Allegiant Travel (ALGT) 5 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Sherry Wilson	Director, IR
Maury Gallagher	Chairman and CEO
John Redmond	President
Scott DeAngelo	CMO
Drew Wells	SVP, Revenue
Greg Anderson	EVP, CFO and Principal Accounting Officer
Scott Sheldon	EVP and COO
Savanthi Syth	Raymond James
Mike Linenberg	Deutsche Bank
Brandon Oglenski	Barclays
Catherine O’Brien	Goldman Sachs
Ravi Shanker	Morgan Stanley
Scott Group	Wolfe Research

Call transcript

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Operator

[Abrupt Start] Q1 2022 Allegiant Travel Company Earnings Conference Call. My name is John, I’ll be the operator for today' call. At this time, all participants are in listen-only mode. Latter, we will conduct un-see question-and-answer session. [Operator Instructions] As a reminder, the conference is being recorded. turn over now Sherry will I the to call Wilson. And

Sherry Wilson

Allegiant John. First Welcome you, Travel to Thank Call. the Company’s Earnings Quarter XXXX

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

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

John Redmond

afternoon, good everyone. and you, Thank Sherry,

dedicated and results through and best spring come the I end. and and incredible cancellations amazing. are we fuel is no XX.X% operating issues produce for high factors, EBITDA reason stellar of can today. now you passionate Our X.X% April chose of Very fuel total Again, of out especially To only and those Omicron, in margins, ATC member. to this weather are March strong in and the the cancellations, load out continued throes This spring margins team the still industry-leading and year. helped XX%, much company's reporting every demand and load high history, at and the a factors the and the to say continue team and thank run-up prices respectively, X,XXX expected members busiest are each offset was XXX rather into very

the rest Our our operational but vision year It guests, is our not priority and the is employees, long-term brand. for integrity. for our paramount, of only our

Our business to demand always match prices. with have and fuel been and capacity model DNA

it. the the is no industry over in shown have We better years, at one

up are to IT, made fare. million XXXX. to its roughly it was hit benefit launched initiatives, drive but XX% up set don't over and happen experience model, roughly streams. overnight, in foundational total is our Strategic interaction business will matters Our focus improve that of the the revenue $XX being where Allegiant investments company. is for most, QX MasterCard more various our to of operating in us XXXX was year X an future to year be a Significant increase average helping XXXX total including into card of drive initiative well and that with differentiate over the continuing transformational. drive to Always can adjusting year World our initiatives cash benefits year imperative and starting guidance in Allegiant The X the this course, years. and, capacity reflects and stride XX% revenue customer really

years We have will given partnerships, roughly our XXX,XXX in out further the resorts. relationships to date, and cardholders which accelerate

along to through increase intended our card, with portfolio. of with Rewards Always program Allegiant interaction credit greater Our are wallet the Travel share

IT our that Our years Viva is project market course, and be would financial as for a in piece Aerobus and will of started would XXXX relationship next joint asset-light have venture with joint laid to and year. be over that will But lead Mexican opportunities. venture. that the leisure in entering this off of That is turn, pandemic interruption further been not benefits the being foundation year. after we same a the other initiatives, completed Sunseeker, the

our out, but challenge. We to cut work have members the team are up our

All total it initiatives over Sheldon. should set for Scott these even foundation all turn to X.X, that, neighborhood we end will in year with liquidity with Allegiant the work the done, With of $X.X the of billion. I'll foundation still being the

Scott Sheldon

everyone. good John, Thank afternoon, and you,

we XX XX-day a the in internal meet period deploy the to nearly due outstanding for quarter. Before an themes, canceled and over The claims operations team And to needs position, I XXX team starting with members throughout the into had and incredibly offline impact first our needs. our management over pipelines not had were XX, December scheduling certainly job our immune out to of aligning did team crudes to unpredictable residual time Omicron and planning a to to in first of folks you members this through most over network having training holiday partners training network. late longer-term impact XX% thank frontline train an span. on we of the and be get We position. unfortunately, the impact December schedule. our flights peak or from from the XX-day our and quarter like was the We future on continues team importantly, customers, I'd Perhaps more X,XXX capabilities. to all first and capacity went This the COVID

which targeting controllable ourselves high industry factor self-inflicted, performance. the these want the days, control. current Unfortunately, being about targets dominating get in being these of I reasons talk clearly short headlines of I take leading into Historically, is to minute in on we're a Before we to trends. operational a pilots, falling very this our and on-time some much environment, completion some XX% out prided

incredible year Looking industry back we in led at exceed to the adjusted margin. the carrier full which 'XX, XXXX EBITDA drove XX% levels, only capacity being an

first possible, of being on-time lasting advantage best at leisure positioned Clearly, and of work as we simply a performance. as take forward decision up of 'XX. XX% made and as are a much lots do. of X-year on departures complex first as it recovery cost growth our are Year-over quarter have it approximately than did completion to respectively. today, to us to wide crime-based We to and growth XX%, Fast network conscious than come more XX% was net reflected We cycle. but in that's aircraft selling a is keep the this

or in and operating are commercial we move this many improvements small X into XXXX. the [ph] bases, challenged focus will that or from more today, new aircraft XX a labor total entities. bases Provo labor loosely give to our our stability high we and advantages to highly environment, less drive these are Without brings on base and crews. Appleton opened During be to which attributes in There's on and level degree operational markets Influent quarter, our reliability labor dispatch headwinds XXth opening as substantial consistency, dependent which of certain fall stand-alone in our We consistency, upon key and pre-pandemic performance, less these particularly on is two relied undoubtedly up small or of a summer. in of are focus defined plan us XX flight which we as

pilots, pilot staffing Moving nutrition. pilot to on and

a are as We the some peers difference. perhaps with of same industry seeing slight our themes

flying the to as the ranks demands other crew carriers, the to stabilizing officer efforts of projected last the bringing in ratify our I'd over Attrition thing was critical elevated last on we've That with target Year-to-date, meet airline to bring May number hand, we've pilots. need workforce hiring carriers It's to pilots, hired is since continue norms levels XXXX. XXX April, We to our already on levels total short through year, our a are members our our of be new to above it's of one legacy target total levels. XXX our the impacted other have classes contract applicants. into would to hardest. May nearly like our to July for and XXX our Since which lost year. and on and And and summer pilots touch historical first and just are June XXXX. XXX look we primarily filled current and X quality last focus, to successful of

to some in the framework on travel from and made members Given Once enhancements year, rules, again, to January, taking mid being life expedite environment team quality leisure patience support and fourth the to ultra just investments here that has efforts of of the risks. new rates, this interface proposals daily. our summer. your the right while deal. comprehensive like report and a seeing Dean. forward thank of your take we are an attrition in scheduling, meant balance Since passed ourselves trends four guarantees, a to This premier the the touch to rate and the I we preserverance drive last this quarter we work everything partners. tremendous, look something always said, earnings in make process the change flexible on are to to It's different, for we to in company, And in Scott virtually closing, and as short with future. and we potential, critical prided every stock near our be and and calculated of with hope crew approach sure I'd been performance pilots brand We've a is In have members way to being unusual success space. help this will operational we'll to we retirement, That struck substantial we year were effort that, turn to we over it maximizing successful positive I'll feel and know no lumps. no

Scott DeAngelo

Scott. Thanks,

for by This commercial side, passenger way directly This in increases And number segments while traffic down, visitors website as the booked did up repeat a ever-increasing range, first-time and for booking all for entering and coming basis, by flight and awareness slowing visitors by On More years the speaks the at customers the being increases up that our up more than XX were so on web in shows quarter being came more to most our XX%. to highest of than the with XX% brand. coming segments X-year levels using ages average at of in by showed website in or were XX% of to XX% on older XXX% XXX% levels. most XXXX, to showed highs to coming quarter. than in us historic levels by a that April our The Users to book dramatic first for our passenger separate XX% for allegiant.com news two and occasions bookings from of customers in visitors was more group mobile conduct by saw XXXX us, no searches November build people leisure Moreover, travel versus year-over more number this terms through notably, home. visitors between the the was app. time frequent our represents than XX% visitors great Allegiant in trailing URL to XX%. more this total XX% to residence of vacation above demand weeks than up Most up XXXX, allegiant.com. sign by many in our XXXX and allegiant.com achieved to March moving period. ever travel flying about more the QX to they're directly in segments primary travel majority and in the passenger travelers, compared X-day we than is age booked know that of who quarter

the X.X leisure revenue Allegiant. for passenger exceeding levels That months allegiant.com. once sign-ups. successively by leisure in enhancing past MasterCard from make breadth of saw revenue Allegiant customers our said, approach it to their two prominent This the again we at card card and web terms to driver, first enhancing of and of new us as to always experience World on buy for Each new the more the offerings passenger addition, the by driven growth compensation total of ever its growth quarters, be continues needs sign-ups, in continued spend our In quarter more having than to third-party and our travel Allegiant outpace the and record month card travel strongest the to average our set was XX%. three of easy by app XXXX

the we're the historic were XXX% nearly compensation For in sign-ups card closing, was capacity XXXX. fleeting I'll quarter, all fare we to It's to we it first coming growing least that, for by levels travel. growth, up of speaks of and In the awareness for effectiveness from the saw believe selling up both to XXX% the with over and pinup appears customer over just serve loyalty markets travel, higher believe to Drew. high and which new Allegiant versus it's we periods low and all for Allegiant preference into, simply both to the and turn across broad-based for the And which our and not of at foreseeable revenge brand XXXX upcoming be non-stop speaks at all structural, customers, travel programs quarter than first-time future. our demand or we demand XXXX repeat

Drew Wells

Scott, I've ever performance the since Thank midpoint joining of for been thanks, of best The afternoon. and quarter first seen. cadence us has everyone, the revenue this the you,

with have weeks. line positive been TRASM weeks XXXX for We [ph] against more sight many consecutive to eight comparable of

month over on drove guided Allegiant finished robust fee Better-than-expected was we quarter World of Superior March now. system extraordinarily The and time both as the milestone. revenue growing drop ahead we've range. factor Madness XXXX, ASMs XQ well an [ph] revenue performance, total our Despite Always with as of in XX.X%. the waited fee X in month March The million of revenue first XXXX. history by above plus The MasterCard close-in program quarter have in mic The boarded XX.X% was total month, TRASM the fixed madness March of us month. total years for ASMs exceeded best over March XX% in the third that the resulted first exceeded company load $X.XXXX incredible fixed for XX.X% and the $XXX best the bookings,

XX% XXXX loyalty ancillary performance represents load make and best the teams which $XX the in significantly more passenger company history, REV XQ second powerful. a Our increase per trailing to have immense quarter in factor over The quarter drive and success, turn just continued 'XX. first

even better. March's about performance, as quarter As the excited second I am looks

revenue on XX% We XX% plus plus of ASMs revenue to growth continued ASM versus second and growth of scheduled of X beat weeks on plus excess of and are to over implies ASMs XXXX. guiding million. service double-digit And load factor plus mentioned, a total system XX% XX% total of plus positive. to success as over X% TRASM $XXX I a quarter double-digit XXXX of growth march all plus posted XX%. were in April This points and PRASM

the We haven't expect months plus everything, finalized but mid-teens. I and TRASM

expect the in seeing and over periods is I best X-year we to performance quarter. upside June off-peak peak real performance display, weeks, the on solid the where the year in are are While the have

the extensively, mentioned to point and not output out want I is that goal. metric TRASM end I an the While

prepare XXXX, in routes smaller XX% will and Minneapolis. decisions. broad so for West planting to network Our profitability had our more maximizing in on several and indefinitely can we've that our with service roughly March plus larger ASMs months team we've and new of of from the XX began like in coming have XX a is over to focused This profiles the strategy network mature we and differently, network we some incredible expect fit total Put Silver's Amarillo strategy XX. new But these that we successes pricing Those can and future. sizes seeds expand still from operations, to our our range of we cities like city in already been airports ads. Doles years. destination markets strategy Key look that to one like first In And mix this future upon. network

in will that roll our happy a the across Lastly, we after of Allegiant XXXX, most to we announce Extra are started we fleet. test, product out

of results a have compelling product and feedback the pause the of customer process. test, a decision been pandemic throughout While in the bit put the the both

by configuration the as We and stronger Allegiant in take over even year. the fourth now have AXXXs XXX-seat last all inducted Airbus been starting further and this of the X results will encouraged months extra quarter

on Additionally, all relatively to a new as as should Allegiant And nothing complementary Boeing the layout layout. to priority ancillary Greg. primarily board This of rows that, XXXX pass structural, should count re-pitching boost return easy and and removal seat to maximum drive overhead aircraft legroom air Customers fleet will extra deliver with space. and advantages, an in as bin Remember, it well grows. like enabling enjoy reserved I'd drink boarding be the an desired. our over into that involves

Greg Anderson

and thank good you, Drew, afternoon, everyone.

we For the be the two of by million. $X.X halves. of tale These quarter, reported first results a characterized loss can net

The impacts the was $XX flying an net margin and for primarily of and We month of quarter due January profitable, XX% not operating to the of the Omicron. of million negative February. for first half our recorded loss of

January. quarter gallon month quarter, the TRASM $X.XX first However, during the XX% operating as evidenced of fuel, million of very despite The through closing our March. north $XX as the revenue This $XX.XX. accelerated per an of team March, the for quarter for by of the under from half of and just increase an of net second of XX% month TRASM paying of was income $X.XX margin during came flying profitable, gaining

$X in quarter first our our the unitized were members. recognition and deceleration first profit were second was would Excluding the not million seeing are Primarily, pressured our due for into for Costs by costs million the trigger $X.XXX, bonus the to quarter we customer fuel, to team the compensation quarter $XX relating during Normally, special results Omicron and that IROPs. sharing. for quarter.

given and Board macroeconomic airline team XXXX. members environment, was our these in However, broader pleased the the a extraordinary both circumstances guarantee recognition bonus our sector to for

best sincere business each thanks We in our have and the to the you. of team

fourth robust our sequential bonus XXXX. higher IROPs and our to would the quarter. accrual of quarter and ATL or this nearly strength customer drove Excluding CASM down the recognition sales environment compared was our a compensation, The in down first of X.X% increase XX% mix been in have million, from $XXX demand

is more and strong billion our of Our $X.X revenue. of two liquidity XXXX's than XX% ATL times

approximately million well levels. and Our pre-pandemic flat debt at sequentially $XXX remained below balances

Turning towards the second quarter.

This during today uncertain the our estimate help our the issued to for XX expect assumes quarter which were geopolitical guide, our over less XX% unit operating guidance XXX primarily ASMs margin total our by to primarily of to up planned second aircraft capacity on pressures. June million. this, per trimming than rising year capacity same and touch ASM this year given roughly costs XX% back February, and pressures headwind be count during be XX. as we percentage by volatility Our This the these To of capacity then, gallon X suggests capacity to points. the reductions driven actioned staffing as And thought headwind growth This XX% period briefly cost that's X. the productivity. expect [ph] frame to an second X%. an in is aircraft $X $XX CASM average inflationary north length aircraft We've quarter second This service expect costs guidance XX%, In the produced quarter, is ex on of approximately we per fuel. does of XX% some at second fleet on XXXX, production quarter bringing over prior calls in CASM average our that add around we the Based to on ex. into quarter productivity. reduction I inflationary by increase place we messaged related to is around challenges the talked fuel also I'd average we

yields is While there this pressure other by the revenue. benefit unit unit and higher higher the puts cost, our reduced of driving production profitability side on a equation to

and XXXX, Allegiant I Drew XX% TRASM bookings current the up As segues XX% total for revenue approximately period in well as second the to same into quarter is which indicated, Extra believe our fire suggest demand on announcement. nearly compared be up and to

that meaningfully of seats gives of not our a of a hallmark a an And low have with us always advantage unique this are the MRO of 'XX, to fleet, bottom align aircraft fuel, capacity weak company. margin-focused 'XX. give While to macro in slowing economy we optimize little reducing fixed, more Regardless given proven low speaking ability the track our to higher pushing the over driving as environment, around will cost we're are long variable room our the supply data high bring outperforming a our and run to number ourselves one, of with we the by record X breathing what accretive And line where fully our delays, fuel, strong is unit early costs, high flexibility stability. may a given initiative the flexibility going induction chain be disruptions structure. of suggests margins them into demand

should XXX expect aircraft not half end X in XX a with initial XXX. we impact plan Pushing in to capacity result, to year reinvestments turning the second to expectations. the our As business. aircraft compared to end our these with now And

that's my airline expecting fuel and $XX heavy Our aircraft and later coming more in make Viva meaningful mid-XXXX. go Sunseeker of Aerobus, That's unchanged. is sale maintenance opening on year, efficient to our CapEx we're full XX% million closing, are CapEx. per items combat revenue and turn the leadership report to over remains approximately - gallon, team, And expecting on other publishing over these deposits, our of And a this we better These partnership $XXX incorporating And Maury, with by thank on and behalf costs CapEx, as inclusive and our sustainability measured this partner, continue said, the to intention year strategic our major on aircraft for from Electric with Boeing with ASMs infrastructure is and growth our of our long-term call higher million ESG million that to now, our and in our many initiatives online tools mentorship, your our 'XX to the Resort later it you in Gallagher. year predelivery Maury year. in This we to Schneider in with and privilege drive plans guidance want respectively. to aircraft inaugural to the guide progress progress increased years. support systems, $XXX investments

You are legend.

Maury Gallagher

Well, how do Greg. you you, follow that? Thank

You've summer. the last breath. very peak past this gotten progress a few very the this years. overview you these as be conference for the is before our to to can preparing coming our over and exploits good we're our I've because from suggested see, date, And journey, last managers particular minutes. on back you done astute see, case in in Deep XX to last should way can of flying And speak, good and making XX as I our these about that calls my successes Allegiant call. I'm our talking normalcy,

on with our addresses then We base, almost to, from directly to available effort XX e-mail last the benefit talked million increase a communication. it. aware us and have in to And wanted has I've months, brand do But unit company. has our and to must what world's we that of And in important And additional the efforts don't stadium from statement first important, a times, Vegas in to that of in you process the of a of these destination, was XX naming done in its my a leisure-oriented the only as wow, people accomplish Allegiant stadium And while the nice, traveling we revenues our be years. us X.X of to was was our in opinion, drive Raiders our increasing from in enhance the way best a XX number about few revenues past talked brand, to carrier traveling further our our we this the increase strategically, great awareness Well, to credibility. having increase affiliation stadium the naming us in have the all that But able we that this times don't the with I've a we to clearly, I'm substantially center numbers own we current particularly have greatest reliable but were and the name rights and following front public are public, more and worth that is end, trusting. we partnering nationwide Las what years. talks heard be you premier wallets people's the rights. provided with to Allegiant of customers. than just customer become with and customers the now are own own company stadium. in belief It'd leisure receiving as football that different Allegiant

there property to Sunseeker during been more to our major trophy Resort has Our year. going of the any open make to of a second my But unlike This ambitious be undertakings forecast, great a from today. one a before, Suntakeris going time success. And you I'm call of time be has due pushback will been the next deal early here. on phone many huge

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John Redmond

you, These But amazing are million say year-end. Thank X.X million the and least. we rather currently, Sunseeker e-mails have the by we're X.X Maury. database, targeting in to

that perspective, open Strip the to of on X,XXX-room Now being XXX,XXX put the world new after property X resorts months in had e-mails.

$XXX direction. breadth in ADR of to has $XXX. XXX of right at a of big We've XX,XXX booked a amazing. of May We reservations focus date for year-to-date also was XX% nights room We are over is have individuals headed different year Southwest Southwest Smith a e-mails. the hotel from XX transient The by provided up XXX. last $XXX, the room on revenue we're the XXXX. year. an the for e-mail database Southwest period Florida was The rooms, same was of up last mid-February and period the beverage totaling set, total We've up Research as also by Florida, The same grouping our into roughly Travel set, XX over track is XX went modeled that contracted XXX us the we which market been lot Florida transient and to ADR XX% March groups in in This So XX the ADR million. $X.X sale reservations nights. booked food hotels STR ADR XXXX comp at states, totaling - selling shows transient were which made

I'll the what's STR was was turn incredibly XXXX the as transient you, Again, by set comp set Travel Southwest year, for year $XXX. for on transient ADR ADR, back For the impressive to it again, and Smith going Maury. Florida. the the provided Florida see to over full market $XXX in Research

Maury Gallagher

and This additive done but Thanks, is us high be in property has ranks. trophy going not what quite amazing equal an us, those to may to stadium be John. the it's it for to going

leisure to an and learned other So pushing the I've public to forward. And to better has Currently, spent operating this is we bringing fallen years, XXXXs. early we critical years I've customer that other the this able Allegiant in XX well I million there our so important the our all incremental The customers needed as awareness a our knock company XX X the we in XXXX, and size airline this for will of be what service over different our to for you of industry, in of in next and named the excess generate to Allegiant I'm And the but on is years. differentiate safe at any XXX continue operative driver I've revenues quality the way more with. word focus my least In over from grow time. profitability. out closing, as the is industry these Allegiant airline a person that carrier this to coming we've a catalyst differentiate of a the the done the the with X years, and And go success critical. from we ourselves heads forward, revenue heart. than and to of been John, years, airline competitors important our going in airline we success, that from reason. component a it we just positioned aircraft. beginning drive airline to The as Travel that believe to In just carriers itself, incremental industry-leading success. has our heard to been network brand In should been word continue XX traveling has will extremely our do so this double since not our

soon a on foremost on travel to and a first focused our experience, ground. the leisure are we be and company quality providing with airline, air customers an both operate in the we While

to will and continue certainly supply be D.C. the should as I moving and the not here concerned. premier will and Washington, we the working support be Now be team problem. it efforts our in the to the of work finalize coming local with board will Robles, we'll President with company, management towards pilots. on background I the shareholders in But I'm a as rather Andrew the solution the be be. I leaving but that's other the deal our to pilot of the to months to in one far as as efforts working

me history ballots And their I joined speech pleasure and in XX major, thank effort have this who to - young die. McArthurs Mr. in fitting never the most just said, members I. so backbone of soldiers the successful in away have sea Douglas as by over years. the clothe his he to and future given begin with become want our being General many the who can legs a watching of Nothing Congress have a of one And team choice Barrick their popular They I of old this great April years, all you. for been called find famous of years retirement. more knowledgeable the Thank upon past statement ago. fields company. stayed XX people in in has most for proudly, refrain Allegiant the Lastly, about

Sherry Wilson

over And with that, questions. for we'll Sherry? it turn

Operator

James. is Thank first you. from Our [Operator Instructions] Syth from question Savanthi Raymond

Savanthi Syth

the forward your that Hey, still Allegiant agree looking Maury. to Greg industry are contributions you I good to legend, here. congrats, - afternoon. and And contributions continued with

Maury Gallagher

Thanks.

Savanthi Syth

Maury. Thanks,

given up maybe what utilization assuming for from means capacity kind if growth here? I on on should Just grow this if and outlook, you XXXX fuel. the you do was here, capacity. much of I catch or in an XXXX front, adjustment of might, this demand of there's And catch XXXX? doesn't curious on the Or change up the side in some

Drew Wells

here. one. this start with Sure, I'll Drew

I year still today. looking around think say XX% full again that as growth XXX I 'XX, at that we're Brent crossed number. for

year an be still general, feel the in So half some back runaway in of there. I some potentially there the revision about I would expect if that this number maintains. good But

in 'XX, et about cetera, that back where that cetera. that think you think et stay that approach I of measured of moving I and getting Again, long-term we're roughly demand really terms toward assumes elevated, like But to run fuel doesn't XX%. back approach. measured of As away, we're type going

probably some come And it utilization of from sure. will

Savanthi Syth

issues Makes sense. And then just wonder are constraints and can in if capacity related I you talk about of it there, of - of kind Florida or partner even of much by impact external it operational to I your versus seeing issues internal issues what know Allegiant driven some and of you're some kind the of ATC kind Florida? supply is in - how the

Drew Wells

to probably at lot level dramatically. taking high there, diving a Sure. A in

of environment a If an about sort Florida, we this cuts half have for though there certainly bit on ATC come did what you of think our little just impact decision. summer, did in did and the our over flow

resulting will the I think feel run to to such environment for there should comfortable peak we hard any we company. constraint driven the first operate profitability. it's with going is, as up been either demand labor, always peak it's forward, we and it always the utilization that limit aircraft, going whether the period against fuel the as or has whatever basically in Off-peak we're periods come by demand whether be

a we're of about. talking both, bit little which kind that's frame of time So on depending

Savanthi Syth

sense. Thank makes That you.

Operator

is Linenberg next Deutsche from Our Bank. Mike question from

Mike Linenberg

remain this Maury, related because Boeing whether comfort. it's - but shareholders, you're missed, getting of that to guess of this excuse largest, of or if going good airplanes? be other aircraft think some knowing overall aircraft you XXXX the materials, the of XXX have is manufacturing it continue coming to labor, delayed issues or bottlenecks that in? a Hey, I Thanks. Onto MAX When respect here. you gives et of rethink are carriers those to the to with Is one cetera. that year us facing, that my economics be Yes, Savi's good will you starting more echoing afternoon. chain from get me, put I sort that a excuse would phenomenon? me, of deliveries. XX Greg coming XXXX, - about back We airplanes questions words, And the have supply on not to - sort largest the definitely legend raw of question hear

Greg Anderson

is half the split Mike, about and the today, it Boeing the Yeah, back Xs. it's between I where [indiscernible] to MAX we're Greg. to aircraft the over we don't planning expecting off we're it dash XXXX. the What turn XXXXs now take and of Why sit still in kick and thinking right

through we and maintenance look for that. it first. and of additional it that dash the to on evaluating kind members team it and get That would our terms be to easier we're to through leverage spec then in running, over you may give So take little a X. you getting Candidly, us to the the XXXXs BJ to But can up work some I on color. of want turn for

Unidentified Company Representative

we're from just first year scheduled say Mike, guess over a now. away I'd the that Yes, still delivery I

aren't we delays. anything hearing of Boeing So potential about out

that fact you mentioned airplanes that late We that hearing year. their coming I the pretty guess of would in the are point just chatter some same are to But these about current situation. in I

in have capacity didn't start planned of we with. so a to airplanes And lot XXXX on those

but that think here, pretty about at and we're we yes, So good feel all Andrew okay. I look

Drew Wells

winter capacity we Yes. to put 'XX. there time our think I out mean going we're 'XX just have to about

Mike Linenberg

$X I'm million are as each things coming you higher then anybody labor $XX the inflation, other where to pretty structure just going fuel, dealing at million is you the million I economics this view way this a that think fare profitability. we And right? we've $X And yet find to good of overall EBITDA million to airplane, curious And are $XX on that's Fed, like it when that the in Or lot seen the and of just that, year, the to into $X than X on including view back to like surge we and million in on million. significant the numbers its use the per think about the still just sort the what about expected, not go we're were think Good. looking something early and last with for closer but year, aircraft, and like $XX late you was airplane? order were of the Xs,

Greg Anderson

XX% like question. that. these a I on it's in a a and - efficient. fuel great basis is per an Mike, sorry, that and to to off, add on, They're great I'm kick on rise some others keep MAX on Why gallon something more Certainly, Greg. an aircraft it's for hour commentary basis, about sure It's ASMs it eye no, would I'm efficiency on fuel. block don't there the fuel gallon

say So third earn because think that that like-for-like combating aircraft, operating on cost. certainly costs. terms the support out in aircraft XX% to those higher would network I have going helpful of obviously fuel we will and of with on we have or improvement utilization, outperform the we us for Boeing What we is will a be a our that's

at areas help pressures can management in we that systems. or it should and certainly productivity see the the that with crew on through that pilots inflationary the had more combating on we back about mentioned, drive improve should on getting system - members, that But transformational to our side EBITDA aircraft talked We're the continue business. where in constantly a side help us us scale or to systems. other from there's mentioned. SAP from We'll house. with as that of looking John the new for productivity, you So doing track up the on that NapBlue, industry-leading per XXXX. through Scott that scheduling back and end We're

also you there, partnership, approved think our John right, ATI. there's have through - accretion - Viva You that have mentioned some where we assuming our gets

aircraft. also we said, if don't and of fare on that John And Maury revenue And know fire lot to there's I combating back a Drew, we're you have environment get EBITDA to and as us cost restore growing side. about at think the but want growing per to irons the will the looking our help in talk So that Mike and

Drew Wells

I change that My one that view is do a in higher a the demand that there a produce structural the think of quite for in 'XX demand of XXXX. probably structural while whether that view people may summer for I whether environment, forward travel, change will is future. you there be pinnacle fair, how looking saw level it's is the bit. on a loans the persistent foreseeable it's changed such experiencing view life it upward overall demand, little pressure think retrieve But a that will has the in the

I avenue well. So think do we'll recapture that as through some

Mike Linenberg

Great.

Maury Gallagher

we're is going buy airplanes. to these point, The Michael,

than so and fuel we benefits the balance going sheet to be come will higher the burn of for And are into not effect XXX-seat would all you costs just that ownership Airbus. and get much our a spend things But normal that. like

to of on just the that's offset lot side. exceptional they're help pressure very going airplanes. cost a And us So

in If haul. you way proper sense in the long manage can a for in ownership of the and be

Mike Linenberg

the lot and it think even when to like things more airplanes, and and don't have going it's of ownership things a the team, just tax those that Yes. bought you that are depreciation, I fully help in of appreciate, obviously, timing, been perfect Greg you your but... and Maury, people benefits could the

Maury Gallagher

business, particularly thing, a partner called this us business, really a candidly, Michael, you've you lot much government money sitting you tell got years money. we make all other it's that a of I'll paid Well, in if when lot helped in so downturns, any and one that the And federal balance we the you of sheet it that's get in that on money our back. made taxes over is,

Mike Linenberg

good. no No, very Yes.

make the few can of One claim. that that

Operator

from is question Oglenski Barclays. from Brandon next Our

Brandon Oglenski

And very afternoon. Maury, to long politic a run in good Hey, here.

to the in remarks. that the you issues speaking pilot to So guess, prepared can I talk you're you that. for thank guys,

at worse? end to that I able for Has of think that? long-term attrition you here? And levels Or solve gotten been year. solution what's you mentioned the the have the

Scott Sheldon

There November was December Yes, you see settled started want Scott. sort bad month, is a last of October. I May a down. This trickle it of to and say, to was year. pretty

come to I back-to-back we XX-plus start had I down that months. sort for a competitive with where something more their pent obviously, it quiet And seems some that hand, as going little unique you in think at sort term, competitive when guys look bit. of Omicron attrition contract But standard other have view is We was a these solidify pilot to foothold of critical on up you have January. as reflects something industry period contracts. was the our worst. keep out December, concepts carriers what there months of at more that will think to in Longer and getting pilot interesting a

with contracts Spirit has minimal Frontier right everyone a I exception the and of think now.

simple can target, to is system, if sidelines be to but reasonable have that's day rate. a going trips. know back. we a which single the offer, of sort and that be paid you're feel think the sort to just We moving we It's a it's of mousetrap So keep that economics to and going the we out

flight got of the the aspect what life much And there's more to quality place. traditional a desirable like, than with then foremost, to offer. get stuff partner first Just schools other carriers is a contract in have and like but and we

Maury Gallagher

me Let comment, also Brandon.

and time, these And not-too-distant needs things. my second some commitment make leader One going work. the can to IBT We're good you working contract, our along things closely in position be future. a it of with get we'll if later and here some move on revised, is a on some than side of answers to and other and thing hopefully, we've will in the jobs group clumsy language is working to got and in job typically be contracts but this of the have take the - will, sooner to rather our we ourselves see first post the

Brandon Oglenski

from response and is trajectory to for about the the guess, but both the term I specific just And this the Does pilots, here. company? as Greg, of appreciate inflation cost unit longer change you. I real you think not

Greg Anderson

of term, investing the some up course, And making grow, of it. longer comments are we, was we Brandon, come would kind as we of said But used in what thinking right where the Maury organization. now I echoing say I before. underneath term our

the come - John about getting we as the We're mentioned getting We and driving integrity and opening that's back will be business, in that going helpful. operational the of I it. so mentioned And now. mentioned, underneath out his remarks, but larger IROPs to and that's talked because goal as whether have going up side. the so productivity Productivity, utilization right on crew the And productivity, there, to that's certainly an I aircraft, infrastructure as the on help cost systems marketing. pilot grow

one stadium, as if but on I - items we mentioned will as those relatively the don't Maury in that those you with Scott his speaking, I ex also CASM Brandon, think ASM, put it's mention we and come didn't grow, fixed. investments, some had earlier, down the costs are another we because together Live Nation. will, Angel team

where some kind and you we're can working there. it and that that's with closely perspective. is of costs so together spending team Viva, on the another combating synergies And from front. combat We're Viva example working their where we time cost find

that, help. will think too, we So

cost are here, the on absolute the margin-focused lot sides But side. So a pressure two to there's all we mean, we're yes, a in talk about all, there's company. - I and [ph] an MASM equation. We

cost on So that structure, a variable we'll we keep outperform. so continue we can focus to to continue make fixed, low we'll sure high that, but

Brandon Oglenski

acronym. a love Thanks, new MASM. guys. I

Operator

Goldman Our next question Sachs. O’Brien Catherine is from from

Catherine O’Brien

Hey. Sean, working Good been you afternoon, years the else's moving on everyone role. and with It's congratulations, want into everyone. Maury. new a I to comments, over echo the pleasure

to about revenue want a little come and I So talk back bit.

peers second really some business some do. early you But have the recovery revenue like its for is of or the same of incredibly strong that that's to the Your many them of outlook don't in quarter. your international exposure longer-haul stages

But two? leisure supply destinations, you're competitive know extra Or to positive next pay So as of a just that where ones is initiatives in that's is overall just come it quarter? are pointed really some a there this trying next or domestic sense leisure I outstripping at passengers some from was over than maybe we - good higher third-party also seeing know fares? strength also supply strength Thanks. year quite I Or excuse most your less old-fashioned pent-up mile the me, the last non-fair willing outstrip get one. into few and where it's taking being questions developments demand to it quarter? just head is is

Maury Gallagher

Sure.

upward answer of simplest and we're the think influencing accomplishing that all just is the I yes. above what I putting to mean, certainly on structure are here.

first this it that. been we've pool for and We'll advantage. had positioned I travel we quarter. as first and than the some well that far take has U.S. are domestic The entire time. think see We're foremost, demand ever benefits in leisure larger of as seeing to in is being

Our average was XQ on slightly passenger business 'XX. internationally. the you I think expand than of higher But that bit was of result a to direct in it which per think little larger I We're with is alluded pool. load to a fare starting it factors, return just

elsewhere leisure industry the field little away will to is I leader to more of recover and here think from simply us. going start a more focus traveler kind open domestically shift around the trying that to for bit up

are leisure say, now. of things lost there. we're and right some But may I those really just strength things where core it over of is suffice to demand positioned have overall true, the So all but

Catherine O’Brien

That's one Thanks. for Greg. maybe then And great.

Or medium or capital the lower liquidity like table the dividend than for content really you're I net you fall. short term? MAX going on barred much the you're know Sunseeker Thanks so from bit about seeing your that do shareholder until later time. the is this think But your change position. strong order, debt So reinstating industry for the the be is you CapEx of over forward? they incremental calculus a just returns to it thinking little do are of deploying in was how

John Redmond

it's whether a Caty. but not not future actions Thank a look QX to looking year I to history, not we've when quarter a quarters right some may company to bad future as had that. or this Board of you capital proxy John. you, yet be, history company's conversation When what is This shareholders, the you're the start at think the been at on look has returning or at

we the look paying But back dividends and So of stock. best it. at to that's buying know, have a you probably history way as

I as future a for we that's good consider. said, that So activity would proxy

Catherine O’Brien

great. so John. That's much, Thanks

Operator

Our Stanley. Shanker is next Morgan question from Ravi from

Ravi Shanker

petition the done Maury, A here, granting everyone. picture. little a sign bigger to Thanks, questions status, for thanks so on legend bit for I couple everything of will you've us. you maybe

space point? How the more question? at price one fare it in this you LCC? whether Or may closer away seeing closer And are the is point one it's sensitive? for of if is ULCC you lower. the And or I of I that debates is destruction. think of think is the demand the think customer debates away a several the big has airline further kind further you would answer for itself been because point that do be again, because over of last point that And weeks the

Maury Gallagher

not fuel, destruct Greg environments environments. at the demand First cost which heard low in time economy we this the model in fuel, look a me the any bear I to whether enabled Allegiant it us is, question, recession, high team I've has we're the of say of in have would so we're with those, rapidly through growing all any you operated, perhaps. if seen history whether of be that those and successful maintain whatever of

we of supply our needed of and use so. demand it pull profitable expense to So make typically we're can and If we at needed. capacity can remain capacity order with benefit remains the getting lower fuel respond high, We'll fares back there. use that sure some get to to as purposely our in fair demand to the

would well I'm understanding the correctly... certainly the say future, into off, if I premise it's if not So farther

Drew Wells

ultimate the management Scott. demand We're company.

in and debt from have goes, January. demand We the September managed

anybody. than better that Scott? for geared we're So But

Scott Sheldon

that calls is the I've of XX% only what The as at I on say, base, airline regularly partners customers Yes. of fly, regional looking order. customer you or I our mentioned thing last well beat know airline obviously, when three Southwest this what carriers, our you in asked, would before, network add flight one their did do or

as So our customers same their customers. are the

Rapids, them actually upon those they that for to of the and those because we're markets carriers out in so older. point third I have cetera, these non-stop, remarks last pointed they demand customers I'd of own homes my ours. and that as some are somewhat are India, our make, second, fly significant aged consolidation that out growth are network they of their comment inelastic and Grand discretionary in Most as airfare, amount So The the and hubs. us left income. quite And legacy of much to in was of prepared XX time et areas us Cincinnati, many fly them taking -

maybe other than to and probably a being customer would or about. further I our would put So impacted base over you're say the even looks base just on forward different ULCC customer customer that talking effects for the lot out bases the by our vote

Maury Gallagher

on on the case not expand of Scott what little they cases, They're in network. there on of when in customer selection not the your non-competitive, a our when we're willing non-stop, on carrier was to are of a more in customer's you how indicative flights a bit than they get just is course, some have case, XX% rather choice. only get - And saying, Maybe spend there. experience to

Ravi Shanker

of new sense And in a pie a you trying you to just your general? on you. Allegiant Thank are on taking of the very stats many there. to web ULCCs higher for traffic. to guys I'm share color. how good That's have were the you related of new or Do those visits you follow-up here? maybe kind Thank growing details get are

Maury Gallagher

know ever Yes. first is And know it's first question. we the We About users. just our of time We little web were first of to ULCC. I in answer bit don't saw them. time if their both. the QX a first-time yes The from to visits think half

the one. that's So first

I think there is a combination.

carriers even they remain attractive gone still an the regularly I a I about or airfare, hypothesized think that price last at tell and have last up, as who given airfares us We made that an elevated comment customers network versus, Southwest or perspective. option say, our from I fly.

will, vigorously coming very they the So the given inflationary shopping time for done they've now. be in of just if and than or be But out well all could just price priced people, to may because first we the hypothesis more us the past, variety for you seeing pressures.

Ravi Shanker

you before for I Allegiant hosted And at Thank an forward an Great. to idea. that. Sunseeker just it look Analyst opens, Day

Maury Gallagher

Thank you...

Operator

is from question Research from Scott Wolfe next Our Group

Scott Group

Hey, thanks. Afternoon.

the a may just - So could be Is summer and wanted hypothesis? a And sort start of year ramp something that of demand you to of to half is do about just that that comment little why call moderate if a I retreat back capacity maybe from pinnacle had bit. talk the may a demand bit? seeing? that's you're right, on the the mid-XXs double low little in you though, to just if digits to want a

Maury Gallagher

So when X as summer well that that, about, pent-up think that combination get structural I talked the the of maybe I and traveled in to I X, this temporary perfect talk going about as from change years. that storm haven't more some Scott folks is of

I it's relatively think holidays that and kind strong. come will just were top, So of on cherry 'XX out because

holidays, Hilleriwater take folks As travel off, their I'll on which for come going and said, [ph] January airline I'm results. saw to every

coming quite levels I'm elevated to think be any summer I remain moderated strong, we're what from quite just pinnacle the looking 'XX. and So to means will maybe not slightly that in by suggesting XXXX back

wouldn't with run continued So also I down, I with or wouldn't something it growth that. but away sequential the taking like away run

Scott Group

allows what a changes lets to get growth? And growth low mid-XX% Okay. changes actually you double-digit to actually that you from that that? to a do capacity capacity What

Maury Gallagher

sure not something year. I'm midpoint. about the I'm we're for XX thinking full So

So mid-XXs I for half. you're the back guess implying

half and the frame, the October it's year of driven through will round time it to of certainly off-peak growth year. comp we a We'll be more as of well. have August, in have the kind for what the back for Some number some - September, nice

a be right, flying what's today. to to place do pilots pressure So get the This today, seeing to we're applied accomplish. will level needs our see there. little I about for materially change by And have know of right have purely aircraft. We'll spike and that profitability where of made us on fuel We we us believe another that to take downward as kind don't it in is something it it. for I the the that's

Scott Group

budget is real thing on you of raise here? updated confidence Okay. quick. final the for level sort give And then update and Can an the just just last Sunseeker that this

Maury Gallagher

Yes.

changing XXX I the to this final X. think challenges to when we when with always bought bought and cost is and escalation. pressures. comfort that We stop, to number. to could - chain out a think that you by things when regardless it additional tough supply industry an now. faced the number, at I may and we obviously but the as give Maybe look chain and be be of is pressures, of have in put project But us all There movement, out to I want we're opinion it's when daily are say stop will cost world slight think and of XX% around world some terms XXX% inflation I the we mean, been there caution some supply comes July on

So QX and number. that will conviction the we'll days, today. feel is real And about number still around hopefully, be over the that we be the call, by XX a And XXX, project. number incredible next of there the of rest out good course, buying

Scott Sheldon

it. out you go And is there's to AR and the there's which a together, sidebar, got coming what's a... a impressive building an As want see in word, to sunseekerresorts.com it's look,

Maury Gallagher

Footage…

Scott Sheldon

click... Well, the there's drone footage, you to - but button a there have

Maury Gallagher

Project updates.

Scott Sheldon

impressive. Project it's drilling at footage, the updates look and

Operator

And would you. call the closing back remarks. Thank Gallagher to over to Maury now turn like for I

Maury Gallagher

Thank much, days. week. good will a all you be you very XX and Have talking group this to in

Operator

call. concludes That disconnect.+ you gentlemen. and participating, for and ladies may you, thank you now And today's Thank

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