ALGT - Earnings call transcript Q3 2019 | Allegiant Travel Company

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2019 Allegiant Travel Company Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Chris Allen. Sir, please go ahead.

Christopher Allen

Thank you. Company's XXXX Travel Call. Allegiant to Third Earnings Quarter Welcome

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

commentary open it some questions. with to start we'll So, then up

as The today more statements. performance from assumptions materially actual comments risk These disclosed cause risk will company's our concerning to events, contain others undue differ forward-looking filings The no Any investors place any reliance forward-looking based do We based our forward-looking in underlying statements our not and factors those may upon SEC. statements, factors that company and are on forward-looking expressed whether future with of be undertake result not information available and the fully today. or Various and the assumptions which update to otherwise. to publicly statements these or statements events, us information strategic events a are to materialize. of implied plan. obligation cautions on results our could by forward-looking statements, new future

at Investor website a as call, To Relations to well the earnings rebroadcast of this view company's as release the feel free visit ir.allegiantair.com.

XXXX on over Vegas call. Wednesday, we use speak like will to remind I’d expectation about to our will such it rather as turn this Just November that XX in than day Maurice. that, place for on investor With to take event Los our

Maurice Gallagher

for again. afternoon and everyone. Thank good Chris you, joining us you Thank

year-over-year quarter, appreciate your a Busy day to you profitable report very I’m time. our profitable you saw quarter, profitable on consecutive as basis. XXth all. quarter very happy for I

the all-Airbus years the caused the XX XXXX, during one-time and XX, of to asset question XX end We've One, this the to are behind grown doubling be total time XX of Used been fleet dramatic reasons. new one core fleet. for great XX the more Two has aircraft the XXXX transition the and our competencies. been airplanes Today, our scale aircraft XX showed of expenses XXXX And this operating model. another has aircraft year. XXXX last managing us at months capital aircraft. two, transition. improvement? our Since Less added of Airbus utilization of day than more and efficient to the to have used than we during a and is what's lower continued XXXX change

traders the early has including his earliest have best it's team sourced the have the Because And a the skill tremendous since in days, in the our done us BJ as transaction complex coordinating added this one XX aircraft our recognized negotiating team sourcing we Since we aircraft of more of have our shown aircraft inductions. transition aircraft market and worldwide. Neil XXXX. been and job

this has without AXXXs. we very flow been today, model. has team our result cash free a component acquisition financing results two and needed have, critical aircraft sourcing financing. new pace XX of XX adding of aircraft Clearly unlike financeable increasing. slowed including Today we during None of as become Airbus acquisition our and sprint very the and our Airbus, C past years XXXX, first the possible is our today's XXX the would our skilled our been have And are in since

To EBITDA. this $XXX date, of have we already last million year’s exceeded

Class as lenders, aircraft the around and do of balance the Japan, with U.S., given our lenders track demand in for as quality our Our the business aircraft world XX sheet. fighting Europe, paper is very our solid business. much World our in record We many

No such continue while transition has knowledge trained source run period, so airline. fleet short airline mechanics the transitioned airline percentage this had this to new leading we successfully. to time years of aircraft, in during maintaining routes, added pilots, XX month XX we XXX by over their over And grew to my we XX industry a and and the have to in this industry Not XXX XX% my still all in only did margins.

generation improve more fleets to our MD industry, our substantial And have in aircraft. benefit. second the make of We the us our us allowing performance, that now fleet. per economic understood Airbus a money to would improvement of leads materially one over We aircraft latest the

Somewhere this proving our concerned is and with We case. our would results airplane. expensive you utilization sensitive work more the model told might it not

an Today year, the increase hours. But average same. Airbus productive this operated past to the are has our valleys allowed in year, peaks June July, of the X.X March, And the of that amplitude three the curve. of we and months us and during most

each trend X.X the done XXXX. reduced over we've operated just hours, to compared the many years. years XX% are of same hours but again able pattern profitably September more That's XX% many We're that we the flying decrease, X.X decrease a fly year. we The hour airplane month, following each continuing but XXXX, from that's day. that increase only ago, for five weakest to the we that hours with X.X our averaged XX% a in peak we to exactly our established But

with gallon of year, you margin or with expect XXXX this $X.XX results. Investor million XXXX, of to dramatic XXX fuel per when Day We completed particularly financial to had we competed, operating income. in improvement that operating In transition we XX% When $XXX that generated our our the we a told at all-Airbus. comparison

year operating But this our of to adjust is XXXX that September the better. fuel per XX.X%. drops gallon, end margin If XXXX this through year’s you to a the airline margin year-to-date respectable $X.XX operating

because factor month as our has months saved of well be with the year we our the power have its we better came completion Dorian We're when critical last in you operationally months again the also since the north lead month XX we its industry XX We problems This game XXXX. of and of The XX%, Airbus. Airbus past team part. and But We've told led substantially been operations. the We January XXXX, the in the in of upped fleet. industry in is second in shows. of improved it every to few doing Airbus our Florida. Hurricane past years would

so. concerns as deep senior over of because management. wide a In we that and had we departures. changeover in our our some of personnel. backfill think with XXXX, we said who bench could falter the were some there the We departure would And of well people of these And didn't

team internally one work that the Today's our management in do the past core with, XX one competencies management really our been again, group Allegiant. growing this. months. of of at able And Quality the the has in through is is management we the of to fact my at most Each my important here years most are product of well. XX as to be their shining one proud pleasure to I'm teams to is company. it's congratulated performance best on

have the to X,XXX providing team fun others from of very reliable, focused, we've done customer years. you, ranking and of is best who with dedicated our today ladies gentlemen, transportation you cost, feedback the You'll members are in U.S. among What over past customers about airlines us front is a in what safe, the for hear that group XX low

And in none of this front way. members these would possible group management team leading without the out have been and the

cylinders. all on hitting are We

that of component major Allegiant other initiatives first The in underpinning X.X the And behind. place. it's coming are providing right for the is

to John Thanks to much. for on his it comments. be folks, your a With of to Hang very I'll hell that, it's over turn hats, going a ride.

John Redmond

much. everyone. Good very you afternoon, Thank

It more amazing we down team product. love our yet of leadership to-date. I people of But proud record going best been couldn't has accomplished to great we all we great the have about Why with what amazing the the be to come. completion. Airbus is and execution. More talked with comes

out same incredible is Also controllable up versus year-over-year to been point has AXX our

to the of incredible team folks months, last this again by XX to thought month an have just minute for we prior I take feat year of here. working XX wonderful a updates to points have around our of will realizing investor a Sunseeker we that when day. provide detail you data on all relates quick important some it couple this as incredible give

With regards committed budget XX% total end of on year, over with the committed. to project and this construction, the of budget will to-date total by of we're budget, XX% be

storeys You of by get high and building be year, end April wrapped topped should XXXX. five in approximately towers and all be the would of should this the

To week. resort have as which branding the you of mentioned before will on project And you a and look is here, website at updates a tab, we end could on opportunities video you out click we the the site go on just the with and sale every go selling I the posted if single year. drone of again, on the before, update

very XX over which we're active different that, we states. have emails to from enough, have by So date, Sunseeker incredibly XXX,XXX emails than approximately more excited X,XXX we

intend out brand ability speaks opens. well that worth retired us room resort an the carrier a the and rates a course additional people about of actually who's they're breadth whether providing go email and long brand or cetera. what register Of the have resort volume before et their website, pointing is, they about awareness for their the detail with what is, of stay, not, leader the to to Also well what gender of their given a us on interest how beyond been to anyone just full as knowledge are, as power develop age

number have who the their them have interest, who of at those look registered to you we registered interest date. When XXX,XXX their of folks are actually

the with of Like happen year. further letting So actually before interest the And start wait by this express we us. their these opportunity end can't by very excited booking for again, to these again, people numbers. that'll

on turn Now, to that I'll Drew. it over note,

Drew Wells

joining John. And thanks, you, this for everyone afternoon. us Thank

plus I'm associated X.X% third announce the to very year-over-year headwind quarter of Dorian. point half Hurricane growth, plus despite TRASM ASM X.X% roughly with and a pleased

momentum capacity and the we we the with within of negative the July saw right continue toward building September further revenue quarter the expected, second high and end period growth sizing As on growth. through capitalize the third

online continued quarter produce at per revenue and the service passenger both scheduled are line. third-party ancillaries XXXX. in airport and including the on the air more for bad this to first since combined company best There revenue reasons many the performance, third-party XQ For in history, strength and

updating card, quarter. third-party Readers Card And the we huge home All the auto three best grew for USA ancillaries, and launched us pillars everyone our at comment one provide far Credit from XX we to on to a Awards, program. of Co-branded I early additional Choice ancillary took runway. the and which is Best day. initiatives Airline But recently hotel honor its to Today EBIT within investor of a cobranded look Furthermore, it’s credit bundled revenue performance, forward too Award

with load ancillary also and load quarter, the in performance expect matched continue to was This factors into that with the each expansion improved fourth. I month positive factor

will lumpiness and the monthly begin which We retirement to MDA higher the rates. than also for hit will fourth quarter growth some growth in create comparison typical

first X.X% lower the in and XXXX X% to range see basis, the December quarter and rates month to year-over-year. of the is narrowed growth the towards a ASM and we early for November. would as October of X.X% full-year we a and higher-end year-over-year Whereas with off-peak growth growth will forecast have between this XX%. ASM X.X% whole of On guide the close be

fee RPMs noticed, have our the and in company should includes no or may flight flights level empty as factor value we this as section generation, Those five repositioning people that are flight. as for and in As we ferry flights. be the off fixed are revenue provide fixed of Non in have terms service judged releases. whether well load flown generally other XXX removed generated system RPM scheduled same fee you from and

put That accomplishing revenues possible The third great the be summer and a company without folks that for in fixed Thank nearly revenue of said, performance. not operations run million this being success record quarter your efforts streak well our incredibly $XX all fee you would together. the incredible had and in with the continues milestone.

I'd that, Greg. with And to turn it like to over

Gregory Anderson

Drew. Thanks

ago. the enterprise, share, September recap, for non-airline versus a $X.XX income year business for units per To the reported nearly in earnings XXX% million including $XX is quarter up which in net

even For of the earnings produced which the the initially largely members planned has in $XX.XX first executing our organization. the share, result is per year, enterprise a months of than nine team better across

in original January, $XX.XX per full-year versus increase improvements increase per guide back This XXXX gallon of an range a fuel XXXX original that full-year our us $X.XX These confidence give communicated a cost our to full-year EPS increase to guide. to from $XX.XX. despite share of meaningful is $X.XX improvement XXXX in

hitting cylinders in taking notice. and we As our on are remarks, his are Maurice noted customers all

best fall. During fly airlines quarter the third this named to their Forbes

Allegiant mentioned, card. was Today's having recognized ranked we branded credit number number the two. Reader And Choice USA by Award also co as one were for Drew airline

delighted seeing about the are and doubling performance terrific more are we to the during operating third We the our quarter, as of the produced well of XX.X% than The results margin financial recognition brand. margin of X.X%. and improvements last year's airline operating

will a quarter This costs fleet results are be unit late on down focused of we third year, and We certainly retiring ago. will airline expansion, versus during MDAD with remain reported pleased and third the X.X% our year the optimizing consecutive margin year-over-year quarter last our since airline's profitability.

and operational by were driven results expectations were again performance. our better internal excellent These our than

we addition, all discipline. down ways while improve cost in to drilling exploring throughout are areas maintaining constantly organization, In the

a during us because markets with scale Let cost better low the growth we Station our allowed team our September help with team providers. to unemployment quarter. due This balance, on me headwinds in these had service largely as to and that expected lead our historically station is structure, pressure cost, provide which of strategic suppliers examples To worked than couple better increasing has offset together. competitive been rates to the significantly rate. stay facing performance has

per we decreased Additionally, by and the operations fixation charges. cost X% interrupted resulted has quarter trip the to handling costs overall in year-over-year. departure saw lower almost expense In improved ground related

are based Another costs, level. drive team with optimizing decisions Scott their continually at example approach impact our marketing and his the market DeAngelo demonstrated to the is on customer and

while right a utilizing net, better right less casting improved of to the wide are incurring thereby more marketing customers time throughput. market data at right lieu and receiving the customer still the spend they in surgical, be In reaching

Marketing cost per versus XX% is passenger down year. last

of the We trajectory our XXXX are cost performance. pleased with

day investor $X.XX costs the cents to back suggesting XXXX, During XXXX. we unit its airline plans our in in fuel initial and would reduce provided by XXXX excluding

We are XXXX, it to beat this expect schedule. a only year ahead happy guide, to report not in meet of to but we

line per bit moved a during fuel, Moving the we during gallon our with time quarter have and to in with on this quarter prices prices around one remaining $X.XX in the only year paid current as full-year our to the continue full-year fuel during of increase quarter guide, XX we we of guide improvements year-over-year gallon. saw $X.XX, ASM maintaining to third X.X% our are fuel efficiency trend nicely per

range fuel As such of per guidance efficiency XX.X the from we to the tighten part XX gallon. our full-year to ASMs upper

total to balance XX% investments cash with Turning trailing $XXX up of XX-months strong quarter which our and sheet, represents total ended September revenue. of million, we

debt-to-EBITDA X.X deleveraging billion turns. are debt-to-EBITDA $X.XX have debt net as We ahead of and currently is in schedule our turns and is total X.X

aircraft. Our since we XX unencumbered warehouse now our revolver remains we at by four as and have aircraft $XX unencumbered number of undrawn June million have increased XX

rate largely interest we basis by nearly second full-year rates. guidance our interest the XX Because driven these quarter are $XX million. was points from to in X.X%, XXXX blended of a third quarter $XX LIBOR ending which reducing was expense million reductions, of reductions to Our decrease XXXX

to cash an of Looking during quarter versus million over airline the $XXX of the year. generated the last flow, XX.X% quarter, same EBITDA increase

EBITDA, $XXX $X.X nine which per first months the has million aircraft. of equates airline of generated the over the million year, During to

exceed per the $X are history, in hit $XXX XXXX in pace target in our on million million the company's year well for aircraft. We time our first to for EBITDA and EBITDA of

in XX into service quarter in AXXX Also the our purchasing $XXX reinvested on aircraft year-end are XX aircraft We plan hit airline, aircraft. we CFM pace to with the ended a spare in-service third three quarter and engine. over back during the million

full-year We approximately by are adjusting reduction largely million airline events. maintenance is $XX cost maintenance by engine This down and our better full-year due our we guidance CapEx reducing $XX.X CapEx during are million. heavy to

enables shareholders. us and using in to consistently efficiency cash return capital Our managing to our

recurring regards $XX.X In $XX expected non-airline million million. and outstanding During of is share decreasing our dividend spend our authority the shares, $XX to full-year we repurchase $XX million we are Sunseeker our $X.XX quarterly initiative, paid repurchased our around by quarter remaining in million.

remains project costs of million capitalized. are of spend Included $XXX in total Our million pre-opening which is this $XX unchanged. expected not total

quarter’s these expensed costs of this $X.X million portion small A pre-opening in non-airline been operating have loss.

the these Additionally, non-airline continue costs resort, second XXXX. opening combined P&L is of will pre-opening to track through of flow for until the on the the which quarter

continue XXXX. to we centers family non-stop they results full-year produce in and expect entertainment to EBITDA combined positive improve Our same-store

with the In in and effort thanks discussions outstanding hardworking progress buyers. to Finally, all potential members of in my towards our we attributed to and team are make continue to closing, like sale their day multiple out. many these day results of to terrific are [Camp] I'd add as

that, I'll to it operator turn the And with over Q&A. for

Operator

question first comes Syth Savi of of Our Instructions] [Operator Raymond from line James. the

is line Your open.

Savanthi Syth

think Greg, lower might third of full-year growth really a slightly And to level you, be The the guide a good maybe little growth capacity the side. quarter CASM-X in the year-over-year maybe seeing the question cost given XQ quarter. level surprised airline I just of fourth the performance similar more the on good tells, kind in for in and fourth of I surprised that given declines quarter I'm how am not then? you're was maybe capacity in quarter, maybe third

Gregory Anderson

In on XXXX quarter. we the given sharing that we increases and growth putting our the pilots the profit in going Savi. too increase quarter our Thanks in going drag also pilots and that's that a quarter to fourth the sharing is for or so are for so pilots to profit that Yes, we're and addition, impact hired up face so then really around our XXX headwinds side on to labor, cost and question. hired fourth profitability the we've the hiring started

Those to not the down the we major quarter we quite but than expect second quarter for are the as like that be mentioned. much do as you headwinds CASM-X see, as other fourth or airline third down

Savanthi Syth

the XXXX, go anything mind I’m well? was kind also of that looking well XXXX have on utilization guidance improved much on how much of we in pushed or benefit that of the that it's not we any driver guessing now is just and and thoughts that the just that into be cost because how just as for and Airbus takes just the Airbus highlighted more And keep should that kind as puts but can fleet we any as big

Drew Wells

Sure, I Greg, will you back to on. take some utilization if and of the want

So next I or would will I think at June, be near, and upper we ninth, like forward top if see as this XXXX come off expect month utilization. maybe very to the kind you year. to the into of should I remain at. XX hour, were peak would look of elevated But you almost a say year March, close July the quarter utilization

Gregory Anderson

on and XXXX. Yes, Savi for the cost side

As guidance, our excited provide we about $X.XX. our say further I we directionally, back the we've we're in providing XXXX in a under guidance fully XXXX, and weeks We're Chris mentioned, is that few guidance budget, plan really we're level and drilled to provided that investor have or a expect there. go. that would day to and we to at ready that high down be

weeks. but we'll then would more in under it I a cost that on We a at leave to side of provide expect kind and there few be detail

Operator

of Joseph DeNardi comes question next Stifel. Our from

question, Your please.

Joseph DeNardi

aircraft just the how of you fleet just Can of assuming you're run next think for you goal I EBITDA end the the you. XXXX. in year? about in year, $X talk at can mentioned kind plane many you million share maybe and Greg, Thank the,

Gregory Anderson

out have there takes XXX so presentations put I there go management think to on to the year-end next that us aircraft and so puts that. we up by Yes, about year, on

well. But fleet on candidly, would year hit far investor is we our per to expect per that plan as concerned. detail upcoming I that year. next I by expect beat EBITDA what that think we million to $X would aircraft next say day as provide We'll more as the at

Joseph DeNardi

that’s position X.X. it the Maurice, down you think Sunseeker a Thank talk a sounds Should or business momentum then a you'd can to make got maybe in two in maybe or kind yes, when just to terms the just say year on we got that decision on you do about of, something, you be decision you you. good some And assume road, of given sooner? make airline a

Maurice Gallagher

basis, days. macro our and we've sale build Right it a that. said On I in but he's in in here, XX, XX the tune the certainly phase. John next on changed turn can a advanced performance, moment start don't and on it But, and here now, comment we're do always to we've going we doing and loose think

it lots data are commented now about I size tell do of And a we've it that's for myself put that years, to again, doesn't will doing with directly another we've really consumers liked. amazing rooms, talked you, as That's there stretched information. excited that of people have well tell a XX the data point. amount there we're for XXX,XXX can does specifically for this tale years want the But on if things we we what we having of rates, have product, they point. and to-date, very in as well, data board are If the

data have, frankly It's from a but upping didn't certainly months, should game us we well points. we're the And we as as XX been positive to here. out use folks thing. And I'd go very until our very, give able XX. you're it us source seeing say And information last, and

know, decisions, my so I will we drive forward. had business And go history data as this in I've that unlike anything

John? stay tuned. So

John Redmond

that here informed we've very an so us always John, this group make we of we that hi driven, we're, said can decisions based very we're got insight, and on that provide incredible data people Joe data.

one I'll but we to individuals is do long points stay. an these how every share is just want of are talking to provide of about the to a example, we I what lot XXX,XXX want mentioned those us that the aspect even So detail them you forward. the of at to to going And you give with it they investor is data day, around resort

look expressed website, the six to at to like that a but days six or months you months in three one four of when that indicated three stay that. So to is the like or range, length

selected So being, people for you between demand those XXX,XXX almost want take midpoint each ranges room Right, barometer if X sell some those as what basis. average annual will And ranges, have amazing. on the to-date that's million nights again, have people somewhere on to we of for have that in nights. of so pretty we and XXX,XXX room an

how that So will is board because when we're of that The on amazing. customer level we're react put we seeing. to of on demand the interest based pretty that market, excited the reacts it but

Operator

Our next Pfennigwerth Duane from of Evercore. question comes

Your open. line is

Duane Pfennigwerth

earnings. and the event, thunder of any if on but on activities, on the have update don't if could your want outlook non-airline just year. from Teesnap give wonder steal us Congrats you sale airline an losses to update into specifically I any on you I the next for

is we're later will kind of things OpEx from interested the second Sunseeker be as or continue capitalized, to see or half to if some get the if you'd we all of the One if XXXX start expenses Sunseeker? in to pre-opening expenses

Gregory Anderson

Sunseeker Greg, on who kick additional maybe to is particularly the And then want it I'll provide off. side. this Duane, some John color,

a flat why there that and cost year, Teesnap in likely non-airline would not the As say think to I probably saw this for be we compare would full-year it next next if far year, will being we that as it'd year. is I loss

perhaps And expenses we near with so increased some are we Sunseekers, that'll could the that offset opening. getting see nearing, of pre-opening

run I highlight These that million you the as far to per As in pre-opening costs se, know Sunseeker they're I do P&L. there's costs. with want anything pre-opening that, And want $XXX are John, the if those of add to But the not the or? are don't costs. they actually through part just capitalized all-in

John Redmond

to No, and why it with see helpful continue pre-opening expense, which their now those to opening, you'll capitalized, I just that. between are emphasize not think it's is

will regard, XXXX. the lot XXXX has course, in thoughts the that to start a be of of some in balance that in have you this we've And at that year, give a you greatest on in time. been it, and $XX and the the million before to of resort the throughout open of we spent point spent number few course happens that Sunseeker of will of you is employees Just date bringing right rest million mentioned pre-opening, be of

So, is you part again, expensed a small that only million of de-minimis see have see that guess $XXX is to it's we and all Sunseeker you that amount there. open, would amount golf but we I that's the until a It's relates OpEx course the the amount would there.

Duane Pfennigwerth

you And the questions. for just the utilization. then up push far regarding Does for you're serve? all flexing can markets taking having your given at in it, Thanks my how success the change follow-up, it of thinking and can types you

Drew Wells

what is, flex year as you'll see think Yes, the is kind of XXXX is and this different as see this as utilization, I directions. combined you'll Drew soon to Duane, and continuing

of to that month we the how again utilization, reacted hours with So with fleet happy year next the peak were very nearly growth. we'll XX increased see

but push harder as want know exist those doesn't really no the you pull pushing to get get you to as in September we those those late fact to reason January there's back. and and demand even any So start in higher to

scheduling days East able we'll not Airbus that be Saturdays it a So we on and bit to like who the and mentality on off our fly particularly always lot operate, mix is profitability mindset But works power our peak of still because of a want changing Coast. is the the of same more is to to markets route of we're what have.

Operator

Becker from of Cowen. question Helane next Our comes

open. is line Your

Helane Becker

maturity? would what like the would much And My Part reach is be that to questions. be guess two is have when contribution point at Part I initiatives, which I like on there there's the -- there expected and is I would what A a a guess how I your they point? first question at is point, on, guess? unbundling like there B, opportunity

Drew Wells

I worth between be on. probably we've the to passenger. and should $X is run discounted, up, booking early faster I it’s off seen of month makes and hit pricing. roundtrip so right hit to product maturity think the kind have nothing forecasted that nine to Drew. just far This would and move the this me a curve hitting that ancillary kind of mix Yes, say given six kind $X.XX per the And of that than bundle

Helane Becker

Okay, so like get it $X? could to

Drew Wells

maturity week rate, that there that's could to run think talking well two. surely be I we're but think mature I $X not hitting the in we're $X.XX beyond what

Helane Becker

completely a been sweet a Do other unrelated lot into aircraft and or get priced faster a of finding there the aircraft. that's my that manner that and year now, lot consider you the you fully gone fashion? have of then of have growth, good a and your been There timely a Maurice, in opportunity aircraft, have bankrupt aircraft that airlines network used used off you spot, in in companies have bankrupt past would always been timely in And gone question a topic. attractive, more have fashion lot if could timely but

Maurice Gallagher

absorb show pretty up you well year a XX%, if as of ourselves those. know we a that'd set a be interesting couple corporate could certainly we've No, goal of

and real September number on now is going The as to well shape, we do enough show the in pilots do we're other QX. put well fix the thing so doing our airplanes absorb we're good you the and the in we flying, can that have for very those we be which

year and don't opportunities BJ see to end maybe that? somebody is advantage the like think like any airplanes, but anything for we're going big take I Berlin of we did or the of goes bust here

Drew Wells

in handful those situations. from aircraft Yes, coming of year next

Maurice Gallagher

Okay.

it for do I we years did are fill for year in forward in, think we? well next what want and year to part is the pretty our to next move it us XXXX, to most ability two incept what and do through the into we're

Drew Wells

into quickly Yes, and transition add just FAA things that order and more lead times in other there's kits then and the would than we I parts from to that are. any

Maurice Gallagher

for kits modifying to serial my typically It also each There's FAA the Airbus an number. is we're task easy these you have the because coordinating this all XXX do particular pieces, an standardization module seats. not

comments, with since So And who B.J. it's, we've we're home That's at and very the add process. our very we everything do as done for work grown this him. involved to I team is real mentioned good this all stuff. I the might here team all of And it's it, win-win in XXXX. a is guys airplane consistently my

Operator

next Our question Research. from Wolfe comes Keay Hunter of

Your question please.

Hunter Keay

But be going to Hi, a people real for thought obviously free the to need But is, have that. oriented. I where people these you find nice and Sunseeker, people I saw have are thought tight XXXX report down service correct how XXX if Michael said to because they I originally feel wrong. guys correct be I’m market you hire to there. said me question And to a job it's

how this talk you to tent. pole about might long about me can be thinking So, a How you're it, in the thanks.

John Redmond

John. of hi never Well, challenges to significant the is numbers underestimate we Hunter people. it this never, We takes hire

slam There's a and done I sit where no Florida. is lot here market, also say no said dunk. Having like the one that choice There offer Southwest and be down down we've there packages employer that will it. enough have there of that of to a team homework So Mike around down offers about doubt benefit there. the it's in down and been I long we will the we the that, in don't want that,

people, coming to our right? are who to Florida We're operators, that the I people with the But hospitality are concerned comfortable, a getting market. demand people to do we're be challenges it. to think existing some Southwest to be it's And this. more going lot We know in website. already. talked associated are of going There's able we're there's We

new one leave you're want that different Las are property resorts you at that to working benefits open. better you're going and if the that's offer, no there, work, people, to would going down because fine these Vegas, and a in to of even of we're the volume of when the Because place here than happen used just to

from old the with newest. our Everyone would best. leave And, the case, of to they in the course, want because be

we're So it bother just that bit harder. challenge. challenge doesn't And a to a it we but know means work have up there's little to us, we

Maurice Gallagher

just high happened are but It's stuff. from a this and comfort this up John training, Bellagio people, planned of used seamlessly, the town background are doing people for last that it the their as said, degree of observer Remember, all part all been this is abilities X,XXX Hunter, and to challenges, of And the there anticipation, the the stuff out. when that town has this years. the doors. coming opened XX as they an and opened that

John Redmond

And those we established way know all is people do of from it's market the locations. wonderful very Yes, of us all Naples, to hotels, from as there it's restaurants. down wonderful all whether have attract There's Sarasota. north existing a

the properties look like we brightest So huge to effort. forward those going training out it's it. not of find to and best We're a and all

Hunter Keay

So energetic follow-up mouth? are rely personality people this to you to, word for you looking the to pool? you third-party that looking for that the use sort And going for, recruit, what is are to same looking that's are of Are hospitality on and going of and a hire you are experiencing from existing topic. mainly on to traits help you’re people

I don't how want going it. know to you're of people and of just you're kind representing in that the about recruit you work thinking type curious

John Redmond

are who mean I service That who of in love people. you Airport, around people Right, people you with actually at could do sector, and dealing people work right? jobs host best the some fly the RSW

do get of we people, beverage food think hotel not to hire, third-parties any and those come going expect us. a a out number it's for this of environment, that to we significant but have fully necessarily of only to to So those or don't we're

our resources here. internal the on have HR own We department

our we are or there So see level there huge we down done, have so excitement living interest and already come about take, a job every they're already open, the will approaches resort. centers that, down they're so preview the and I'm whether level about and of very down traditional there's incredible huge comfortable it's mean the people there, are brand resort, there, living fairs of I there and a other key course this, we of see time awareness the

Maurice Gallagher

storeys drive way, months, on. in be nine, few past advertising bigger around you've other a about not the the got Hunter, XX,XXX billboards there's seven, next thing By six, this And to what's five, when going people day going a place. one

what's on that no the could beneficial him I going make secret they awareness I which to to do jobs, King things there's even about don't be happen the joke both as economic should they So I the John John factor and that but as it's much area, impact that we've down is the in had win-win. way incredibly parties, there. mean, the could,

happening be going are to know people place area. in this to the going the So is about John's place point to

John Redmond

We called I'll give a that you Manager. think We interesting. pretty title data into position, person that applications I for just XX had a right. you'll find one point hired Reservations one

all throughout that's going we're going what of And just that us for to we're have example an experience of our have. to of the that's So see most not all physicians career. seen

Hunter Keay

you, John. thank Okay,

John Redmond

Thanks.

Maurice Gallagher

to we've side we've before we've call, and that My going are angle class group been but world that problems things anticipated there's and theme react things. come won’t got pretty and happen these this pay going that this going in with issues deal and management is is And on to they down don't for, professionals, of the up management be haven't appropriately. and running the I comments place done this to good you to you Imagine phone roads a going things before, are seen sitting and these these of anticipated this one is problems my probably that's haven't anything's team to

we the the the we’re really running excited show and comments group themselves as here about people So of in quality said our executing anyway.

Operator

O'Brien Goldman Sachs. from question Our of next Catherine comes

Your line is open.

Catherine O'Brien

apologies XQ in EPS help will like great? is we answer my the yet. kind obvious guys sequential you A question your in quarterly it an performance is is be something have But numbers any gone on the is higher don’t that year-to-date baking anymore have missing of really you looks that the EPS better just on know or guidance for here because outlook that Thanks. from guidance

Gregory Anderson

Greg. Cathy, the question thanks for it’s

that’s his fixed it was budgeted. to – cost of fee – what throughout much alluded Hope much think and better. mentioned remarks Drew on on more year I in what come the side stronger initially coming revenue to continued had we in also the have than said

nice been that’s been But nice mean very that a with upside story. well. I So revenue has a as

about and so think in it that. And will I be talk jump good

Drew Wells

opportunities. it record it fourth I and well the open so last I that of mean think fee kind the continues with turnout previously a third performing results fixed across Yes quarter of as operation incredible to board the with quarter did lot year again

We fee they're need to hit the getting scheduling we’re process into they success space ensure to have the where of inserting with what point fixed that do. can their maximize probabilities

cobrand, great is I think exceeded out and we year-over-year the have though. called jumps that a with worth other thing between here hotel all third-party noting three auto the expectations would that

all by very enthused So that.

Maurice Gallagher

just points MPs. much part superior to the Airbus other couple Yeah the is

very much doing. got happy we what it’s in come time good pretty very excess and not Airbus with So and of we're your be while lot it’s us for we’re demand. a September And fair to

particularly they past They been in from United they or might benefiting capacity just been MAX and next maybe year. are also Southwest haven’t We the the DoD. – this in year from don’t years

So we up of able had we’ve but very our pick to the airplanes airplane quality has slack nicely the to much somewhat qualify been the very customers. it of been by and because our appreciated the having timing

Catherine O'Brien

I clarify are growth comment making quick Maury one ask year? you fixed this May one on benefitting overall side RASM my an question right you meant your this the second fee before on or

Maurice Gallagher

talking No fee about. was is I fixed this

Catherine O'Brien

here favor, mix solid really was revenue ancillaries Drew there strong And down performance notice one of fare yeah then does showing Drew you bit and kind just the on with know like new Thanks was that much. Is that or switch kind driven? buckets level an just performance of industry ancillaries the some growth. intention as turning on really you of so RASM fare

Maurice Gallagher

PCB back factors Yeah we so shifted of there XQ this couple fare. remember is in there the last

it’s capture area effect So been up and combine still in fare next as third-party order last continue see we affects complete load interest before drop claim bit maybe But creep XQ that small appropriate best in to that’s of still where little build a the also that the we to in and to the that a quarter ancillary. and set.

of So pieces I of mixture kind there is both think there.

Operator

Our Michael of comes line of Bank. Deutsche question the next from Linenberg

open. is Your line

Michael Linenberg

your XX% think think of guys. question selection to your Maury very I is it of part at and of and is just the it market are platform, airline. the the industry-leading sort payers mean they and good, just your when I this profitability But fact numbers also term operations. Airbus that I sort are just to longer city about I basically guess of good look big you are its moving improving they it’s I speaking of

of that so when mouth your width that’s mouth of I sort a think it. of part the big And about

where to we in routes markets the like years just to XX% game out you that As competition on many and to town, it think over you’re clamoring plans Collins Like how know to new we what years the Maury? look picking X from there you. growth now we at is and X more similar you call see the and like. for that sort X next if sort of out know are up you see Fort of city market sort Thank only fast of thoughts call like Do it percentage and look Vegas everybody X X years. forward we Las pairs X

Maurice Gallagher

years. team you're I people long take they direction have Michael over prepared wrong Well picked of asking who and have many routes from list Drew a my all the

we’re So XXX. to up

Drew Wells

XXX give or take.

Maurice Gallagher

that. XXX talk my routes but about yeah I Drew didn’t know let

Drew Wells

Yes incremental Michael XXX,XXX in actually it’s the believe competitive. out that XX% we are those roughly over of past we called routes

at worse number keep we Airbus and routes of likely we think we actually today are more under operate. that levels the can So I can grow scenario noncompetitive where we

so poised more into to just we’re the – even not but So we well future. think stay

Maurice Gallagher

have yeah we’re would we’re ago things doing Michael Yes, things doing we – of number I think years thought. frankly don't that

days change, go. to level we’re people mid interesting just there city, evolution and of are trends the that seeing small where things travel in really the want we of the You’re is things cities early where some

experiment of with I also play places with other these guys the with. We’re some people to and that teaching to go how think stuff

Michael Linenberg

think back that Yes, operation air through remote that’s and Fort as that’s there right you traffic one there's control be I well out there. Collins of the are reason going that’s an of going market, nobody into sort what I I to think that’s

cost in fly airport to out be probably be clear so the out? and You’ll are able

Maurice Gallagher

we Yeah ATC us in in bugging fully have little still are issues going very bit but yeah get shortly? there to the are pulling a we

Michael Linenberg

They one longer-term to suspect anything numbers the seeing know you majors on you are that they’re that? this pulling guys for are low higher. are you. start from any all of guys. turn respect to the is keeping other you and But guys Just Thank there retirement been valley this really for I there we anything see the are pilot would with thoughts that over. place you the that we your place over be guys it's or to And the where team there in are historically pretty actually that

GregoryAnderson

just as pretty for Greg. every unique we have here life we great that in about been see rate do attrition up X% stepped day. have we X% pilots and we see its mean Michael, they what of or airline there nothing and out thing it's it’s a about it level. our its our One quality back are I meaning No,

but nice in a crewmembers our kind well our in so I and us really Allegiant. recruiting appreciate as that particular And pilots been and tool retention of so for think it's they tool

Michael Linenberg

new actually that how get quick Allegiant Just a at it quick? years is that be can that on captain four can to three, quickly pilot one one

Scott Sheldon

is course right a thereafter. half you're XX guess probably days see trajectory given this Michael, FOs of my into years at the Scott, point hire new about and LLC this two and is

Michael Linenberg

well Oh in you you see well, go all know great everyone to guys. Thanks thanks okay right there that’s November.

Maurice Gallagher

Thanks Michael.

Operator

from comes Matthew Wisniewski question Our next Barclays. of

Your open. line is

Matthew Wisniewski

give are and you I the or out of you you’ve been what come that. I think do down have better that I know kind you lot been than turn higher than Does coming greater It's of kind wanted weakens. around markets it a what in But anticipated kind if the flexibility utilization next that to is understand back sure you has past? had demand bit than of flexibility and just year. a said little make to really

Maurice Gallagher

to five able Absolutely in I year And our primarily and to MD-XX only grown we bring September. hours and lowering the showcase mean one down, Airbus do. the are under ourselves to the down bring that of it are things with we has this easy we we day it pride upon always Airbus to what very the is still upside that again flexibility

do the us seen have XX hours would MD-XX. in with June, July, and never March You

even to can't on thing the we to we we’re the manufacture the bounds flexibility just So One than and and going both continue September more about use have push the you today to superior. week high-end and demand low-end.

going not there see push to anywhere will else the try to push pull and find very to you're And but continue high us and we right mix. so

Scott Sheldon

- ratio Matt lower low point, one particularly dollar? other on thing is with kind of very what's breakeven and around fuel the do

Matthew Wisniewski

a think a dollar I yes. gallon,

Scott Sheldon

dollar less to the of that markets markets you lets or yield gallon better XXs. dense A thought so weaker that wouldn't and otherwise fly more a down the have with curve doing you

a the of a of So airplane. the regionally talking. benefits to go Saturday just perhaps deeper depending again That's where kind or flexibility into you're Wednesday that

Matthew Wisniewski

what could just to down if and things looks as be the far comes should bit perspectival guide but in outlook to probably know Okay, up, great. of similar anything, as utilization potentially or it next lines, coming kind And I little then you look we year year? at gauges a not they a if impactful like that cost next cost going I keep other mind the

Maurice Gallagher

think the be high likely level I just for at headwind Matt, ownership. Yes, would a next year

depreciation through is - I the bit. and honestly I little I too our maintenance see differed It's to program, meaningful, just a think motors capitalizing one not biggest So we're but them I starting we'll that I am that's to spike run face. headwinds cautiously. and differing. mean, But which think take we up of continue say

I continue operationally. we to while would that. say expect some mean, perform tailwinds, I

marketing that a as want say And I'd next year. forward year, well. this see we moving to so that's tailwind hope nice been to

his they've investment and put our digital some if DeAngelo team, in commerce. Scott What

to so probably as conversion means seeing that to you so and a we but down stadium, keep that take his Allegiant have then terrific we significantly signed that on sponsor that world. is the e-commerce And rate our marketing DeAngelo And team we're into what to the, flat higher that. we're spend the made up able the and that noted signed now called digital is of what up line we're investment because of down because able item Scott

Operator

Your comes next from question Stifel. Joseph DeNardi of

line Your is open.

Joseph DeNardi

wildly imagine would I expectations. from credit Maury, performance the has card exceeded your maybe your

you that the revenue broke think? What PAX years, in the to value maximize for time can So three per quarter. you out that think four do guys business do line? how first the I get reasonably you this that ensure you from to

Maurice Gallagher

over Well, to guy, comment and I'll it. the it one turn really who make then understands

tell. can and wildly pretty damn I We much We to made this haven't to it, we're as years going - come not four near it's exceeding. pretty forecast ago close

of Scott? out couple and and team expect the Scott lot a of and taken card we ownership of the years, last So, his it had over

Scott Sheldon

Yes, for Joe you thanks bet question. and the

can go this at It's growth, new tell but cardholders I a more Investor Day, can at a you you is, our if You look know, as draw tying little into now right? without right ruler. line we'll as depth you what in about a straight up

so can we're accelerated the for end, question plateauing. That linear go but doesn't nowhere couple at can of to new you least answer We foreseeable tell it'll your card signup close actually years. when next have it I

agreement, get we We by and contract, on a up but card they our paid help current tailwind a variable the which new holder, of for paid also what we then get both of those parts spend. percent pre-negotiate is other signing The get right. of potentially extensions variable

two of even to a to we of years next as we'll linear three both those more for parts cardholder acquisition, go and of pretty as we the but at an aggressively very right, spin, and it kind so growth into say, go So see I kind address the acceleration, that those detail, cardholder retention least. in up, suffice get

Joseph DeNardi

network little and the on just would you. headline have all. of doing I card the curious, can away tie given numbers I wasn't bit I to just it guess, and Vegas stadium Thank kind the credit there suggest you of then that cheap wasn't pivoted at from mean a deals, into And is rationale kind but that explain seems it the that for a - that

Scott Sheldon

Yes.

So in, credit this order. big there's not tie quick three the things rationale a card but in real

then see that I set, the will The drive not first replayed the is year viewers million by were XX when much the last top will is awareness it on always head It's that, Right. the scratch games out across tens nation the so Las or it's power visitors and Vegas. that NFL television the of fly upon XX the even of here episodes to like games. and over ESPN, you in and billion throw XX or NFL of there out a millions, of programs

that So it gets national Vegas. live exposure it Las from

into The will getting be sports real quickly other two travel.

of out and the night, to stay it a we Cris on actually and stadium So be sell fly, Allegiant Collinsworth name tickets stadium. Michaels will attend events that's not travel Al the at called only also packages on side and by but Sunday will

think opportunities, to the And have it flagship like for recognizable the around but we relationships. these not all they preferred wanting talk soda calling companies, being all manufacturers can big that that like mentioned brewing discuss the as big last of the stadium now things the one on of of of because just BXB from reduce but become have disclosed, airlines to part Sunseeker get about, do can upper to that, been buy but to the of of everyone cost haven't other Right. isn't all board us we something together. real promotional our companies, providers reached and beverage started business necessarily can't that deals these how big up certainly about stadium lot a - companies names out I people get program, most on the and food and kind not relationships auto a smallest, publicly

So that becomes a benefit too.

Maurice Gallagher

that within week, Scott the literally don't we on factor? call saw a the Why newest you impressions

Scott Sheldon

After Yes. stock impression X know that August at about billion the kind the we And X then [X], generates and plus a we advertising impression. marketing already several the impressions. of the I quarters all year about within do hours, a months are of price later three in billion XX announcement billion marketing of we were obscure now

was on media we the what simply and a So the about announcement year in of accomplished half spend coverage. by

about actually customers question there out the to went comment double of of customers NFL from was well, more it's that That One or than prospective your And non-customers national two-thirds knowledge last this them? the the fans. the great that and/or the this were market Allegiant throw into consuming was is impressions average. your the are Allegiant avid customers things

throwing looking we're droves customer the and association were on via of So with a we the lot out was fact and NFL match coverage the impressions the that for. there NFL, our base in perspective, customer consumes

Maurice Gallagher

use might all the them that let keep to and to in to and it be after the on Scott, this traffic launch issue website. off increase not whatnot immediately pushing know, to helpful You know top

Scott Sheldon

Yes. Sure.

all of visitation Greg things, put we relationships science we to know, email, our to and between of between website. things diluted do, whether impact big events lot TV, one a the the these, So it's how advertising, that you

postulates route year-over-year website right. XX% visitors, we in One of but we those relate, would we to see XX% when announcements, new do typically usually don't increase

come flying Newsfeeds all entering place. new over Allegiant market, on a the your hey and country to

impact anything and XX% route point a there believe announcement, to Allegiant points when It's ads, it there the at that The that in you TV when fraction. typical only that higher the see incidentally, for you needs what than the that. we some you to aggressive to return rate top right, see this across that sets had following email, double, They does were what our and our not terminals we of And hurdle week to than investment percentage announcement. stadium actually for not simply full that it XX right us. the easily we Allegiant after stadium date. for having when mind, do It day, that that everything and makes for to we of X lasted don't mid new bps XX that of route, hit other itself is is new get

Operator

I'd Gallagher over like call closing time, to turn to this Maurice the At remarks. for Sir?

Maurice Gallagher

very interest, and much. all you and writing. go Thank Appreciate your started time get on your typewriters

You're busy. you. See

Operator

conference Ladies call. and gentlemen, Thank this concludes participating. you today's for

now disconnect. may You

Allegiant Travel (ALGT) 24 Oct 192019 Q3 Earnings call transcript