Allegiant Travel (ALGT) 25 Jul 182018 Q2 Earnings call transcript

Company Profile

Participants

Christopher Allen	Allegiant Travel Co.
Maurice Gallagher	Chairman and Chief Executive Officer
John Redmond	President
Scott Sheldon	Chief Financial Officer and Chief Operating Officer
Drew Wells	VP, Revenue Planning
Robert Neal	Vice President, Fleet Planning & Corporate Finance
Trent Porter	SVP Financial Planning
Hunter Keay	Wolfe Research
Conor Cunningham	Cowen
Joseph DeNardi	Stifel
Savanthi Syth	Raymond James
Duane Pfennigwerth	Evercore ISI
Mike Linenberg	Deutsche Bank
Kevin Crissey	Citigroup
Dan McKenzie	Buckingham Research
Andrew Didora	Bank of America Merrill Lynch

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 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. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to our host for today, Chris Allen, of Investor Relations.

begin. may You

Christopher Allen

to call. Welcome Company's quarter second Thank Allegiant earnings XXXX you. Travel

On Maury Planning; questions. company's today Chairman me our help and the with call answer Drew Officer; are handful our Financial Executive Wells, of John Chief to Operating Sheldon, of and Officer; Gallagher, a Redmond, Scott the Revenue President; VP Chief Officer and Chief company's the others

in no our statements then, those to information publicly These forward-looking our open comments new information to undertake We forward-looking expressed assumptions events, The the cautions us concerning company it statements to based actual today. assumptions update commentary, otherwise. be undue future statements, will not reliance SEC. may investors not start any and whether it as forward-looking company's are contain a over with materialize. company's to John. call, from turn available statements, of on that this other statements. questions. to events risk as of site cause differ view at well or We on obligation Relations place risk our results performance Investor today as materially result which and do future or free to release I'd that, a to factors like based implied earnings and disclosed will the Various factors are of statements the forward-looking rebroadcast To feel visit some on ir.allegiantair.com. filings our With Any to with The these plans. the up strategic forward-looking and could by and fully more underlying

John Redmond

good afternoon, Thank you, Chris, everyone. and

job out. they've a and all we release of you in I We the - - A at in first have have talking the But say reflected standpoint. things - are you on going of making quarter, even as advances that done continued can the the on lot great there, to a quarter great foremost, the in as a see don't fleet as of you of of that the here this we've lot And another all a been execution operationally we've Allegiant. course, here about from transition lot to been thank we've aren't numbers Of happening. detail importantly, in yet. are executing see through put things employees

better and proud gets performances of forward. and move the very we So that we're better, as

us then, recent been Some both improvement. Customer the of of at the that, well late. Market the of improved there airline as customer as service. of which year-over-year in listed And have had as Forrester most out is course, industry largest that Index, J.D. the as having Research, as in recognized the course, Satisfaction American of surveys look identified Power, you

XX be we've the to to that. thank We're XX we're against been very back regarding That's progress do real proud comment So having And Sunseeker. and did timing. at again, transition Touch of release a We the in that, at very a it we're end able done days. God that great. to making. of on difficult the a looking quick have base financing in fleet

that a detail on closer project. and that would we'll do we want investor mean, to do concluded been concluding detail. -- did part on a we I but I project as amount as able our behind as get of obviously, we data that of of haven't So a date, will put be for happy significant tremendous or then comfortable financing, mention But reasons. anticipate very to fully multitude sharing day that we that, us. to of to in type be to that having that either But nothing dedicated, explain roadshow

after we will financing turn be And shortly look We that, over forward that done. be tuned. that of it course, And So well. stay get Scott. doing on as would to information that'll the be released to I'll so -- that,

Scott Sheldon

to partners Thanks, network the by associated delivering scheduling AXXXs, John, virtually our and quarter. for some unplanned substantial and solid reduced our And notably, over of improvements $X another some then, regular some induction in good Most afternoon, is still a operational significant every Despite year-over-year, couple full everyone. over in pretty the X and on to guidance. results, team to pretty by lastly, a thank expense X.X-point in just number year and the team I'd of area. drive of factor the across to XX.X%; operations operationally million; particular most MD-XXs challenges, given XXXX increase the by controllable like changes all operational team driven customers with just impacted comments reduced retirements, XX% fantastic delays members the drove X able completion under circumstances. importantly, the

primarily As by updated and plan full driven release, assumptions you XXXX our to see provided can in a updates, year fuel we've prices. changes are of number which fleet on the

to our on results impacted earlier a XXXX our fleet mentioned by largely As on pretty going ability execute be to aggressive calls, were plan.

induction and the Our of initial XX entire AXXX plan retirement our called by year-end. aircraft of for MD-XX the fleet

year-end. potential to the taking And and planned with plan remains to the in our we XX and needed in guided for to the ASMs XX said, aircraft Although service. year being XX per service plan now events, number we've some That We've units Based from reducing consideration by of aircraft reguided retirement end some gallon. into inductions fleet timing XX.X delays on reflects in some XX.X. the previously reduction our we're in critical MD-XX Airbus schedule used experiencing induction. deliveries intact, Airbus kits

a point top out the taken of we've end. So

down now M&A profile per share per guidance from up $X ASM to take XXX up to XX% to to did XX%; $XX. D&A have X% aircraft to XXX and growth to XX% We from And from our month $XX and lastly, per reduced XXrespectively. our and XX to recast we up $XX expense EPS

aircraft. was to that, upwards There to XQ. it impacted. mentioned, timing units, XQ turn of Wells. driven I cost was Drew in So want X ASM in point nearly as over I a this is by us But of largely production with

you aware, all left Lukas, sure. new Johnson Lukas he's the company opportunity. looking another As and is Drew has for pursue are better the to guys

about the Drew that, So pricing in network let with some trends and talk environment. of I'll we're seeing the

Drew Wells

furthering for big thank good much, forward are everyone. commercial a afternoon, Well, very Scott, opportunity look you but definitely that I'm leadership. to and we've under and very this Lukas' experienced to fill, success shoes his the one grateful

consecutive three of factors positive since the revenue results quarter ancillary quite XXXX passenger. third had Second quarter our year-over-year factor and This of routes air is new time Florida; both strong on per streak. the in a total back load first Tennessee. of Carolina; Sarasota, that came including such and South cities: XX new quarter, Charleston, in we've load a growth We the Nashville, service in to launched

results shift. of encouraged look We the X.X Including We recognition early in markets basis the XXX new the network. rule, to destinations are due point to these new the a QX forward the by developing numbers. three to previously year-over-year. holiday points headwind very TRASM our by Easter revenue assumed impact and On within improved

the and in the break next-gen the XX continued during RM of of period, that drove first the we best flights exceptional majority headwind. success system the the days through to returns strong However, saw the overcome spring quarter

the improve system learn RM a on basis. to continue daily about We and

where will results the this summer area like from fully our and to As One through profiles. of meaningful breaks holidays. hyper We've have to the the we across start, different is peaks talked time off-peak periods all about room system spring we improve and take system flight develop period. seen through focused still

not we same While the us achieve certainly they're we've it's back, through setting unlikely seen gains periods. other the that

milestone non-summer to on confident be the starting to forward. the in team to this XX% the work results schedule. gen a testament put and by This big of with is enough our as We flights next we flights pricing are, the very in however, a winter continue push the system from in all exciting

still some and due quarter, gap in will fuel beginning to capacity capacity irregular peak the market narrowed of and cuts be off-peak than at growing some the we month. cancels for rising targeted this more third operational-driven that has While

the range full in like addition to to X% with to of our that, new the As as it in deliveries, earnings cuts. noted, targeted aforementioned I'd aircraft revising to a guidance due slower-than-expected ASM are over and noted we year release, questions. XX% And to for to lower turn operator Scott fuel the

Operator

Our Instructions] first comes [Operator you. Barclays. Thank of Brandon Oglenski question from

open. Your line is

Unidentified Analyst

This for Brandon. Hi. Matt actually is on

that the - of understand kind Sorry just to kind about this some - cities. back growth the management the to what seeing to go team wanted Investor wanted smaller there Day to period. mid-market was about last reduction the growth, some of - and talk wanted middle year, talk expanding And regard. some at competitive I kind in was of in to of of that. the talk I the capacity I to

Drew Wells

Yes.

So very, range focused we're we're out to with capacity about very the on that's our there. of competitive still non-competitive holding XX% And market. so XX%

operate our and we So viewed changed network as forward, network the hasn't moving today. that including we

Unidentified Analyst

Great.

ultimately release team. there'd referring management I the going question. another of greater kind just of the and towards. teams the division press I if of see They've on kind - the how Just kind noticed kind division. the that would work of of was it on Resorts as started the Sunseeker to hires we'd new structure be of some wondering among forward

John Redmond

Sure. President, a Resorts. Operating name Micah the We Richins. Sunseeker Chief hired Officer Vice gentleman of Micah as came by of Executive on

days bring we're XX to we regarding run course, we as all we doing, until as for But So of projects. probably he and mean will be responsible and on as on for management start future to we're have those. We XX any a time project up. and other to in scale complete lean the people that just some probably some next can that He'll have responsibility to staff, of well. have talent continuing of additional would couple everything

resort those month opening. a it, So itself, would never in won't the the - have significant but call of come you're employees, number XXX you somewhere to on at going to XXX see probably a before until,

scale continue at have we'll people People level. the crossover the dedicated to from some finance, don't management it's various would are any now, and have responsibilities. whether resort to energy that going that XXX% cetera, side, et some not are resort the But expect, crossover areas HR, So that those in in but marketing, responsibilities, ones significant. the there's these time it's I mean, limited you and

Unidentified Analyst

you. Thank great. Okay,

Operator

you. Thank

comes Hunter Wolfe Our Keay Research. from of next question

Your is open line

Hunter Keay

got It got mean, in not this second the you've that are that revenues? thanks. guide. to you much Hey, the the first -- but much it's do worst you've like $X.XX the range? some of in you've you half or you do imply bad years. a earned that margin, so would done driven cut not this slowing, just to see in year. for conservatism worse, to not, or EPS if cost first turns higher. should is expect get pretty on range. or is little I X Or like Are costs surprised I I'm Capacity revenues, what half Non-fuel Fuel say. out growth new baking It earnings already half. you far you've a new the

Scott Sheldon

Hunter, this is Scott.

- that down, you If the still [indiscernible] at ex a guide, than seeing remains we're initial you kind good a of and fuel, story. despite break little it more look if

moving relates we that lot plan continue single hadn't of XXXX. fuel, I ex and highlighted, impactful - through probably see should We in there most addressed think, we a a the it reductions the on said pieces fleet directionally, fuel. item. that's we still obviously, just should lot to, just There's as we year-over-year

took even we think XQ I release, up at earnings fuel $X.XX I think $X.XX. or maybe our

low move it, a call is big pretty mid So $X.XXs this from, $X.XXs. to

that's seeing. on we're I revenue of So -- to I But are items. inner on another a million. weighed full in kind of Drew kind kind those of million $XX the think bigger the year, can $XX strength

[indiscernible] than expectation, a nothing strong. I other. we the the doing think these together know a a The very on managing really definitely else timing through We conservative. It's job if some three the end four this pretty But there's for going you really the still being point, despite sure. the good regular be performance, looking coming higher in. margin still our side. schedule got Obviously, [indiscernible] tight We're Drew, think don't with as we reduced operation. had planes headroom through for at on you I quantify is some to sure. anticipated, to a put pretty of there's is the year. go of revenue units, we little than if lighter good Four, team pretty anything

Drew Wells

Sure, full on built back from gains revs, real we comments. to those about in some RM the kind system. When I'll first year tack the quick, of have initial we're of going thinking

I disappointed third back ended like us RM a relative the said, We're holding at through not So quarter. where system expectations. forward, to while previous moving it's especially up little bit

Hunter Keay

Okay. the can the and came winter, But see. about seems you said XQ, what guide. you and you like do it just we'll given better out Yes, the price gave RM me, just this in how than system, you

good And Thanks. you second John, Okay. tell to lot you've casinos. it. of doing did my Sunseeker-related. experience job is People then, talked a got running question pretty a me I

this Florida, serious. I course. you and you But So place? -- I this about don't mean, no, put a seems know business. golf thought you some anything American -- in I about mean, know I there's Native why you it in like tribes it. I'm casino a know mean, bought don't down have I like

You're obviously bit. this about putting up a casino little place thought you there? in Have beefing a

John Redmond

law. tell can't, something people time state Every you lying. -- when question we get. tell can't. Florida, The always Seminole kind or It's that's to they rights first you Florida. obviously And in tribe I of But speak against the gaming I'm anywhere me of the second everyone the I has It's funny. like in

there we in only present that only even walk anytime it, want future. away whether for get this might right into. to in looked opportunity. the to up we're But would see happening to and could changes do. to way have that itself, imagine, to limited that gaming I so be not the ever don't even that an and give to something just would be would I I explored of is in I the we've going laws, open haven't extent the that that's Florida up, something, the don't The But So not-too-distant opportunity someone idea Again, sports you'd what going recent the no betting the state that. Seminoles it was something

Hunter Keay

you. Thank Okay.

John Redmond

welcome. You’re

Operator

Thank you.

Cowen. Our of next question comes from Becker Helane

is now open. line Your

Conor Cunningham

Hey, Conor Cunningham guys, Helane. it's actually on for

are some maybe non-peak And So versus where about talk you you're the industry what happening? been there? unit trends. there's seeing the assume flying? still in Can Thanks. peak the just that's I talk revenue off-peak about on adjustments capacity

Drew Wells

this Conor, Drew. Yes. Yes. is

exactly You're right on there.

general, we've seen has cuts through period. looking We yet, but same we what that guess, I still haven't the the I capacity seen, off-peak significant at come have In think, we're environment to for a unit is seen capacity during against few periods, will but during years, high generally right-sized the largely peak off-peaks where rev. headwind a the continue still a bit be that

Conor Cunningham

then, maybe follow-up And on question. a Hunter's Okay.

on capacity within have to that with -- of a and Just not I'm it It would the kind like fuel fuel capacity some not of commentary going had XXXX assume in aircraft? of if lowered on the -- the you role on maybe reductions level? seems growth your growth played do delays did I EPS. with Or confused. Thanks. Would kind

Drew Wells

Drew, is again. This Yes.

this did it's on So But the related would certainly some outweighed role. I at portion still definitely play to say, point, a fuel. is fleet. fuel

Conor Cunningham

then, How on that. -- capacity more how how Okay. like going bit are of to you XXXX I are growth? the in approaching all you early. like know context you of are just -- about thinking that? I imagine of it's Can viewing I follow like just little be talk And would a mean, you're How up your now. deliveries elevated kind XXXX to are XXXX with kind you Thanks.

Drew Wells

And team periods we we're of with anything up going deliveries early, still and Yes. It's to be now. match very to align not working as the guiding when sure, for best kind closely those come trying XXXX our bit fleet as a We're peak obviously through. to can. with we're

So levels I the probably can talk think we we're in give to best that's similar still for you and about kind of today. the targeting past,

Conor Cunningham

you. Thank Okay.

Operator

you. Thank

Our next Stifel. question Joseph comes from DeNardi of

is open. line Your

Joseph DeNardi

maybe It or should Hunter's cost competitive some for talk that pricing in is doing of fuel as to just what a markets. expense, seems that million the have standpoint power Yeah, Can in these advantages some question in thank revenue mitigate up on following kind more you. of position would your just Maybe like well. pressure? if you you of It you're the revision. guidance one seem from like of that about $XX you just accounts plug

has impact television primetime So from gotten the it revenue better fuel environment as up? revenue gotten way appearance? any And about any has any Has worse? gone think the to your what's

Drew Wells

Sure.

and our maybe sell it to turn customer. to over about On a the there. start, Scott So we promotion I'll very network to front, I'll price-sensitive talk

is and to able be be market trimmed but chip increases, periods, to we have immediate which a The in of do us. change to but kind going to capacity, away throughout are we'll drive And rising. an anticipation through increases. year not fare out thing that particularly biggest fare extent, also slowly for off-peak fuel will pass of of it's able couple the We some thing

that's started So been we really April chunking the we have earnest, since. rev of and the biggest kind pull, away in lever front, and from could really, in

Scott Sheldon

Yes, first the was in I'll well, only the Drew, that, primetime - [indiscernible]. obviously, thing add is you, thank mentioned

advertising were that and was we And such our us conjunction a The as able that literally elements aspects were campaign. with second other where started. integrated to e-mail new digital right related saw in we pull thing that before we back one brand launching at

expect a booking's So continue to to going from ahead we perspective. forward plow

Joseph DeNardi

maybe downside of much, and just about is into even starting new finally about do Can And your better. strategy guidance as here are sustainable then, CASM's to talk you Okay. guess, these talking I CASM Scott, the not trends how XXXX? we're

Scott Sheldon

Yes.

types the I you go at the gains biggest as probably couple of of fleet to three couple types. experienced you you some to time years down gains, the over some if before the XXXX were of look mean, efficiencies three we operating you of that kind the we from of can see fleet start that regain larger in next a things. one, So line

is folks movements the I going it trending you equipments. XX, out to our how incremental and new pipeline think upgrade churn with continues this to to crews. minus tails than start efficient Ideally, Obviously, so with you're many when more with much operation lean get see more deploy now. the get year into we XX

result better direct much of seeing think bigger a area. is running the one maintenance in I a you're areas of the operation

If the which we've a is look taken guide good at expense, you thing. down, maintenance

having out MD-XXs you would continues you stripped If decrease per MNE XX% see to better. the get noise of XX% to to related per maintenance Ideally, of year-over-year, that kind month. in a aircraft

scratching fuel Yes, reliability just attain getting what story. MD our think mean, Airbus of fleet. me, see or operational think bullish really more be I there. nice to the -- we're across benefit can surface going uptick think I we the excuse aircraft. in starting fuel-efficient to mention Not I to on is We're of a ex I board, this a we're the our

uptick tail that of to that having you're seeing per unfortunate from see slip move continue a nice couple ASMs in so XXXX. we're benefit a It's think will should on. But we we I able gallon, forward. as XXXX be into

on cost I'm really side. So bullish the

Joseph DeNardi

Okay.

down also? in sum 'XX fuel So that up, I guess, cost to year-over-year should probably ex be

Scott Sheldon

yes. Directionally,

Joseph DeNardi

Thank Okay. you.

Operator

you. Thank

Our Syth from next of question comes James. Raymond Savanthi

line Your is open.

Savanthi Syth

maybe the low than better side. that of Should cadence because single-digit color thought. figured, transition? just improving kind on of cost type just in perspective? the second the first and the of more expect was give of little you Could similar second as everyone. takes bit the kind transition better safety execution hold. we Thanks, declines from on maybe on any Or the cost I Okay. in more half? half, The much a half, Scott, I

Scott Sheldon

good Definitely The it's beat comps -- a so yes, internal expectations. quarter.

the -- guardrail, a year. of kind we obviously, think than if kind probably I or year There's beginning half still, the the higher full looking of two second anticipated we're a you're of a of year. point what

that weather. Third the half particularly quarter heavily think new the year that respect, in environment cooperates. assuming irregular of year operations, by upside in some last was impacted of there's We back

I mentioned, labor. mean, particularly just I to take a little operational to bit productivity going out teams of, the it's of to Some related grow

of sustainable, Some the be and areas more repetitive and than it's driven down when other should aircraft anything. calm very really

the they're if in And higher XQ, remain. probably underlying so an [indiscernible] should basis, than on theme experienced I that think you X we what asset and but

Savanthi Syth

clients nicely into Was helpful, bit the the flattened little at expected digging kind see that probably of I unusual I that costs half. in we how more. have more so second and per-ASM should that is of as -- And training of really kind year-over-year there then that? something Scott. just year that and less kind think a on more wages and to basis, Or of out a you If about quarter? looked next and flattening That's this the start would benefits this out. things kind get like it year efficient get

Scott Sheldon

Yes.

an as of far the you As aircraft. levels kind to crews, as whether We're see efficiency start you operation. far use should into back per come as at to staffing, FTE start peak

[indiscernible] have a of CBA. new in-flight, We a effect

So to effect to of we heads. support this fleet that the we good a guys multiple one that of have are had yes, payrolls some noise. we there's increases a in to into going to lot But which that shoots operation, grow the -- through as excess as lot the go have which start of labor. of types. We infrastructure We we lot of forward, run a that's secured year, be new

starting you're be allows staffing to real, so you a targeted consistent, repetitive in more operation, And see to levels.

think that see you'll basis, -- come gains on see in. a start to unitized should I you yes, So

Savanthi Syth

efficiency. you. then, just quick on Thank the one And one fuel

we kind you should XX versus a expect and efficiency As out, MD-XXs we of exit the this this reported fuel the are quarter? year perspective all from what

Scott Sheldon

long-term, gallon. per we've ASMs think, I XX targeted at

time. continually see to You should creep that over up start

Savanthi Syth

So that as Or this exit get do is the XXs year? into we a little we soon? too

Scott Sheldon

AXXXs, the given that XXX-seat number sliding. These configured. of I soon, are think too all definitely tales it's are

Savanthi Syth

Got it. Thanks.

Operator

Thank you.

Evercore of Duane Pfennigwerth from comes ISI. question next Our

is line Your open.

Duane Pfennigwerth

but the want that make [ph] to to half. communicate intend don't just to Just what in guide will up guidance, implies. the the -- sure down in That's you want RASM, was that be half, the first I I which back belabour

Scott Sheldon

not going give on front. a specific obviously We're that to guide

I we how as to come that of what think the XQ, about And than the wanted gains think, system. it go going to talking specific XQ. numbers. thought, back system So about But as outperformed about RM probably isn't don't we kind talking pertains giving we particularly think RM I certainly through I quite further I'm to we

Duane Pfennigwerth

speak fleet Can Okay. a you delays? little bit more the about what drove

Scott Sheldon

to point Yes. it this. I'll turn over B.J. on been He's running

Robert Neal

Yes. there And I during delays same jurisdiction. it's were year, aircraft about of we first took certificate, it another of to were out are the on and of, coming in this a another They're the the trend laid remaining airplanes applied getting transaction, are which handful aircraft, just of that there half guess, from and X - late which that deal.

So assuming in those XXXX during come now. we're

Duane Pfennigwerth

where -- your issue the issue? is the Sorry. So induction is the or is issue

Robert Neal

forward arrival looking The of issue late is another from aircraft carrier.

Duane Pfennigwerth

get that been just of to sort have the of function is haven't desire of party that a Thank you. and to able me Or on off lastly, debt, just had of function the just financing? it John, to you wrong, quarter. but sign have of place a financing your hoped the are delays? you Can end if Is the then, to why by I'm And second Okay. in speak there you cost it correct a to think yet? I non-recourse

John Redmond

to There's up a complexity with trying the No. best in it, come program lot around it of appreciate I possible. Duane.

size being non-recourse, But to be things whether and to of So together. of all being we complexity whether partner, just are not a the partner, would table in non-recourse. evaluating project we evaluated. Clearly, of like that's of it's it want position the these still in all and the on still recourse, everything

outlook some a we're XX-day pretty fronts, getting why and comfortable the that's So I'm all been on on getting there's with delays. finalized. XX- But closer this resolution to to

Duane Pfennigwerth

you. Thank Okay.

Operator

you. Thank

Our Mike Linenberg next question Bank. comes of from Deutsche

Your line open. is

Mike Linenberg

this just change just capacity, would fair EPS, the assuming -- dead guidance to say on I math good of to Hey, points the is but that. to result a breakeven beat guess, you're safe horse X or Not mean, I and additional imply that on a afternoon. say? to you're the that

Scott Sheldon

It necessarily the we that we are we would breakeven, be that, from be to targeted very approaching worst being a how on can. lines wouldn't we're trying take and but out schedule

of So it'd be yes. that, kind directionally towards

Mike Linenberg

question, and second this my just then, to is Scott. probably And Okay.

really the X X on the Anything is as labor done noticeable more the nice up the job performance? it you've months, Just, your to headlines goes? steady ops recently a she over recent or last front. Or in operational on in press showing

Scott Sheldon

implementing in the are to she that to be outfits. as the to used steady mean we or really of general, it's small nature consideration. another the to relatively It's is from into we're going replacement, goes. not being I No, have CBA replacement unfortunately, taken that every In tool the takes kind Yes, use There the time. a application that it. it PBS IBT what have, agreement chose different. is subtleties

how between pilot more the do these it So do group. solves to time we IBT. the is we how to obligation and it's long and our think just two, to But supports it how develop a taking things the communicate importantly, company contractual I and articulate

We're And so unfortunately, our a a yes, to and and this our time it's just that's spending substantial money. That's solution. process. of input obligation, amount

of really other So proud -- than I'm operation. that, the but

have some a quarter would speak. think would really to year difficult would if ago, had down, have that answered so to It operation. they been we the probably have attributes And really melted I there's guys bell. the happened our a second

during I think they still June. tails, put out a X really being good quarter, down particularly despite

and the work solidifying. made, somewhat of hard that a they're So structural the changes lot we've

variation, less you're higher so seeing board. across And execution the

pilots year-over-year. and our perspective, more capital that right trends of basis a parts tools in larger have techs of consistent. we you're substantial seeing And we give so The and the the deployed from And improvements opportunities it's real-time. Some tailwind seen direction.

proud So really I'm of the operation.

Mike Linenberg

Great. Well done. guys. Thanks,

Operator

you. Thank

Our from Crissey comes of next Citigroup. question Kevin

line Your open. is

Kevin Crissey

the the think pair how make threshold financial what about routes which for to you Maybe, Drew, is about can you back? Thanks talk decision? you makes that time. Hi. that Meaning,

Drew Wells

Sure.

on more. to If can of there's So week, this. markets That's service of best frequencies about where ahead the we'll across four thing, and of thinking have back find of ability go maybe continue or the fuel-driven we out we're them. have getting multiple we long-term two we that the and to a we're reaccom as markets, ability If different more -- and fall fund as kind as planning to have ways start kind of talking round-trip a passengers to to you, our when it saw that trimmed rising, depending consistently [indiscernible] summer summer And the where certain didn't fuel markets come we candidates, and with a for thresholds, at the down planning We XX% over tried of St. push Generally, Pete. margin those around could, had demand below to every it us. the around season, to we're process just that. you season. into right

that'll how to in the of fuel. of stay we're the addressing the But winter. example So of rising tangible kind a that's markets face

Kevin Crissey

into could have airline that itself natural Sunseeker market. thinking about Punta and you. maybe Terrific. the itself, to more maybe airline the you're you profitability frequency And how of versus Thank talk for about the maybe Gorda the incentives

Drew Wells

Yes.

next abundant there at over So take XX% And growing We extraordinarily we've as were of will been the infrastructure now, to we of stands as the have fast. XX the several months. allow. we're last Gorda pace opportunities years feel the that airport airport us allows. in kind growing it right will Punta We the the actual

meantime. even from we the in need the incentives Sunseeker that So think I don't

Punta goes of back. Additionally, the middle middle that relatively out, town bank morning kind few bank whereas in the of in launched the day, stay that new of gap from for you're as able we've basis the we're will calm to of that until kind hours airport Gorda in the plane a fill comes

As you by be to middle in more get the of soon Asheville, fill-in little growth. at gaps yourself the bases the can to those you [indiscernible] bit the day, end year, a of get

wait the you While airport on infrastructure.

Kevin Crissey

much. very Thanks

Operator

you. Thank

McKenzie from Our next Dan Buckingham of question comes Research.

Your line is open.

Dan McKenzie

that's guess, could kind it I, kind uptick there the business a is of scratching in on in wondering the just back an guys. as there if is trying here too, understand business head Good just you here. the competitive there's perspective If here. on to -- just deterioration does Hey. not talk as half business, you reconcile going we the of the how if the the can in afternoon, couple capacity I I'm on maybe ancillary I'm core to just seem at it. I'm EPS a strong you can revised revenue, at Because guide. bit year? it more as little -- is if trying of it's core wondering of look if just add your should. I'm kind revenue. running am things firing just be in that something to side my of routes going And revenue

Drew Wells

of a X we the -- No. air Like a that consecutive per-passenger think still that is within front. competitive still were quarters quarters front, I ancillary core three businesses year. of we're we on a point at strong. On change growth the of There's not basis. mentioned beginning, running where over last on meaningful we're

biggest for from the absolute rev pressure So the unit us meaningful on of a and a of the was really, little dollars front more capacity trimming putting than so bit out the thing basis.

Dan McKenzie

And capacity pricing that think as get bit And absolutely earnings a of back the if because implied little just that in love of love earnings phrase. pricing. do that about Maury, to back to the are the Okay. manage business pursue gets similar pretax things as growth we as right can I guess, of the one kind -- more. you it profit need to should pretax a Allegiant sort targets say we the look to profit guess, I drives you know, the that's half you pretax I I what then, What I Allegiant I annualizing to you of to size of kind year, here? XXXX. -- about or outlook the us ahead is think of

Maurice Gallagher

near-term first foremost, profits. fuel Well, and drives

You at go back, looking year. I last was

'XX. For were or half And think, we 'XX, we facing, I the had we quarter like something in of first a first June. of in have $X.XX $X.XX fuel --

fuel did quarter. like when it up You it can't this catch -- just you to moves

it So some profitability and And down you that you had because accordingly. with of time, and to pull time. stuff up over start longer we'll particularly, pull -- generated one the here. diligence that, but per we'll We've our over always catch capacity And that's anticipate your we've and haul route, the weaker.

around a $XX, moderating been for WTI's has up bit. barrel fuel a front jumped to little $XX the there the on So and $XX

capacity our responsive able be margins we'll are So to we based of this to XX%, deal still of with derivative claim routes can that. to pricing But business price. you think is we have we and strong what how non-competitive, and on drive our we XX% things, the model of be point

pricing. with -- quarters now, transition. just this of where get final we're That's So how we capacity at right we're -- quarter not X there. of drives And in we're

like the think there laid the in as we're pretty year. we shape. is But good our got last a well third There the within in into we've while from year, may middle just quarter, pretty or it, be year, here overall out, So everything -- we of quarter. go bump weakest

rising going we that, So into as push fuel. we're transition to

gauge will out exactly hard of times. kind where So to that come at

Dan McKenzie

trying is this to guess, year structure this perspective, were a get If guess, more of squeeze this strip were out here. fleet everything tied a just much no in that can I from from year? I if transition, what cost of if impacting the we to transition, just normal I'm the like? I cost Understood. look to fleet Scott, the a how might year cost one sense

Trent Porter

these the something to heads. types of that But go, and other that growing we're get different to carry pilots, you difficult extra pilot, It take is primarily all the to away strip This that pilots. because the heads operational impacts that carrying would at in transition of be the Sure. $X.XXX, one of Porter. Trent least additional as as all It's to well if the X/X then, I us expenses out. able programs and executing be like the to And said, we not into takes transitioning for to the away disciplined grow that's across board. the It pilot Airbus. also us with fleet goes just

Dan McKenzie

hop the in back thanks. Okay, queue. I’ll

Trent Porter

Thanks, Dan.

Operator

Thank you.

America question from of Didora of next Bank Merrill Our comes Andrew Lynch.

open. line Your is

Andrew Didora

Good Hi. everyone. afternoon,

at back out Scott, think, Day, per Investor $X EBIT think a I plane threw figure. you Airbus I million

to the or is would fleet far lower? end either there so come change that seen that maybe transition of you've the higher As that here, you anything number,

Scott Sheldon

we're that to utilization. No. Those It's the the $X I million AXXX looking are Obviously, seeing kind for different think reduce [indiscernible] a But of [indiscernible] $X this completely even million profile. environment. at guardrails fuel I'd comparably, be still at

Maurice Gallagher

Yes. Even fuel environment, at yes. this

Andrew Didora

per I take would $X aircraft, meaningful that's does earnings it that how you think And Airbus number? Because a to Interesting. ramp long up at million to say upside?

Scott Sheldon

than that utilization. Yes. crewing flying we're I of on of the XXs still MD-XXs you're because the more on, Airbus delay certain coming mean, with leaning is we XX for the units anticipated, which a problematic much level and some we're

And so than that's we a us be going longer with bit to anticipated.

in upside now. definitely where So sit XXXX from we

Andrew Didora

you. it. Got Thank

Operator

a Thank have of you. question do Research. Wolfe we from Keay And follow-up Hunter

Your line is open.

Hunter Keay

A guys. me. for couple Hey, of more

do feel of that XXXX? vein, I CASM-X see -- in of $X.XXXX Sort on hitting you still good same that any reason Scott, know you about

Scott Sheldon

the plan? couple our cost you Yes. a really to of I side going mean, I to be referring the story years. think -- XXXX over next We are short good of think, is

lean back real us airline. of think to a kind to I get lean, see you're going

Hunter Keay

did new? to is door And want debt? that something I traditional totally not open John, debt clear. finance non-recourse that to the Is make Okay. just then, Sunseeker you to

John Redmond

me we're everything mention even looking past - a we're partner. the in like Hunter, just at you never heard

things interest those make on everything's it's sure the think I our of So that that to it's best one table. in

like would you. I non-recourse partner. preference and We a a preferences be mean, have

fruition approach more that would partner But just the your like strategic brings well. a standpoint, the we did that's that best if like if came table as to than that have So wallet. to partner, a to we would lot and always see from a something ever be it a

we're at exhausted options, and to that's so we So those the are best make end up all options outcome why that the want possible. with we all sure looking

Hunter Keay

that to on on change. same page just financial -- mean, this this think want Great. another sort the I important I an able the not from I I thing. isolate to isn't this it's here, need we're and make that I'm of stuff, I'm sure expert risk and

pledging start sort airline finance I to isolate going hard the rope So this going going how I to risk uncomfortable be if to you're and of from just downside to change you're going if to we're it. terms which the assets -- upside and project, feel to the of off is

to of airline the still I into are and assets the there's use So whatever to resort is, itself? financing guess, no core you risk question commit nature of the this you prepared the that the isolates bleed

John Redmond

kind at think, early just commitments, time, it's point those I to this Hunter. make too in of

the would best And working, trying with happen, great. I if me end look get not going in want out, don't going the going done make to day, for at partner would a point any time I is this think or piece commitments we the best predict not within we to this then time to resort mean, I'm see, partner XX non-recourse are that and that mentioned, of to it, to to XX whether we're more at days when still That make I that end say the strip on in I frame, outcome I any to mislead And way, have of we're for would the all say have non-recourse, we XX- to paper the getting I at would than have recourse can say a to outcome to can say versa. comfortable a we're be a to as because if how us. as it's we done. that. be be strategic that's vice but partner. could the But I it XX-day exactly can't like financing

Hunter Keay

you. Thank Okay.

Operator

you. Thank

Stifel. comes Joseph question of next Our from DeNardi

is line now open. Your

Joseph DeNardi

Yes. as well Drew, leaving. Lukas the maybe with RM third unfortunately, of, not mean, system coincides just kind your in around it on working I commentary quarter.

And about provide bit little talk you working? can not of why So not in maybe it? detail it's a why in a factor more that's terms

Drew Wells

bit Off-peak historically would flights. off-peak up more as the summers, price in a kind Kind top aspects throughout in -- bit they RM periods the to as The pattern end. easier it need was your many of system view of this periods. we spread together of tons do we to I break a data Sure. that as, order have more we of peak have by your the which to prior up spring and models learning year. such have With it's build out. proper kind of we holidays, it the put periods, terms beat a machine don't unique

weeks peak have of XX XX, You periods.

and I top think to trying it there's say, periods of somebody when while versus those all end. the a more traveling, difference comes maintaining June out XX, to peak June bit balance XX

better help I something another the that think need order system in next-gen the it's we feed to year produce data just results. really to of

Joseph DeNardi

doesn't TV pull try impact work, about bit and that your trying because pricing want special? think so just Okay. on more core Or you Why maybe there a back? you're not you talk don't to the loyalty? it a And is. pricing bit. there'd of just Or power? more, a then little your just be network little Maybe customer Is you that You'd just something isn't given question power. then, how non-competitive this

Drew Wells

Sure.

there's trying. couple think Number a responses of I we're to this. constantly one,

we're fare each pushing and available. the individual pulling basis on that's on So pricing an and flight

trying We'll where can. comes bookings whether in to number of terms expectation. push we see of we're there relative retraction the So a with to every single flight,

the front, another On necessarily not well, competitive second we're with airline.

push on against then We to to relative other options which point to other too for they'll We're it they'll different fighting they're most are a And willing drive or we we're of the airlines. airline their for vacation much spend center. travel if an a of most what competitive spend spend. -- with by this for, entertainment kind to

Joseph DeNardi

that following it. and just you John, little way started feels do to were before That's to project x it Hunter's It condos our and a question little like was preferred debt. the the bit. Then, percent sell standard do the was forward, moving we'll then, bit. And of on Okay. changed non-recourse out, first going a up

why bit. push a that to changing and sending you. isn't maybe you go demand standards with whether Thank you the continued little Can message that the just there? talk that's just like is seems project Now to down forward about a it this

John Redmond

our changed. That Sure. No non-recourse not problem. debt The is has preference preference. for

then was that of So happened that we continue project. that there's possible remains that to make to the evaluate same. a When lot it's you things look project the to ago, that a the us have how for prudent best year and announced, since at

that, year best over the that project what it, to absolute done we that's of long is passage the possible call have term. So evolve become

necessarily You us. be can money condo. might in long-term That make short the strategy not for a best the term selling

So most we time prudent why the impact coming taken because are continuing for that to to greatest the the airline. we're evaluate it's up long-term that. that's That's with taken it's the project have going

not long this high a of for to are about project make So make very to the very XX a all days it's going or year is and This trying that time. trying for be it's us, best. days, a to sure is XX the performer going be sure period that next to viable,

shifted, impact I So mentioning. mentioned our but have of I law changes that's I tax call change. that is And have points past data law that it it's the analyzing drive on one projects. worth various data mean, some mean, doesn't decision, point, as is why these a tax the significant and there

is not point of resort and wasn't a driving that decision. first there in a year. we just itself this It's So that data last when back announced

be to potential provide I think So impressed all I I say this do long-term. on mentioned detail, the it, everyone as I think the project, going project, would, when we the I as of is by

Joseph DeNardi

and would you maybe, Okay. Scott. in, to just Maury, throw I

think maybe some you buyback, really the of right? like $X [ph], would in can use I X million XX EBIT do you If per

Maurice Gallagher

point. a that's so we we And good so. far, Appreciate have think, Joe. proven not that, Well, it only Yes.

Operator

do We Research. have a from you. McKenzie Thank Buckingham follow-up of Dan question

Your now is open. line

Dan McKenzie

how little we assess talked the pause kind your signed ramp-up about going? -- Hey. the looking agreements. is last the Thanks in a you goals to And project the bit know office the XX a just of here. that a of up. metric get wanted from you up talked are of for the in you'd I John, call, on know And I questions think is Sunseeker. I think, to be about, I that at your more a think registration couple to How follow had sort past should what of about perspective, as sales that how this resort? -- I

John Redmond

trying mean not numbers, Well, we're of to I do drive We say numbers. focused, to completely of you we as mentioned, runway registrations. the When the plenty got number that. the -- on drive I

trying that now, to we're as regard, push can. not We but XX we of that as are, as approaching in much actively

you well. an the out We channel can amount on sure line also there's have, have, button of you become an you I'm information a others and you if which and on also owner extensive push through as -- provide go that site,

So we have -- that. done XXX over have people

there you the a Because lot make condo. necessarily a lot a for asking of I can you choose selling those than money hotel great can doubt off is question, great no if sell a have but demand strategy, mentioned we Hunter condo as strategy. long-term more it, we was earlier, selling So not when is that running products a a short-term to a but

be we're So term. to to trying balance for to the what's us the see long going best outcome two

in in we're moving maintaining then becomes selling pursue of that long direction real long have key is there optionality want So sure in condo list an that We regard allows in if maybe parallel But us go any make is this the price list in we to tension people interest. a that we're the up, hotel some to unit. that guess, opportunity greater there's a regard. who I to takeaway that to choose to tracks by and continuing

in And able earlier, continue every and something you detail answer do I for develop as to to question that best said potential the we for combination all continue the develop once of done. will be a we is and to and I'll as we tremendous as I the And rooms. to the model units, and -- have So that help of potential amount mix hotel we present for will that with financing out this. straight

Dan McKenzie

that I the Would I the to last expenses most you the would shared the EPS you're call, circle cost if EPS financing I guide well? had back, labor the incremental last costs or development the in wanted talked just a in how you anything And Sunseeker about operating guess, of is -- one. simple be know there's I had that's costs some if question, being still then, and And capitalized. really, thinking house be costs presumably just this, And be the capitalized. Okay. cleaning -- here? capitalized as about of to the headwinds the does as revised going think from factor see

Maurice Gallagher

regard No. capitalized. is The provisions we're in with EPS that have Everything doing to nothing do Sunseeker. that

you we to shouldn't we're as point mean from type So make perspective. of anything a know, presentation, laws there. statement you operational the from a standpoint financial to resort an have accounting get opens where going see force to When

detail. that able you the out, you're So detail to you'll be you're can so see to broken focus extent still to the airline going to the on going want see resort. continued And

to do but requirements, that want would of accounting have standalone can airline operation we an well. as to lot going So have anyway again, a you we're visibility so on

Dan McKenzie

Very good. time. Thanks for the

Maurice Gallagher

Dan. Thanks,

Operator

over And conclude would does you. Thank ladies to the gentlemen, remarks. Maury any Gallagher for back closing turn to now this call like and session. question-and-answer I our

Maurice Gallagher

the your much. good next you very time, Appreciate Have Thank we'll and you to talk XX a day. days. in

Operator

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

day. Everyone, You have disconnect. great a may all

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