasn't ASMs, our X.X of year TRASM adjusted system we we'd to be is due spring X One X% the to that XX it in precisely was able consistently was like which over point in of excellent it other are an rules, we're to headwind. excluding year and note compared only more on points flying but quarter. the did XX% overall staggering that worth period X.X%. given improved to things, an to for the which flights of in points has On recognition through grow peak off-peak in achieved is, yield, next-gen quarter the improved the the a stage factor XX% so out it's only a discounting. lower apples-to-apples peak X one which demand RM impact break was was This to drop of about overall. new the

about to and And stellar So, breaks the quarter few finally, of cadence those job for XX%. a be that headwind done deliver markets. going to helped second basis peak be XX% XXX number all a Easter these shift of the takes growth a we'll quarters. and upcoming results. will well up days a update in off-peak be on approximately point days with second And the is moving puts on for off-peak, growing spring about quarter, the to

and slower of for about first than ASMs the with time a peak off-peak, that, a growing little than quarter, the we're in less the several third for to here's little actually bit day and for operations. – it's headwind, quarter, And be fleet the first going bit So, Scott the more time to talk first then years.

D. Scott Sheldon

Lukas, good a just afternoon, quick and comments. Thanks, everyone. couple Yeah, of

thank network efforts. across and Everyone the of all service first their of our providers partners one to results. First really tremendous team our should for be proud quarter members,

and the everyone's to And maintenance I execution and out. of day great putting operational hard efforts improve. that's planning, on Our recognize work engineering and to continues in out incredible direct commitment to integration fleet to a And our product a teams. reflection want fleet day end,

execution we we're Inducting would MD-XXs induction to a XX accelerated risk work with Airbus XX-month on different and our on number challenges of for aircraft, ready our from impressive Airbus in and And arriving and be five aircraft modifications, our think Going time second inductions than significant continue has questions. take into Despite surrounding quarter activity assembly our ranging typically XX kitting I the retiring there we for is MD-XX and more XX was scope transition. six organization. Moreover, from and an team year. retirements period XXXX, which entire fleet target. delays, that, late would members knew in execute on accomplish operators

Operator

from Our Wolfe is Research. from Hunter first Keay question

is now open. line Your

Hunter K. Keay

you. Thank guys. Hey,

that normal us that back year? can if a is with revenue the certainly being range above the tracking, but we you're and actually the range positive bookings, that in overall the point? shave contribution part you like the big same, factor RM and can like on fair cost load (XX:XX) outcomes. system this and EPS maintenance from of fair to assume that on items to XQ you're end we sounds D&A the this Is maybe and low it not EPS of you of assume at roughly new the raise it guide look So, the performance it gave and to from $X.XX off midpoint, bottom at the fuel

John T. Redmond

think a that. I Hunter, to first time, still course, just the bit annual think we premature this given think of And approach followed this we've it's and that is upfront. little I do guidance

in the left. very runway still first were we think I happened in the tend to obviously, you quarter, and impressed react of months nine that's with But one inclinations what the with. there's of a year, lot

take little do look So, months. I that that. at after six to something obviously right I chattered think too now, that's probably we'll bit think at, we premature looking before, it's a But and a about

Hunter K. Keay

Okay.

of of ask I of what as you increase we compared on through similar X% can the in think expect near that's saw move maybe X And year-over-year get above XQ? fine. point do of course maybe factors XQ? magnitude we I'll year a then, Or improvement degree we back Lukas, to think differently, loads, the the can the we question in load

Lukas Johnson

Thanks, Hunter.

XQ point for better be (XX:XX) I a summer, to be year. of up But, terms get year-over-year as the if will up to we you the in were bit think little where that, high were through loads last the load. worlds

different that yield yields. and periods. bit I different off-peak bit whether depends factors bit I a little is a load peak we'll taking So, you just periods versus target with on be system approach taking the think it of on approach – and the more little side a or focusing think little We're

focus and in the yields off-peak some load year some end months I'd expect peak So, have we'll bit little your of on the improvements periods. more towards a factor the to of

Operator

you. Thank

Our ISI. next from from Duane question is Evercore Pfennigwerth

Your line is now open.

Duane Pfennigwerth

of Florida, Hey, whomever, of or Maybe perhaps based hotel behalf construction of promises more trading in towers thanks. it but is for the some the there horse bigger, sounds John been on there's on or are some press the like reports county. condo and

you give your wonder just scope the if us initial update I could of Sunseeker an plan. So, versus on

John T. Redmond

out some There's how tax clarity doubt financing, when get it's lot and impacts a we get happening – been to of course, there's and driven Duane. we on at of more noise no a get this, still and of start there been Hi, by on that's we overall lot and that ago clarity looked development law more the a changes there's and all favorable. year been we

to given sense these changes make going So, for Allegiant. it makes see seeing we're forward most and to the a sense do what's take for to going look that us

kind out better release be approval would to the any So, the I at board press put at we're time. time to in scope a that communicate in going because project the be position we would with of in is the a financing point think that conjunction be same approving around what when would

the So, I that a think anything for to bit premature. say us of on board would in little advance be weighing in

So, reason, to hold for we financing expect QX. get done we'll But do this again, off. in that

you'll is think be color because the So, to project. financing once board like. get project I see mean, a look and more what approves project, And the much lot mean, down. that's pretty once locked it'll the to not I that been approved, has you're I a around going going

think the lot sometime put definition next more that around a So, of we'll I over months. couple

Duane Pfennigwerth

a larger is that saying there sounds amount it a initial do commentary hotel, XXX, you've that's and fair? Is room presentation. to mean, not committed XXX so, for in that's the a bit that just I like domain but the the that. is quite appreciate than I fair hotel, like of example, public now it,

John T. Redmond

the initial is Well, announcement. I commentary think of when that some you from comes –

going expansion approximately early the be out to think size to hotel were If remaining rooms. shell were I going rooms of and build rooms. XXX, XX hotel roughly We you going to go that the total the back so was we was XXX on, to

sized So, day large. it was one that always potentially be from to

speculation we lot what scope project probably time, to misreporting. on through there's we market, see lot be the signed clarity lot points where more But, and, complete board time put to and that we when understand on the off there's from course, lot everything a say, approve that's Now, move do and the a in it's a the as I And, financing and the the a to project. do. final data as as noise able we'll like what's frankly has going more we of of therefore, of may the on of of

Operator

Thank you.

question from next is Our from Joseph DeNardi Stifel.

Your line now open. is

Joseph William DeNardi

Maybe had Thank Yeah. think, Lukas Investor revisit and MD-XXs have in when out, quarter or EBIT you about could and talked that I at fourth plan, you wonder maybe for of period? the once the you per you you. thinking what $X million Scott, if your I Day, this AXXXs. at is guys EBIT point at look per the actual just AXXX that you aircraft

D. Scott Sheldon

was correct, that yeah, which $X.XX slide. gallon little AXXXs $X contribution It in EBIT a just Yeah, million our we a Joe, although and fuel bit, that's number that on I full will was Day in a up adjust is there. hair that roughly for think a around year down, Investor had tiny

adjusted much. So, it shouldn't be too

revenue are pretty still what close I number that's think we a environment. given expecting to this

Joseph William DeNardi

and revenue just pretty the about just on made of more whether the Scott, the of well. the the then, or you standpoint one milestones, guys here, And side, a kind from guidance peak the it it on seems cost cost talk you periods through side? the Okay. side Can upside year, see you of rest

D. Scott Sheldon

Yeah.

handily, guide first in you a movement don't big quarter, it beat definitely if which at our nice I expectations, think the the I we think surprise, we area. if look ex-fuel, beat maintenance saw pretty internal we although the

XXXX, operation. better, would initiatives buying that of lot were a these initiatives, out in I coming part run better being lot suspect there's of as that specific we just troubleshooting our a on. mechanics would a better, costs So, the of launched the strategic and continue organization that inefficiencies are are

look you maintenance we aircraft at guide if think per I to month. it, used per

that, month nice drop-off, cadence, could sort in ex-heavy-maintenance, Other you we seeing was see downward. per as the quarter. If of as in that else if at $XX,XXX line. move would we're first Ideally, relatively than a much aircraft we everything that keep look a per nice

think, so start have ex-fuel, will So, pipeline, like the still a lot I because very well. many which we flight-crew mean, tracking a guide the the folks we everything training carrying efficiencies said, to inefficient we since don't us through else going fairly I absolutely see we're of lot still of of members, those I end come we through Obviously, through. take is are before year

Operator

Thank you.

Andrew Our next from of Bank question Didora is from America.

line open. Your is now

Andrew G. Didora

costs. afternoon, up Good follow on the just Hi. unit to everyone. Scott,

hold? expect think for on you I that that of through the I quarterly rate Are down to ex-fuel? is good any run should XQ mentioned thoughtful XXXX. call guess, CASM you anomalies And, January a in there be that your be trajectory still go we XXXX? Does we as

D. Scott Sheldon

I it's definitely think, directionally, down.

mark if the year. at at XXXX. right accelerate half come obviously the should that in higher back directionally, low costs because costs the these you year-over-year is of should absolutely look so there's think, comps, percent in, think, in the a reduction now, But ex-fuel I the in I probably as

Andrew G. Didora

an you? types a become could maybe I maybe about you financing approval sophisticated a estate, Sunseeker, Can that you other of you it. a then, fee be like seen entities with to option or real and in you more for this help equity, John, looking more have project? let private think And towards business de-risk for talk looking – and a the you Do could bit pure it Got this of any being talked interest XQ. potentially project just guess, pure from partner about in

John T. Redmond

extremely whether We mentioned, in to, disposal forward, we we our all we're particular the forward. optionality company want always obviously, going of we're we've the manage. have options further But management pursue mean, will Those once construction have going talked at I look are at down project, the to going sell, along will contracts. to those and favorable, distant sources decide for the that been very project. in our to, are we've the or these aren't be a they like interest from, rates it banks BofA, it, talking future. the are Wells the and out other about. these favorable. a financing sources interested traditional make we is road that in like that efforts And extremely talking thing are all can are whether any terms you that decisions this call are board one Right from and now, know The about, own, these love, The when these you're

been contracts excited So, the a start obviously interest management we'll going in we start them the down. going do in management sometime contracts. there's of Probably But XXXX, that. chasing by lot and want after what project start asset to And will forward. is approach we we're will those which we pursuing to light

a on staff So, this to board. new of coming being we'll be start led lot and gentleman have by that'll people on coming going who's

this. for us after the street cred have the the his start at to disposal, going he'll résumé, So, resources

Operator

Thank you.

Our next from Cowen. Helane is question Becker from

Your line is now open.

Helane Becker

the Thank gentlemen. you time. Hi, operator. Thanks, for

quarters. Let's just at two XX have I see, last, is, look revenue trends your the say, I questions. over One

say, of You've right? $XXX really million, You range went from sort to million. the, like million moved up, in $XXX let's $XXX

like improvement? you, And B. of as just probably this thinking to this new sort able A for rate the driving management with we management, and be the the part is, part should system The Is about for that's not you there's run A Lukas. of cover substantial which the going an your the this quarter, question the for fuel B are a revenue everybody, So, forward? but cost and first increases revenue were in is

Lukas Johnson

That's lot Yeah. Thank a there, you. Helane.

it's still that we're the we pretty And quarter, year-over-year ASMs into is is to was on we the a it up and into to going running some some for going running continually working said having RM So, to lap you team way quarter that, the continual start third – benefits. But the think system quarter, system. beauty the built second going than is were I system as of and on comps in the yeah, significant the be improvement. see designed, that higher bit little fourth get

of to exciting. XX%. the think bulk So, right system the of gone there's XXX% we're is can plenty system. the we're do, ASMs and about We on now, because opportunity we the to XX% And still still still that's enough haven't the seeing our more improve than reason

not system thing In price is revenue an terms component, carriers. versus versus fuel management perception of the it's per about affordable more customer about the it's se, a really what fare driving, other

I typically, to amount, the recapture a to see fuel bit if general, fuel think, X a industry and have that, the little percentage just you'll you're Y pass-through will up on side, going go is that in not us.

Operator

Thank you.

question next is Raymond from Savi Syth James. from Our

is line open. now Your

Savanthi N. Syth

afternoon, everyone. Good Hey.

maybe more the are Just back, taking the big a past, there little two in presence a a mid-size think bit is the to one fleet differences and of the younger, step other a fuel-efficient greater compared I in model today: market. is have you

and in increases. through the if in fare that two, of drive, about wondering run-up ability of factors to talk you kind (XX:XX), – of might So, terms what could those field these two one, with kind decisions push factors your in two capacity

D. Scott Sheldon

Savi. Sure,

of I exited, flexible terms change, so think, fleet with in of it's really out this far been. We've we're we as So, have the just as year. four decisions cities capacity always

So, origination the changing, terms still if we're that we something cut, markets, flights, is just granularity out your and discipline really macro I'd I to. larger before. of And fuel that now any it or proud capacity, more city are years look don't here. much that we seasons, you that had destinations than again, if you're changes, decision have six seeing as wasn't market, best efficient, make where, with our markets and being see mid-size making you're – up, It's as still revenue assets we've have the – think, as or destinations, any anything, redeploy connect-the-dot always flexibility to the to to five of I high is goes simply of couple because and much MD-XX have didn't that most you opportunity move I system allocate city ago, capacity seen so always a And environment got markets, a looking Airbus marginal think these and day-of-the-week to XX we are much able us say, more the more the if in opportunity you're the teens when able we've work back in much changes, had more on destination the connect-the-dot. that

think optionality model continues I So, the the to expand. in

Operator

you. Thank

Deutsche next from Our Michael question Linenberg Bank. from is

Your line now is open.

Michael J. Linenberg

everyone, afternoon, Good hey. and Oh, thanks.

you factors system and Just RM two in, Lukas. and a talked it to you the – about TRASM markets bunch your questions of What you're have – the are of do XX% fact RM results curious all? seeing? how like you here, have guess, how the the about I the where or that system ASMs One, X% different just talked unique at X% markets system, where Lukas, RM to to markets, competition, that I Allegiant I'm versus new enhanced differed, guess. competition. And if

Lukas Johnson

pricing. – and, want sandbox, a only Yeah, is Mike. great anything a able to kind where economic terms in market carrier, almost of call of obviously, this it you're in I unique we're you the That's question the do

passengers those hundred because a of typically more several over is connecting even umbrella going the It's not for comparable going consideration you're our legacy roundtrip see so, an to a higher. in be markets. schedule outside little the effect And to of fare bit dollars really a

then tends say, still effect see the the much that $XXX in does I you unique in say, had just to of it's better they're as in more fare the still a as a perform it going one, to over those ability but better, competitive flights versus $XXX markets. to a but and bit your you're So, system there's, little if if markets to yield off-peak umbrella a ones, is It well, not up. kind the identify bigger

Michael J. Linenberg

Okay. dust where the it forecast rate think that? Great looks driving just is better question, come it tax at tax to is the more points the the be rate And and the Scott. that I your a tax of to where your couple rate When that better. this then at is Is coming for able and basis with I right rate you're you you run for second hundred a going settled to up there of for precise is year? guiding beginning is Or like is XXXX? anything look now were year, a to in think the

Gregory C. Anderson

each and Hey, for that yeah, you're year. I'll XX% the one if easyJet right, the on Germany. in, XX lease of in right guidance rate, that's that were that been remember those as one. have rate acquired And special they Michael, they run we the purpose the to is aircraft acquired, in Greg this you take were under put acquired XXXX, companies And we tax and that back

we're those into those dissolving And is allowed DTL or the getting some so, us purpose too in between to much Without as the up those went sheet of reverse drive the tax in for the and to year we're rate. what a we this SPCs, bringing between and back. GAAP. tax companies differences dissolution which of on GAAP put the it, through had balance adjustment required there's The special tax kind decrease they GAAP German we are that effective major as U.S. U.S. then that, rate come effective our

Operator

Thank you.

is from question next McKenzie Research. Buckingham from Our Dan

Your line now open. is

Dan J. McKenzie

John, material? so the year I Thanks, expense here employee thinking Or be financing if does you're cost/revenue in afternoon. a given go EPS just any resort incremental mismatch be specifics, the guys. it essentially the generation? good wages to ready so, potential talk factor second hey, relative wage, that to here near is revenue we to full development in term? attractive in And mismatch interest but and guide could going there's should with sometime be know the quarter. Oh, not

John T. Redmond

look what think see question, to going We of a we're taken balance the of most we've it's good a to at. Well, is be in year capitalized. one the going

So, a part, any relating amount the imagine of most a expenditures would there's around capitalized, project. we as for always the labor to would have that, be of well significant nuances the as but I'd that lot

something get that But done interest to in the of again, of capitalized the regard. that a change whole be when start any to element clarity there be And announce that give be there some interest is that interest that rules the in we there's is would there deal When would project. we second And any that extent to would interest. would type that if going on surrounding think impacts, don't which quarter, capped. we be issue. is presumably I So, going

you to But at when thing out significant everything the we most that So, because there that being, EPS the can capitalized. going is stage, these think I one for I are no sure put make assume think impact and of the are we that it numbers going what announce this be, we'll is impacts, done all to they're this to enough fortunate to early part, impact. what all

Dan J. McKenzie

for Thanks Okay. that clarification.

about fundamental quarter of revenue coming prior demand it's demand the I'm the was kind just know some hard wondering really of as or throughout calls something question, you just of second stronger, is talk questions. drive if the quarter. the What that a but Second hearing trended at how we're to from into up we other holiday-related that's the going there some end sort on of can here. in pickup if following if more in March, head there's on to of

Lukas Johnson

say Yeah. with hearing carriers. I other would that's what from accurate you're

further the of The that flown increases in did significant have dates March, quarter, booking is you and pretty half as for some weren't in period. the also there. loads, outperformance we which the significant yields further And we but off-peak, trended quite dates had and into quite first both

Operator

you. Thank

from Sidoti is next from Company. question Our Steve & O'Hara

line open. now is Your

Steve M. O'Hara

Good Hi. afternoon.

you How you. maybe the project, to expect topic total and providing Sunseeker what's on like Just that projections estimates things the timeline granular provide cost do and the when maybe on get on to your of it? that? you kind expect Thank and ROI

John T. Redmond

Steve. you, Thank

budget course announcing announce us project. time board's financing, the approval expect can would you at that of the to think announce be I we and same a same the at we that of time

that and I project. homework and contemplate that as not in continue would announce all we be more be our give that on, mean, at the be in we've the like to revenue evolve expectations stage, not something be that sometime we in lot would a give type provide of We is that at look would at that at might at returns, in clarity that the been not doing point intention feel project. you to to as that you But, not would just some internal would a what guidance how looking doing degree so why revenue, in to own for mentioned, have time. what the EBITDA it. point expense as a and It least it QX. something QX. doing I of detail, will in time But we're at you have you'll number So, our that we we're

Operator

you. Thank

Kevin Our Crissey next is from Citi. question from

line now open. Your is

Kevin Crissey

Thanks.

a follow-up that, Just John. on

about the financial maybe you what when what to at what numbers could financial discuss talk you you Sunseeker, project to for not the metrics those with are Just go board necessarily the looking you that are provide going the but you are are, when more hurdles for do board? them, it

John T. Redmond

think, since the our started is, on we should sure having clear I'm with I board thing make this. I conversations one we've been

them project. first they would've like for when the we a approval, the time do understood it's not a So, it presentation it's or seen make to final

board So, the each board we the give of and at quite meeting. bit – board gets every clarity a update and these conversations

So – pretty we're the and why to standpoint, from they're that is it educated whole it is what do. going project on

whatever and whether want using standard that you ways the on I use, would to or all else think the evaluating it's the return everything assets, this various would. anyone IRRs mean, of project of, same think metrics I you else, you return that we're on

board. So, what's they're information the looking downside, to is all the of what's and mean, like quantify be trying and would that same at what presented the to I type upside anyone that.

non-recourse condition project looked that's and what's surprised sheet, we we're much are. because the we the hadn't that helps at one, day around But the obviously up outcome the at That's terms, of from get it's to all a cetera of favorable. and pursuing the are we been there. over Of into very get-go. that's it arms et why of your always have a we We been lever it the said it been just And not It great but do financing, we financing last until rates, been throes course, idea by is couple from what better the the when months, that. you're to course out don't expected got it looking balance this. pleasantly wasn't of out intend

Kevin Crissey

Sure. Thank you.

Operator

Thank you.

ISI. from is question next Our Duane from Pfennigwerth Evercore

open. now is line Your

Duane Pfennigwerth

didn't get enough. I Thanks. just

the comment phase financing, first sort be you're can on the Or sort financing? whole of of able down enchilada? on Just would take to for you if you looking

John T. Redmond

the assume you're Sunseeker? I'm I'm going about state to going to obvious, but talking

Duane Pfennigwerth

Yes.

John T. Redmond

Yeah.

be interesting that depending this have – involved multiple phases, done they of these idea entire on the the So, with very we've want right? would build-out it, in conversations going So, they're looking some to project. had be project to we're definitely at sources the so are in some interested of in

to are be sure that interest well. of related something as doing it's us the what to that evaluating we're make costs to would that So,

one to and to phase, would of at a obviously, extent just tie relate function to minimum up a it's that everything phase a be So, would would future the we also terms. try

we favorable, where that they are there as envision scenario wowed extremely probably and were well, just ones would you you out by we've them wowed. So, could as put of if a all be

looking we of for reason it, how first, look only it, phase that's interested the other in we we're level no if had So, have just then doing and the that favorable one but interest, but at terms, at not someone's certainty. everything will

Duane Pfennigwerth

day on sheet? balance would it then, it. sort show taking debt does And credit draw as would as sheet So, Thanks one? up words, against the balance act on as that Or the be a for other That's you the of all it it, questions. in line?

John T. Redmond

No worries, Duane.

this could you think draws. as I being at look

the sheet So, we balance would as draw. build

Operator

Thank you.

Stifel. is Our DeNardi next from Joseph from question

now line Your open. is

Joseph William DeNardi

you up maybe you. into considered cyclical the some spent options? that as did questions for and that down Were kind I else you going of avenues what two there were on to up other less clear you with Sunseeker? with ultimately perhaps. mean, you landed guys just guys come to Maury, and that trying ways Yeah. guess, it's businesses board airline I the time leverage pretty come

Maurice J. Gallagher, Jr.

them an this other those of and Cincinnati, John we sitting well resort primarily But focus things the All that is over out, customer thought the XXXX Teesnap, size we've NASCAR ability anchor airplane. And scale, and on Pittsburgh, that's just the coming customer board Florida's land and corner DeAngelo, the think things. programs, events, all we're a kind capture great all looked the west of about just and just talked things. different to now with the in my how products they and Sunseeker are a that I the them these and we've but was to benefits a of the where which third-party we resorts, market And you really we've going the opportunities. we've been make years go can one synergies done start it's to our Indianapolis, bringing at leisure go, to they all for product. to are does of And is thing we the when And and of think some our everything, the They XX that I from for around and minutes our kind main given golf, perhaps – away just look had on I tie it's is X.X do primarily in us that's building hotel on at first There's a point together. with go fly event? in the the Punta case, phenomenal. other go that people bigger a is million Scott than picture hotel. coming all Joe, done, Gorda and we September, leisure coast of heaven, Well, in mean, to from to that's coming more all vacation can found board – sit, traffic loyalty with hard things, and with offer backyard. this the you know with board – done couple in years cross some am golf, maybe where other to I all you now the we very see

Joseph William DeNardi

Okay. Thanks, Maury.

John T. Redmond

to talk... used the things we of One

Joseph William DeNardi

Sorry, John.

John T. Redmond

okay. it's No,

getting look someone's the of budget, things we're the like in of right? is other XX%, they're One And approach, to at kind analogous about is to their the significant. that look regard getting If we not you more XX%, much XX%. obviously X% getting right, at it. travel if you of XX% used to XX%, talk we're Disney, which Disney,

that all that's these into extension entire I the of the people hotels markets. was if XXX%. that why, the these the this, complete driving. So, to the it that mean, to something budget as have ecosystem, always all board bringing will, go you after are looked synergistic just extremely was at of ones we We business it's think balance to natural our we're a go travel after

Maurice J. Gallagher, Jr.

we're no right kind Joe, this this company to size, And very the sitting scope management other of. that expertise that. aware of this heard, and to, even scale, in has the we without strongly, Wouldn't thing just is, in and this expertise the is gentlemen space have I'm you we that execute. as the probably expertise believe my ability the of begin or one, anything think reason other leveraging of to

Joseph William DeNardi

Okay.

share back that second buy assume lower Maury, be going here? is we then buyback, have able to the some stock than to mean, the quarter? yourself in you quarter And just count been Okay. to can with I first I encourage mean,

Maurice J. Gallagher, Jr.

Well, we certainly can encourage ourselves.

year airplanes have we XX Joe. unfortunate and a tempting maintain is it putting capital make point, at on But have look we're demands this to sure it's but We good obviously very to is. our liquidity we and timing on it's what environments, some reasonably the of some this

Operator

you. Thank

Lalwani is question next from Morgan from Stanley. Our Rajeev

open. Your line is now

Rajeev Lalwani

gentlemen. afternoon, Good

Christopher Allen

Hi, Rajeev.

Rajeev Lalwani

you. wanted to back Two questions to Actually, come you Lukas, some earlier. I for made the comments of

or if in my some to however data off-peak on something good balance approach what if between more like be us quarter question? had that off-peak it of Can would shifting gave the you're and that, of growth, you're growth. the it, able peak the you following RASM quantify impact or quantify maybe help impact you the between You peak versus say, first

Lukas Johnson

Yeah.

would full headwind over for first towards first, and any obviously the to quarter for think bit X.X kind and TRASM a because year of see third was on be quarter the days. growing shouldn't the just heavier the we're point I So, that little X XXXX, peak points the impact then slightly weighted

So, are third quarter quarter, of say first points flat the the second quarter fourth kind I X and in for be to to X.X would going range. the for quarter, X-ish

Rajeev Lalwani

that cetera, the that perfect. to that sort coming interactions pilots that's going XX And around describing to is flight we CASM that from perspective more relates Is impact have piece, would your you attendants? color you Anything to having on any anything are on inspections Yeah, of consider or be the labor to can of sort Minutes in with just it and what have as back you Okay. earlier provide terms getting then a of FAA, were great. now? there et

John T. Redmond

there's No, that. impact no to of any

Operator

Thank you.

question Hunter Keay is next from from Wolfe Our Research.

Your line is now open.

Hunter K. Keay

you sequential of to – maybe, consensus happened. get want stuff of of give purposes Hey, kind the wacky other about just too change for either end? story an doesn't so order at Lukas, us us news Can thanks there's for all this follow-up. the moving magnitude you to between help lot the a modeling of parts that RASM and think XQ and in with Do number how RASM calendar

Lukas Johnson

way. sneaky guide like a sounds a in It you're asking for

Hunter K. Keay

to like don't if We earnings of have it be anything... you it or can doesn't RASM talk I terms margin want. – about really in or

Lukas Johnson

well. the a some and story, some bit little got put on system headwind shift basis is Easter We've markets. canceling about bit, market bit points. in I a network on flying, versus based the shifting of is with If of is off-peak RM headwind Okay. a Easter, XXX doing a underperforming outperforming Obviously, new

and ask would that's I say Allen... say net positive, I'd a So, Christopher

Christopher Allen

Oh, sure.

Lukas Johnson

to that want get detail about you If story. little bit more a

Hunter K. Keay

right. Appreciate Thanks lot. a All it. Okay.

Operator

you. Thank

is Research. question from next from Dan Our Buckingham McKenzie

is line open. now Your

Dan J. McKenzie

what for new the if guys. role. perspective. from on I is might bring execution priorities wondering you congrats understand Oh, what your can follow-up us biggest for your around and be the you to Thanks going Scott. again, initial I'm you hey. the and This guess, question help are what concerns be,

Scott DeAngelo

question. the for Thanks bet. You

we're right... that (XX:XX-XX:XX) marketing, about – think talking I and

Scott DeAngelo

business, question. going that play, drive Chief Marketing in I areas But, driving really really what think and my a a when more brings experience marketing the no. And and Officers this awareness are very It's the Traditionally, one about loyalty. we that's bookings. is things, we think top in traditionally, of around successful and ecosystem great think around to funnel building,

and and streamlined of really we to with partners, we et benefit car do and makes our our airline, a as not just with And about, that relationship user and ultimately provide cetera. So, not the it buy think most build frictionless find, engage, Worldpay, how a killer the direct book, search, how then our easier just likely a to to Sunseeker, from customers sponsored makes functional to ultimately with to partners, around the plan, and processing hotel them with current digital that second, years but experience the to very ultimately do customers seven last you is probably process. to for in

last to of of the the are together Ubers you likes makes Walt move product the revenue and put that travel of you the confluence and do. say winner Amazons and leading likes I'd years for in The that value right, certainly the to so, leisure, data, and from able And and seeing Airbnb, right as technology the forward come seven when earlier, and the the look that, of across Netflix, a data Company chain Disney and type capture John even and and economics

Dan J. McKenzie

execution? around concerns Biggest

Scott DeAngelo

are Chief great upsides, think moreover, Officer, week Certainly, on in a a the truth. past have lead general, spot are. great the of in think, with the is concerns. bad and But the to would can naturally ton I no there side of there team a we're a Marketing so marketing the thing events one

that stories carriers we in. that Allegiant, And visibility you Allegiant, of so, continue our see served we, and of value have umbrella, not Sunseeker expand ultimately other just but always will our be what will ultimately essence, then from to of from either but our just greater have abandoned, into broader into is I that the customers, served the think or and not – where employees, community our

very going So, continue segments to see forward. value-only greater toward versus positioning one-size-fits-all and specific positioning

Operator

Chairman am no call I remarks. time, this over I like the back CEO, questions. for At to you. would and Gallagher, Thank showing to Maury turn further closing

Maurice J. Gallagher, Jr.

XX you. Thank very your Appreciate and days. all much. Thank time. interest in We'll you your Good-day. see you

Operator

the for Ladies your in thank program. This concludes you participation and gentlemen, conference. today's

You may now disconnect.

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