- Earnings call transcript Q3 2022

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2022 Allegiant Travel Company Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Sherry Wilson. Please go ahead.

Sherry Wilson

Chris. you, Thank Allegiant the third XXXX quarter Welcome Travel Call. Earnings to Company's

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

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

John Redmond

environment, the XXXX respective getting where very to continued to lot more were airline in up the $XXX line of QX Sherry, QX only a The not hard acceptable fare we capture just gap average trading carriers. with positioned severe total XX.X% was weather in The getting saw 'XX. afternoon, results we a rising continue other are to and fare domestic have should QX. base but fare percentage, teams and performance into revenue in between significant pandemic. of to In grow more with the everyone. good work QX exceed Thank before and picture down, assuming levels, customers of operations quarter similar 'XX average the and this solid, back and these over you to much, of average fare issues The levels our by total done uniquely the balance shy given have us quarter. effort no also

'XX average and other ULCCs, one-off such is X between four With carriers' as base us. special somewhere as extinguishment and $XX charge $X was the encouraging times all Resorts the Sunseeker of almost well. million million, of other adjusting higher on items the the the for the million than exception loss strong $X.X going into share After and quarter recognition bonus of employee and debt, of QX

XX% Turning rate floating. to interest fact outlook the is important point sheet. regarding XX% our we debt that outstanding to our balance make One are the and given fixed only

flying are on Florida at to currently XXX, of resumed post Hurricane X aircraft Ian, maturities very current all our Our refinanceable. is Equally primarily the flexible, or operational we X. airport our year is airports. debt. debt shutdown All and and shorter by struck Gorda only outstanding but which Punta X% prepayable secured all debt duration floating than In only this is regards maturities. rate are October less Ian, important,

Even expected. us allowing relocating did reopening. within Our faster fantastic volumes of better, to our returned aircraft to traffic pre and Ian, a post become job XX than teams normal operational days

assessment is the and building, damage, to story. as carriers intrusion. Sunseeker interruption. We validation this supply the never further Hurricane the the allowed is parts without Resorts to was amount determined Sunseeker and of believe Charlotte chains. from referred but some of hit state, worst initial or Southwest insured, million, to estimate $XX incredible, and the Ian, of storm including the The which is resort to except all falling impacted after water subject amaze any ceases fully to insurance which cranes damage resilience have change is of Florida Harbor damage survived storm the business unfinished further understanding by

days. the be resort estimated of have We to the XX opening delayed roughly

result, to September As May 'XX beginning acceptance or of date the pushed from X reservation XX a date we've 'XX. of opening

years. the throughout of would we members and decades out company upgrades years and some been all change never the and our everything nothing the to of and be IT allow complete system in and has transformational the X will This contemplated team achieve Given knew team will upgrades impossible more seamlessly integrate we to XXXX The by effort 'XX take us happening our partnership. advantage but for Certain our put short full others, in by time. exceptional. accomplish for Viva members company at Aerobus take do, touching foundational our same would

half X necessary including status Category While certainty, the Mexico approvals believe 'XX. be not first will in all in of a place in we

Viva frankly, pilots. negotiations partnership the upgrades, full extending recently Our ongoing in being made to able negotiations It's is offers reported their personally take approvals. in involved be that story. Partners that, reference progress than Maury conjunction longer basis. to on [ph] an the a we opportunities an arduous the the Because the takes weekly of made should. process I will compelling it with QX, and with those advantage is [ph] and In our it call, earnings of growth QX outstanding necessary

of the our that and We will value done of parties works model. for recognizes importance get maintaining the a deal our both contributions and business pilots that

year. months. towards team incredible throughout to our Scott turn couple their And We the members that, the I'll the over that you passion in Thank significant shown with not for have stamina progress you Sheldon. expect to quarter end and of next over it but only

Scott Sheldon

you, and John, everyone. afternoon, good Thank

I and want team from third to on results, throughout to our you and partners members first say all thank of management this Before the touch I quarter team network.

Your efforts throughout the the Southwest through devastating quarter third were in impacted and September that hurricane late particularly Florida tremendous.

comments of nearly for labor. to an excess I out Our basis. before movement volunteers the XXX environment operational in of ground maintenance outstanding XX% a well members flight quick Florida effort. touch A fleet, passengers enabled countless and and you is crew team family of off on our of hat My our on few

continue it during improvements quarter. labor clean performance It solely the We was on in that in to stability. operational and see relatively by dominated quarter wasn't our all a fronts third

We year performance, discussed 'XX. prior third we X As operate Year plan the and requires continue in XX and Florida and in substantial absence franchises end XX.X% seeing we fronts. over aircraft will are production in costs cautiously up the bases to optimistic, our needed drive quarter Utah, control of unplanned control but is based high departures calls, reductions nice and trends. X.X% traffic through our We to and we completion as Uncontrollable more to on growth and on-time on network month, remain see quarter over XXXX. of growth respectively. be we crew factors and dispatch and XX%, footprint was were of completion of some but it ops see crew on complex than in scheduled headwinds, our staffing factors bases The reliability such of programs individual we're with XX% our significant dispersed flow AXX just base hope controllable XXth both opening in the into ended as breadth traction stand-alone This operational improvements and Provo, October. in as moving on-time to nearly XXXX. performance our up from air XX% to

are be still a The upwards and ratified secure Moving the formal loop is efforts continues to Denver, on exclusive entered are for a contract pipeline we to closed This needs. is growth pathway matures. to happy ratify pilots our critical Number report Spartan Legion is in And future our be but customized airline. our We're excited annually focus as produce of to branded expected XXX One. College Altitude will to program of the new for pilot touch to a direct with joint a on pilots. Aeronautics program the announcement success come, I'd like agreement the pilots. program X of our pilots we partnership and into to to our long-term exclusive thing and last to is in be with Colorado. Details to prospective first

good the The environment the proposals the old by in As team, made Gallagher, has X progress JR to over And been IBT passed with we rate to himself, our for up volatile. and meet months. X consideration. person comprehensive continues headed incredibly since mentioned, January, man be Maury IBT continues last

and turn have not-too-distant coupled Our up domestic A And have the proposals ratified enhancements, of contract, all Boeing that of new other work since and future. with the air something in over report of to of from for into I'll rollout the rate the with in half beginning rules nicely directionally altitude-pathway retirement, CBAs us the year introduction quality it the touch guarantees, which scheduling, everything year. DeAngelo. program to our reflect newly back life Hope the on our been of sets that, rates, fleet of XXXX. carrier Scott ratified to

Scott DeAngelo

for Thanks, travel and Scott. segments booked. to QX leisure demand strong allegiant.com across web sustained saw both Allegiant passenger traffic

an of leisure addressing customers two approach Just buying to to direct-to-consumer discretionary important the stay our we're again as close two by negative face and with threatening and fares impact we low us at advantage distribution and way enabling economic nonstop engage seeing the the most ongoing communication in our of gives top spending, pandemic travelers, factors is for ensure consumer mind to saw Allegiant during in flights. them to us brand as that the factors

economic XX% ever affordable, XXXX life to new versus accessible we're attract nearly visitors up customers to website we Year-to-date, proposition nearly retain seeing more the XX% brand our total leisure are and During XXXX. remains living climate, the by first-time as and ones. by what our new existing than versus current up resonate visitation nonstop travel, positioned to

booking nearly Allegiant by their customers the versus first new addition, flight number XX% up is XXXX of levels. In

to versus than positive new leisure XXXX boomers of X discretionary past of levels. older time unprecedented We customers Allegiant age more. travel see from strong have the now and up baby the by more the years is retired Year-to-date, impact XX% to travel or number number the XX also the who continue to

are inflation, connecting high or with whether American fares, or grow As XX% have United, flying to Allegiant to we XX we've the leasing XX% leisure Also XX% flying reasons new addressable XXXX out family upcoming week, Also, a are with most were In relief customer concerns. said customer second travel travel About this into likely occasion time was growing or flights types season, continues work more considerations, they point, This flew likely to looking I the consider flying the inconvenience, And thrown leisure XX% or year. be forms downturns. the flights who during of on said date. well consider upcoming all customers remain seeking our crowded have this of of material the to with for noteworthy more of the sky those they flying category. visit Among asked flying American as segment prices, base often first year's weeks nearly avoiding XX% make travel these and vacation combined Allegiant with survey with as referenced audience to leisure travel last understanding and of to who recession customers March are flown as in our with search in home. to less their economic traditionally flying to more customers noted customers representing XX%, and XX% Allegiant same hubs. of are next They're most traditionally this than survey for the through getting travel months. year forward, among that economic web represent last next of with would such coming deeper in a during them Allegiant time as associated what slight they Bleisure customers gas XX% again Each particular, light consider we Delta, in most for often airport friends. to resilient of for above said at those this past, more between levels Allegiant and more who as likely time. these for United, past depending in to to leisure-only consider them nearly in year, from through of needs. risk, the a And and fears searches Allegiant economic customer believe virtually quarter, Southwest, customers Allegiant

MasterCard and helps has World average card and Always compensation of above the the best MasterCard post program's Rewards about customer the card and our total currently nearly flyer beyond program the however, spend Allegiant. XXX,XXX may to base new consecutive thanks of we're stream, our our revenue revenue. to for year ancillary months of booking Allegiant to frequent that linked to Allegiant, third-party air revenue X on its sign-ups, more our retaining is non-members. to The USA frequently on average compared our levels year, new Choice and by customers ancillary be also in its itinerary drives into top motivate our total in greatest notably, Having average total and seeing air and continues already of XX% account books loyalty program air also year for more spot setting to Always and the cardholder XXXX. these inaugural to the program. revenue, fourth air positive Most profit but this XX% growing these in active of customers record of not to members vast we're existence, more Always this in And spending our customers these has of customers only since terms ancillary in third two nation. World the about per than on program majority growth and making X returning it terms revenue value air air who attach claimed and hotel and rental Beyond Similarly, distinctive in with is fares in proposition, rate. ever, customers ancillary of with Allegiant alike as and who grown customers our such Allegiant's low and loyalty in choice. flights we engaging these are times uncertain as airline Always also to numbers I'll their third-party million Rewards spend unique closing, products, economic believe greater new about over the turn And award-winning of that, credit awarded a record Best value popular compelling group a Airline Drew. at our Allegiant by members card level and on retaining card and at nonstop brand TODAY especially In that attracting and of XXX% programs Readers to loyalty air remains XX%

Drew Wells

this you, afternoon. everyone, Thank joining thanks, Scott, us and for

XXXX. plus come Third quarter the to quarter in nicely third revenue the above a tracking of guidance was of original bit versus XX%

Perhaps XX.X%. at point in the distinct collaboration, best job excited operational line. ASM immense The weeks planning periods an third needs balancing was enterprise success, peak across operation we've quarter that for unitized still seen most improvements since pre-hurricane quarter generally The saw unit positive. done and demand hurricane importantly, amount an weeks the the on on were revenues of Similarly, of resulting scheduled The up with However, due capacity Ian, finish revenue to the the to marked million until growth third strong outperformance. front. growth approximately and the plus of quarter. growth, lost Hurricane TRASM challenged XXXX. positive we roughly the strong incredible the quarter rates we're were XX.XX lower to ensuing are There and and three the XX%. to of finish summer relatively X is plus service while of were was rest lost they start the due groups revenue about up The with the quarter set and And metrics. likely have XX% to through communication in we high the total to that $X.X X cash relative based the

table of growth experience, in was lift touched manifested since changing double believes strength, and cadence shift pleased the how in theorized travel September shift. the and growth Despite performed how is and the dynamics in a September periods, XX% hybrid business our model measures peak the as with long business, both trial. floor around but structural off significance relative the factors we're is on everyone well and elevated how travel the digits, TRASM and so that should also with the growth valued the was XXXX. was X.X summer hybrid the on Scott average of September year-over through If weekly points the first other ASM the that load headwind. highest revenue perform on to X-year and better the about emerging our rate, to travel peak this same growth ASM leisure We XX%, still basis. we'd were between of quarter still unit the expected a growth quarter a through have as life While

the itineraries approach where per to maximizing and balance unbundled total ensuring flight, generally to inventory the yields we pushing employ, allows to the piece capturing ancillary where approach the is With tried greatest. that demand revenue we that we are

As ancillary seen revenue The per September we October in both on success since record load Allegiant fourth products third top we of program. of balance, XX.X%, at end our quarter at in per approximately the the Always was MasterCard ancillary and by again, $XX And plus passenger. essentially driven should with second World decade. quarter the the passenger during monthly a accomplished quarter bundled line part with step-up part the hadn't passenger early and per of total this in factors last

this much end quarter's and new-to-us Airbus the and required aircraft by on Throughout X X in in gaining X previous see the rate will XXX-seat Allegiant new positive tails layout currently continued the adopt gap shortly years. service quarter, upside Extra hurdle XXXX, for to won't we this to more Allegiant the performance after returns Extra we the aircraft contribution year. month, on versus incremental While begin the initial both widen and

to versus ecstatic with to fourth little capacity the expect this for XX%, between a up more XX.X% make year-over We are Zooming to throughout flatter total days a point mild available sequential ASM TRASM headwinds while holiday XX.X% incremental up X in remain, out roughly X-year and Hurricane growth at to due bit, primary quarter service the due we the quarter revenue to And customers X% acceleration midpoint. third, bit scheduled fourth the two is timing. and quarters. and coming the implying be off-peak

despite quarter will it quarter any However, turn of Greg. TRASM fourth over highest with in these the And I'd for Allegiant history. to that, via to headwinds, the like

Greg Anderson

Drew, thank everyone course, today. you, of And special to a Team and joining us Allegiant. we thanks appreciate

We are of extremely to work proud you the amazing accomplish. continue

third and has of stability operational of first Controllable did not the much trending priorities higher our So XX.X% was of very the quarter been in results right disappoint. quarter and half one X.X% completion top the direction. for XXXX than

out ripped Ian disruption uncontrollable were through Florida. an as we Hurricane as However, the experienced quarter, we closing

First and foremost, our heartfelt by storm. thoughts are with those the impacted

XXX bases Sunseeker is Charlotte largest team announced to Sunseeker of Gorda surrounding area. Allegiant ways, for it members areas. including Southwest Cross the Resort. recovery the area. landfall week, Florida, the in and areas, is in Port to and earlier aircraft the our Punta Gorda this around one home rebuilding this Ian When with and live As Punta of Red devastated made and partnership many our surrounding and home the us, hit deepened Charlotte Port as we Over This our support in

the we for, and them respectively. to that to grateful And headwind for third accounted the recovery our to the the points fourth all damage continues. hurricane to We of our be many members to damage approximately have are report point are be limited estimate cover these margin quarters perspective, X in of and We X required operating a record safe resort, although team the the building. hitting primarily information, $XX regarding caused to and We And were quarters, but still us from subcontractor by of estimate proceeds insurance preliminary ample cranes insurance the GAAP an million, loss which preliminary of estimated will offset estimates million physical believe suggest subsequent have we damages. in as $XX accounting collected.

the fuel cost to our quarter exceed fuel third our So expectations. line exclude down the costs $XX by prior as for initial pace hurricane Drew operating initial our with income $X.XX guide. in a third was and was our revenue adjusted Ian, [op] if X% we $XX.X was X.X% prior quarter explained, from aided this quarter margin. the million, costs, million, And gallon Absolute in on were of and per for reduction generally a quarter to

hours charge, period grant XX.X% increase in on X growth. and the during aircraft that in utilization. unitized productivity, points X.X this period you driven X points quarter. excluding day Hurricane XXXX. X.X Ian of largely it X Aircraft and in XXXX during special of $XX that compare was recognition block up at hours points was same Our And hours per of million inflation And costs, by fuel, utilization to came day by labor the XX.X% the same per measured as ASM [$X.XXXX], versus third

so quarter. costs Turning And in a to fourth [ph] the utilization reduced have aircraft our per day per by unit estimate increase $X.XXX hour X would we

should lower for and in three. X, today of quarter pressures XX.X%, this increase. be -- this XX% X an issued year provider improvement result meaningful This X, points X%, of fuel. of operating the utilization follows: roughly assumes points; and drive roughly for another points; and per guidance adjusted service a should is summarized X, margin lower a labor airports over to aircraft based $X.XX system inflationary suggests as we increase our labor productivity Our is fourth X on that's X average at up expect And sequentially, gallon an CASM-X growth of quarter, and of the ASM

budget our share only margins, important thoughts. supply of as not $XX towards stability, continue around XXXX specifics price spend sight levels, provide plans, for priority million but is 'XX high-level remains look such, is we our line improve constraints. As which financial there improving more And to our our we is, couple all fuel and and of we have Overall, team OEM but XXXX, to pilot us some underscored prepared we'll uncertainty on chain by are is is which and get on. of helping This total XXXX. in will IROPs, guests, paramount results. not than A steps members in first, our operational year-to-date also delays which

reducing are addition, that absences unplanned seeing In we number stability by crew reliability helped the improved with naturally of has and sick calls.

Second, securing labor contracts.

active and We our negotiations contract groups. are in with pilot flight attendant

terrific communication, and We priority. improving upgrading top members, deserve systems as they contract have getting a crew new our

restoring deals plans teams new ability internal in headwind take these to of While the continue to nicely optimize should achieving of them order. being ready our absolute a increase expect and we our speaking have aircraft And productivity. to to aircraft, pace staffing to aircraft levels MAX our of momentum costs, with XXX our delivery

AXXX as a they bring advantage earnings MAX to the bring will COs. believe we We particularly aircraft, to are XX% our on compared excited

no from is months. This with is the way in pushed reaffirm ASM we want XXXX plan timing around With one delivery suggests only October three the weak. demand We expect XXXX. now growth year expected to a next few our aircraft the to that XX%. not first of backdrop, However, of current Boeing to actually until the of be right

we strong very In see to demand. continue fact,

rates capital is interest the and have raising unprecedented some Fed which of X% target inflation at achieving of is as stack. derisked speed, We close will, on leads keep consumer debt far however, off into greatly our still recent that transactions continue goal the to its a eye

and loan with secured year bond to During be third rate million our the paid X extending we carefully new pre-existing $XXX years. timed expected rising at term X the This environment. times $XXX X was rate interest given on That to And offering. than was fixed from market less bond quarter, a priced loan out million the oversubscribed X.XX%. the maturity the to is offering of high the by be

the didn't with we delivery PDP require $XX the billion from commitments for and in secured debt and 'XX prior managing stand-alone with is on more 'XX, in financing, which which long-term also Lake of on revolving aircraft. hand our Fund cash in loan financing with than we Also secured our This the flexibility of pandemic. part aircraft rate the as undrawn month, we as any liquidity, Total and really the revolvers. with billion, million expect during of $X that's quarter, financing facility inclusive of our final and balance of $X million to a total Castle as at environment. to addition, tremendous with to we PDP transaction, provide pleased Boeing. us II roughly $XXX And million This our at credit commitments billion to a hand XXXX finance of interest year such, will while sheet those find take X.XX%. drew in net leases is Xx were In end Barclays. tranche We Sunseeker, upcoming liquidity fixed debt. navigating for we end interest $XXX this Last rate $X.X implies expected inclusive

in plan to have additional our of flexibility. our network meet to aircraft of delays tremendous extended order are adjust the MAX used And delivery XXX event in requirements. with retirements book, fleet We in could of AXXX fortunate timing and/or a the our take we market

for Our at change [Operator service place question XXX last In Syth quarter, aircraft and into of year additional Savanthi in Instructions] end XXXX. half in service. first options comes we valuable And take delivery and XXX This we James. as first up XX MAX And the questions. aircraft between from storage means aircraft for Thank to will mentioned XXXX to XXXX addition, in with you. of them X with the hold this decided line your we that, we'll have Raymond XXXX.

open. is line Your

Savanthi Syth

just train are -- an could kind to will if of of seeing you ahead Hey, of hire that you levels by XXXX, offset you're attrition think I'm kind and having the much if thanks. and crew of And your color into improvement improving? on provide XXXX, just fleet? curious kind of about into kind of a Good afternoon, kind little be you everyone. coming MAX as how expecting the levels of

Scott Sheldon

'XX appreciate Savi, saw annual I definitely is throughout on question. months attrition this are we specifically certain basis. where Sheldon. Yes, an the reached there first XX% officer

throughout at put through about If XXX we're And in about list seniority you net the XX%. We've at you than of complement folks. year. increase, school, the pilots system, schoolhouse up look the folks running XXX if the it's more the this look

order Boeing get to of lot sort sort obviously our the of with the a that's fleet. of done. introduction the got far deal a the so thrash That pilot are underwater. in more of end we importantly, day, being launch a At of the So And to program. for ready said, of rates get

directionally, I and plowing the where it quickly we through just know be can. needs as as we're contract we think to

to more than So this I have of each want classes looking offset we're of think sort how should attrition. sort any we at aspirationally, which of 'XX. But XX that's month, modeling into

Greg Anderson

top CASM-X. at question where roughly there cost aircraft, And would looking On Savi, I it's of CASM-X XXXX, incorporating be hit we from where 'XX, we'd expect the around we're that $X.XX the about today, headwinds $X.XX the of think MAX Greg. your be to headwind.

Savanthi Syth

the If little there provide all That's hasn't color. the really what if seal super Wondering might the a the be. fleet helpful. could I on trend that efficiency color might, like seems more up. you bit of showing side, fuel it Thanks efficiency and just for been Airbus

Greg Anderson

Sure, Savi, it's Greg.

that. take me Let

fuel It be I on the by target -- the fleet like so think roughly AXXX XX also ASMs efficiency the by gallon. to season, per is quarter. season impacted overall, we

generally least will terms quarter per gallon. the the The in so or ASMs hottest that third be lowest of is quarter efficient and

think types, year step a up XXXXs. end the the XXXX. I ASMs probably we're of going -- those expect aircraft, would per I think and the - fleet, the Boeing between is where X little So XX year mixed the And or we then to that, bit those once gallon. mix roughly I next the in in are you'll take X

you're think gallon. per I XXX about ASMs

per on, gallon. ASMs So the XXXX, above to XX get to per we gallon in ASMs in and see I'd have like more closer where XX going then XXXX

Savanthi Syth

Thank you. it. Got

Operator

you. Thank

line Our from comes Pfennigwerth next question ISI. of Duane at the Evercore

Your line is open.

Duane Pfennigwerth

for you the thank time. Hey,

XQ And some this of your similar going your have to that, some until chugging your are to to fundamental to the we're the implies what for still peaks? I'd confidence better? bonuses, historically But haven't all the like confidence improvement charge, unusual sequential ex And Allegiant. What yet. is guys up guidance loss lost in think at money, XQ? see you would lot be really along hurricane like ability levels comments in margins that a debt increasing of the honestly, which more to we charge. special in love flex Is in about time your it drivers point of And had here you is if looks biggest getting the XQ. from the margins So you dissect you reasons as on you

Greg Anderson

the think it sequential Duane, here others thanks for the the the is fourth kick But third the question. don't improvement quarter than It's in just of jump seasonally. I sure want Why terms to quarter Greg. I stronger margins, and in in. off I'm will

see help we and revenue. strength drive that So should should

operational we see is that well should tailwinds the as reliability. of Some

Third quarter, even did we nice a quarter. much but it's fourth trending there, the job into better

the Hurricane out Drew the Some headwinds, in fourth Ian. think, of quarter of still pointed this lingering I be will the

operating we well. We have some quarters opening of get have up that closer as to the trending as the Sunseeker been costs over

more the take periods. and I'd is increase about those so make on you for and in there. with periods, we've you in utilization improvement, year, I that's a mentioned I most I we think think where Candidly, opportunity though, think absences think seen how also Scott operational we crew Which utilization reduction peak you give you labor, about know sick an capped our to and what years, that's know, like aircraft a peak get if crew time. of optimizing that focus of Duane, you us say, our this you can many that reliability and that unplanned followed as stability, but we've we where, -- money.

our I all March make earnings the in of those in periods. peak in summer, think of XX% we

capped, operational us it So pause And on we time, of we has there. with stability, I in and been step, produce to the mentioned, as help, then see difficult line of getting those anything layer we there's that the and to results, Duane? kind Did sight but back it sense having that continue appropriate that's more utilization time. where type anybody first at up we'll mean right torque right I'll Did of there makes can where and we if anything? else. for miss

Duane Pfennigwerth

on I expect the maintenance-related year Sunseeker you those the just us, remaining you think appreciate total you'd disclosure can remind and that And year? into on Can have. we CapEx thoughts. I CapEx next from aircraft next spend CapEx, back just then

Greg Anderson

Greg. a -- in it's is only caveat you payments PDP of part understand going the uncertainty that the with what great around as I'll this big CapEx it a all But And trying deliveries, given timing between know, of It's for to be -- point it's it's Duane, question. 'XX. order. MAX fluid entire not and is to our at just

sit at say I'll a today, floor we least is should I million. year what $XXX be So next where think as CapEx

I to So end for year we'll want the this million at airline. $XXX say

will So But because add? he's we want million. to CapEx, here, BJ, for least want anything year, sure on BJ some of BJ done at put job the financing But that to spot it. add of airline the support you I $XXX but have to I color nice maybe, a the next think be to appropriate say what making really ask

Unidentified Company Representative

early whether are, things mentioned, PET in actual airplanes, of there, couple AXXX the in in impact Greg or CapEx XXXX moving And end being Boeing schedule deliveries movement just MAX we a the MAX parts Duane, XX deliveries Maybe of to used finally, deliveries may that Xs. or 'XX. the then bridge those gap. up those or that acquisitions need the And first will just to like other in there's then course, Xs not

Duane Pfennigwerth

very you Thank much. Okay.

Unidentified Company Representative

Thanks, Duane.

Operator

Thank you.

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

open. Your line now is

Michael Linenberg

then want the should out on we threw afternoon, a And Is So X% like you employee for earlier that called I cost sort that go ? as a thinking the it you of out I from adjusted be X last also going X know fourth to know it like special recognition to the through? the X% everyone. margin back quarter include X-point operating the item I that the Or don't Good because you you points just quarters. margin a Greg, margin, piece, call. more are as ex-Ian Is Ian? to incorporating feature in rolling CASM. that in

color? get trying Any that just we're to So to X%.

Greg Anderson

I'd Hurricane exclude of include fourth adjusted of you one tell the the that So in second, it impact from quarter, Ian. margin recognition the bonus. will recognition for why or the Michael, X% bulk op I'll say And that here would but

we years makes team save have the had bonus Hurricane would started this members. reason you'd that is for to sharing bonus we've And achieve for the year if Ian, a a be a sense. XX%, we to X% it before So recognition - many, policy profit accruing excluded margin the operating many our

came did going sure profit to we Given from the irrespective approved to our and make or lack members, labor wanted they're would next pull for of What is of year, in team thereof. say bonuses right where going out. we this them we're we of I unique just all beyond, had that ready and and our thing, environment and above across that

on to would when in brand. It's to CASM-X. that expect and next profits, be again providing to going exclude a not to we're be profitability, recognition not back So going to we based year earnings peg and we it

Michael Linenberg

on Okay, Drew quick that fourth helps. quarter. to one just a then capacity And

XX%. mentioned You

indicating I that. still schedules think than bit are higher a the

to that the So be that through next assume month filing so. we're we or we I cuts guess schedules additional going some additional should -- over should see Is accurate?

Drew Wells

Things will reflected the they in. were we around because sources public that file so be happened changes close need that to essentially never the Ian think in just I made. have been

So we there. took an impact

So I we this do were - thought to last and we're weekend. going scheduled think I

think will But elevated forums is to remain or slightly I cancels filing with coming associated public a will closing soon. those due new just the deal EM. remain

Michael Linenberg

enough. Fair

everyone answering Thanks, thanks. for my question. Okay,

Operator

Thank you.

Our from Scott at next Research. Wolfe of question line Group the comes

line now Your is open.

Scott Group

Good thanks. Hey, afternoon.

you if CASM thoughts So any next on to want I have see year.

you the get are ASMs about if it like year? directional maybe new a it be can you are color? CASM-X pilot next employee recognition, up you on down about expensing Do year-over-year basis? deal. a sounds So How Any think be maybe XX%, you'll thinking

Greg Anderson

just budgeting Scott, the it's Greg. for directionally, XXXX. we're process of in still Maybe

we on to want here and expect I be be. So not CASM-X careful get where to specific too

I say half back 'XX generally well. to we've, be you XX% that that You ASM would growth of mentioned expect that number that mentioned course, is -- loaded. should as of

the to are, I growth or of So the flat. XXXX a some be is be I aircraft. that IROPs limited asked first the least earlier tailwinds unit ASM Boeing XXXX the on helpful. And be Boeing, some being to in super When half going cost the at down, generally tailwind or versus will incorporating think say big right? should of headwinds then Savi the

year to the ago, be the are But of this going candidly, as and So at of larger make up get of pilots mean, be. I pilots that have. mentioned, a have in we spring kind that's the XX% to exception infrastructure we're headwind the kind loosen up kind we'd you in Scott than of good support go. The $X.XX FTEs thing and we coming in growth. this ability larger. as and be up ready Sheldon XXXX, and And to we're we infrastructure put about place. utilization to the coiled CASM-X is thought with time, to pipeline

forecast deal contingent And a in even XXXX. the but of some back half until then you begin building give We're so say I that's numbers labor likely publicly being internal being in here that on will. at to doesn't just happening talked or assume And that for negotiate foundation place. But to I if that again, would what pilot I to is everything want about nice expect to we don't have our a in growth, I And point, could wouldn't I going done. is forecast. then for And expecting. think cost. done be see we're that the deal you directionally But that's

Scott Group

let but get get year to, guess, you margin But to operating double-digit margin, do you is to me back I tough consistently just the to like think And there? double-digit so How guys know what next I guiding to which if it we margin know getting improvement is feels path differently. have? margin, you're to and used

Greg Anderson

great question. a it's Yes,

it off incremental I'd of rid say $XX XXXX. in of here -- It's me versus op to business, Let got again. I stability, And this million getting costs come year the saying IROP. out keep kick it, IROP total and

ops, can one. that's could crew most time periods, us stable gives so That more more is for So we that fly we the stabilizing fly. peak profitable stability to -- in mentioned, up is as ops, peak us we those which

growth. getting X. deals utilization with we're with bringing The That's Labor helps aircraft in. two. that's which Aircraft. done, So

aircraft XXXX, are potential $X The going per XXX, If about of that million talked of has an be Extra, million that's even to per EBITDA we Allegiant earnings you we or shell. -- we of think per EBITDA copy. the XXX $X XXX-seat --

of can the we mentioned, discipline. And to unnecessary So I Scott I'll systems advantage commercial if the that mean going austerity as Navitaire through or ahead. Viva. want like I I have any be the there budget Like we're well. Allegiant we economic opportunities pause don't on of but key we this some maybe initiatives XX% theme and aircraft know think Drew and happening hit out or mention well. that such or drive think bringing else really higher, potential that is those support add? with earnings in big to the to cutting of drive sure along that Cost year margins want going Boeing anybody make and loyalty the that's not is can these the But everything as we here costs, to on -- we're side house as a to at as

Drew Wells

you think bit. a quite covered I

Greg Anderson

But I much too think apologize. took of think I so where and to hit. covered kind time probably everybody, I for yes, wanted we that I answered

Scott Group

Thank you, time. guys. Appreciate the

Operator

Thank you.

Andrew America. of line the Bank of from Our comes next question Didora from

open. now is line Your

Andrew Didora

of everyone. in Good were highlighted all government the September. at afternoon, I restrictions release, or on the of removal John buyback. Obviously, suspension lifted you know Greg, the the existing end the the

consider have new buying how about stock allocation these now deal? would pilot you been before, Just today there. restrictions curious capital back thoughts And a of think Just do that curious getting you lifted. your say,

John Redmond

regard. in timing predict to try to that going not We're

I do the to make is to think in capital back place strategies that, in as up Act. to able as we the wanted due restriction why that opened we which those they we our past, that the allocation had are [Technical Difficulty] the put sure lifted we Board soon Cares

restriction, now longer if have no that So you we will.

going have to do restrictions those past predict to not forward, what try to we gone. the do have going the trying flexibility But do have So nice we historically done it timing. to in We're that to is here.

Andrew Didora

pretty few for years. Drew. DeAngelo your over revenues some maybe have ULCC peers I And non-ticket Understood. aggressive Scott or of for Look, lot goals think their the next a

Thanks. curious Just and what the think about do do you your trade-off is between And ticket you how think opportunity non-ticket? for non-ticket?

Drew Wells

I'll kick here. Drew off it here,

of over next not will that's terms approach the internally the we some in last number incremental about for Allegiant, think Navitaire talked quite the very that to of we flexibility at hinted a the or how on firm plausible being provide a target. There's unlock so Greg in more in initiatives, $XX X we a years. I believe lot continue ancillary us ancillary the an that'll I and that that program. of really had have history capabilities side call,

our by can capable, more been there. own been think bags, unlock seats, handcuffed dynamic, lot we've and but particularly around I we've a in like areas other really fairly doing

Extra bandwidth. per So seat which can to the was copy the line. drive of mentioned, return a some mentioned, if the take pretty to million up Greg lot that. we to Allegiant AXXXs EBITDA will 'XX $X can on bullish also

have -- and lot kick third-party Beyond that, it develop. a the I'll guys and lot over of he a of we some co-branded that hear Scott, elements stuff you can to

Scott Sheldon

was the for in what the Maury is room, that, Yes. question. to That's would add if would exactly the selling point, I aircraft. and it thanks he outside put as next The

don't being John able where spoke traditionally are hotel strong. been Las even really with of the future. the leading OTAs, Vegas, transformation adding have, if rental we'll the to parity at -- beyond have we've part cars hotels something there we to add of just near capacity the in it's that streamline and inventory buying includes and So is about also IT be currently but challenges, which But to

sales, what from us helps to So says, rental hotel revenue perspective. outpace additional that a car addition in think and I Drew

Greg Anderson

in not opportunity just well. maybe just idea the think but as base focus on is I the to closing, fare ancillary as

as on fare. larger So you if everyone well. but But can we focus as on different to there, focus total deploy on base a not get a strictly it's ancillary getting will, a a strategy, average

Andrew Didora

Thanks, everyone.

Operator

Thank you.

line the next of Our comes of Global. question Daniel McKenzie from Seaport

line open. now Your is

Daniel McKenzie

Hey. couple of questions A guys. here. Thanks,

there's question economic outlook? next some said you're on perspective elaborate at initially be no I upfront for up on the can a Just recession. wondering now I ask CASM-X little real guess this just least thinking kind contemplate? how And in a for to guess, on probably because And just I'm point if is you Bloomberg of X. bit opens, then just scenario XXX% that I has there's year, following that next offsetting the revenue maybe report Or on that September provide earlier cost think Sunseeker I cost more year, until we including What does you margins an should broadly, of that. reason can more expanding on if going that.

assuming market XX%. I is think the

be on elaborate So bit great. more just can that if a topics, you little would those

Greg Anderson

we'll On off. it separately. kick I Sunseeker both. don't to see I'll next it all we're them segment that try reports, comment, out, break Why hit you'll Greg. going year, It's so so your and

stickier Scott little think leisure it sticky, second VFR I mentioned DeAngelo, I from if a home, more think back comments, that's his that think customer thinking peel a get terms that to in which year, in bit a And recession, base. a leisure next and stickier point, historically you which it focus just customer, on been So begin -- as in I in then if think we've about X, of even you 'XX. to got your opening planning customers, kind the about -- we of next year XX% perspective. that of on probably right, it's we're we're generally to face

measure going next up to So We're year. XX% growth.

in that and are be planning the markets. team Drew think to on I existing

I that the So if industry, unique some than it's facts and But most XXXX consumer more think have to just type not going so overall, as And can that the there's well and better we circumstances. of to direct be demand, distribution. if than even where we then and and with growth. a we're recession outpacing headwinds flexible think model, capacity is derisking the come not all to GDP -- network, And I we we're constrained sit we the to our somewhat continue today, given our mean, the other I stimulate even mean positioned fine. where if better carriers were

John Redmond

the the up just all The now, elaborate opening And a piece remaining Sunseeker we'll part bit little maybe see you'll next Dan, will of primarily and you'll blow preopening, in to right? see of the most all skew to we're about. is of 'XX. that QX leading next asked year, of incurring you resort. the expense year So out that on

know of in So in quarters, share the order as QX 'XX. of then skew is it we'll you give is course, magnitude all We'll you into of thoughts the it, we when and that number you break finish number quarter. X the with is, will most and first And have what for we'll that what to some let 'XX. out but what

expect that The to delay. due But Preopening of well. other as that just that, thing, will we impact is some larger insurance having course, delayed of just to opening. through the recover said the would is that

we'll you lot on would, you QX. a that will, more with guidance share So you after if

Daniel McKenzie

Scott your at DeAngelo. with more. XX% what reference feeding revenue sorry, -- (inaudible) one website follow Second management question here I systems the was And the go should versus is revenue for, 'XX. into is To system the extent to I'm going this just I Total informing data or least ahead, management to was visitation guess, up work? up how

of XXXX to reference kind second the indicator my referenced X-part part reflect really picture? the You apologies. this versus the and that the pent-up it best XXXX up of finish, I of Well, question, XX% So structural [indiscernible] demand Or about think going is we the change just the more as ask, of our in kind a was in revenue question. earlier and go demand? so to script, ahead a does

Scott DeAngelo

bet. You

I'm I last share We the take XXXX our were first, but web up consistent, part versus the year. it's structural to to versus think it latter. by demand. second commented XX% just we'll So users it's and total happy keep

So steam. you actually see it gaining

management mentioned. So of as then on And especially not revenue off that teams question, extremely and first able as were. peaking had and planning work some suggests the structural, able about to to you it peak on we marketing do grab close, network might grab the think as being what peaks the be Drew

And to sure from coming fly the those -- places. when to and lockstep with do users those wanting we're right revenue so to are the it's users and make network market we where where and planning wise, driving we them right time in at and something from drive we

Drew Wells

RM driving model, It's a that's just here. to recommendations actual art significant still on It just into accordingly. - way is and science. on this probably the falls this changes automated Maybe analysts not the integrated more the but at in slightly Drew or model. interpret expand react than point. It's

Daniel McKenzie

Yeah, understood.

the Thanks time, Okay. for guys.

Drew Wells

Dan. Thanks,

Operator

you. Thank

the Cunningham from of Conor comes Our next Melius question from Research. line

open. Your now line is

Conor Cunningham

Hey, everyone. Thank you.

lot that right seems you're capacity terms you that growth, like a your a problem. Just XX% sizing infrastructure, ATC of resources in but now, have it being on issues aviation still of the major to there's

navigating of year. your on curious next those own lot issues a of control you Just outside how plan on

Greg Anderson

Sure.

certainly ATC after look really a of it didn't a driven the through some first call AXX. outside, major baseline, we like the at a as we material I and of issues. anything bit As I being March. mentioned, through year feel cancels It the quarter Not struggled wouldn't 'XX that. the by impact using AXX little lot as has summer year, next caused some really probably

this So that. schedule our plans restructuring at or network point, not we're our around

not other and get plan on issues. based story infrastructure similar that to a There's on this XXXX would to. think I changes TSA pointed in that referring infrastructure plan on at juncture, material you're to. our probably But one-offs I

Conor Cunningham

the just then flexibility. And dynamics changing like from Okay. the

monthly a And you're curious I bit barely now day airlines or when that standpoint. forward at you you're adjustments if Tuesdays You other on the of from how Saturdays. talked weeks looking about fair making be of a trend going any But a in trend a about have some changing may talked little I'm and how seeing think press it? bit. that release about of fly you. guys, as the like like to on your changing result and just model you Thank

Greg Anderson

the bit at all. on shift same And ton a X a we the would behind changes week, we compressed markets markets Wednesdays, where that. you times bit are on we the bit had running I Where more average. our certainly philosophy the don't three head little have necessarily or that a larger it to a primarily We've think don't more think the I come even lagging little constraints given schedules and some hit advantage. of that love results in restore week seen and of would toward that been Wednesdays to per believe. that to up is seeing, Tuesday week. a with exposure be better we've or that No, be the we'd We have and place, nail times are without two take doing that we beyond to have able still I

our other the So seeing this that up needs opinion. other it's what day. something to approach just in and mentioning, not part worth the And my I you're indicating, but came change think

a our also or Sunday of destination, you weekend more experiencing patterns midweek to than right? instead implies peak are your of as those As covering heavy to pattern Monday, booked, travel. you're just the that So destination the kind out type kind booking, of Thursday about Friday going that of just of into coming think factors XX% well exceeding load the as

facilitate So the book adjust those order of the we'll load shift to in how see dynamic dynamic and you levels. that's need at kind to factors more of that

Conor Cunningham

Thank Okay. you.

Operator

Thank you.

Christopher Group. Stathoulopoulos from International from comes question next Our Susquehanna

Christopher Stathoulopoulos

Thank everyone. you. Good afternoon,

XX% the So moving much and pieces year, is some say, what XX%, give growth next there, could the but expecting let's departures, book? meaning Y? you're your risk-adjusted ex-aircraft, And on Thank gauge you view the the to how on from a order of, you're stage. for you're on John, then us color ASM on yoiu. minimum contracted So receive to come expecting

John Redmond

talk We're the Well, some the day, I'll with let Greg place have Boeing. end or over in agreement you about BJ we kind phone. going of those of But of - details. an if the renegotiate, will, the more to not at

just to we're conversation really there's see beyond add through As But we for we a right in what you're about? what into But that and expect. go that other with that the deliveries to mentioned XX we come makes going Greg into sense will talking more nothing now, but about tuned stay Boeing, information react Allegiant, and BJ way detail happens.

Greg Anderson

Sure, Chris.

the what ASM of And We're I on maybe then comes where gauged lag we'll think planning point deliveries, John's next going I XX% what they're We're see back to We'll on be get in. year. growth, on eager we've we're the but always slightly, That's the Boeing but and expecting. these with out it. aircraft two, a back next on to to year. get that that. growth check going half point, would the are because or to say me departures here, fact Drew may

up We that. and set towards have a whole working team

with earnings those -- they're advantage aircraft. mentioned, I XX% As with that

depreciation, 'XX. bonus of our it's and taxes to XXX% steps It and in decision-making in which cash part very XX% XX% offsetting us in terms have candidly. XXXX. That's down We for of helpful in 'XX then

that and if depending are a want we're I time flexible fuel being particularly we're changers, we these for know, don't you if in environment aircraft there's us. when I on to missed But to add? comes. in. So game high They planning, preparing But else BJ, anything, get want anything

Unidentified Company Representative

your contractual question to and deliveries just Yes. on deliveries. expected

the in from signing aircraft the be during that lot X it sure XXXX, going those, when help with delivered whole now agreed X originally to point, To to received to So we're be into were deliver. aircraft them we've that us fell to take airplane 'XX notice on to for aircraft reduce we're on working and X And are that. counting Greg's we reasons with contracted want they're will that had some mutually Boeing That a out to onboarding to shortly determine we're XXXX. XXXX. airplanes after only of type. not will things then with was still We we but XX operational the fit of agreement. There made

on So we'll update the that next have maybe to call.

Christopher Stathoulopoulos

CASM-X for response carrying do suggested on Okay. XQ, believe XXXX? XX I Scott's plus your be then also, that the to outlined, of which anticipating these were like much is sounds aircraft. expected points over second question CASM-X And half, you the that just of how into relief And capacity the see X you you in breakout to in a Greg, function CASM-X some you where

you So that scenario? that is And that then case? a in Thank B, deal is including the labor

Greg Anderson

is take in CASM-X. I is a utilization I remarks, aircraft, getting done utilization In $X.XX increase a per every what labor I like my path deal. That to But us say would is optimize of think which hour Chris, mentioned utilization per or meaningful. including not of day a is worth prepared I really gives aircraft labor per deal up think

meaningful So that for us be a there. tailwind a could

versus what's I of early kind year. think -- question XQ your about next to next over rolling year into costs

getting but in seasonal that year, costs We're this accrual cost comes so of headwind. but maybe our add the unit a Linenberg costs it there depending to will was year, just when One things at, next back we'd that ASMs. But are I mentioned. on be also that excluding some as -- of in that it to be going bonus headwind is our think the unit

generally we're quarter, have to going fourth First quarter. would we ASMs more the than in

be to to I into that to pause much have going mean guiding mean, or the again, detail think just careful we're there stop too. through But like too that I and for yes, for because be fair to working we'd want into already -- I'm as I and still account I want Because, take So I getting budget, process. well. not to

Christopher Stathoulopoulos

Okay.

Thank integration $X.XX? you the was Just or did $X.X you Boeing, that from say

Greg Anderson

in of And XX [ph] $X.XX $X.XX that's at then a by of mature CASM-X. CASM-X. added

Christopher Stathoulopoulos

you. Thank Okay.

Operator

John Redmond, turn for Thank to you. now like closing it back I would remarks. CEO, to

John Redmond

the Well, appreciate questions. we

Allegiant Travel (ALGT) 3 Nov 222022 Q3 Earnings call transcript