Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the Q1 2023 Allegiant Travel Company Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question and answer session [Operator Instruction] Please be advised that today’s conference is being recorded.

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

Sherry Wilson

you Chris. quarter Travel first the Welcome earnings call. to XXXX Allegiant Company’s Thank

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

ask it start you the commentary up call yourself to one please that open to follow-up. We will limit We one and questions. with and then question

Statements The fully Various Company's our forward-looking comments the expressed disclosed concerning the statements today more our risk could to These with SEC. factors statements. actual performance will underlying plan. those and contain differ strategic our implied of others from are these Forward-Looking in and or and by cause factors filings assumptions future our risk results materially

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

will I over that, with And John. turn it to

John Redmond

Thank you everyone. very Sherry afternoon, much, and good

$X.XX, favorably our provides to our continued We guidance midpoint earnings to raise results. full-year and hit the reported compares us roughly operational XXXX a ground to of strength share the have $X.XX running share. leading expectation to confidence of and We in EPS initial per financial which

quarter underpinned our history by revenue an approaching were XX% performance operational exceeded with XX%. These company growth The with as results of leisure compared by completion prior QX XX.X%. coupled range impressive strong as recent expectations QX of year a load best to remains controllable total a evidenced and stellar during exceptionally customer factors

We factor quarter the delivered acquisitions card XX,XXX on More we guests growing active always helping performance card record a X.X% credit departures during million than XX.X% traveled card ended a X.X quarter load operational of fuel quarter. for while our holders with holders. this on the as airline of XXX,XXX

is the our A customer key expanding our guests improving focus database our the for in demand by is identified. XXX,XXX This has this our strengthening tool and experience million of is powerful a customers, product of on growth of airline continued team by management XXXX The brand. per critical routes of of us XX.X our support growing which the team average month. our is incremental customers key that to

strive impact XXXX. and top to see named we Being mid-size of best the members for to XXXX Forbes is one on Newsweek's America's our employer for our thus, team Workplaces Allegiant employees, was one America's employers make I priorities, a our positive for choice of Diversity Greatest in very pleased of

on attendants number and list. includes prioritizing Getting respective bargaining agreements is pilots. members done our reaching our flight In addition, my collective these also one team deals with priority

too with be I finalized proud would remain are progress the to and distant support. these agreements members team we team been deserve has these to optimistic members expect future. that about these reaching made Great CBAs with in both not and

finalized. is around been on pleased the just other hurricane opening are construction Sunseeker to The report for to and remediation Harbor, work the XXth. to currently of have track date working we team crews I'm related and clock Charlotte Turning our Resort, Sunseeker and official events about October

to and repair budget. of line sight clear final worked construction the we through hurricane, to a have delays have work As related we

including Club, which budget, expenditure Aileron $XXX the Golf course renovation the new both clubhouse We capital have to entry construction updated million. and the inclusive gate golf is of and the of

we nights early minimal curve, effort. outside of normal booking hotel an encouraged remain $XXX XXXX the by room at transient are booking advertising of ADR have indicators. We with well yet booked To-date, roughly we

in accelerating More booked been of importantly, for over months the the March April has last ADR and two-months, $XXX at and respectively. coming the in $XXX business

In addition, to seven the and million over we to six date. emails emails have Sunseeker grow opening number million to expect by Resort closer

contracted group food on for another four totaling XXXX attract beverage. million. bookings over and are advanced rooms to beverage conversations million groups different and X.X we continue as with rooms high well groups and in XX.X quality There rooms, We with are XX food currently in

and unveiled to we of all will month, area. truly looked always an a Last kind resort the incubator offerings have launch we unique created, the excited reveal beverage XX for one the food These original to are Furthermore, concepts. being at incredible as so world-class concepts. we IP be these

right in million Touching estimated Sunseeker QX five during Total expense quarter. the below briefly on financials. for XXXX our came operating

continue interruption rate million a expect include We XXXX the related XX recoveries currently pre-opening to Sunseeker does attributable All per the quarter, jumping expenses. This roughly we in, a before insurance for share coverage. to amount anticipate to Resort. run second related to loss to in not quarter third similar business during $X.XX

tremendous employees In our for want quarter. closing, I to thank a

for Thank for employees of and bases Many travels you my passion drove and enthusiasm, your and company. guests, efforts infectious. is long-term of operation, of visited which for exceptional this paramount our is recently our dedication you vision to I you. an on several our Your

I turn it With to over that, will Greg.

Gregory Anderson

off start operational areas completion factor The results. to thank you quarter in notably terrific a meaningful reported controllable for industry-leading XX.X% and an completion joining first our delivered improvements John, XX.X% you in great team XXXX across everyone most the Board, thank with factor. as call. today's a is

as million, to operational in came $X $XX is in evident our This below period our XXXX. performance total the down operational was million irregular financial excellence just in that cost compared same

Keny. the and our performance, this Officer. Keny Interim COO happy who to appointed permanent our I'm Congrats, since January, Wilper, our on as as update has an served is prouder team's and be has Chief been I that report of couldn't Operating C-suite

full confidence. our and have support You

most is exciting of have Allegiant. experienced history with in This my the I one times

strongly leadership this dedicated rethinking our and is team productive strengthen and more to Our and executing members to to and process strides team aligned organization. are become

our planning, approach operational and example, operational capacity For shoulder-to-shoulder multi-disciplined matching with excellence expertly continue teams together drive finance to a to demand. work while on

some points capacity airport along construction growth. travel delays Recently heavy peak trimmed reliability, markets, particularly during is for ASM and disruption X.X team X% MRO to in and preserve days. ATC and to guiding zero the result with constraints, operational This of a but aircraft full-year pilot maintenance, now key delays

$X of capacity, to Even airline share. guided leading our regardless share, in with reduction per in deliver expect of coupled in full-year an guide increase this approach measured improvement with environment. believe EPS up results $XX differentiated macro industry of we earnings full-year well model, the our us We per our broader sets to

mentioned have and agreements. cost As incorporated compensation these open expected increase increases will guide our agreements. the quarter, last actual terms vary we The in EPS timing depending for within labor for each our of economic the upon

our was in full-year compensation This incorporated beginning increased EPS guide initially into July.

to date up be fully and once finalized to May we we approved. have this Xst agreements future now However, expect near in paying are the moved higher rates as

pay in This contract I'm with extension CBA their on increases agreement by two-year fact, we reached the a IBT. and final modify to our In current a the dispatchers will rate provide announce extension happy CBA. tentative a on the represented agreement

parties it the XXst is did together work I of but this improvements not this bring that think until amendable important next note to meaningful year, dispatchers May to today. contract even our become to

in still are and our attendants agreements negotiations we represented mentioned, represented active our our labor highest is flight IBT. Resolving John as our by pilots And TWU priority. with by open

eight flight and a on open the with that been sides quickly we and months we look progress outstanding are to ago very tentative our very with are forward closing has attendants made, the opened items. agreement soon. pleased Both announcing Negotiations in

front, an parties in the the left highlight sessions session week IBT finding place another had next gaps mediation encouraged week. identify to expedited by deal. a first On with with our the the working possibility path each pilot last side's After the and taking of to proposals, all we first sessions

to additional resolution. continue already the numerous together As to provided a mediators towards result, have dates work

our on year our trends remains staffing, flat head the net for consistent pilot the and count briefly with roughly current message Touching last quarter.

are However, pilots within schoolhouse, hire outpacing expectations. our initial of our new number the

With ability our recruiting the programs team in to attract, pathway pilots. in the grow strong remain and works, confident and train, we

members. uniquely for the team to destination our set Allegiant is up be airline

be provide crews proud is agreement something to model back and We pilots, importantly, our to be with rules and out around compensation most highly having that is work they every night the reaching they attends look deserve. that can forward and and value. flight home and built of flight they and our Our opportunity

Tracks make systems briefly transformation, progress NAVBLUE. four system significant on Navitaire, to Turning our our SAP core and to continue we integrations,

First up expected go will bundles. platform drive our we functionality to commercial features which is unlock ancillaries expect in live this additional higher quarter. Navitaire, and It be to to enhanced

necessary through Viva provides Navitaire Airbus. venture addition, in functionality to us our the joint for In internationally Mexico expand New with

awaiting still are confident are in this we outcome. While antitrust DOT immunity, we

incredible and value partnership more fired team provide guests our ability growth its opportunities We for about to to up are our unique this members. and

more the particular Team these broadly immerse XX-days, results amazing the with our frontline members. closing, the in of and had over in the efforts have be to Allegiant without accomplished past And myself organization cannot throughout I opportunity team

exceptional in has in to our thank been convenient meeting privilege want and with best field a I every those and I each the to team reliable, to provides the one the a product. the experience that me. safe, me members insights of the visit and everyday with industry, help continue provide Each for them. assist guests that have of learning

will call our I Officer. Marketing that, Chief to with over And the Scott turn DeAngelo,

Scott DeAngelo

Thanks, Greg.

maximize and First resulting setting and record demand that generation enabled load unprecedented capture in leading quarter Drew team to revenue results. his both revenue and saw management industry yield,

year-over-year that targeted, create data by beginning nearly personalized more impact and and driven our including year. revenue was This more, is driven spend was was efficacy higher intelligence increase advertising marketing enabling in lower XX% XX% artificial more prior leverage greater technologies, execution. leveraging science than to by What to

For February days top they major executed assets eight example, purely book the history. drove were of revenue our advertising owned and media in four and our January events sales in digital and our via

QX card signups in of overall strongest Rewards Always continue both being for credit performance new to ancillary card signups program. month we historic terms fare outperform air with terms in was also, our to-date, the and compensation. best of new to addition revenue our QX March ever expectations mentioned, In card program in with John as and the base single

of year revenue from more recognized than than as closing in flown X% about holders Rewards $XXX margin you from and card fewer in are card, represent has of on million holders expect revenue who in and the total for We to million which, XX% the XXX,XXX an more customers. Always card XXX than know, generate EBITDA credit still

continue of new increasing ever upside we signups card generate an plenty So at as to rate. there

Beyond that ancillary XX% take up million versus non-credit year. program, our and rates Always spend has greater QX. exhibited third during than program higher party rental million Rewards than more total is XX and rewards hotel that non-members attachment. members members members XX% these booked driven saw That by one last air And car which was card greater

time us be Like sample active program frequent we for well most last a members a and this as customer first as balance time these healthy to flew rewards repeat customers. representative both surveyed the continues Our first past of quarter. flying those base from ever who quarter,

intentions they and results what why with understand to were January. were identical future travel in and were, us To what their virtually the traveled they

XX% and business leisure frequent and For for only, these traveled both nearly XX% most for nearly traveled leisure. flyers,

are resilient they XX% into vacation stayed at they travel said and during economic that XX% second of home. with That around most or nearly types XX% climate. negative than More their said means family friends, stayed fallen the

validate again told worsening with the they did these customers us a travel this, to their the further of and ago. they they To economic the Allegiant given thing quarter same which we conditions, plans prospect ask to expected extent impacted, be

with their next more XX% considerations the have economic XX-months Allegiant no would that XX-months. make in the said in XX% likely more and flying impact them actually behavior next Nearly that economic with on fly Allegiant would to considerations said than

levels. who our we In Allegiant customers majority are core that addition the to to fare record new flyers, continue of traditional growing higher airlines this from frequent defecting loyal of base revenue, add to at and drive

with them these these fly Allegiant will intention in more And more future time with of make the customers express to again travel likely XX% than saying, year. macroeconomic first customers have XX% impact similar saying will and that this no more it climate than upcoming

said quarter was portion only flew change three-months traditional a carriers. versus regularly ago higher first larger four one top were flew customers largest significantly the The or they among of last meaningful fare past that, time at

the year, travel we as that some a portion to do while patterns. expressing a customers take are normalized than trips All plan travel they did non say last leisure economy peak fewer said, view seasonal concern to pre-pandemic about return peak this simply they and and

And fact that might new has bullish from downward look come as our macroeconomic forward decision appears the remaining to be driving a as factors that, perspective. from keep flying us Allegiant any reinforcing pressure only Allegiant more well existing to customers to customer's demand

off that shrinking temporary capable during the ability travel only in a leisure to is Allegiant greater of travel capture, peak our leisure fully there capture slide, maximizing peak pie not any unique should demand travel are of direct-to-consumer that be slow crowded seek we connect through them marketing approach to brand. fares believes makes from and flights for periods hubs flights non-stop through all aware relief in fare those high and appeals our of and sky

of our who as our the but grow higher to have customer current traditional we usually are points greater capturing the into fare share customer Allegiant. those category choosing given And environment research ULCC audience carriers, with addressable buy continue to by a flown do,

as well-positioned conditions, historically. As always we such, weather challenging done just is to macroeconomic Allegiant we believe any have

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

Drew Wells

of in XX.X%. beat XX% Thank and produced the first X.X%. a you, and revenue, performance growth ASM extremely everyone by thanks year-over-year combination million pleased XXX by I'm quarter grew this us which for previous growth TRASM just nearly total joining $X.XX of system with of Scott, and XX.XX, of This first quarter morning. any a

spring March in financially not landed quarter both Could the be peak from and the four as break whole, with Further, top and the happier season TRASM an XX time perspective. a weeks operationally. all

Encouragingly, to mid-XX%. core soon. this one the in strength on ancillary thrilled expectation points call, air balanced each against Allegiant outperformance routes while expected the and has as well products option The was rollout quarter to contributed the to yields lift X.X the more continued both previous the of are and of expectations from to guests make extra still more exceed we early available providing

our They in fee incredibly January the to Group and new gaps, performance were opportunistic service a quarter incremental lift. in through with filling as Additionally, fixed well. us business set Charter first fuel worked hard scheduled record revenue giving high February,

our that As three-months are I ago, to forward and incorporate mentioned we looking downturn at indicators have not causes into seen a models. anything

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

us pieces overtime. overcome. business macroeconomic and In made the our become many real, is macroeconomic have that Building pressures model Scott's on event, to adapt of the well-positioned strengthened have resilient commentary, pressures to

and provides airfare total a has Navitaire environments. revenue historically Our later of in year total We this benefits can the coming expected ancillary deployment accomplished after maximize the passenger we base from Greg mentioned. upcoming which performance optimize first the of quarter resilience in without milestone all very that to $XX per healthy shown

drastically trip lower Thanks to Boeing required of and achieve will Our costs used Airbus and to to non-COVID continue first continue economic profitability. since the to that the downturn. reduced New the has addition AXXX last technology Max family soon, threshold aircraft reduce

expect in be nine-months most over challenging face aggregate chasm coming still to we On more the whole, the mid quarter. comps in of single up with fourth digits the the the in challenging last even

Allegiant year. through a support historically provide mature that product the integration Navitaire extra stability, the revenues the expanded operational and Continued fairly tailwinds network,

schedule, out schedule, continue to and than best trim with will about around we groups two-quarters bit we to made a next to the the have story summer align of future decision our ASM year-over-year our lower operational points X.X work of the capacity originally full-year the hand-in-hand to As push flat which thought.

system, percent the of construction plan original in here our trims Vegas came an dialed back of Vegas as operations. also portion impacts schedule a the work outsized recent overall as While already summer had

controllable remain to operational process. as the fuel environment, We uncontrollable to factors will in play demand continue a though planning well both bullish Allegiant the reliability, role and completion, like on as

over I Neal. And like would Robert it that, to with to turn

Robert Neal

thank for And to us Drew. you Thanks joining today. everyone

first of of We a net today consolidated are share EPS million, of report earnings $X.XX reported and consolidated to income our quarter excluding yielding pleased only ahead per we Sunseeker, well $X.XX $XX.X adjusted when expectations. of airline

back capacity. on was the to the This of quarter the fuel X.X% Drew same more mentioned revenues same X.X% versus as increased unit year X on airline were unit X.XX, year. cost quarter that compared last XX.X% which of up last

Unit airport that XXXX and credit card along had aircraft higher in with elevated included revenue from retention productivity credit employer higher lower in cost fees one-time headwinds the the comp. quarter costs, a we

through costs elevated XXXX, much in to performance but of XX.X% were unit a per the coming higher fuel the costs. tailwind first Additionally, quarter of provided versus gallon our nice improved operational quarter

our percentage outlook As have points. X.X reduced roughly noted, XXXX capacity full-year by we

So metrics we leave this on unit year. will expect cost the pressure continued throughout

our from cost per since dollar estimated point nearly of full-year in reduce in have gallon outlook January, primarily driven $X.XX. guidance the be from steep our last seen to our improvements gallon per us fuel cost the update, allowing spread to late by high reduction a However, in crack a down $X we

our demand to $X earnings The the of fuel estimated reduced new strength continued per and airline drives range at coupled an share with forecast midpoint peak $XX. to $X to increase full-year leisure of a

full-year flight agreements, technicians earnings well with May. and beginning costs maintenance our Our as attendant as for increases all dispatcher wage associated guidance incorporates pilot increased in

completing vary for work depending top will groups on priority a CBAs increases While of course terms costs the reach, major is us. actual with these these in final

than the better believe the we infrastructure are larger costs we running gain new fleet with and and are built today, efficiencies existing airline outweigh to rates. We associated utilizing our one be a labor from will

the liquidity balance the approximately with facilities XXX of at finished and X.X total $X.X looking equivalents. we available million billion and In quarter That in cash cash includes undrawn in sheet, billion. credit

in operations business for quarter cash during from high a The roughly XXX produced million quarter, Allegiant. first the company

to capital of CapEx As expect conservative finance a continue year's remain to our take throughout we and elevated approach most with debt. to XXXX, this commitments expenditure will liquidity

to Airbus operating the fleet, operation to which XXX additional two turning in the quarter, bringing the on with at the owned AXXXceo first inducted property we three expect fleet weeks. aircraft end of the aircraft Now we quarter, during AXXX aircraft coming in total in

of remainder of the For and series midlife two X-XXX aircraft. XXXX, expect three take delivery we to XXX AXXX MAX

scheduled As are to last the first fourth late call, our our mentioned Allegiant very X-XXX aircraft for on XXX delivery in quarter.

purposes, capacity for not until on service early And XXXX. are relying so for planning revenue we these airplanes

in take Boeing regarding active of with of our delivery order remainder in remain MAX to schedule. delivery still book late by all as very We the today, dialogue of expect XXXX. firm the aircraft And XXX

with XXXX earning this for in investment one is most is approximately an with in year assets potential of CapEx, XXXX. for Allegiant coming billion and

And we year, this would with XXXX expect net current EBITDA levels. production exit to so similar expected notwithstanding earnings our to to debt

our In budget holds for deposit updated project. capitalized account and expenditures regard resort release XXX cash construction. XXX in today's remaining financing would complete of Sunseeker completion to Sunseeker facility million indicate for our million the allocated to CapEx, current in The

remaining to use remaining sources expect of the So meaningful not million, for costs. liquidity we cover XXX do to clarify, construction

of me ability to my model. during quarter, this add in gives and thanks closing, business operational would particular, the strong in our metrics unique to like hardworking confidence members, I their scale In our great team all improved to first execution

to Chris, we ready With that, questions. are take

Operator

moment for Instructions] Thank our One question. you. first [Operator

Syth will of Our James. Raymond Savi question first come from

Your line open. is

Unidentified Analyst

This [Matt] morning, everyone. time. the Hey, Savi. for Thanks is (Ph) good on for

are the CASM-X half I'm color contribution on each the quarter some could provided wondering second provide buckets second and all capacity as on thinking cadence how from You there and a you the of if those and you of maybe impacts. one the well. detail little and

Robert Neal

to think Yes, reduced by that irregular points is think can know, That being credit. the the benefit related is retention offset offs Matt, you the increase in about from, I largely X.X% you it of year-over-year, BJ, costs. four

call couple then have a and couple related A three and reduced And for costs. for got you card stations asset then, fees points for utilization. it, points let's credit airport

kind covers of there. that of think should bucket rest fall it, I other onto the it the

Unidentified Analyst

all are to that I hires relative the then net spoke that the worse and thinking attrition you your your how Thanks. that attrition you situation about quarter? Okay. appreciate spoke about there. pilot imply last And year. it on plan prior Does you to when for has also gotten or

Gregory Anderson

hires what Hey, we is new attrition within I plan as as of schoolhouse, No. of the is, particularly but late seen with where It the so have the in-line mean, universities Greg. a is lot Matt. upside, this have and terrific mentioned with some coming in. Pilot the think military, with with program The call and pathway the I Pathway Alleviate team the also called Spartan. there I on last

So perspective, into pilots new put we like that class. XX to per were planning on

are May the and XX as We summer running per well, in in roughly class. XX

encouraged we So on that are regard.

mentioned in that we are pilot so I comments, what basically I my think just flat. net and is expecting it is in-line with overall, opening

Unidentified Analyst

much. You Thank all you did great. very

John Redmond

Thanks Matt.

Operator

you. Instructions] will The from question Michael Thank Linenberg Bank. come of [Operator Deutsche next

open. is line Your

Michael Linenberg

flown, they time Do was had to legacy of morning intrigued customers time flown everyone. you you also lot first of the of had the Scott who've fairly answer first a even one time last bigger I or carriers? they flyers by it carriers. ask some these of seems Question the work, Good granular. flown the DeAngelo. customers do be who survey - Scott, for current

the year the think the last do so. loss was reason about have we airports pull to XX or the or big three I seen XX What whether if with service? reason out of had over of a and

of question. have airports that some up curious picking traffic? second I'm some a - are just you that serve. that if you I And airports of those And are And

Scott DeAngelo

price is, these and out kind in they Yes, The that answer tend a people flights. of that as history non-stop is yes. But schedule. of absolutely. say, has and places because well. up for pulled are price versus flight, us been of growing other indeed tailwind by to as largely would choosing Thanks market question. The because I winning options where Michael be But reasons certainly actively followed still our of non-stop

Michael Linenberg

And guess probably and I just guidance, BJ. in for this then great. the Greg Okay, is revised

fuel You What you assumption I can able you correlation, in what reduced is the the you pass of stickiness? in of I kind just do the don't are by given sort macro revenue back are know, building if revenue fuel to price. you down into historical cut you amount as fuel reflect have of of by How a you. building some prices and/or sort weakness to. that? for a in impact the assume certain on of Thank from correlation about that sort decline, are loss to think revenue or percentage structure. you amount, the maybe hold through fair certain

Drew Wells

is price capacity. here, if we will you changes a the been I handled towards two. how is has fuel have metrics enemy add as advantage has this take Allegiant Hey, as historically through massive you But one. lower kind Mike. of unitized take and about benefit become think Drew but definitely own fuel, And There to relationship will capacity line. the if to between of bottom our a worst we

price We of the bit we short-term. take been a fully more have here be fuel are a historically probably able in than advantage to constrained declines to

wouldn't I I sort revenue on to will the side. remain to intact, rest of more but run our with So any non-impacted, away expect decreases be probably materiality would it won't

Scott DeAngelo

Thank us in the and to you. things set is allowing that fair Okay, the helpful right impact.

Operator

Evercore Thank line the Instruction] you. ISI. question come of Next [Operator will Pfennigwerth of Duane from

Your line open. is

Duane Pfennigwerth

thanks, Hey you. to good morning

think quarters. XQ I couple which So flat, next said just one the with respect of those is the I to assume you quarters guidance,

flatten is like your to XQ. terms it demand in absolute So quarter you undersized bit in of assume of biggest XQ relative if you year can XQ, you are the a hit I ASMs. feel

So, just here. with bear me

it just mid-teens like If you can flat in mathematically. XQ just XQ growth hit teens you in growth feels mathematically, low could hit in XQ and

practically that you you how would holding back just push is what on So back or math?

John Redmond

periods, into think would about the Duane, way break the is I right. the Yes, quarters I different down talk

So we think obviously be in mostly quarter constrained, our third peaks. about will

which impact what there ceiling July, is the do a a quarter on whole. so, will in And we can as

And probably today. we wanted something that room we that is looking September. increase think to I But there don't are to is if do

see I is to morning. will think some, some continues additions again X% down into - think September. down, this that run I you If

lot fuel is and it versus a right. if we some I that in being be we dictated where otherwise, are is to breaking of quarters get you then each the September would by out but about So it those expect constrained. flying peak demand, going there, are goodness ceiling where run, hits.

Gregory Anderson

sure want that to Hey that ready Duane, so of the start our going to support year, other add We we let the take one at Greg. be this comment to Boeing make could Maybe me crew. we is to order. just that, and end aircraft, are we pull to

element growth limit And of so back year. another half in kind capacity that is the the the of to

Duane Pfennigwerth

to why on growth follow-up on there, would impact Airbus? Just Boeing ramping

John Redmond

able to get crews Max. the to Boeing pull fly be to them on have the We trained to

training will unable during the that are that fly on Airbus for of to we a number have pilots time. that offline that So

Duane Pfennigwerth

of have maybe that. relatedly, guess of thinking What that thought back now? about Boeing way. wrong as fresh of sort to you that about not would that the then because maybe recruiting are are year I the we are Okay, pilots, but second of you are new, and incurring I just ask in net and wanted you just fleet the sort half expecting I that the type of costs

Gregory Anderson

Yes, kind year normalizes $X train XXXX, headwind. up million new XXXX this to perspective go And on in back of it the into is, point roughly way then is. to the but planned have think be $XX, we then a the terms pulling we way pilot it that pilots XXXX as Duane, I inefficiency to think From about it of Drew's probably we XXXX. gets it in in and will aircraft,

know, So a productivity of will think Is two I But year what pause But, this maybe, the is half headwind, cent thereabouts, DNA of you is probably going. of we kind there are are you back perspective, the that from from CASM where with a of think we is expecting. tenths limited be me that that, there. a a perspective. let

You to D&A wanted know, just understand from the perspective. headwinds you and a labor a,

Duane Pfennigwerth

you. Thank

Operator

next next for will from One Cunningham The you. Research. of Thank Conor moment Melius question come our please question.

is line Your open.

Conor Cunningham

Thank everyone. Hi you.

low think the some of to the done half. how in on be and the this year's you Sunseeker bit historically just know, it XX% just, revenue is have stuff, different curious net back and like but in to half, with end So a of your all, going you if end get mean, based. the income I you little I not the unit first labor high

curious on Thank there. swing the factors Just you.

John Redmond

Yes.

discussing is a quarter, would is Sorry like pretty I impact relatively the Conor, caution as would much it. remember think low. every revenue we pretty also, big to there. I count we were Yes, our environment share

bottom So swing EPS, in lot line. not a is absolute $X of in terms a

don't have be to you one, fuel. So a big

We will there talk swing guys anything I else a is little about. know don't you want to bit if too.

Gregory Anderson

the three you way bottom the holiday year Connor, point. That this to I just three, is the is And March that there periods is that kind that summer is like know, Greg think hit, that or, about and really, mean, you I know, the drive it, I Yes, line. in the think period. on is of

really I good you first quarter put I think, So, numbers. out we thought know, some

catapult that into us continue see we and a really as quarter we it. strong same year to the will second think will do I that

Conor Cunningham

of any think helpful. Okay. the I'm the is if be on if certification can you the to language you XXXX then get about MAX, digit curious historically in just I just to you start that like, And as at delayed. on you beyond? that have spoke all, to allow that the contract to Thank you. there continues to think getting about is seven this thought double growth back rate, Have out That and in

John Redmond

Yes. can't the language we Hey mean, about Conor, contract. I in talk

the that respect have as been have, of that Boeing have with year, this we the you protection all I they on certified. for throughout know, the think working on company close to aircraft we to agreement in getting adequate MAX, been certification

have positions interest are we we that aircraft to those we will compared the really to out replace. and that any in extremely are going are forward point looking I delivery of those think as don't earnings commitments getting know that those at produce to valuable just they this given those

Gregory Anderson

quick might a that Greg. well. Connor. comments as couple just I Hey, of add is to This

As the are next we about longer-term at aircraft. to years, think XXX to planning six five over be an Allegiant, with airline we

Boeing, targets. big new get talked is our an the that. a about is has foundational partners fleet BJ long-term having this important support of you a This to be in And past, to those order of with piece size, really to of as when plan part airline order

as said, lot aircraft, economics efficient. But a fuel EBITDA the you on six about are per like we talked Boeing more XXXX. aircraft, they That is million the XX% in

in average those two than the If about earn current our aircraft, MAX fleet. think EBITDA on million you aircraft more per

inefficiencies some base and all of Boeing believe that and So talked the having mitigate terrific operating with metrics inefficiencies of economics on the there to is also - our greatly those in complexities those some giving in fleet Airbus where but one There outweigh all obviously numbers. strategy fleet another. we base fleet aircraft different basis are about we various operating we base we unique dual type, able

So all-in-all, long-term job bring it done us, in. be a up type still has order. The ready good team on. fired a we that game the fleet We are getting it think about could to for really changer of really bringing

Conor Cunningham

I you. Okay. appreciate Thank it.

Operator

question Thank from come Global. Instructions] Daniel [Operator Seaport you. Next will of McKenzie

open. is line Your

Daniel McKenzie

guys. you Thanks

trying One my conservatism just each to some to it possibly revenue full-year expansion was the or would really margin just if couple point quarters. embeds questions conservatism question guide in more put it finer was sub-optimal tie cost So to and perhaps of tied utilization. remaining the whether a here. And on a aircraft

you whatever Just, be great. can would share

Robert Neal

about Hey, really mean, that, away produced Dan, say to have of it can I what and stay that off we the can margin on hear you in of is on the Really guidance in Look, back I from I quarterly the we see if tried remaining cadence think margin me. kind the BJ, produced particular. you we and into in a will on the full-year three-quarters. basis quarter. proud any first

expecting expansion we your year. are answer the not continued throughout To question,

of we guide drag feel just definitely lot fleet good in side, pretty the our most in of our costs I the - On But a cost utilization eye on cost about and asset on that the an are think productivity. scoring, is keeping already.

the you Drew, have then to And anything side, if revenue on add there?

Drew Wells

No, half I are year. back good the of to mean blind the have insight we kind of into bit more you as pretty and the second quarter, we a go then

that there. variability there could be certainly is some So

Daniel McKenzie

Yes, I understood.

enough. Okay. Fair

the Second follows last and question kind a a getting of on that at just question upside from operationally. good just here, point cost the of on operation, unpacking here up

the away benchmark like trying So buffer reserves at today what a may to how and makes think can is eventually you the and that understaffing, into against this sense operate then guys to back once can to cost the have operation, soft I we past versus we where bit to environment to cost ATC built once the of I'm year so little spares just would about that revenue goes times related schedule whatever good where more guess the penalty it you efficiently? be we get get

Gregory Anderson

XXXX, Dan, our numbers XXX don't quick - why IROPs. start look like takeaway think think and IROPs I just last the you with I was is million year, at if from full-year it the roughly in Hey, I

XXXX or eight million. of that quarter first eight well We The this were XX nine was million. below million, like quarter,

are is really really when an and that gets that you doing running that, not see can you completing expensive not you it flights are operation So quickly.

operational to and that putting that. so and will up Kenny make is build and team focus, we out we sure that and on then Redmond, John And are why, shout reliability to Drew and

start absences flight a improve, that direction, the trending example, things in have operations there because you our, is once crews right unplanned now in then place, our there. And out with like across you much better for seeing board are the better

on then you So you start that that. strengthening get and top of stability

and gives the So particularly important bid is, upside I is what how to on a run that it good ops. indication think for believe us. We

want anything that? think the Drew, side, you with I did to But on on revenue follow-up

Drew Wells

No, it ATC control, I be number through bit things we earlier, fair probably spare the to are and or for that under at our say to slack schedule we out a little amount then able would up We a of day higher. spared be count's I you even healthier terms built right. a of in were mean, now. catch and probably are

will doing maintenance a run smaller We weren't airline. lines heavy we continue which through that the entire to as is something year,

of things kind but the lack unique productivity, persist So in will of things right overall of that terms some company. are there the are for

the a place. the So But get us penalties couple the there is a particularly that out. into rolls of taking advantage of those to say little of for next is amount Boeing as we I bit recapture will Mac aircraft would that reliability there as of fair remain years, in

John Redmond

And you look when And because brand. all obviously, we are if that, we we thinkers, you at long-term not denigrate provide a you operation have short-term. when you guidance bad annual your will,

the today is want that why And operational so what make comment do. heard us our we to integrity is is long-term. as paramount about me And the a airline important of to and to you brand, extremely

Gregory Anderson

point. more just Dan, I think add quick might And, one just

I but last hour Sorry productivity think, to half we does just But, to call, what this, about talked on the back like in. extra the an bottom-line. jump

half of of $XX Just of to extra a cent quarter hour environment bottom-line half in with hour today's mix worth worth flying is like extra well. an million as the an like a

productivity, now day, six of that per a But you see some that is running upside can the the to hours constraints. to for because are right six provided. we able little meaningful some reasons talked about as with over we we take are up that you about numbers hours So

Daniel McKenzie

I the you appreciate Perfect. guys. Thanks, time.

Operator

come Helane will of of Thank you. line [Operator TD Instructions] Becker the Our next from Cowen. question

is open. line Your

Helane Becker

Hi quarter CASM, quarter you operator. much, fourth third a and implying question. are wanting just quarter On little second second everybody. the and then for XX% year-over-year know, for very down to bit? Thanks Thank and then you

John Redmond

I a we implied quarter think have at level. anything don't

between over to not there. the could you much comparisons maybe But, think going we run probably came it of in where and the earlier, little and bit are like I the the last buy with Robert quarterly mentioned nine-months year, too from aggregate read last specifics. of from a lines

Helane Becker

full-year guidance Okay. CASM number? Did you a give

Robert Neal

didn't. We No.

Helane Becker

Can you?

Robert Neal

No.

I then guidance we think big are we kind the other into you there that what is table full-year would back price. throughout CASM-ex just EPS, in can decided at year Helane of numbers with the that that and fuel the the guide happening

Helane Becker

anticipate the on question. contingent approval code X have share I Viva unrelated the do reauthorized have are who status. Mexico quarter. it CAT then I Okay. recouping That just fourth is And one you fair enough. has Is But should And DOT the you - by are Mexicans, any know be FAA the know this they delays? thinking that to anticipating I year, given of

Gregory Anderson

to place May take category that is one expect the expect Viva here expectation, in set would data counterparts being be of Greg. I quick? sorry the Does May is kind is there take status I'm one kind real summer. our in outcome timing that and this audits a that to of the Hey, Helane. place reinstated. reestablished It That and great Why don't The take in in that - regard. category for the

of DOT, application is our antitrust substantially the terms In the community complete. with approval

that. and get are say. come DOT on for per we a to will is timeline I will optimistic so to hearing have looking that. information There are with think But But waiting we it, are where forward they that back all And a we ruling we not set we the in at then with be to we the be.

Helane Becker

Thanks you. Thank

Gregory Anderson

Helane. Thanks

Operator

Our from come Thank Goldman you. [Operator question Sachs. Instructions] O'Brien next with will Catherine

line is open. Your

Catherine O’Brien

help to I time. hoping a quarter, so further. helpful Sunseeker outlook have was everyone. part us much the just out this gave you but for could that you Thanks bit that Hi, Really us the

typical how a about or to hotel fourth quarter, As full for the quarter, up get we a think does ramp Thanks. which do breakeven? that to breakeven to get is think closer almost about a new operating we opening

Gregory Anderson

Catherine. Hi

to the a going going moving point dollar There is number the negative lot in is into dollar a quarter still think and are I of we parts this provide and in QX. best we quarter. are to run time a at

can happen have anything solid, but another opening hurricane interruption and including you is insurance. BI, we pretty the believe You know, also date

mislead is there So wouldn't to happen in that regard. things lot a there I that anyone can of that want

the today, a as just and stand at guidance negative the UTS So we that it dollar Sunseeker of stick that. gave quarter I think I a we we with think on will leave for

Catherine O’Brien

you do shouldn't a lower, now we but last X.X quarter versus that further May the in know, And July, cut apologize, be versus then but won't step up you And understanding puts one a now on a and want this be out, come any I a capacity points and a to were to details me takes. to digit CASM-X high I year-over-year. assuming increase. given we to enough. one is where the labor That year, personally I for only got or you capacity council gave increase formal for lot back throughout single providing was three-months guidance, the expected is not of are fair capacity of couple extra doing versus CASM-X year. be little CASM points Okay airline are ago

like Just the into is high get low of is, double single that on code? digits zip in me right any own digit mask number would that my

Robert Neal

Yes BJ. it actually

with we what that put there, you is imply about could have guidance what think would I take away you the that for on out or the that CASM-X full-year.

so up and labor were the quarter. take baked above and we where in You May then of spoke X - have costs, little you when took to out beginning bit capacity, a them were the which July we brought it last slightly got you previously X, is

Catherine O’Brien

Okay, got it. Thank you.

Operator

will International Thank Group. you. Chris Stathoulopoulos from Next Instruction] [Operator come of question Susquehanna

open. line Your is

Christopher Stathoulopoulos

everyone. Good afternoon

a beat I here. the of some to just kind this. to core guidance of absence the of understand But here, explicit sorry So horse items more want in dead

seem about the that. but was question The that on for led, would airline talk double that only really you digit So you much this it are giving chasm color last kind cadence low mostly prepared of got full-years. of capacity, implied, lower I your growth EPS remarks, a not really sort is in for despite it of if

that it of steady or productivity qualitatively sort absence correct. led that a sounded you point and here you could is utilization of and want is caught economic also of tram numbers sure the this right, case that make in fuller scenario and better Thank midpoint base you. of here the here, your put a So underpinning is hard like kind to and if state, guide, I

Robert Neal

others Yes, in and can start I will here.

there, I benefit into labor of couple and you adding the peak the And raise a about the think, the on of account talked then are some that period. reduced of Drew. the months cool particular year in of the additional in taken course for price. continued then guide fuel costs in revenue we strengths

Drew Wells

Yes.

outperformance first front were the but relative in a last On travel what quarter communicated, reiteration of to we the what for nine-months. we expecting had the

steady that comment from So front. is that accurate

Robert Neal

not are additional on is still -. the aircraft we and at between we and the of the forecasting utilization and now And moment increase end that coming year because between not a AXXX have significant just now in asset

Christopher Stathoulopoulos

Okay. Got And it. you. follow-up. Thank my

So prepared and you an a talk recession wait when out. perhaps let's as scenario is academic clients, in that with view referenced about trade which sort it and of see your remark generally in plays perceived down, I how the

et run of the is how three don't it big will, in customers car gave bucket you the your flying, of kind the survey there that thought a more different you terms is airline different and demographics perception I work, think and are LCCs, but cetera. given So, much versus generally as of variable in the your and if really you

you put going just more about a you this down trade you in on could lower why there, why point if finer slowing. that to into Thank but cyclical ultimately come is you I realize to feel perhaps if fares effect give - it on slowdown a down that could you. detail believe so strongly some So

Scott DeAngelo

You is I'm to start happy and there. This bet. Scott,

and let's demographic the profile a example. use off, first customers, prime So of our as CVG

hub, largely Delta a Formerly flying reduce they it.

second specifically of an them. bunch perspective, discretionary perspective, one and is share a of We And from they virtually cities, same largest customers. origin we it the from are summer home ownership with customers income move a our

don't Atlanta they want to in second are and Delta are when they and route card, home their They they to corporate on when often the Florida. their a dime, fly doing it own stop on

So they us. fly

airport know one see specific we example, in play for us, but I one over So Pittsburgh. a Indianapolis, is big the that and the that in again over

presence, customer former that is Delta to have. outers, shared traditionally that these places about Think And pulled and but is had - through carriers markets. consolidation, in U.S. a orphan now or strong we I there former what say like network left a

nonstop All see like to market the cities and their serve know customers the cost they us. at is way. that classify we that is us The know I airport to other low airports flying don't well, So what from ULCC. next it

surveys and envelope, other mass, only base, we to extrapolate thing would this you back customer fuzzy kind two even, the will. to you, if X.X mini to do one suggests complete from our is we we as from the And I anywhere the trade of it tell have but to down,

Meaning the fly, who of buy carrier, down. for every we customer decides X.X market or drive another from goes part one out come two to of are the not to as seeing

thumb, bunch that triangulate And rule so, we quarters. last what seen is several as different we have of a a the of ways, but

why for and there? an about going grandma on if the still do macroeconomic quickly just summer paying are believe going app, is how went they are And a to are as little deliberate to see price spring shows that go They They saw. break. get can to be holidays. vacation environment They are more deterioration we we the going that still a people they

John Redmond

of what down to not the selection pay The pay on someone's to demographic. carrier willing they indicative the to I net someone's is carrier or as of this worth are is on opposed selection what comes think travel willing John, experience. it to, is the indicative what

who So like on that a because are want us and they travel, carrier more decision the selecting less people the experience on lower make. is to cost pay they

when the associating that on and of really mistake a to is people and is on demographic a arrive. Allegiant they less it mistake, with deciding and different is customer make a lot more spend a So indicative large the experience travel, of

Christopher Stathoulopoulos

you. Thank Okay.

Operator

the from next line will come of Scott of Wolfe Group Instructions] Research. you. Thank Our [Operator question

open. line Your is

Unidentified Analyst

Good [Ryan] Scott. (Ph) on afternoon. This for is

Just one here.

periods than peers sort of trough of peak have less discussed your of normal demand. weaker fill Some given

Just wondering something if is this is seeing Allegiant as well.

Drew Wells

Drew the lot February we was is very are leisure carriers would we in What I typical think and experiencing seasonality of January for what what here, what expect. looks like. a saw

relative We have pandemic of to still kind performance. elevated pre

customer, things of an summer, holidays, maybe needs it at to the spring in lot leisure think that generally as industry, a mentioned folks the it But and I with Scott that And catalyst, last response. priced break, travel September to September. just that re-accommodate of carried out able got how are got we I was, that think the we good summer, away

don't January, I that run September, are in through the early space. through But the poor we forward traditionally quite leisure the expect rate should February, through think that December

going is are there So everything to the valleys elevated, is be supposed still leisure and but to that peaks be travel.

Unidentified Analyst

Thanks. helpful. That is

Operator

closing John to conference for the I would Thank back call. you. now Q&A the Redmond This for to will today's session like end remarks. turn

John Redmond

Thank issue and had from a change which raised risk I hurricanes. in Allegiant recently such and a Day, operator. has team to in again each comment don't two recent events it kind several you, gotten made read me of negative with analyst pandemics This better pre-transition of Investor management Allegiant. I the past as more and course ago bet report years reminds a was, only

have that only better significantly and as team been has refined gotten a transformed future. for we model with a incredible an But

hosting of very week look next Florida, And many to of So informative should be fun I forward and lot you again, in stay tuned. well. a as

time your you care. take all for thank So and

Operator

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

disconnect, day. pleasant and have may You now a

Allegiant Travel (ALGT) 3 May 232023 Q1 Earnings call transcript