ALGT - Earnings call transcript Q4 2019 | Allegiant Travel Company

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2019 Allegiant Travel Company Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Sherry Wilson, Director of Investor Relations. ahead go please you, ma'am. Thank

Sherry Wilson

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

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

will with up We start then some open to commentary it and questions.

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

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

that, I’ll over With it Maury. turn to

Maurice Gallagher

our profitable happy report consecutive to everyone you, quarter. Thank I'm Sherry our welcome fourth quarter call. to conference and XXth

terrific By any was share earnings has $XX.XX. increased standards been to income year operating Our while XX% per XX% this year. past a up

good were the the quarters we place of after transition. our past in XXXX calls in said our I completing at As end four a

aircraft. alive model with well our Airbus Our is and

did and my this MDs. million with per XX% we're over aircraft results. a would to fact, $X.X at we said place In and compared We year $X stayed of it better million, in the EBITDA we where increase a mind XXXX we in were our generate

the the XXXX margin led had of margin for in generated and we operating in operating a only and the XX% both $XX for over quarter we EPS. industry and Again year airline

Sunseeker year XXXX well. are Our will the progressing be years, and and Nonstop justify outcomes the this past in investment Will investments other investments. will

Allegiant progressing Our X.X implementation is nicely.

one suite customers customers. our the relationship spent focused tools, Since have on years our our tools. We through products, enhanced increasing XX these relationship which through them our them in we IT the experiences relationships in program attractively X.X direct pricing customers Allegiant IT ecosystem. and providing leisure together bringing one to on developing wrapping with loyalty focused participation better by utilizing our enhanced with the are past travel of our with with rewards [ph] leisure them particularly was

is this awareness to our our effort Critical customers. among increasing

We category, on our and with have new Stadium reps. XX an had excellent our efforts particularly announcement the year our recent in of this Allegiant

terrific As our need are air products than national product. business. release leisure I in truly our the said But we becoming by just company the more we defined

Additional Florida hotel critical in a products particularly component. be will

that in room majority The X.X here is this at sold Las previous will intermediaries. our us have generate of comments. in have experienced rooms customers experienced the sell given largest add focus selling to said early days nights exceptional XXXXs over as will EBITDA allow might as been on nights we profitably without Florida but hotel well are products, quite the This our our we them allow sold numbers to us Vegas, Sunseeker second have we market. hotel We will our of million the effort. I are we since room and the in as

to as year. people and earlier, Others a specifics. great to things said what we our of I personnel, had wanted our some I last team. comments turn year remarkable to our comment and my we did management As today will the on

have see do. nicely We the hear matured are and candidly you and what over we everything us from past People core to many years.

And team among I past in product both day. operations this best have the can produce management in who level our these is best the They categorically, been say the with including members I team and the years, associated industry. every XX are our the

results this verify claim. Our

completion number factor past We months. been XX one of in have the XX

deep ranking seen as XX management among U.S. our points is the top increased the I group net carriers our well promoter Our during and bench have time it. in in air us scores as as have this strength

first And just does team and this and inside we not I findings. the to for support country in four companies company go environment created only researching are time members via we of the quality a the for our the culture this verification has are Glassdoor This reports independent This team have me, work to for the site category. our year this, Nevada this not company's personnel. we past believe is to of top the walls. They saying in in on our online made indicative people from the me it its based of XXX

effort is And conscious of This environment and days they and talent are enjoy in convinced our quality internally the us both succeed this where future. I'm a the where to date to our result remarkable history while grow. environment proud will years better coming people had of lead to work can team an develop and create we've to many a

us of has he by me DeAngelo But time outsized been years. short EVP. congratulating this to during an impact. Let promotion had personally close on Scott two with his has Scott just

is understanding a development years. and has things will Allegiant He coming efforts His works terrific spearheading X.X he talking date to person, how experience and customers building First been the manager. be great our and X.X well. the a of and other leader among foremost, as data to when critical it months in and

on him board. have to fortunate indeed are We

to me today all and John. over you Thank turn it let

John Redmond

good Well thank Maury afternoon everyone. you very much and

Investor to the Maury's echo comes we year which past reiterates Day course guidance that high it I have the expectations done continued Allegiant amazing this course our team forward. wonderful the job when Allegiant this going demonstrates our comments has for of team in release and Of

to our of you team. all thank So

I'll still give that. on of budget update is million, on on time of Sunseeker. quick $XXX you change. course The on our a I'll This bit and project detail is give budget. you little more course no

place in million out we these of million schedules. $XXX we is million mean million commitments Again, Again and XXXX As year-end in was on of our the agreements little course and that have $XX had $XXX will $X that in preopening, including of of be and that you a color Greg in give his XXXX XXXX which comments. balance will that more of spent spent commitments. in

back million $XX is out the million you take in I the $XXX you budget, committed. roughly so budget, have if million, preopening that the referenced So that you $XXX XX% million the $XXX of

million shape committed. fixtures are in those $XXX are relates where which and And placed we right obviously of of course operating the down roughly before XX% $XXX of always and out by reduce go good really $XX further orders million So with towards to course stand. that you if opening, $XXX we're budget around supplies back commitments furniture, but you million end, we another that

with We're how XXXX. in progressing to good look and really we're forward shape. So happy

July Day, also to kick Investor August bit expect this Key all little this and In the off still in buildings of on date, opening enclosed. around June we talked or year around funding but year we completely to to regards a explaining and topped again. as expect of we mentioned, is this worth we that be our about it the

to the we We inventory have put June sale put May XXXX public for through already. there there inventory in out out The XXXX.

to open I don’t rooms with it hurricane only want April, in to money. potentially we building expect have to be the and another to We refund but deal season selling

this opening So quoting point well we as open time June while are we believe early we as April, in date. a can at

before, will quarter mentioned to a in fourth this pick that new new I month expect be I month April we'll the it of and the I pick timeframe, in year. As

to get that update And we will expect day. we when we month as XXXX season, opening once January another So is what an throughout get is on before, into actually you we'll we hurricane said open. the pick

are marketing our systems as we very of testing developed. we very, mentioned I all rooms, that into we're selling heavy not soft. We're currently

XX so far, extrapolate relating ADR we and to to $XXX that average rooms. and XXX, bookings yet. just want XX date have So Obviously two anyone received daily to the room have to again modeled rate but we've right one don’t booked around person I we is date

to two relatively look are people enough sold excited amount how out. about in haven’t do of this, getting we're time. things And progressing short in XX we're again very rooms are booking period months of at We you but information that, the this when years to

so we a we crazy. never We be of expected to just start can all like test systems. our wanted So selling soft

will I two we're be a for excited that anyone and site also restaurant. about going two phase phase before too wanted next submit ground-level a week pool filing to gets we just that and to mention a is that plan

site you when it, types When an approval, an again, of it So these opportunity. submit creates these plan create obligation. for the just documents approves don’t county

project but when it's put and we for down submitting in it that the to these a position the so is make ever ourselves without file. going want will process board to there anything and to misinterpreted road, do it mention not to do something choose that's if can't normal of out through this we when be So we the the things. just decision I

Vice on over And President, Executive it recently that promoted turn I'll of to note, Scott DeAngelo. course our

Scott DeAngelo

Thank you, John.

pile ancillary on to products aircraft on beyond for model Allegiant and not but of leveraged achieve data Maury cost-effective, only revenue a hotel card As with to by direct-to-customer distribution performance, and X.X strong vision, program. lay we revenue and our technology air the capitalizes foundation that third-party our generating co-branded also vision in XXXX the credit referenced commercial railcar our that and our top

XX% web Nearly versus XXX a increase prior visited users in year. the XXXX million allegiant.com

internal revenue this more an into became convert $XX allegiant.com we that achieve average grew ever visitors as despite database of with with More means those Allegiant visitors nearly than dramatic productivity to growth helping sizes visitors more to these ability by us customers achieving digital And allegiant.com our our per visitor paid net which transaction website than came XX%. remained even cost-effective more our XX comparable advertising of more web email in any web which attracting constant. without requiring XX% metric importantly, visitation at million attracting the than maintained to of

traveling digital are see and and third-party our else. from Couple well-positioned to purchase their We large to say vacations growing leisure for first know customers they products. that anyone air are fact is make of before and the customers our nearly revenue we that growing these where XX% of audiences the continue with first they we our

This gives us with future unparalleled opportunity them options event sport and and railcar the tickets. in even hotel to present and

XX% We we're seeing In flows Allegiant revenue with third-party X.X revenue. from fact, net income. returns ended approach. year-over-year entirely And please product operating in remember, growth this already almost to our through net XXXX

leisure X.X. areas driven MasterCard our Allegiant hotel achieve rooms existing key direct this and new even at while Continuing greater our for to our rental and program reduce growth of experience to and demand surgical cars continued course air Allegiant for buying approach and of friction in the data year World generating focus streamlining and commercial allegiant.com remain of market, attachment

partnership XXXX we that And in arrangement official the the lastly, announcement This I'll Indianapolis the five today now brand fly to driven partnership, is with our Since market this Colts. address entered in base airline established with part as XX to a thanks the of Allegiant then, we us simply we destinations. Indianapolis when began made in continuing there large conjunction awareness routes. and we've the

in helping Colts record-setting of ours, fixed we're customer the are also marketing three fee and also our Indianapolis We contributing are the other build benefit they Like revenue cost. not more, to has state other this. this airports one sports incremental major experiencing no fix our our in the fee What's sense partnerships levels to also from serve that impact business. in us our which so only awareness, but sales

to our into and deeper And to with performance. network it that, Drew I'll go Wells turn over revenue

Drew Wells

All fourth right, on joining everyone thank this of for X.X% you TRASM year-over-year afternoon. thanks the I'm ASM us plus growth. Scott to X.X% announce very quarter and pleased

revenue XXXX. point we ancillary of result contributions from one-time roughly in a third-party fourth both sources. a received half is large our quarter this reminder, As the benefit We received air and despite

Air growth. the quarter passenger improvement ancillary as mentioned third-party revenue for and per surpassed Scott doubled $XX consecutive fourth ASM

for source to the fixed remained On planning for full five of the Defense Department time by an quarters. increase immense the a in quarterly TRASM charter our X.X% is the record the This by continued and last revenue strength air, setting largely incredible in and we attributable of third X.X% record plus ASMs. work a year grew flying Furthermore, fee and group.

our released release This up bundled a to as boon learn we and which level fairly will we we a practices first of October, be fit impact to product expect best start our a curve, results small through but In of quarter. the to period during XQ to had booking timing pick and ancillary ramping earnings typical due in XXXX.

Shifting MDA quarter. toward XXXX, retirement drive through lapping first elevated the will date the growth

this expect be growth ASM XXXX. increase plus since the highest XX% XX% of to We to quarterly quarter's

reduction at Investor fleet talked with I will is pronounced this off-peak more periods. even our utilization extensively in that we As about Day accomplish in

the XX% lumpy in have would that to like cadence. XX% will we add to order some I achieve plus and guidance to year, the clarity throughout fairly on Looking ASM annual growth

plus Throughout first flat be to gains in slightly half the front XX% the in to to QX rivaling back ASM and quarter for in quarter That ramp the the range. coming for in quarter with plus quarter through the X% in summer second total growth with we the growth XX% of positive the will XXXX third the will the X%. continue half highest of

XQ working X% quarter are of to schedule, the portion the to still up we year-over-year. we the to believe Lastly, is XX% holiday finalize likely be but

somewhat With grow The constrained including now we've Houston monumental we meaningfully to Allegiant. for the new levels. step a of phase MDA grow we have. preretirement transition Logan, over and the of were are of would has history. us, XX Chicago that largest through new final Hobby announce ideally retirement beginning the additions behind now the ability for This that to While able to network Midway we our in year, are versus been the just routes, Boston slate routes next company aircraft

to all time elements is for exciting our footprint model The over company. XXX unique maintaining of ability routes certainly and while business feat very exceptional to expand our of the the an a

for markets So I'd milestone. few this pressure ASM us achieve increase in years. some market providers certainly employees then that as It our our is metrics worth a experienced developing like to for the to unit thank on of we've huge service noting network and returns higher of new helping all will revenue put proportion

levels level Coronavirus, global Allegiant system with into state unit the pressure and be revenue of will the X.X demand elevated remained the XQ and developing expect routes ASM quarter Scott I the back about solid of Books encouraged persisted. I'm of best [ph] of perspective while year year. that of put from Peppercorns both increasing the growth, the Despite demand new putting half strong a combined have of action. current a as fears will some whole is on the and by strategy the power the

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

Gregory Anderson

four increase year its in than only by operating prior income, year-over-year in exceptional top EPS truly million the with grew delivering only consecutive million completed XXXX airline $XXX XX% growth. high year and nearly These quarters consecutive history. XX.X% at our to the was profitable versus XXth margin amounts Drew margin This on more Allegiant line by improvement. industry results the airline of as leading not operating $XXX and airline of In of XX% an capital of and income you, Thank everyone. airline's hello year

the program. team record distribution their wide members we their airline. airline our full-year year-over-year first goals efforts employees thanks members our allowable I'm happy my XX% maximum to payout and are beat impressive in our increase in like our world-class a airline This for possible profit-sharing, of to million all our support translates Because profit-sharing to a the grow airline efforts. report of our to efforts, total under have therefore the to These all team $XX without XXXX time members. history would not personal results I'd been team tremendous in and amazing corporate nearly add to our tireless of of our of

be and results should are proud. with We these everyone thrilled

XX% spike end in on during XXXX will latest expect we came of our QX the industry due in to While fourth the price in quarter. guide lead it in low a fuel of the the growth primarily EPS

Our this our was average in assumption cost the higher than period guidance. gallon of fuel $X.XX during per

However, how grew for back positive during in the initial January example year. an full guide increased of XXXX and through the us $XX of was we midpoint our year, continually year range EPS the momentum the

reminder, a per difference our XQ cost as actual about That fuel our or week the release. $X.XX was to release. between earnings EPS. paid guide in so on provided the As gallon simply fuel in said, earnings estimate recent a is detail to based prior we We additional approximately our our price

performance fourth higher year-over-year. fuel, cost came in for original the CASM-X Excluding our than down slightly quarter airline X.X% with expectations only

quarter, delivered sharing a members we than meaningful growing strength during it planned higher than should add when team in through better we profit-sharing expected Although than is expected due further productivity I improvements the the by airline problem profit come costs move quality a earned higher year. labor in of finish CASM-X. year, with as a expected to slightly higher example drove to than our associated the high your

year. airline XXXX cost, decreased year fuel, unit prior Full by excluding versus X.X% the

being of significantly to However, on are profit costs unit by along in decreased to our better XXXX, metric through the for full CASM-X you we estimates, Based than and same U.S. have not the versus the U.S. the if XXXX reduction X.X% belabor exclude the another carrier transition. in would report range. only sharing, fuel, it with benefit in the year

performance XXXX. for to build in cost us a XXXX foundation strong upon Our exceptional provides

drive the the on is relentlessly out to committed searching for business. wants team necessary and of entire ways costs Our

end XXXX ASM XX.X% fleet, aircraft Airbus XXXX XXXX XXXX. short not too are on The of projected. the our the service to aircraft into the by additional still and had target X.X% we are as scheduled growth shift December. number in now and service capacity by The growth of to the Now XXX did with ended impact the aircraft we turning ASM two in we reach quarter the two XX in aircraft the demonstrated to in

with both the AXXX We Airbus performance of operational are and pleased economic aircraft. series the

airline EBITDA, is XXXX basis, out aircraft in in delivering all the $X.X $XXX XXXX increase Flying million fleet and penciled a greatly and versus of aided per on of nearly through Airbus us to XX% EBITDA. an

CapEx the than $XX higher primarily maintenance various Our status XXXX purchase opportunistic acquired quarter. airline of spare fourth CFM parts engines million with in during better than expected at two to is the coupled related The on expected. and increase seven the new aircraft

of to Now moving second we airline worth be in expect to growth expect second full-year we better quarter along in the our Drew difficult projections XXXX down and we mentioned This CASM-X cadence with a outperform the the more year-over-year. quarter. versus out comp X% largely our the are first cost confident It projections correlated to XXXX unit is first to flat. to of quarter guidance, half pointing is half second the

XXXX expected Additionally, $XX the our $XXX is airline gallon is to the nearly flow $X.XX EBITDA and guide which during during aircraft rate $XXX $XX.XX of we generate expected extremity our million current per the Coupling of heavy fuel year, Including increasing to free XXXX run current million. to assumption change aircraft projected full $X.XX be airline only total approximately for from in maintaining to our is XXXX. guide. cash year growth our the cost to maintenance, are our EPS while per

end generation turns of turns us leverage, By X.X the XXXX way debt-to-EBITDA X.X XXXX. strong ended is quickly. example, of we Turning at versus helping to cash de-lever at

trajectory the the support quickly of existing aircraft, grow expect as was we our aircraft critical that amortizing debt. continued expansion. fleet EBITDA secured and We downward Taking on while to timing transition

money capital tremendous provided these the access to to access us financing. banks aircraft has with throughout and ability our our to combine you If world inexpensive make top from

in similar Airbus a of We acquisition compare combination financing MD-XXs. to way our this the

Therefore, two is types, an all given same the the the and traditional capital this amount is a fleet Our debt than have the profile primarily different more in since with type MD-XX ultimate of efficient their flexibility outlay between mobility. wasn't cash debt. assets risk financeable. around Aircraft tool

engines short down we purchase At to liquidity new parts in term and mentioned the revolver engines revolver. on spare pay provide with We early to our various the end XXXX, these of XXXX use drew earlier. proceeds finance of fund most help to of seven intend of CFM the to

Now to sale other we in remain within than to comment further guide. turning a active we to plan EPS is intend not included given sale reinstate negotiations sell airline any and is reminder our we Once do the Teesnap nature to complete, the sensitive non-airline, the guide. not non- our formally

messaging recent from our Day results. However, XXXX we XXXX expected non-airline should will reconfirm rate similar run Investor that our to be our

As still the second remained Included flow a non-airline we expect XX% we to of our at $XXX million. John expense mentioned, XXXX project the costs $XXX which is operating of loss. million to and million, will XXXX quarter Sunseeker of as XX% $XX operating reminder, in in open through total project

up Sunseeker CapEx expected gross to during we project during is over in million earnest $XXX in year. and XXXX the CapEx pick

will first $XXX The quarter be of The remaining construction. funded XXXX the be drawn funding Allegiant remainder by we of complete by the their will first TSSP. during and million as

reflected positioned continued full XXXX well the growth for guide organization. year see for in expect as and a we are throughout improvements We our and excited the strong very to

turn for the to to it over With like that I would questions. operator

Operator

Thank go Syth you, comes from ahead. from Raymond Our first Please [Operator Instructions] sir. question Savanthi James.

SavanthiSyth

Hey, really here. kind I color of afternoon. appreciate good quarterly the

growth, capacity bunch this XQ then another have markets bit, again, new that sense it's little up know year. opening look some than at you rather the the Just best had if open late Drew, you being understanding probably my last year. but from whole I you'll makes the a And

as the kind see this new you'll peak peak if kind wondering about, year? markets of percentage anything the variants versus talk of growth of that and there's you throughout progression can So off of ASMs kind as if a

Drew Wells

that Savi. for thanks yes Sure,

So some XXXX. routes that went new through were there

stress back really XXXX to that relative was important think I of to it XXXX, significantly lower, really in that. half into before it's the any year

mentioned but being developing in I've we of states. of our X% of markets XQ I this think – XXXX our troughed being ASMs before, kind under

new kind move these a of than to XQ we we open there XXXX over As than over will XX a will will be markets we double these be routes forward year significantly new will XXXX. so pressure that year front on when more into of XX%. lot more on That basis, up saw in XQ

Savanthi Syth

expecting Again maybe quarter? you are RASM I best misunderstood, still be the XQ to

Drew Wells

it be to best. expect Sill the

of we're comp from, Some XQ that really XXXX can't the from remember that dealing away run that.

growth one that's the lower as larger So, emphasis as of rate. the well overall

Savanthi Syth

going if know business entertainment the, And Thanks. kind small, versus small secondary and performing earnings it, addresses. build business, email just maybe but which a is loyalty also more then center on family but standpoint, from ask curious, of side, might on just very is get expectations kind an the to that of reason kind to is I how of the this I for

Just you a kind an if the curious provide thoughts and around update that been they've can for while open now of that?

Maurice Gallagher

ahead Go Scottie.

Scott Sheldon

is Yes Lake. is Clearfield, reset. can really It's two had team the it We Scott. which a first new Salt place. management in of in was a in tell was open, one stores hey, this I kind you,

The second Flint was one [ph]. in

a of Top running grand through to-date think it's the line look similar would around is I January, If kind was about business and you XX% XXth EBITDA the literally we to profile XXX thought look. at margin. month how this

significant As overlap kind Air versus far amount there in was what as of a between emails, database. Allegiant Nonstop our isn't of

think, right gate, of which dramatic that that shows the there. Just pollinate is opportunities But costs probably to of I lot didn't a of we lot do pretty why some out. is made stripped a of there things unnecessary really no, kind there's we out cross changes,

you got to you a There's see good a so it, we've we forward. believe profile that's I can of have anticipate actually But the handle. it think kind going seasonality, of lot

really be still think to business. a going I it's good

Savanthi Syth

you. thank right, All

Operator

you. Thank

from Please Dan question comes Research. Buckingham McKenzie next ahead. Our from go

DanielMcKenzie

a know trying embedded be daily way A are here to the the thanks. context? you why XXXX is utilization and plan. flat know of just simply put field couple CASM-X in Hi, X%, plan you to average the questions you've reason drive utilization higher ask What's the extent the guiding but to the I I'm could costs, just down down on that into I to

Maurice Gallagher

utilization will pulling something – relatively first half per down full plane. be little an periods will an right the the half holding peak down the up we but I number so like March more be the hour. now. steady and for down hour I'm expected, year. number in June than in Yes, be a We’ll come have April like a will

to quite there's but come a about So hour half still bit would the that, out in expect of flexibility I a for year.

Daniel McKenzie

you inventory? clarify room I little to Sunseeker, relating guess, see or expand the revenue okay. that I nights, What do sold more, to to And if just the sold you wondered then plan available? can I you remaining on on bit the plan nights, just room manage a manage revenue room been do percent or total nights how have are what and the

Gregory Anderson

we just that the to-date sold total that to what and we are are already, put half two it that. a be opening have years inventory comments, Most people out course of people inventory is the as out. year of The said Dan. nights didn’t fraction we didn't, booking my in room a Hi expect rooms to people quite we I know that doing don't was done in that advance. hotels people amazing to I who fact far is us a people have XX few mentioning The and

of systems But our we developed internally. all

traffic we want marketing, there get of and allows to systems of we selling get our doing it then us functioning those them to for as as just so can all an extensive important amount how possible, was it and monitor to. in. out quick processes tweak trickle So And exactly let us not this

when start heavily market. to So we

is expectation to people year starts months get ramp think in a as a like of our way out. up So about And you I out. will more course, booking that start more significant six

that fact we're has surprise just getting the expectation, our that's a traffic to us. been, great So now this

Daniel McKenzie

Scott, good, on maybe if squeeze just if I more can one I'm you bit could here for Very little X.X. more wondering a elaborate

looking I evolving. What it unlock of guess kind revenue way of you think question, capability the are is that I you? potential kind as does Maury about about that What to another you think ask looking gain? to revenue potential, to what are for talked do you differently

Scott Sheldon

certainly once You we bet, the is this accretive come essence most of aware invest of the and our And can to thing that, in we premise the dollars Allegiant people they're make as so in at their whole fact and to website. the our as that put them is is do in as possible much like or to premise. have shopping cart I certainly to that put website it store,

the same enables So does. makes leading of your Amazon and streaming retailer. an that and you that that That directly by internet all the a of mean use or mobile, from I things or answer the buy frictionless are desktop, way that website personalization a on buying and laptop, land all same you that that shopping use service requires to a question, the flexibility

but people fact and ultimately, that that of we what one there's hotel room is nine reasons. list unlocks for sell, their today a put it every it in bunch another we shopping cart, so And know for the

to other way make reservation technical the But pay one commercial size one be and/or all maybe we're room items. night there and front to that things them rental would they that hotel able have are conventional for we is, your a and/or in it desk. cart that pay of These just car of for pay versus and and boost doing think at all the you

there. here we use is, market trillion so the us. by of The now $X the for of a everything they again their revenue out those way Apple hotel they establishments marketing. to were the happy pay right Apple rental and People already to same through in entertainment they're XX% that willing heard they just that dining email car ride partners, distribute served asset and iPhones developer comment we seen directly hand lightweight. it the iPads website was and the up this because just a partners, every our got way, and that get software and companies and cap, and do around are to hot around to to very and customer last In customer. much potential it not along not other have because to from that media company, sold would right about believe or they selling quick view we've all turned But I'll

is to pay be in sold sort in but store, this to not ecosystem opportunities site its to but doesn't have willing want the come infancy, that a partners marketing in customer, while other only the stream the from other revenue in and/or extra from the or efforts. that net new are other this top, advertising order becomes on our in comes digital And our

Daniel McKenzie

Very good, now, you. I appreciate that. Thank

Operator

Thank you.

Please Our Bank ahead. from Andrew Didora go of next from question America. comes

Andrew Didora

the how just set, Hi, questions you customers good Thanks. John is airline if of afternoon, John, they a curious where they And bookings you just sample not? stay small – just and are duration them, what cited, that's your this know meeting of everyone. or on I or expectations quick very couple curious – it's but Sunseeker. like just expectations of curious sourced a that the not?

John Redmond

Well is where place. is couple construction site people, good – a questions. getting our stay of the on both a we're walk-in taking all even their these of into preview center, by We had right actually, people are the which

is we've been the shorter has great walk-ins, of course, So, stay some one. seven all days booked stay of course, the longest rest been had of which has booked we and online. and The

So, is starting that. night suites you're in rate and higher why seven like which we to the stay booked a see too,

slow, very by So, so people out, booked excited while is it's are that. that years traffic two our expectation beyond this

out booked, that out almost month people furthest the and about every are there have February have month we XXXX. is We of

We a have that believe far couple bookings it not. of or out,

start in significant, So again, dollars, in years not paying advance, real or months it's XX appreciated, advance expected. it's when two you

efforts out we frame opening as But as focused to pick start marketing do as will it our traffic course six year time And that around when that I months get, we see expect would we to of closer really much said, up. be too. to

Andrew Didora

make I And you. Thank had. sense, all that's

Operator

you. Thank

Our next go Becker Cowen. from Please ahead. Helane question from comes

Helane Becker

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

maybe just questions. two I have So

preclude from teams? your with Indianapolis one other agreement first deal the NFL is, you with a any The Colts doing does

Maurice Gallagher

all. at not No,

Helane Becker

easy. for the and you longer. half was first of do then Why that wouldn’t And maybe MAX probably question will Okay, of out – second service, is it be year, given – is my you that have the faster? the grow

Drew Wells

Helane it’s why question the don't Drew. Was we grow faster?

Helane Becker

you advantage don't the why So, the available? that. faster somehow utilization why adding some plan of capacity I to airlines wouldn't think think don't other fact how because to flights, about or grow your than share? more you have advantage steal maybe take that, increasing current take Yes, to faster about that, of don't some can't fact you grow they the more know can But grow

Drew Wells

the being I benefiting MAX on part as by unique remember our think for being so here gone. from – the to while model. and All Helane, ones we've dictated the is important or routes the we had MAX network we service. unique announced most in business really such not eyes and weren't in were have weren't a the Yes, We a

think our exactly well I where beat the to and to or really the or rapidly areas us. Southwest where to. So taking we doesn't trying American of Hopping expand are network jive want our marching own drum into with routes is cadence we're

think I So at

forward at. so rate, a can percent think where and of with the together very company one kind that satisfied give growing or I one move great we're I'm XX take at. half points think we're I at a And or entire

Helane Becker

that’s Okay helpful. that’s great,

Gregory Anderson

team MAX on going his of side see the that I advantage just to fixed on I’m opportunities take are to and a mean, Greg. that's with definitely is add, we on that. fee comment hyper-focused something advantage taking being and this Drew the Helane MAX and out, that

Helane Becker

you. Okay, that's helpful. super really Thank

Maurice Gallagher

Helane. Thanks

Helane Becker

Of course.

Operator

Thank you.

from next comes Deutsche Bank. Linenberg Michael question from ahead. Our Please go

Michael Linenberg

end some out. after maybe good there's look where the always new two Hey, but all I tuning, the launches, the at XX maybe of on didn't when pairing pairs look questions mean, your sure play of what some markets they announcement now? some here. I day, good do the to afternoon, some is rate success at the and paper, you city everyone, and city have just the Drew, pairs, a year of fine operation, I'm

And ask years, then carriers I make reason is drop we've see other out. announcements. that number sizable seen over the the And big few we actually, last service

size, And that, so, I in has as you've how called evolved? has think grown it how success that rate,

Drew Wells

Sure.

this kind at back some long XX%. time, came hitting Lucas a down half XX% So but oil has of elevated in quoted close hunting that point. plus there, hitting actually as it a still of around the to come to probably XXXX/XXXX I for rate before, were even we're of We just XX% bit success we believe XX% back this little

Michael Linenberg

update like Okay, just Allegiant question It mentioned Clearfield good Nonstop, quick on for Scott. Flint. was and great. And to second the you

looked Thanks it? the expanding I For the plans two Scott. should another sites, the what's XXXX XXXX? there? sites, site. it's you're think everyone. news buying like if it saw out about Thanks one fourth. I in how business three that for or don't What's plan recently, third know new or Is we

Scott Sheldon

Michael. hey Yes,

things. couple a So,

knowing Jordan we another The the in one other back mentioned were not know market. buyer. one a West and that on half facility it's some we we two there's the really what were Utah We the in potential I As Fort that in we comfortable have spent Wayne. – have and of moving locations own forward Wayne we we're Fort anther decisions now one We think unwinding technically made. just we the year

which But Chesterfield, new the Louis. be we in third quarter. do St. in facility That opening a should plan in is on

the of that Yes just So unnecessary in front we're the is some like and purchases plan. what we throes we end. transaction know one, space probably now, the said some took that done so know developing I lumps on

one maybe are how attractive we're kind Michigan way more the some the with the in that's up of area ended how started opportunities another, year, in kind other two. There's we a importantly, that pleased at But I'm minimum, the lands. So, getting of but well. there's as really store, of XXXX.

January, through seeing of As we that modeled majority similar I the is a mentioned, to what ago, year we're so... profile

Michael Linenberg

is good. very EBITDA No, thanks, Yes. XX% good,

Scott Sheldon

Yes.

Michael Linenberg

thanks So, everyone.

Maurice Gallagher

Michael. Thanks,

Operator

you. Thank

Pfennigwerth Our from next go ahead. Evercore. Duane question comes Please from

Duane Pfennigwerth

been it's prepared we've Hey, high your since you thanks in for teens. questions. mentioned remarks while you mid the a grow, Drew, seen to

done really shaping job have of capacity nice You demand. a flexing around your guys it

You new mentioned the to second going was mix half. market in pressure RASM that

RASM. The you Savi's it's March But point quarter. following being I playing your new may be wonder question could how comment, markets out up on not to just here maybe if dilutive the into

positive think sustain So, RASM into here? trends can you March do you

Drew Wells

between I'll too have the on that a route all anything percentage longer. cities you add XXXX close the a of two market has one to our much. say So, generally of out It obviously depends markets operate the bit launch, much any a predominant not guide that's you Obviously, comment a will kind We're out cadence. was a especially take connecting that. bit to RASM relatively dots, Anything presence, of of will already I'm going of type this not without curve. city, GX bit going sort which on new quicker. maturation flow new

but markets will down the So from think kind of some [ph]. RASM as of far information that, kind about can think balance of the glean I if you and type I you think that's guide

Duane Pfennigwerth

an stepping your think to picture, as Okay you big plans. about input and as then just maybe fuel back network

Can the a you've could these keeping fuel how fuel growth of think carriers us of prices Allegiant one given if as talk better when projections I tailwind about, lower you a these you one. change? at get sustain

Drew Wells

Sure.

marching XXXX XX% within So, of we end annual like said carrier. the toward of as to we'd a, already we're be top of kind kind long-term where to X%

out pipeline than obviously you want to but stays the think on we're go. able hitting in pretty the where this, we it close couple another will which maybe of points, fuel planes. can we're lower and scratch to acquire induction I of top of Some If depend to

kind operation fast, you the over some a stress of time parts of learned you too if outpace lot puts We've other that grow or of that the general on that either infrastructure. and company

know the ahead don't want as company XX% start of goes and get fuel to the far I So low too a whole. that's to because go that saying right for answer really ourselves we’ll I if don't

Duane Pfennigwerth

CapEx have just today? XXX XXX one there is sight And midpoint, you or on sit to of the you of follow-up line that lot your hope on at a sense. deals as here That complete makes that of airline we do

Gregory Anderson

it Duane, Hey is the Greg. thanks for question,

on in sight aircraft of of all that line a already fully is that are business CapEx we've lot projected that that scheduled counterparties the deliver with CapEx firm they it have strong have with in place. expect we fact done definitely commitments on we and the kind CapEx of in And times that past. we and or Now in in

Duane Pfennigwerth

Okay, thank you very much.

Operator

Thank you.

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

Catherine O'Brien

afternoon, time. good for the Thanks everyone. Hey

launch than your about making recent of announcement typical Houston, decision maybe a concerns us Drew, process Thanks. little duration more tell So more there, you to Chicago, the recent the your launch, for of Boston, can response? just service of type on but bit then competitive on should not the you, really as destinations cities, are view and any markets these one we

Drew Wells

Cathy. Yes

there. So, are These definitely think the on type cities. nail head I more the you destination hit

we very New and pretence. under XXXX to back went York you similar into [indiscernible] If launched

Chicago, You had with either [indiscernible] very and fare markets and Boston. now completely high and into York New going Houston unserved both or

a for niche lot not of to of traffic what from small a to of airports it cities drive at to each be thrive these to each as origination these a that's after destination. these serve here. very going to and us kind So difficult It's and and expensive there's we're a of all very try

reaction. niche not to but We’ll as within not expect our that little it's concerned we're competitive others. we the anyway, obviously industry about something So watch the we rankle do

Catherine O'Brien

you maybe or mentioned Thanks. there. And or on to margin? system Okay maybe just New versus you. system a since compare York those How RASM and that then got Baltimore like follow

Drew Wells

bit, up us specific no is take yes, hurdle about be But schedules high high for concern. not level kind a order a been At continue margins obviously you with to continue clear we're there's there there concerning. little obviously, but concerning obviously we've the XXXX to overwhelmingly been able to There's talk of though, margins. to to nothing to in cities. Yes, rate nothing put XX% going But since there's for fluxed it. a I'll capacity have

Catherine O'Brien

anything the of I it, negotiation had of On assuming Maybe underlying quarters with one. question you Got nothing, Thank quick closes, associated you Teesnap XXXX share shot. more that, expenses just one here non-airline to you're on just like state the Teesnap can but give it a or when your a guidance, have EPS with couple believe in sale you. that us I that? no

Gregory Anderson

Yes question. Catherine, for the thanks

timing transaction. and the we I'd have as we're it. And have do into we while timing, it's the probably the expecting first been the through As we’re on clear disclose we're costs give sight it have certainly the working guof on negotiating far year. possible. we through prefer give quickly but for just of half just of Once budget guidance, right we’ll with so as a couple, Teesnap to diligence working baked don’t as of far kind We've of don't for well we as non-airline you some line guidance on in due now time that close update earnest in we've process. we spent as the counterparty guys, to not we continue lot it there a time, some when a for

Catherine O'Brien

so you much. thank Great,

Operator

Thank you.

question from Our go Joseph Stiefel. DeNardi comes from ahead. Please next

Joseph DeNardi

level in going evening. just XXXX? the terms for many markets that's competitive? year Drew, network Yes, of talk you XX good way in and were thanks not competition ended can how which competitive And launched, you then versus of about those then the the where you of

Drew Wells

competitive. the so were routes, XX XX% among Sure,

competition Nashville Albuquerque of well to over going Orlando. We Florida, as routes of have out and the of the into a some panhandle as couple

But the we where actions because positive the last for us we've a and of between from the ended to have non-competitive, months. it's competitive markets competition now in XX% as around about of some in announcements We and direction well as year heading trending there. that's XX% positively some six XX ways right our more being So competitors. for been been

Joseph DeNardi

you to in on the expectations? continuing maybe on as still that so plan. remarks, every Got what below it sure I margin was of then how prepared if some if give said below you know the why so from And that XXXX just level but then John not I you're forward? some expect your being was you're it. you. And there's are spend Sunseeker give booked, schedule many is plan? into spend your eaten something in missed And we the schedule, to so, of that Just rooms should going Thank going far and planning – quarter but

John Redmond

Joe. thanks Sure,

be on important commitments doesn't honest to are with speed or The that more the relevant have spend – On you. the an number. impact

management the I if we $XXX I at to was can of commitments. with great From saying up thing So ended that's end XXXX, million the end we the at in do. of about cash delay standpoint, mean, a year, paying,

a So payday standpoint. cash predict like and to just trying from we way management its have out to

more It's than science. art

it for if good that's But around. change delay opening move the us. date, you'll No But that's change anything. see So it. we to to no kind why change can, schedules. of No to paying cash, a thing

So think I ended XXXX. we

$XXX XXXX I terms of million the we in think had project on end spent million, roughly had million commitments. the of as $XXX in we of And again, $XX about cash.

providing increase quarter. first call transparency whether don't of the spend, that And be end the the bookings will you. doing, everything all terms we’ll expect I to occupancy, I construction, There it it's the cadence, room in significant update now do quarter on nights, quarter, end and between intend I everyone bookings complete – In every of as mentioned of be we're again, the before.

we where we're again, So are. with happy

of them. expect would to book big start to it's we end year that to the going the handful of expect think quarter. part but the front opposed rooms we to the The as don't to a year. back Granted expectation numbers, you see in like the more We in happen again, of

Joseph DeNardi

Thanks John.

John Redmond

welcome. You’re

Operator

you. Thank

go comes Our from Wolfe Hunter Keay Research. from ahead. next Please question

Hunter Keay

Thank you.

a – said free million you Greg I cash think do expect on Just you the in this year. to quick clarification $XXX

what are a number to in number? that calculation? using Just sense want you for CapEx CapEx to be gross get true clear like I just a

Gregory Anderson

Yes, that only would airline be CapEx.

would exclude that So Sunseeker.

Hunter Keay

the a net airline? at for Okay. for CapEx number gross financing like like for real least And that's any aircraft, of not that's

Gregory Anderson

run if just the expect average EBITDA That out your is $X.X we million aircraft, that we're aircraft will get the CapEx and you of take – count it and – the in Yes, yes. rate per EBITDA yeah subtract just over then that take XXXX. showing you

Hunter Keay

it's not like so CapEx of net gross proceeds? It's

Gregory Anderson

exactly. yes, yes, Yes,

Hunter Keay

just how of Sunseeker All many third-party in near little even the marginally right, a okay. or bit wondering room line. just nights nights if dropped the stuff obviously that asked the geographically. like then, bottom the this way? third-parties really Sunseeker I'm cannibalize sold the all potentially are at even as room you XXX,XXX straight And to because And some high competitive I margin might through is hotel effort you that to sales said, Sunseeker question

thousand disruption sold in of for little Sunseeker, I a nights margin wondering we bit impact a should not if of there's couple So exchange just room about? potential was think

Gregory Anderson

of since sold are any do with the we it there the had don't was Hunter said and you'll number of more number nights inception airline. that the I we've Vegas, But room impact to I course room sell in skews nights think see hotel of quoting always we of the numbers the gross past.

So sell always been has in the rooms Vegas. of we concentration

scattered were and The in all the second selling is over. are Florida, of Florida room market in nights course we

any market, displacement activity So skewing be with there. the so Southwest see traffic Florida go in or is that going don't down a we're Orlando, to will type to down on there Sanford that see accretive. towards We everything going

John Redmond

it you'll what our have. at those gen the is Orlando an we now opportunity Vegas offerings that no Beach, and that next markets I would the business virtually become, we're Yes, do I to Myrtle of have is dominant are markets to Las have is add Savannah, more type see same that effect refer or hotel destinations, scurrying and Nashville, right

swing to Orlando. the customers the sense way we Las question, get way, the those potential that as start or book answering and in the in upside same would educate they other may So, there here Vegas of and represent in online down to

Hunter Keay

I Okay, it. appreciate thank you.

Maurice Gallagher

You’re welcome.

Operator

you. Thank

from Our go Genovesi Vertical Darryl Please comes next from Research. ahead. question

Darryl Genovesi

that John, I Hey take the are phase two like pass your what one you phase stuff milestones plan on two you that guess mentioned, plans do that for in Hi to you'd before the board? the to time. phase guys, the thanks

John Redmond

These we are And I comes we've if in in two, they doesn't any doing look will. great are added don't phase anything think phase to is would when any and because the the rooms. the added pulling trigger phase pool two amenities level and restaurant reason that traffic monitoring relates being when metrics are just additional before room you revenue Those add established be on you it a to a milestones capacity. added producers. one generators at just

the is we it, it So which is at part why first were the important waterfront. of finishes looking entire it off

disruption So to lot we the any have had current during process. construction tries it that construction takes would of a and concentrate that

make be will So the always groundwork in again, future. make it's some need time there decision that But point decision, do. a a board the to in to at that order you in is to position

is now currently is and The adding one taking project, of buildings. the pool is the pool again, place the on rooftop a in restaurant. what's that's So all resort it's adding that right groundwork. But a of

points pool charge with create able to the to be So this opportunity able a would a and be rooftop pool give maximize level additional guests. to grade and us these

Darryl Genovesi

up in rooms mix some at just adjusted it's or with to then you know wondering, expectation, that, rates don't? sort associated just but specific of across very that were counter suites called entire that that look And your all I if on sort Okay. Just, everything I but baseline conclude way $XXX general actually mix that the usual for out running for you know – ahead is more and assumption it’s the of that was for a days booked and early of just the if caveats, the you ADR Andrew’s, or was and not follow year?

John Redmond

rate there the be year closer Yes, ago, over financial maybe we well projections that, when ago And be were where have all our put out. that again, that in it put for though We've that's decisions, to always much in general to even Board said we assumptions modeled we years and the to was even position very those conservative first a just one market in a information is stronger. we've we time making one. along two is a wanted out

pointing I in those how Investor had, And the most are the strong Day think rates we in we recent marketplace. out were just

said out May through for very complete has work our as out inventory. there I very a I room seeing rooms we're we've while you rooms it XXXX a posted rate a rates. June strong XXXX. So is look every of could from early, single single - mean, but And every and of posting there there day at go and and is

it, So their wants look anyone out and there who pick go at to day.

are so market Day just how part be We that is purposely that always those is would our which just on and that. things talked those That's us I've the strategy. have of Investor room rates It's what strong; Maury priced market one about we mentioned the had that excited is there. of below the high market about

Darryl Genovesi

did you I then quick if And booking? can there, when you. a in thank open just squeak Okay,

John Redmond

of opening This a on site. squared tweaking of gives us you our tools hotel of small site, a get our number early to the the things at or can. week right site our analytic sell like into in to allows shake it been call as interest we've get rooms room. get as out we December, so of all And continuing a out to like traffic it's say some based we're best to first of want finding, find and upgrade but all I soft early the just two. best kind beginning soon there It’s of on or the we say away, it to the us where possibly to to

happen, we first we've now and So changes that the And at to it. done half opening assuredly, year. between will now have changes numerous to even end this continue of the launched we it and and several site most an the between call just since of

Maurice Gallagher

like the the the one a to and is and add of course bookings, of sensitive be the ahead there's price strong pipeline tend much business groups speak individual about good higher time. independent talking as think airline on book But at that than hotel traveler. right now John, group might we quick as are we certainly comment, will well to margin reality free less further about with be to the

that. audiences to think really I on there in and will of updates group we booking has think so a different calls, for a when And will the a And that subsequent quickly time about ability start customer big chunk take the be inventory adding Sunseeker. of hotel set in up amount be

John Redmond

be a providing, as No mentioned point. think go I that of level very forward here. it’s good insight before I we And that will we

the a group activity expect we but booked the that closes have haven't will a that yet. group fully happen to quite of leads, expect We a lot we see of We before and at large year hotel. bit that

that's exciting piece a very of we as and very, lucrative move the business forward. So

Darryl Genovesi

Perfect, thanks guys.

Operator

Thank you. This this closing Q&A CEO to our time, Chairman I'd At for session. concludes like remarks. Maury over Gallagher, turn and to call the

Maurice Gallagher

all you and attention day. days. XX we'll to good and a your in interest be much. you very roughly again I talking Have your appreciate Thank

Operator

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

disconnect. You now may

Allegiant Travel (ALGT) 29 Jan 202019 Q4 Earnings call transcript