Earnings call transcript Q4 2022

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Operator

Good day and thank you for standing by. Welcome to the Full Year and Fourth Quarter 2022 Allegiant Travel Company Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Wilson. conference like speaker to now Sherry today, would hand over the your I ahead. go Please

Sherry Wilson

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

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

could and start please will commentary fully and then to the We our our comments these our call the materially and cause concerning the performance to We question differ statements Company's forward-looking of future assumptions and open SEC. with our questions. to more and today ask disclosed factors it forward-looking those plan. risk will one results one others factors limit expressed implied up statements follow-up. from underlying The are statements. in that Various contain you yourself or by with actual strategic risk filings These

of To statements, Relations feel reliance call, Investor materialize. release ir.allegiantair.com. events this view and the Any to forward-looking forward-looking the to publicly the not on visit on statements information new whether us available The future which do undue cautions or earnings place rebroadcast forward-looking well may statements of a at events, be update assumptions as result any no undertake based otherwise. are free that on site today. We not Company's to as Company based obligation to information investors as

it turn over John. to With that, I'll

John Redmond

storms, were hit sure challenges care countless by of. up you a most past our hurricanes to and to for thank was COVID their recently, team taken like The was good made to our this and year. Thank you from customers spikes but operation moment winter stepped Sherry, difficult very afternoon, XXXX another efforts taking all yet members begin with and year. everyone. much, I'd

I am to Your commitment safety responded you how and these of to proud remarkable, and is service challenges.

that years heard to You opportunities. many to news for the future to resign wish Scott our best service his other all his and dedication Sheldon thank and the we I has endeavors. likely the of COO, want our to decision airline, made pursue him in Scott

as With Scott's will assume serve departure, operational of to Anderson the oversight President Greg continue will teams. Company's and

He and Company decade. you have he year. As better the the the person initiatives for Greg internally is highly within on the in store and is industry, a role. numerous strategic both There been all know, than execute to utmost we no has with respected this will phase on more have this take I

pleased with what the and completion This noted fourth saw quarter. Earlier a happened this operational company, grow. of a the we during We year exited report with are is year, improvements, the testament to half operational is would of to controllable success percentage that we difficulties XX.X%. margins exactly margin-focused a of last the half of I the I'm year, first during despite challenges the the the XXXX we implemented.

operating an margin, just recorded the for recognition special Sunseeker bonus of shy We charges, XX% excluding employee quarter. and

$X.X XXXX TRASM than the financial generated we $X.XX highest signs addition, $XXX in in during of revenue of Underpinning o TRASM that robust strong about more no helped quarterly to This demand a quarter. the slowing. with record-setting shows for just company million history. In is EBITDA this billion. environment total performance quarter contribute a Fourth

great We momentum XXXX. into have heading

as sections. have flight sections. principle on The tentative regards our have open of midyear. progressing pilots, to done tentative X/X reached the well an in negotiations agreements agreements our half is In our and with reached we are on To to with about with our it by open ongoing flight attendants attendants date, pilot expectation negotiations agreement

effort an the an the an union Company providing to operation positioned safe, principle, agreement We agreement in proud jointly to to continue is It while grow secure pilots reliable the ability and by support Company and requested collaboratively to to are a that midyear. the done bargaining the our look in with our agreement to expedite remain In fly on expectation an have profitably. forward and process principle working to NMD mediation.

estimated are on total Sunseeker, Ian of is of an in Touching Ian towards to necessitated in to million losses. to remediation the related resulting work Further in Much additional back in continue force. crews progress completion. investigation increase full Hurricane now we charges $X make damage Construction related us. behind special

by We damage recoverable insurance. Ian will continue Hurricane to believe fully be all

million addition, events are November. Losses November respectively. related to damage million, significant in well Ian covered thunderstorm and fully Hurricane in In resulting recorded in of Ian in early Both small to amount damage remediated, $X.X as a prior being a followed events by elevator $XX as additional fire insurance. the were these

offset were related million Ian by damages. predominantly losses Recorded to insurance $XX proceeds

special As record recorded insurance we charges months, during these coming recoveries losses. the are offsetting the will received

insurance, Also cover to period will opening the of opening out 'XX the we we worth date again, May pointing and the the scheduled resort. date have which business interruption pre-hurricane believe

reservation pushed of in accepted by we this caused delays subsequent year. the Ian the to the date XX first Given October storm,

related lines provide but We to time recent opening intend firm April. remediation our still a working to storms, call earnings next through date in the are at

in stage due any early Sunseeker to provided at date. We uncertainty have release not this on the operations opening on the guidance

In up the for the QX provide EBITDA income call revenue, preopening earnings the operating and XXXX. in leading opening year April, will we resort, XXXX guidance on to expenses

extent numbers interruption information. a also we have final and business budget update construction will to We update the

of you in are We you year. resort Sherry dates to who and the happy to coordinate opportunity the early to this be times any intend tour will extend Wilson also to interested, April May. in with

year. the including in in one In regards in be necessary Aeorbus, our still the this status all place, to category we Mexico Viva partnership of half will with expect approvals first

we the appropriate, future if we to guidance of you returning given annual as forecasts. end the release, providing in results in guidance, are we As did date At to and annual XXXX. the will the quarter, each saw update

reporting XXXX. a As in we will be segment relates as it to reminder, Sunseeker

we addition, be comparing not XXXX will and XXXX. to In

have We is prior year XXXX or to results and moving field more progressed going XXXX and comparable a beyond relevant forward.

a history results an strength. increasing In bought both at balance returns, and and during closing, a This $XXX the the price report Allegiant $XX.X share, XXX,XXX million. has fourth of I sheet of authorization Board's totaling we Furthermore, Board strong shares pleased reaffirms authority our million. our shareholder future am quarter repurchase to to in approved average $XX.XX conviction back

With to I over will it turn that, Greg.

Greg Anderson

worked you, thank the to He here, luck ride. in sentiment best your his I and John, and echo around nearly endeavors. I Scott have future and XX years which for shoulder been shoulder fun has an wishing of amazing

Scott, best is terrific organization the of provide, in I hands. is compliments the One can

We have bright with an incredibly an strong future. incredibly team

As will take COO announced, Keny Wilper on role. the interim

Keny Over strength the an past as has years, and an exceptional demonstrated operator his leader. as XX

as Additionally, both will serve as customer our Experience flight well team. Tulle experience experience vast leadership in-flight Tracy Chief as overseeing and has our Officer. ops sharing Tracy operations

drive while on In team experience role, also and organizational the our improving leaders alignment. focus this internally she customer-centric helping members new to develop will for

to and awesome feel both our our Drew Chief Chief do, plus investors. have are BJ Wells they of to already to well introduction further are known Financial Finally, best now our leaders, needed, able pretty is be is admit is and and Officer; Officer. Revenue Drew say, the what it's Neal I and I they A to given Robert no

I look forward and to each in working even roles. them of expanded closer with supporting their

names, a the been. and throughout ever only best strongest While organization this few I breadth the it mentioned have depth and has is

in us, fired can the As up the team when for say look we in as most speak we in exciting front to I amazing space. forward the are Allegiant establishing story I the of opportunities

lot ASMs its -- year. XX% own by the X,XXX. to members more our team members, brought past XXXX than While compared member more XX enabled during grow team a aircraft us more its than total challenges, These to fleet achieved bringing fly as team and we added XXX our XXXX. to We count unique unique

in which financial leisure first XXXX unique revenue and This lost of environment impact. of crew the cancellations. operating over had The providing financial going This absences challenges beyond million impact The operating constraints during $XXX by half periods, a significant cash impacted in costs, above those elevated by fuel flights. significant and resulted labor customers spikes. environment to and Omicron to unplanned including IROP costs, compensation a peak travel led had experienced with and canceled

To combat schedule the to closely and challenges, for these operational together worked environment. in teams adjust refining this our planning

points a controllable completion better this half aircraft 'XX strengthened meaningful operations of and was completion controllable more at the than results XX.X%, our X quickly saw of industry-leading improvement half to a our first While near XXXX. cost productivity, as of second than the came 'XX

had with quarter over operational as of showed adjusted year am I on and $XX out our is back X%. were than achieved million. in pleased results report winter operating the had guide despite holidays. first our initial 'XX. the our financial op a improvements this the half substantially of a up margin million These operations These This to from of the in six the $XX storm the XX% results is improved impressive results. adjusted total December The less than report financial a irregular higher margin the impact impact the of positive to these financial much we quarter impact our months closed impact from

progress shortly with systems NAVBLUE core have systems XXXX, of track more of after. systems certain the SAP, We NAVBLUE. investments in organization. is Navitaire, Another XXXX to important Trax on as should follow element three a made software our systems to we towards remain key transformation. move efficiently made live these scale to In first key decision best-in-class from the systems the Such to such been go XXXX. proprietary we significant and

the as of the contracts of at our our we on, we that as early our MAX near finalizing schedule addition, the intend of to at incorporation our these deserve. our continue aircraft We crew new delivery of members Sanford ahead MAX expect first And highest deliveries to these MAX on John end Boeing Orlando In touched labor place remains priorities year. deliveries base. track one

to far, is both across into these a effort our amount goal of get the soon as attendant unions. of we flight deals pilot and our as It possible. finish our with have great both put updating So line agreements

back these done, we While incorporated within potential unsure of the around timing are deals the year XXXX we the guidance. cost exact getting the in half of have our

depend realize increases the the terms the Please and cost the in agreements. timing economic that of on will actual reached

year full headwinds, will assuming BJ As them guidance we aircraft levels in and staffing restoring these detail 'XX towards full utilization, provide any guide, expect reminder, momentum are capacity contracts a improved momentarily. more year be productivity increase although our not optimizing we cost to but will

We on in will continue of are our excited 'XX. in focus operation and us about strengthening front what's the

prior the on As making leadership initiatives other calls, laid implementations on we initiatives. new changes items such steady and we've have are These will our these the Viva support these contracts, and further for foundation organization executing teams and as the the Boeing. on across progress systems highlighted of Sunseeker, announced labor

on we contributions will vision strategic an completion More specifically progress front. better As that follow expected more to from further outline host expect frames, Day information have time Investor we into on and to 'XX these initiatives. the

I'll Scott our Chief that, turn with And Marketing to Officer. DeAngelo, over it

Scott DeAngelo

the well app continued off record-setting on for Fourth traffic and demand Thanks, important satisfy in an to advantage Surging passenger saw Allegiant strong travel and segments demand as the give for for leisure approach, travelers, both to bulk, by non-stop quarter as capturing capping able awareness and a most along flights. low web across buying Allegiant brand, continues to year measures. Allegiant preference allegiant.com Greg. our direct-to-consumer both factors leisure for distribution us two with being fares

I XXX million that continues two audience new -- XX% XX% customer were by referenced XXXX. to web notably, allegiant.com XXXX. that limited, Because up me, users past Why? nearly despite allegiant.com, XXXX, came web new And addressable year no the fact new the channels. as users crowded full grows fares for from our as up quarters, to the leisure of route excuse their enter hubs. travel For via from more most connecting direct flights grow avoid sky looking lowest-cost and consider to XX% high new our ULCC to category associated the came with needs. customers through Their our risk and seeking airport What's users and Allegiant from time allegiant.com more, inconvenience and relief route

to Allegiant awareness partnership XX% advertising That's for Allegiant e-mail brand Always as direct our credit less co-brand well like or our organic as of grow URL, means That's paid on on It both we're our Rewards loyalty and card app, marketing a and non-card. continues search. less in scalable from as fashion Nation preference up the and relying and programs, our fixed based investments Live Stadium XXXX.

expectations We is active continue XX% the cardholders more in acquired XXXX. card cardholders higher program, to than That's more with year and we highest co-brand ending XXXX. with the than than outperform which had new acquired than year, more our XXX,XXX previous XXX,XXX

As result, drove total card compensation more $XXX a in than the of co-brand program XXXX. million

non-card In program, X addition, and members totals XX million loyalty Rewards, our last million Always added year members. new now

left rates products like -- has total an they not continued than of million average opportunity active aircraft and well and customers, car. solely beyond Rewards constrained greater to by growth. exhibited air was growth higher XX% reinforces spend average revenue per members in in sell on driven unique non-members Always achieve is X.X frequency customer as ancillary higher third-party rental XXXX, program. This were our order transacting of In booking passenger behavior per take XX was customers capacity that non-members. XX% higher to by higher average, nearly of greater outpace than that that products can the XX% hotel This attachment and as spend booking And the Allegiant in the

drive three passenger with total XX% traveled makeup, year, us year. more subset what about Rewards of times they surveyed X,XXX total and terms total week, of intention a why booked representative future of transacting customer and In roughly past elite their of us we sample of more over frequent this from than cardholders, revenue customers, segments the both our X.X which members the to for for was. the understand with and Alecensa our with and respondents group million travel and flyers In unique just XX% is fly customers or Always

nearly nearly better And bleisure, they leisure. travel said for news leisure the said both travel XX% for into at getting most friends the negative and keeps climates. XX% their they nearly Of around XX% resilient and with home. these family and types Allegiant business only than Allegiant. for vacation frequent during fall means of or stayed that flyers, or traveled That economic are XX% XX% stayed second More

To said given to with ask no impact told And with their prospect customers have here's more behavior of they validate the on Allegiant months would have with the their extent would and which Allegiant travel worsening plans the likely this, XX in considerations Basically, to XX be to economic flying Allegiant impacted conditions. they next we nearly us. that fly these next they that in the one be quarter months. expected economic said what

to common case many and It's the for an base. not that's infrequent ULCCs But think have transitory Allegiant. for customer that

Southwest airlines, we legacy our and core from a who are continue time, at base flyers base numbers. a revenue, majority loyal to have our namely customer defecting record new We and other same that the to customers of frequent of drive add while carriers

base. at travel searches year, allegiant.com to by at are spring versus all-important conclusion, when during as has for comes year bookings historic forward was a we last a up our travel balanced summer searches in customer know, and our looking trifecta break forward-looking for all which, it season simply high and to Put XX% revenue. in and Allegiant for And XX%

travel solid the a behavior of upcoming no have who retracting We regardless climate. flyers with core the signs year of in economic show of frequent their us

flights that members to programs. customers continued same leisure fares a of high-margin that of and new are and the non-stop assortment airlines surge in customers numbers other asset-light, we we're are And our in showing strong across make coming because Allegiant with at that our growing repeat all third-party they're lift products at seeking we also from existing along low loyalty record And time, are available allegiant.com. seeing

Put customer life. seeking the live another are these to Allegiant all non-stop segments at way, as refer of we to what

over to it I'll Wells, Revenue that, Chief with our And turn Drew Officer.

Drew Wells

and number close best for previous history pleased the out year us joining total $X.X than this Scott, When for company in with easily the in afternoon. find seasonality, best billion the to everyone, you, nearly XX% I'm lot continue to teams through results. higher a record the XXXX. a in Thank and remain extremely of results. to to to capacity year all the And revenue, metrics the flexible accounting thanks, well improved while constraints record the the sequentially produce levels, optimize incredibly shifting through we year produce great right within

had in throughout the quarter despite X.X points lower stability above range ASMs service. quarter fourth and XX.X% approximately system of at most and and reflect scheduled came at that. points revenue fourth the our level above the ending quarter The $XXX for Fourth year, nicely X lower the the XXXX, million results

guidance initial that We an card did breakage under $X.X produced Always of the credit a factors ASMs divergence guidance $X.XX revenue co-branded XQ and the excluding best approximately Rewards for the just and higher benefit, with updated all-time take million associated TRASM benefit the Even XXXX. between XX% program. on nearly and for than

The of performance level the of at ancillary X.X almost the per first particularly exceeded to upside exceeded December. in XXX drove roughly revenue an the XX% major was the time sequential The and was all-time upside for quarter. quarter our $XX in total passenger yield Total quarter expectations also points and the catalyst, passenger high. per improvement

a disruption of quarter see did points. holidays while expected the of Hurricane headwind under the back of the bounced the of year. The Further, Ian, weather exceptional was lost out Winter around Elliott million was revenue Storm of rebooking a Florida incremental close-in was loss continued from of round and which X nearly and demand, points softness front, rest capacity. Gordo the some some saw customers $X the On and just X impacted to through Monte quickly

impact temper been to quarter the November, areas. to opened The market maintenance into in the point the X.X Provo we bit our we've we but continues Utah. base for a recover. region the to Since still total crew entry should low-cost revenue a our XXXX, expect In first surrounding the and aircraft, headwind as in roughly Provo, option and XXth

anniversary on serving our coincidentally XX, which route in is began Nashville city. XXth XX-year the our We February

than turn have somewhat toward different New story. a we we the As Year, usual

midpoint rate than be X% of other full XXXX. than Our would growth any ASM year-over-year lower year

the ensuring of second continuing and operation paramount First is the solid XXXX. and successes half stable to XXXX of and foremost, a

elevated cost amount gallon, growth temper per Second, off-peak will includes in our continued continue a we fuel guide and balance periods. which as demand EPS non-peak the of fuel to

quarter First close growth will X% be year-over-year. to

a The before growth second quarter a be and than fourth third bit rate. higher first high quarter the single should

unit growth revenue growth year-over-year provide Perhaps is 'XX, peak worth first robust by the with low real reminding for that some expecting The I'm the I'm be the quarter than environment quarter, first outlook. coupled larger to rate of comparison metrics. great mid-XX% for and break the the should of slated Omicron and quarter XX% XQ TRASM a runway XXXX. encouraged still in demand first spring continued extremely

discrepancy broadly Load year, the search the higher the changes results. Scott rest not Through available and between to yield well the contemplating factors volumes economy. material are we inventory the for are mentioned bodes and Angela and of

seen and have such. headlines, leisure our read customer the base impact from not and we forecasted any as While have booking hear we same

our second weighted We Extra window. expansion Allegiant heavily X% most markets also ancillary of history on-sale of their platform of of air providing be in maturing tailwinds year. in the scheduled see in the Approximately months. of Allegiant's half our any of the will commercial half is and both the XX terms time the in to Navitaire 'XX program, of the more only that rollout for the network first the Additionally, mature first should

in this mid-single-digit hit beyond. more the the for percent and and last to challenging Collectively, unit leads catalysts expect months capabilities revenue positive comps. range are over nine through significant revenues we Allegiant's XXXX reasonable as There

incredible us capitalize an on to for remarkable what remains foundation to We continue environment. leisure demand are a setting truly

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

Robert Neal

afternoon, million. Thanks, we us on employee initial in recognition Adjusting well per above joining charges you net to today. exclude This Sunseeker, $X.XX income to thank XXXX earnings reported to call fourth quarter the special of the guidance. quarter, bonus, $XX.X Drew, share our everyone related and the was for

a quarter strong Catalysts strength had our ops favorable course, better-than-expected favorable fuel included, of improvements, sustained more demand cost than results -- brought behind the environment, and which non-fuel cost of anticipated decreased the fourth operational irregular a we costs, performance.

was cost quarter costs, XX.X% for to unit of and recognition reduced up 'XX employee as bonus ASM with quarter to primarily quarter and in charge XXXX Elliott. X.X of productivity as compared excluding Fourth utilization, X.XX on was compared comprised increase related capacity. aircraft Storm fuel, the more cents, XX.X% The points X.X X.X fourth Winter points fourth special the Sunseeker points labor

As temper full contracts, in share cost to assumed release, with and forecasting and guidance are which attendant 'XX per we of integrity per year operational approximately purposes, seen average earnings this to cost prioritized. our growth On you've our ensure of midyear. $X.XX Even flight reduced is begin that related in capacity will assumptions we capacity, for airline increased fuel would gallon $X. labor pilot an only

quarters operating expect the of to of two respect quarterly roughly million Sunseeker, the $X in first million to rate normal our year. With expense run to record of each $X we

provide property we with expenses have a operating next or prepared to firm date to the -- today We year on are not income guide preopening call. earnings opening full our until associated

to Turning CapEx.

comprised of We $XXX million roughly expect to total roughly CapEx for XXXX million, the be other $XXX engines, related coming PDPs airline from and million induction $XXX airline costs CapEx. in aircraft, and remaining to the

deferred heavy levels similar maintenance we in to $XX million. addition, observed or XXXX costs In roughly expect

MAX We XQ during expect to receive aircraft late XXXX XXXX 'XX.

capacity weeks by at not not XXXX. the the service for of plant planning we and are we onboarding of of requirements conservatively operational in be end new type -- the ASM a to chosen early have until aircraft these year-end, for possible certainly it's While to year are these for fleet aircraft

that know take XXXX can throughout on what share We directionally, month delivery year two to with Boeing planning aircraft remain we roughly to discussions schedule, we're based today. but next finalize per we our in

For year, XXXX, two which of revenue into to service January a AXXX we throughout induct in at fleet and of the end plan operating the non-property entered already aircraft which the XXXX. X of were owned have three

CapEx financing attractive of bulk the of proposed debt the expect us and level during far. be with support XXXX We spend our terms been and financed to have to thus pleased

Although with will ATL billion plan in total heavy Allegiant, a to to XXXX be roughly maintain liquidity year available for roughly and our CapEx $X year end of Xx the balance we expect cash and investments.

like impact around, our XXXX. proud the In operations We're challenging particularly the extremely stepping fourth turned of the half thanks over which first for financial have quarters. add the to reduced to team about X,XXX how quarter by of compared during the back and team into the efforts closing, in XX% a I'd After my incredible as team two together to their of story we more the momentum the regular the to members half first deliver year, than results, XXXX. came very in the excited

Justin. begin thank taking We that, With analyst you, can questions.

Operator

[Operator Instructions] comes Our Sachs. Catherine from first O'Brien Goldman from question

Your line now is open.

Catherine O'Brien

impact puts wanted just of the talked contract about on about to last growth think and then I single-digit a high slowing was will we flattish pilot -- kind time this of so and costs year growth half -- to ex-labor contracts. across cost the I for mean about think adding what some attendant I year. things wanted think the flight Trying just putting and the capacity

underlying guidance? So from about current just the walk there, EPS think your trying to

Greg Anderson

BJ for our basis, deals This July would off pilots hear to So it's year, X/X a the just Greg. again of X, about we've don't so basis. CBA great the flight deals, here? be this beginning what I Hey, and back as both point it expect year to is you. I labor year of your a attendants. mentioned, half -- on half Why the incorporated for half on hit Catie, kick in And for CASM

some In the puts takes, think be terms and I a of that IROP, tailwind. would of other

on there the there in slight D&A, we'll a out there's XX%. at what called we from I about call see X lower the year-over-year are productivity. a you the being two be a anticipating side, on two or than points IROP headwind that about to lower going slight So to ASMs I based point it headwind maybe mean inflation, think

points worth to I X think that's roughly year-over-year.

recognition the other mentioning last is 'XX year, that carved really, bonus, but so in included too bonus else that to you sorry, this the two probably But year-over-year, each in we're thing of Obviously, guidance, anything formal I that's that 'XX. to I'll year worth just pause will compare -- year I'm will headwind. out. kind kind a this We out that be But -- be if giving of if some your help not if of other they questions wash those Catie? there. But think answer anyone wants add or there, that

Catherine O'Brien

a was Yes, that have follow-up. I great unless anything add. do else to

to I get going couple more You think a think at per a hit front bit So you record Day. that? a of of being of passenger $XX, over there's with talk about tempered sky you to the Navitaire? or forward? Like here But fruit some growth Investor type number, levers if little know, you're now next about this some new from new you running set like, like kind might the upside we initiatives ancillary of Just going be don't that of should have along lot years little it. blue

Greg Anderson

Yes. Yes, to have to that do come. are there I think Thanks, Glad Catie. you more step-ups back.

second out little expect We quarter. as of into a the would tapering become. of that in will And not I kind rolled yet that bit a have what come likely builds Navitaire it could

of XX only that LOPA to fully at at Allegiant the be things up tails loaded, Additionally, half by really seven we of in Extra. these back 'XX, are end we'll lot be stories. A about 'XX. -- would talked but There the XX of pronounced end

those and you more to valuation Scott, whatnot. in an don't into would I more? Investor get of know at if terms certainly will We Day like add any

Scott DeAngelo

able And big been say not la to bundled people our which ancillary. think as that fuller even I a about would to being just -- say, No. a driver ancillary, still but Yes. buy carte, has that just have we of

better still that as as create of that upside. not interface merchandise the but small to be but are for we have plenty there's card. gains in at think to of experience. a least, going to these We along would user customers to user technology way to penetration easier We leverage for just last just Greg things make and add it easier and foundation think continue we the we room their levels And our material mentioned

Operator

Our next question Global. comes Seaport from from Daniel McKenzie

open. now is line Your

Daniel McKenzie

a I've Congrats few strong. that I'm on second BJ. elaborate RASM up got fourth through that big to if guess, pretty questions first, quarter. bit. that's is benefit just wondering here. the and just Drew can digits, a quarter spoke you that I Obviously, mid-single I you comfort, more the, and Navitaire if can drive from there mild change recession, Navitaire Extra that? extent guess, there is potentially that forecast? that, help And a is related guess, then, I to just would the to what How secondly, to the

Drew Wells

series that. mid-single a historically, we've since aggressive of have some of long quarters positive and perspective. didn't Maybe place. Dan. It's given time along really had we we overly mid-single-digit I the with a Thanks, revenues view growth in strong have the digits. slightly a And low to different had kind Yes. I in cadence been

If you summer, to remember our of back material out pull we capacity. last have to amount did a

that through little Like more. in we I of we'll some think a online think coming to which able upside of but Investor did there. Navitaire XX% We of be about provide final terms little to year get certainly in mentioned, ASM, bit as into bit a XX% summer support. valuation, will that a results, thrash more our and I April this buoy bit will whatnot will and actually took did contribute out Day,

not reasonable all, it's a in all revenue I do So think particularly target aggressive. and something

Greg Anderson

Hey, is add, and Drew, I this might Greg. Dan.

Just million some revenue. the think lost our a But that other big we then in talked about puts already last remarks, about opening full to of right? chunk IROP year, is items year, $XXX

markets is year-over-year that these at, Drew So measured, although to The that's going unit comp be exist already it's helpful growth, limited it's numbers. that a de-risked. It's on looking revenue it's today. in

trying and There's out add going maturation there. a to So markets. new already we're not

And this per right? by maybe potential low, was then it eight utilization hours, of going X.X about is recession just point XXXX, hours. to your comparison, aircraft the is thing, our way year In into other

is so periods demand. in lower to peak capture we built to and the our And flex that those utilization already have model

So well slowdown. positioned I we're just do we think the event in very see a

Drew Wells

Yes.

we Greg XX% I of to our think a as up of look week going the XX% the next be of capacity off-peak day only quarters, on was what likely at kind mentioning. couple

for what the know we that. aligned customer very travel incredibly we're where that positioned leisure So wants that with far means to is And We'll well already, resilient. see leisure well the price leisure customer kind finding is of across right that just event broadly the there. able still that, travel to But the that the in -- customer point get stimulated so to happens. industry be to for

John Redmond

And mean, on half front, first the the the sure, first I of have for year, on inflation we the quarter. visibility great

see year it, or back extent we pressures, the there anything. be to modest don't going the feel is just to the there but is it's So, to ended in any extent inflationary

Daniel McKenzie

wondering in sure, I Wow, this a a perspective. I balance just off is just but here. cash potentially if getting already outlook use question take that. I'm be BJ, debt And potentially I'm speak that's to could worry we second cash inbound on guess, free solid to on or you additional can if the table? flow plan if to It's great a sheet, negative year. that can get the the equity

Robert Neal

LTVs, Greg, CapEx debt year if where the can new payments. debt talk -- this the rough of the Most bring you throughout in about sort numbers in of at navigate We financed. can I here. million in $XXX as we think discretion and year. Thanks, our specific is $XXX CapEx like to we historical want if there's million you and that's just Yes. use north $XXX is know principal then of But to Dan. don't between

of is really The a fantastic we the line thing where attractive CapEx all terms coming I'd in. mention financing sight have of on to

interest really know, gives and ability And on the supporting to you placed a that the of appraisal think, then is million, for $X raise in up, our Sunseeker interest I something aircraft, the XXXX, just the that's us values end $X.X As lot an rate pleased financed money draw go of we're we at order the now, are a great and million airlines. which since out already with. financing at

Greg Anderson

about to to EBITDA. while midpoint in was here. 'XX This the of just is two add for just maybe guide I going Greg. things, That's crystallize that just leverage, million our going to add just $XXX to BJ's gives point, we are take you if you

that billion. you so BJ leverage, you debt; debt, in with in kind I think the we'll of the the and take end billion waterfall $X.X cash said, $X debt of net gets If $X.X net take billion year you

when investing strong that So three to assets We're these investing in we're time We're still comfortable. yet this -- be turns it doing credit. back the net in producing. a are revenue are is But a leverage with Company.

going And that 'XX this so quickly expectation. beyond, pretty to the that other side we -- on but get when and see as de-lever of you're our

Operator

Helane Becker next from Cowen question from our And comes Securities.

Your line is now open.

Helane Becker

that? being is, One growth this think single to How service Or your about in words, where -- increased Is growth? about about markets? you other year, low you in digits prioritize is how questions. new should you as thinking so we Two it the think are markets? existing it ASM

Drew Wells

not Thanks, Helane. Sure. markets. new of It's lot a

X% when step a a a minimal. in a little small in about of XX from I we markets here on pretty we It's come the -- and get For half that's of focus bit we're our that will it's X% ton more talking first only about it. of up, frequency starting of first it. within the quarter first their in first that's restoration beyond And and the that, there's the can markets few not that. quarter, But new where have been year, the ASMs months.

Helane Becker

resort And guys. then And a do Punta actually. for the issue obviously, issue how the hits is about the it's are this thinking resort, hurricane in Gorda, last increasing and year How helpful, you big companies. That's you you a of Okay. this was protect been hurricane my like an as Sunseeker, on, in so region the year? has seasons from climate Maybe future? season lot forward about going for it follow-up you're thinking question -- the

John Redmond

state I'm buildings been doing has in is Florida John. stating by obvious be codes to around lot changing the operations the time over run when differently I Helane, be by differently. that in say this forever. have technology to to a reacted allowed those with hurricanes building built And of things

probably when that the of understand chatting above were thought about about it, you resort, height resort we when didn't we frankly. A first designing the So we take mean were but lot the you feet when built we it, XX pipeline.

falling So but we're we cranes. had have damage, wouldn't any

worst you hurricane, the look to referring people of at the that's lot Florida. state If to, happened of a

if and resort Myers and would type was resort that storm way, end. is, another where building Port other have done put surge hit the the of underneath So the it the out gone if the hit

wouldn't we have So any had damage.

that only the that built in of resort also to we're entire five state Florida So to standards. it we're and to the able don't like withstand be Category

building Florida, as they're seeing reacted build others in what buildings we I'm homeowners we've seen have how after differently. happened And the building state them of that's and they're Myers. office to and in else, sure that's what going Fort sure differently anything how think or will well forward I whether So reacted I'm down

of in a Florida. love guess positioned -- And was I forward did. we going obviously fantastic to weather test we storm So we like that. We're what to the any kind this

for And in that issue. building, Florida that worth falling hit in the Southwest pointing it's was but have these Charley we hurricane out, last major like wouldn't the 'XX. hurricanes also down an Again,

might like annual somewhere not extent, a region. in state, to it's in events. So the but They are same these the exact always annual be certain not

major us had would was from one, we that the that And at were all went you So 'XX which have hurt completed. not it worst, one. the next to 'XX before

Operator

And Oglenski question Barclays. from Brandon next our comes from

Your line open. now is

Brandon Oglenski

Congrats promotions. had you all guess, leadership have some as at look on But John, the you changes. I XXXX,

You're you you preparing think in investors the What how the the remarks, year? it do pulling back do for away some XXXX, to earlier context? growth, as year? want strategic this Is MAX? for really take priorities so organization what this Like up? are I giving since from this the figure it in noted put Is

John Redmond

sure couple in our them on I all if little we've electrical, started 'XX, edge touched there. of in of are technology we it, the hitting 'XX, starting at of been our, spending will, we call systems. significant which a right mean was significantly bit, in on in but it it, invested the you're all of package, make all get them, a We we've our plumbing to that sums you and been of money leading it

will at edge operating. turned on and be end leading with by the in everything them we So of that all

system the tracks, SAP on investments, a all heavy Navitaire, NAVBLUE So that's Greg touched lift.

you $XX 'XX, instance, alone look of You in in we at will. on the neighborhood all for about spent the technology if million upgrades,

of doing in a us that. So relationship fix the from obviously to and everything shape The We do strategic we're a format. to we're initiative, that. accommodate to that's We which better to reached big is to that, for great to very had much some yield relationship what do and us. allows in Viva Viva, technology do that operate order in

lot on done a it's be has driven, that's waiting understood. there's the mean Boeing to to all driven. We in of just really leading QX we're well approvals. back-end that of any the regulatory Now the MAX But know receipt up plane. work

being all So that's done.

like in that I -- to anything I are to we're with we been time. actually we is resort where what did, at. do build we're has mean but We've that the open and 'XX. some longer obvious on delays we have scheduled working one. So Obviously, nothing it that had We've to than it. for had an taken

Greg in back this with job. But that team year. of not shape initiatives going to touched these of that. that these The X great on has and until revenue are to last major driving from all end all are years CapEx the see are BJ major the initiatives. done we great a X.X we're benefit years And But in any

absorb We're all behind people to of has focused positioned well significant oil, new it. have as like this burning all We Company of we're where They're growth a lot able say. to these be falling we I on on that not on the the and opportunities. anything, midnight we with taken But working stand.

Greg Anderson

add, and at trying is members in been the highest everything getting our time move our number priority. our to stating already Gallagher, we spend that's Executive heard might deal the maybe and top I possible. and priority flight crew you advance heart time done in mentioned, a I John too, of integrity, if remarks, the and a make pilots airline the you at or this opening your as hope on as John, remarks, Chairman, as this the And operational hit is opening one, Brandon, but members, do, as obvious, it's with soon crew has attendants ball continue to our we deal Maury to for and get sure continues And

went -- without high about know that very I as we saying, of that but too a and So all think us priority is probably for 'XX. that,

John Redmond

It's very worth -- that's for very sure. much worth reiterating,

Brandon Oglenski

for that's you growth this I your this are year Or I this to Is but because cost now? that. as Greg, appreciate well? and really ability more. Drew, grow? bit, little the been spoke commercial this constraints think, planning pilot John guess operational specific to or you I right the to And is had a constraining it what really availability integrity, is demand-related And related

Drew Wells

The is demand environment still extraordinarily robust.

first our to might our not number some to operational months. in in going up we and given be that try pilot and is concern. a headcount the tails scheduling That's we of be available to have lines others, that heavy structure valleys. our So with We're generally many constraints it maintenance how peaks

the So primarily driver. that's

preparation to for we begin in to fly MAX get in to off be early order to first ready of crew the possible. as training the year, those start pulling we the As have members will half deliveries, as line into back the some

that we'll of into later bit So of being a year. kind run little we as get into more the constraints the

Greg Anderson

tease term a for team ready we the going Brandon, larger in go. because here, me comment is use you I and to add, screen that and is alluded might organization. your to plan I as sorry, Drew, to coiled And that we're And this

able when I ready you some so to And if support items, go. crude to being pacing will, that's The be term. how constraints up, viewing mean, and you long to were and is we're one. But those there's it infrastructure loosen that, coiled going spring

day about So that. you'll maybe count if than compare the you like working see normal have idea in -- per take we're next of because utilization take hours that you to so flying we're growth day or per potential per But may and aircraft in as aircraft higher were 'XX, X.X year it towards to the excited to you X.X, we're 'XX.

If you obviously take as going to that an up capacity hour, well. that's improve

that to So also. make we mentioned want sure I just

Operator

[Operator question Evercore our Partners. Instructions] And from next comes Duane Pfennigwerth from

line now open. Your is

Duane Pfennigwerth

was the don't one if I'll me, for just question it. know I respect meant but

you I of an of these helping something constraints was peaks periods, unlike changed the breakage, and the couple the you XQ that markets in on particular drivers the there kind base demand on kind differently up inability doing what in On and there or Any of is that the think were kind last was outcome, back that up again or Is you're flex more revenue I something that of quarters to detail or you you in we've particular. fares touched last guess the pattern of the peak and little holding bit flex go if seen on back. upside quarters? the is three a in two has could into

Drew Wells

this we necessarily holidays what that's basis, that mean to in summer before true. do of our was certainly know best on I don't extent. able wasn't performance it and were to the I the Duane, a yield some

there's has holidays of I the very is travel tight drawn where been a Year think out we there versus but heavily Christmas in longer -- summer, and out difference in the and holiday, with good, of window occurs, the of in giving around always think versus summer good. that's very kind concentrated same break spring a of bit little terms spread drawn which a it's New have right? kind much and this I

same concentrated demand, good. we to level was still to able able well. looks that -- were opting on be you're The really October healthy way a in well not that I as stuff were the capitalize at summer. probably of we in So window thought very at least

good necessarily call individual out. I piece windows. mentioned, any not outperformance in some like there's maybe holidays, all It the with So tight looked to slight

Duane Pfennigwerth

-- to I going guess contradict sorry, myself. I'm

just that Or guidance? is guidance, that the is consolidated airline EPS EPS? On

John Redmond

Yes, Airline EPS.

Operator

from And our comes Linenberg next Deutsche from Bank. question Michael

line Your is now open.

Michael Linenberg

on Congrats to the the team promotions.

just some you you interesting here. it. you I your you Just provided you the customers. markets that picking mention? Is thought traction base with and backyard? were qualifiers called that you it seeing Southwest around may you in of the other the have or compete where I meaningful recently, overlap out because Southwest guess customer Is loyalty it of passengers are getting you was about up Scott one in more their of airlines them? talked DeAngelo, the new called or where actually head-to-head out, and Or

Scott DeAngelo

more the Michael, Thanks, tended for to overlap the of former. It question. is We've the them with most.

much did market classify though you about And last time ask to I it's overlap West. ULCCs, So recently be other have when the don't who for X/X other or convenient, going the alongside fly there. is us to know even carriers, you our Southwest then customers, is with answer of reality we the that most the

our order of or customers brand actually Delta, but airlines. identifying United of always arms, fly regional that And right, overall so airlines the that and those obviously, many American are three the when recently asked last who next with answered most did you are the in with, with flying

to ULCC or even Southwest network of continue whether our coming that travel. indicate simply would increasingly pie the ask there buying there it of was any much would in also shrink, even -- that slice as -- brand travel, meant that so overall as this because if pie I in into of at grow as show the carriers pie in the any market look just some ULCC was our would slice it's point of category, data environment, the to recession, if of type at was are to is other to And that contraction and/or our were non-stop customers given -- down leisure

providing helpful color that's in there. some hopefully, So

Michael Linenberg

it when what is reason? curious. Well, experience? the number the give one Scott, just the Is a fares? on is they airline, you I'm had because it Or because survey, of they lousy

Scott DeAngelo

great, and two. flight are Schedule we else undoubtedly one, someone non-stop it's and just fourth non-stop we but don't the for preferred experience, one Oh, look -- yes. No, bad it's but And down know flights. those connecting that disruptions, third haven't usually involves draw go way and everything for when far beyond. that fares. one two, now away can overall ties seen those top and then to airport just given to is swell but there's we the But a usually it flights we'll right especially

all as non-stop. are you know, flights all our And of

So stuck nothing every is whether than only worse the getting of destination, potentially disruption, the thing get times thing to an driver, delay it's key seeing irregular that by over winter, to or and react what in customers that's drawn to be summer, just we there airline. But the one And middle. your canceled the it's whether your operations weather, a in happens lot non-stop. there's in I one over airline that's we're origin flies really think, it's it if know, in of

Operator

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

line Your open. now is

Andrew Didora

I of plan, Just Because guess year this a I I the coming of and to. guided How north going a is floor think just will what non-aircraft thought of last can are year next you in ahead time of XXXX at minimum think CapEx never pushed the million guess, question could liquidity said as on then big think deliveries, the you like one, And it would when with CapEx, particularly on on about call of I MAX I about finance you do the you $XXX lot the of pretty think million side? CapEx. kind CapEx the $XXX a I to you right? be know the buckets CapEx, that well. forward? be this. out are high

Greg Anderson

being that it really, bit because the of kick -- we a around I to walk will quick I'm think I'm of next detail lot out real through that And Greg. floor BJ PDPs. just timing in -- 'XX million more and the was CapEx just one was delivered of little a aircraft it's it going $XXX year. Boeing of the off there and Andrew, uncertainty threw

less floor we -- throw so of will be that the no wanted than. to And out that

so work And why we're that, with which more had with But you to numbers. and timing, understand is those the we've time through BJ? now that updating

Robert Neal

I point, year of out the with same that if you've are many mean, portion to think in prior lot on calendar just PD so going Andrew, Yes. delivery, paid aircraft XXXX, of this moving got year. a about aircraft CapEx for so for into the a you large

we I think largest in fourth And two then year. our slid aircraft CapEx the year from And you have actually placeholder this the that's for pre-delivery is from XXXX of quarter this commitment deposits. into remember, aircraft delivering then also XXXX. Boeing

'XX. 'XX sliding was this of lot and a CapEx 'XX and to 'XX for So paying from PDPs then

Greg Anderson

gets liquidity, it million. roughly comments, run in ATLs right opening And at then Xx, now, his Xx I ATL, mentioned BJ about which think $XXX you

at around that I think targeting is fair? would for be billion Is end. the total $X we're what the year liquidity

Drew Wells

part are Yes. as undrawn well. facility just and mention $XXX maybe our PDP million then $XXX that revolver are the is facilities And of which our undrawn better financing then million today,

those So, necessary year. as throughout using the

Andrew Didora

what CapEx? the And are just buckets non-aircraft of the Understood. big

Greg Anderson

$XX IT it's talking million we think non-aircraft I about be $XX were going million, $XXX that about. -- million that in investment million, that's It's to total

maintenance simulators of to would CapEx, and standard the kind then that like going remaining things take to Boeing be or sims to aircraft some the tools, as And have acquiring You fleet. parts, just that. be card such normal we're CapEx, delivery your

Operator

next And Syth Raymond question James. from our comes Savi from

line Your now open. is

Savi Syth

on summer. pilot of curious to you head a on of you as by well? deal and are kind midyear you're the Just the of with being pilot that terms also side. getting into that the have in staff means attrition and of flight levels the just if I'm an What kind able only kind seen

of kind airlines headwind versus a having deals. pay other increased have You will be that a lot of

what So just what and there on curious you're you're seeing expecting there?

Greg Anderson

taken we don't Why schedule that would stab, a we've plan think one this as the big I for is it's takeaway what in and flying give 'XX, season, and I just I approach support and Greg. available the making attrition say conservative very we of as Savi, to those summer. and such resources and a crews sure in onboarding have peak terms that the March the

a side. pilot year the expecting we're for about system color put full around 'XX, the some to XX% Just attrition more on that,

'XX, To least we've put that expecting months, we're higher than or point perspective The seen scheduling however, we're it's or the XX%. historically what higher past in it and three it in XX%. in roughly past to and months three being planning the was been But for be at year. last again,

some and anticipating to or on ability attract the of house think we're terms -- bring pilots, I every perspective our new there, class, school give and around just In to we're hires XX pilots.

Hollingsworth to bring -- join XXX that together, We Allegiant had during two pilots on we're XXXX. this Chief roughly [Rod front Ops. there our and I of of the recruiting VP additional Really All Hardisty], to our Flight Tyler, out about pathway classes putting expecting and new in They're to in what Tyler in all excited pilots January. XXX Pilot, also think class. kind programs. XX There's just Rod, in

So five creative I eight. there's to think that taking programs pathway They're today.

really destiny. we're planning And I down the protect And planning and control of case think, a to scenario. so but we're -- -- doing the for kind taking of we're our -- kind for appropriate steps,

feel that And we good plan. far, so about

Operator

call over now for questions. the no showing am remarks. to turn I further back closing Redmond like to John I would

John Redmond

questions, time Well, and great all we questions. everyone's appreciate

position coiled investments spring uses excited 'XX and term a about why wouldn't he see we mentioned be we're in 'XX the out years. the can 'XX. for Great in 'XX, the to but in You as

So we're jazzing.

course, pilots, as -- And that investments all et doing. employee the from touched only the of we not But we're we're else flight those on everything our everything infrastructure, attendants, IT all cetera, doing. investments,

going growth to order So heavy required and we're it's on doing the it's forward. lift, in but that needed CapEx take a

stay will else. something to 'XX be So but tuned, going is be really amazing, 'XX

everyone. you Thank

Operator

call. for participating. This concludes you Thank today's conference

disconnect. You may now

John Redmond

great time. Great everyone, job,

Allegiant Travel (ALGT) 1 Feb 232022 Q4 Earnings call transcript