Allegiant Travel (ALGT) 2 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Sherry Wilson	Director, IR
John Redmond	CEO & Director
Gregory Anderson	President
Scott DeAngelo	EVP & CMO
Drew Wells	SVP & Chief Revenue Officer
Robert Neal	SVP & CFO
Duane Pfennigwerth	Evercore ISI
Savi Syth	Raymond James & Associates
Andrew Didora	Bank of America Merrill Lynch
Katherine Kallergis	Morgan Stanley
Michael Linenberg	Deutsche Bank
Conor Cunningham	Melius Research

Call transcript

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Operator

Good afternoon, and thank you for standing by. Welcome to the Second Quarter 2023 Allegiant Travel Company Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sherry Wilson, Managing Director of Investor Relations. ahead. go Please

Sherry Wilson

Welcome XXXX Michelle. Allegiant Company's Travel Thank Call. to Quarter Earnings Second you, the

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

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

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

John. to that, with And over it turn I'll

John Redmond

us the both operationally allowed face is efforts our their operational the exceptional In high XX.X% among continues completion XX% that complexity, of have meet everyone. customers' and in expectations. quarter, I'm industry the operating during for good the very to and you margin to thrilled morning, deliver. and to quarter, Thank team report It Sherry, highest the the second and exceed demand an controllable and much, financially.

are the our average year, scores of continued and at each not for the you now our do much dedication. since scores Over the team members prouder points by increased could we your an every have Thank highest very passion day. be last work the I NPS and of XX and pandemic.

Our the of success. experience a key remains commitment to our enhancing travel driver

Over services we meet the only our of ensuring the our and not years, in customers growth evolving needs have create also invested our and but opportunities we for expansion. new brand,

will expectations. the the for no and help continues signs Sunseeker further well later our dividends card. co-branded to continues of into area surpass drive and to has slowing. increased us propositions the We shows over this Resort future. cardholders by since year XXX% program and pay provide our is of sign Cardholder credit cards believe credit With One guests spend opening issued, that XXX,XXX cardholder value XXXX

Last strategic team. this update quarter, I spoke on initiatives progress. management quick of provide to I'd our about a the key like

that will teams that we around progress finalizing our deliver to additional but it importance of the our support. contracts outstanding are our is status, and continue provide Greg contracts foremost, priority. top First proud detail our utmost remains labor making and

the as Secondly, the It to strive pillar performance. over investments our brand. operational results. obligation to our in our is we to shown our necessary industry-leading in guests deliver years ensuring a committed we've are is for protect made continuing to QX performance high It in we

remarkable. so a end This to remain has Sunseeker track is been see Florida, insight -- Finally, our I'm long in mid-October. in The open happy Resort outside to project the full Port of and coming. time report Charlotte, challenges on delays we to control,

bookings, of people transient the we from an total, have for rooms are impressive, room of excluding nights that room X,XXX $XXX Bookings booked night. inside group most which transient speaks of rate volumes XX country, This the To in to continue in date nights corners hotel room of states, book XX arrival. at approximately all average all sold Sunseeker breadth coming date, the of database. per days

have bookings, group in or process I room nearly high-quality in over to team contracting contracted room has all Regarding continues for XX The groups group groups numbers brand this nights These never year-end, the market. XX,XXX roughly booked of covering and and existed expect XX,XXX fully incredible booked. bring number in to by that property group grow to our years the are nights.

in is this in nonmanagement for applications provides we after employment. XX unique inaugural for July applications team We full team economy. a Underpinning full-time members. of Florida retention supporting early Resort a announced looking our years applicants of It over mode The targeted resort, annual the around over within Sunseeker the XX% to bonus retention continuous X,XXX with of XX in influx in those years radius demonstrating local a bonus $XX,XXX commitment received personnel. an hiring is residing of X,XXX to onboard headcount XX-mile of completing our

Interestingly, we have people residing applications in received states. XX from

With program X,XXX response, attract pool. that early help the an the to should application the expect Given continues us we of evidence this within and the we retain to see professionals, pool people. best application grow, pool hospitality already very would exceed and this innovative

at Resort million. financial budget Sunseeker a $XXX From perspective, the remains

will loss. full quarter. ramp We in cost the the As remains due preopening to EPS the quarter, $XX $X.XX at estimate with roughly third year Consistent expenses. prior impact to calls, will in last consolidated million indicated be impact total costs quarter this

I will to by asset-light growth continue to our the trajectory. the laying the value creation long-term for groundwork Sunseeker of focus Resorts. completion encouraged of begin team Upon project, be shift the

will around corner, capital expansion regarding material future opening or projects to future you requiring the speculate intentions plans continue some of about outlays. the With our

We an will without not projects any pursue such equity partner.

happier not could I we today. closing, In sit be where

year our about in the deliver continue conviction to reflect revisions guidance performance balance the upward to coming strong Our of years. the and

X, equal quarter XXXX. an authorized $X.XX, value dividend our through of satisfaction customer in to has am such, pleased our shareholders. committed Directors to of September the second increased that remain Travel enhancing by annual I payable Allegiant As the and beginning We driving growing delivering profitably quarterly, to announce offerings, Board amounts

I'll turn that, Greg to Anderson. With over it

Gregory Anderson

you. thank John,

Over the periods has Team days us, operating ends business, year, uniquely is exceptional operations, and from obstacles, having here behind and Allegiant In at heaviest away summer. Despite challenging everything past delivering begins and year a industry we our only with March faced many these flying results. the are Allegiant, the the of environment.

controllable that's July, completion an are impressive we XX.X% and year-to-date. Through factor running

we leaders ago. driven This in same our over compared year-to-date improvement the to has represent during a industry In of month we a seeing we $XX were operation addition, improvement irregular down year by are in significant XXXX. amongst the today are June, results performance. The costs the period on-time million where

more to when much It disruption frustration the in run. delays higher to Obviously, for expensive but an isn't ambitious to excessive and also scheduling our guests revenues, cancellations, and may unreliable Overly unnecessary squeeze. members. is leads its team lead worth our operation and frontline juice results the

are while meet manage demand We approach. as This planning the is by a integrity. to a together, to they scheduling our environment jointly leisure approach maintaining executed operational expertly schedule and maintaining balanced committed operational teams

differentiated Our fixed in our structure. by is unique adjusting low ability capacity cost

on capacity. Moreover, carriers focused over been are you traffic. and schedules hearing peak leisure the interesting their flying their days network for leisure our reshaping of lowering This are been themes from focus accordingly adjusting approach carriers some years. XX and One has off-peak around has other by

We pay leisure are flying peak you this dividends. continue in this ideally forward, results. approach, see our believe suited for we to can and going this will And approach

our is a performances, also financial In able there our behind and accomplished foundation work roughly being support an years. to operational aircraft X addition strengthen and scenes XXX-plus to be amount of airline to in to incredible the

efficiencies to and SAP X, getting went this key a teams. live on system step our across office changeover back milestone journey. major will happy This Our are report implementations I'm system major drive a help once-in-a-generation along in there, July internal

plan over travel its to expected go-live Navitaire our summer Navitaire to to in outside cut late delayed date we incremental of pricing any dynamic operational peak its drive ancillary period. August. move to revenue to due We disruption capabilities. potential to is Additionally,

In will Mexico partner, our our venture with expansion addition, support Aerobus. Viva system into joint

affect by with due application want U.S. recent We on areas be been our within merits the put that temporarily have Airport, to of does be hold. at our application. the City to undertaken Mexico our not though, It's clear that has Mexico to control actions readied we DOT this launch to able is also ATI noting approved. worth affecting ATI operations the However, carrier once

prouder be Not members efforts the margins and XX Allegiant half could airline of share of at Allegiant completion amount, team profit me. team strengthen first amazes team to members. work do million industry-leading truly but paying XXXX. over the thank their our they during execution This operating and foundation, controllable our continue only We not a triggered out The delivered the you. to does of maximum incredible

for are we we this to uniquely maintain incredibly labor future element set up to our are believe A of be ensure destination competitive is team of for airline We members. all a contracts. positioned well and key the

rate and are represented X coming amendable CBA, Last have TA the included years provides significant agreement represented IBT, current their the Similarly, of with a are before increases in ratified our in more also to approval more X-year reached end extension extension contract their mechanics by rates the The tentative This date for IBT pay to a as than subject by is weeks. of formal the industry. year quarter, X-year mechanics, dispatchers, who TA than which we amendable increases the the by to contract. a the prior at higher happy date. a to the

announced agreement our attendants. In flight TWU, June, a the we represent which with tentative

flight unfortunately the to remain table deal reaching While in committed this TA short attendants TWU order. a the and we and was down, with with reengaging focused voted our initial at

working are Regarding and our pathways mediation who by remain to IBT, deal. pilot group, towards in represented we the a

and success. it to Given a outside ongoing play of deal, bargaining in recognize importance compensation the address the timing the pilot uncertainty our of we pilots felt necessary our around

June, the to that deal. banking XX%. a except even rate we We increase for all first their retention for the As of pilots began company ratification through which to year current at higher with announce pleased first a were XX% an of bonus rates, accrue such, in officers, early remain

continue to to are the intended pay our pay line be more the negotiated rates mediation final bonuses bring will pilot industry, with the through with in process. understanding retention These

are we that a the retention our We them with as deserve. IBT continue pilots bonus work to pleased supported towards contract this

to of I closing, thank In Allegiant. want team all

the in do. best We the you are appreciate You everything business.

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

Scott DeAngelo

Greg. Thanks,

being Our leisure remain Keny Officer, Operating capture the Wilper, saw rate his above near in the in recognizing Thanks far completion continued work our that keeping all strong testament family, expert second to our with leadership a greater travel we're book by level, along year's improved and historic Chief team XXXX. and much this demand to and operations, year-to-date. the a portion great highs last strong year's of of quarter Allegiant revenue domestic leadership controllable means

shortage no pulse consumer there's in the of predict while less and of we're opinions and it. future time forward, domestic with intention. starts we their succeed customer more ensuring to with on to Looking keeping behavior, leisure prepared travel and leisure all impact time our to fingers macroeconomic regards the trying spend travel their sentiment It conditions on

who a we quarter. for both as as time X past first past the the repeat those well following us our customers quarters, flying most as representative Just frequent sample surveyed we this from did flew

is economic groups, in and about XX from X Among on the than the us. in both Allegiant will will results have toward considerations economic more moving next behavior conditions remain strong likely XX them no actually with next flying The that fly that to Allegiant and months. said the unchanged more market XX% The XX% impact with months said past their quarters. make

the between the leisure XX% or any forms of group fact home, flying during majority sentiment vast our most their just than visit of of and family These group. flying flying or the XX% remain macroeconomic of primary residence them rationale vacation the stems to that For their travel resilient are are from under most environment. customers, more and their either frequent for the relatives repeat intention the unchanged

Year-to-date, flying members. nearly number most XX% used at XX% with of along program. vast our with nearly members allegiant.com. their new coverage from with of customers is last year. Allways have having year, such up with number as loyalty frequent our enables Ultimately, sold with members rewarding is amount, the XX% first Allways up Quarter activity easily is bookings turning any activity anything any nearly versus Allways in majority to them that into us be come at repeat Rewards of currency, Rewards time, points repeat customer versus year-to-date engaging reward broad can of last the new customers for customers, and The our customers, and our Rewards

Year-to-date, this more are products, X.Xx that on largely take than ancillary notably, more air Their air XX average, higher was driven are them nonmembers. products ancillary do. Most Allways XX value percentage Rewards spending points than valuable members of to on rates core seats XX% nonmembers. by and than bags, of nonmembers

engaged within loyal is, card active are segment card. million our of and the course, XX about co-brand nonmembers. Currently, most who our Allways of program valuable Our Rewards holders has Xx of total the more than X.X% customer database credit

years. such, and have a program significant grown we the we is million in next to X that X As years, there growth expect double we believe In unit, business potential. into $XXX the

Later an transitioning Visa. from we excited To to card this program. co-brand that to end, our month, network credit our upcoming partner change be to will Mastercard I'm announce

MasterCard be and the World Allways renamed rebranded Visa as Rewards Card. will Allegiant Our Allegiant

While cardholder higher in from enable believe We derive it the remains and drive both will decision card cardholders and Bank of program. the cardholder will because issuance leading levels largest X made acceptance new credit our revenue that spend, nation's of issuing and to Visa, ways benefits partner America we brand the move no we the to change. us to

not Allegiant for. only customers most said card who currently while said do our XX% Visa, likely card, to asked co-brand credit XX% they We be would have which apply MasterCard.

Costco say nation's regularly XX% more Visa shop only the of they and than there. customers one addition, our retailers, of In largest accepts

more? Visa analytic and Allways providing provide the Rewards What's Visa support growing Allegiant Card exclusive partnerships through benefits in financial, stronger and proprietary technical for capabilities. program will additional their and

peak in below as slightly simply patterns. as Year-to-date, historic pre-pandemic much is travel seasonal levels, represents and to year's normalized return up. nonpeak this last continued demand a we high Wrapping believe

end customers in the cities demand among adapt to been our our travel company continue close of hallmark history, and leisure We to changes as serve any remain view we to the ready environment. the strong, customers to we domestic as the we in but its throughout it's stand

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

Drew Wells

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

industry. remarkable results operational on the of As top among quarter in the Greg achieved mentioned, results we second financial best in the

The both our areas an with reiterate the together resources am and aligning issues, teams planning to to impressed it. ago, current are do available operations to I coming potential about anticipating immune proven challenging incredible about of environment schedule, talked believe has we points job operating it summer risk absolutely months we I the from help Three mitigate and and uncontrollable schedule we not was worth controllable capacity this. alike. how trimming with and X.X and want to

is faced especially the anyone done is margins candidly, well the including our position. of in harmony better ATC-related could at piece operational Florida. We've In operational an commercial schedule world returns, out financial first by operations, in Those of buffer when we showed regular that half but combination. maintaining often into else recovery while as that enable options concerns, with as better we expense and industry-leading or piece added of than X do excellence. The XXXX, the measured the the elite

of great to serve conjunction more in as foundation appropriate capacity. We with deployment operational do ensure going the continually but will this improve, have to to summer forward still work a reliability

as continued per We passenger second in which success ancillary once the co-brand bit. bundled thanks and incremental versus products in our again, to well part as ancillary contributed $XX yields each Diving and revenue quarter was passenger XXXX. a per in ancillary to large in continues revenue as thrive. with Allegiant Extra the well $X the Allegiant program, products quarter roughly The balanced strength into exceeded

Extra aircraft Allegiant and expectations. XX exceed continues now on featured to is

Allegiant we in option. aircraft incremental have coming with XXXX, Extra the XXXX layout While in Boeings will expect any this don't all

of grow from revenue business charter fixed and XX%. over and additional strength operations current us both from new fee on fee the our team fixed to to capitalize allowed diligence Additionally, the clients

mentioned, expected last over previously be TRASM As are now range. of months the the digits, to expectation narrow up side the maintaining lower to still we though X mid-single to mid-single-digit the of

product addition operational stability talked factors In incredible an continued to the Extra same, remain expanded Allegiant the Allegiant of story upside continued demand, the about. for we've and

service routes start. started Another average factor an among other growth routes Oregon, reintroduced with doesn't Denver, summer, new extremely Utah exceeding cities. upside and system that development. own the Provo, profitability including X X is X network, that happy routes and even some in this mature from their historically Portland, but all have I'm mean X in

winter new Florida with which presence. one our Additionally, demand last continued X base. a announced evidence prior month, compared announcements, leisure booking we season, on the are is added to above routes Mesa for average announcements of These to mainly strong focused

Lastly, Navitaire our ancillary program. lift should provide a to

given However, by yield lift curve, integration we we somewhat not did upside will see that through third the previously demand. quarter, into fourth. in are compression summer the atypical see we anticipated offset delay, still Furthermore, the close-in booking baking of heart the some the the though

matching As you capacity all know, on Allegiant with demand. prides itself

flying For more than and daily monthly have XX fluctuated our years, levels meaningfully. of

understanding when leisure want We of most they and fly. have customer great a the to

ASMs XX% slightly a September guide peak as X%. both to flying, fall very to year quarter, will no be the up flat in ASMs expected generally of roughly in while quarter of remains service XXXX. look intact with and third our leisure full at negative quarter different be to are line Scheduled be the roughly July's will The our of ASMs on third XX% days

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

Robert Neal

Thanks, report quarter, $XXX X.X% record million, in everyone, up resulting second line thank million recognized consolidated Drew, EPS on us $X.XX, revenue X.X% the in for of to adjusted call total XXXX the adjusted and capacity. results. financial produced operating Allegiant We're prior with another pleased quarter We the of joining $XX.X of earnings. higher you, for strong the quarter of on income today. over net in year

noted, XX.X% in last to the for of we increases, accruals costs X. about comparison nonfuel lower Our largely pilot points to unit offset pressured productivity, drove cost cost Improved with unit pressure increase. our May Greg operational a which, that points the same June X to by call, a which in payroll performance in year-over-year frontline announced quarter, was effective that that were Similar the attributable last in as were beginning inflationary period increase stations. and other increased regular expense operations accounts by of year by nice reducing tailwind X cost labor

of drive Visa, of to Variable costs Mastercard margin came and financial per ex-fuel quarter to below drove the XX.X%. improved X to our increase compensation the the unit year included at various which to Fuel came was some costs nonrecurring team from of an other CASM cancellation the for expectations airline points in points of remainder the operating roughly over helping transition related fee member of card and items. co-brand gallon, our our credit related $X.XX to increase in quarter increase cost X.X second performance related onetime last the

guidance. to year full Shifting

$X.XX full expected estimated $XX.XX. decrease earnings EPS by airline our attributable per fuel increasing midpoint to our to year full gallon $X.XX. share in fully the estimated $X cost is a The are $X.XX increase per at in from year We to

Sunseeker related noted, year of share. a continue loss $X.XX John full we to per As expect to Resort

in $XX $XX.XX. full costs the ramp midpoint quarter. adjusted roughly taken the approximately guide, opening ahead expect When property preopening earnings of the of year in using fourth We third early the per quarter we expect of and consolidated million, conjunction during our to at the share

June. million and That's in and of investments billion over in aircraft facilities available after debt Turning to cash secured capacity $XX PDP the in late $X just billion and undrawn ended quarter the financing with June million and balance sheet. a prepayment We $XXX liquidity. in revolvers $X.X in

remained debt billion. last with Net at quarter $X.X consistent

up was year-end debt X.X do year. down a months first EBITDA We X expect of aircraft strong end leading up our net the first at add would debt X.X to in quarter of by the expect some level year. to above the net to from delivery reduction MAX slightly just the current incremental XXX to and during Our late of the leverage turns, at driven production be the fourth

expenditures and our predelivery property included came expenditures deferred purchases, spent $XXX to other million. heavy million $XX airline capital in We Sunseeker in an during and $XX CapEx deposits Second costs. additional other maintenance aircraft fleet-related was million for quarter. capital Resort related quarter million at $XX.X CapEx induction, the

ended work service. of AXXX owned the XX Moving expect Airbus We to AXXX AXXX aircraft had additional the and in with to X operation aircraft XX additional quarter fleet. as inducted X one undergoing into aircraft during AXXX We AXXX and XXXX. induction aircraft and purchase the and remainder of end quarter

our And second delivery first Boeing moving indicate delivery this that aircraft of Updates on be from by approximately to which were aircraft, delayed scheduled XXXX. will the for weeks, into year, the us and one end leaving each for the X XXXX MAX in fleet. X at XXX

discussion, XXXX this XXXX schedule effect delivery impacted of under While our not the our by the capacity is still on delay. remainder follow-on are plans

begin approximately throughout we year next As first we've XXXX. shared our delivery to per of to expect month XXX X the and quarter in aircraft previously, expect first of aircraft operating take

CapEx guide and of full with aircraft year be to timing full in, $XXX spend predelivery $XXX from Our we to the updated million year and implies deposits million. reduction just timing year aircraft guidance induction-related prior under airline roughly engine deliveries. CapEx of today All in expect this related

level we've the start earnings trailing investments our potential with in gallon. the trailing business. Adjusting infrastructure notwithstanding the $X.XX $X back unlock past our fuel, aircraft, XX would excited million per XXXX to per in few the to for be trajectory XX-month the the some $X.X is of pleased financial of very and earlier. EBITDA can on been per approximately EBITDA We a we the fuel in quarters we've I cost cost pressures of added of in seen benefits mentioned I'm making. million months aircraft for

I improvement continued numerous metric many moving parts there initiatives as online. recognize on While expect are here, our this certainly come we

a We're sharing reliable of results we're extremely to our have today. that the that achieving Running proud team operation and to paramount together been the members and way worked schedule has they operate I members the airline summer our by to X,XXX for a just contributions challenging. during remains time that want of their thanking all team peak travel end season. during this busy

begin Michelle, analyst we're questions. ready to taking

Operator

[Operator Instructions].

The from comes with Pfennigwerth question first Duane Evercore.

Duane Pfennigwerth

mix envision to be? that to relative groups would you for what the group transient be with, do transient? you much how had I John, to the like Sunseeker that segmentation cited? contracted the rates you And versus for those rate mean what if you look have would guess,

John Redmond

questions. good Duane,

I think kind have you of at when it you to look that, by look at year.

to normal in a could in So 'XX, of XX%. XX% of, When like at to looking of more something as be XX you're the range the into it's we'll starting probably with booking year, that we 'XX, be maybe say, XX% we'll to to move probably range XX%, full be looking at looking forward. XX% XX%, out at as with you're XX% but as would probably 'XX, you're the to range get but range high years start I'd in wide the going probably of because year in the -- just

have look fall been that roughly give of the nights booked, some already room that, when at XX,XXX group color to you those Just about 'XX. on into you XX,XXX

-- nights that's So than over year. that have slightly more XX% roughly total of in we room the XX% a would given

But of where we that barometer, brand gives you of peak good think XX% we're I going why where percentages existed that's a with a but dealing to it hasn't would it's that's is 'XX. these to and the property be impressive, incredibly fall. like I a starts range are kind think that's to in that So and kind again, run as

Gregory Anderson

or on XXX thereabouts. XXX rates, to John, are And there group the

John Redmond

awareness you around at to XXX-ish I when unknown. look not Yes, room they've would and a averaging there's all to of property XX,XXX expect been an And ramp into we're as the greater nights. selling up those

are we're selling we're than rates just the the unknown the point. selling into get into an is we rates those another data to as mean, up will we but in So 'XX, getting more ramp I expected, 'XX. out property, into again, continue -- years It's

that nights group been So have we already have into booked 'XX. room

Duane Pfennigwerth

thoughts. this just And it's give little us Appreciate quarter? help somewhat I know rate, know insurance it. on Got got then OpEx hypothetical in the at the the point. a reimbursement. you some you run can I

was kind kind see how And rate OpEx XQ? Sunseeker for run in of ramping what you So the that do XQ of into and XQ?

John Redmond

my you're it the be was, for that have number, probably course, was less think as about. the all talking sure, top head would half XQ but is XQ, talking number obviously, than -- about that I we're The which of preopening think I what $XX million, of XQ I number. don't off the

Robert Neal

Yes.

had... we think I

John Redmond

ahead, Go B.J.

Robert Neal

to and between quarter. million, million the $X first say, I $X quarter, second Like per want to

John Redmond

Yes.

Duane Pfennigwerth

the when of what you're sort up that sorry, with million like? And that look does full $XX fourth running quarter, and

John Redmond

financial airline, the from to we which do that guidance for an intend data the Once be historically put we any at out do probably, we're We standpoint. same operating haven't up provide after and should operating, QX. time,

So the we time. operating at that would same resort provide guidance for

the we now, right are OpEx, opening. So a piece before only providing

preopening just numbers. adjust So

you those put night. out range, see, around in be was $XXX years transient. that when blend a and I numbers think a and ago. we I $XXX we're better group projections the even the to results they're as ADR would something because better is significantly you there expect can And dated, There few much public Obviously, running

Operator

Raymond Instructions]. with Savi [Operator question next James. The comes Syth from

Savi Syth

a talk capabilities hiring bit has little that attrition today? bonus and could talk if improved I that of seeing rates if the could Just about pilot you retention that And about and you're little a you're bit kind offering there? the the

Gregory Anderson

thing sure. Greg. the as question. forward was right do. hit for Savi, the and moving we It's And bonus it, to and with to the just up on Thanks in general, came

rates at Allegiant but be want of to stay to that that they do to has to because that the thing pilots we of the understand do life. rates felt mean and we be it us say, right so and to here this back when compared low pilots for providing feedback Now to here, many I low. the want are to we Allegiant be quality was and is how difficult in of want industry. terms have the so were unique here, talking our overall, We setup they to are our to out want that the

one is wrong. we me contract and areas, where get, in and make of forth. we need get quality ultimately a need is The retirement of pay life, to step. certain improvements so This rates, Don't including lot to

of pieces. terms staffing, X let's maybe break to just it I'll In down --

schoolhouse number But full. Let's I'll mean the pilots Savi, one, the then -- I and being months, pilots a the of net in that past couple of about through over kind been of classes and we've schoolhouse, seeing. we've attrition talk physical the the house. are terrific increase as seen coming the

X X full. I the think classes been have last or beginning

about to So class. per XX XX

perspective XX per year, that in seeing were we the Before the roughly class. of first part to XX

what there. by we're encouraged really So seeing

different that that a up. really several has unique the quality and of pilots focused and Allegiant this of be Our life right lot team, recruiting kind Tyler -- pathway Hollingsworth to of on programs turned by around type that this, led set at want sees of

if remain the encouraged really we signed as rest will. about to continue full the of that you and have up kind maintain classes, the and those still to status, class that year, we -- look forward So of

the terms staffing, attrition around that some we in maybe guardrails But notices put that and the receiving. just to around were of or

about were in we pilot just simple I receiving mean, notice like it it to a put was say into nearly a terms. -- day, I'd roughly May, So April,

early -- June X/X down that since number. to been of has June, since And number that cut

certainly trends we've those So seen some encouraging along lines.

that's probably of Some seasonal.

again, not And Some bargaining. airline, of this trying continue all of make then that hopefully the important retention we deal going our thing it just but the members. for in our destination want improvements reiterate from and -- of to collective step do to most just make big can pilots, there a team due we done there of also us, outside to to could the all go but getting but of is to and I not bonus, out a

Savi Syth

well operate the where the That's is constrained going super to kind MAX just to investments and thinking on kind in these very it's another early year is, uncertainty? and still might, if XXXX, type how kind MAX And of be is color. growth like capacity about you of deliveries on XXXX could target of as of helpful what you early? capacity make are somewhat Or recognizing you XXXX I thoughts

Drew Wells

it's here. Savi, Drew

foremost, our biggest of First beyond one CBA getting flight done delivery. a the be with components the of crews will timing and and above MAX

today, still on the we have of training have MAXs through requirements and focus 'XX. constraints all we As we'll will the though that drive

to we're a there of would of bringing a So produce what the ASM-wise the I to end maybe of expect little to be the bit ceiling we're fleet able on terms year. relative until in

historic our a might get to that lot but run rate, bit. pull start can a to back we little closer think I I

John Redmond

the AXXXs, thing fleet. the some would retirement yet is of only on out expect I Savi, confirmed schedule we we Yes. of mention haven't our the to other that there take

And so that us a little of flexibility. bit just gives

fleet delivery gain with to specifically the haven't XXXX some we and come so certainty we out around wait the And as schedule. want plan MAX

Gregory Anderson

I'm add I'm comment. X be I quick this is my Greg. just to years, aircraft. planning we're next mentioned one Savi, more And over the to XXX-plus in going -- remarks, going to

-- a and -- get doing. what growth. just path have reorient I a most exact size. all not that, airline to may that's We're going building there. that people. don't investing that's at but foundation planning We're looking We're we're in we're to at be the foundation. want in long-term And strengthening we to right believe the It of around an we importantly on. things strong that to We're So this and we we're cadence, what our know support

we're lot getting X able number to we the aircraft And And XXX-plus as believe years. grow that continue moves next prepared in that we're of for and hit so a is the to seeing profitably grow we us that.

Operator

Andrew question [Operator next Instructions]. Didora The America. Bank comes from with of

Andrew Didora

Just CASM. a on of couple questions

double-digit to in all Any you bonuses June, think paid the change -- pilot outlook. out maybe the agreements about I Where kind then think low in And that the this that industry? out number I new part the were were others targeting been that with of retention pilots the had year. of given in growth tentative including number? you from there

Robert Neal

in X/X Andrew, it's of no, B.J. a But we the I'll those it start, think on in of mention, the jump and Greg, continue to only will yes, about if you want quarter, to cent. second I X months included part like that. second we around accruals. of

the of of the year-over-year through quarter. throughout costs months kind of X the the on moving you're the unit yes, so each double-digit for the But rest right, you'll in back half year. year, And of burden low growth

Gregory Anderson

still over pilots first that the clarifying at an those just June. retention not points. . all in pilots maybe That's paid retention that agreement in to It's out through locked and are process, this a rate first We've locked the for out a And actively final But time. XX% employed officers the but in bonus It it's negotiate we'll at couple with paid of bonus. actually that year, is ratification rates a the for Andrew, that of is upon exceptions mediation continue period. at of

Andrew Didora

suboptimal, timing How year? around can of in would next lower than you scenario? helpful? puts Savi's are Right. should kind pilot I requirements XXXX and mentioned to Understood. growth think moving there that a between question And response for maybe type CASM about look, provide of a But deal, Any lot MAXs. know training the takes you growth historical we of it's about parts in in that be

Gregory Anderson

a to just don't lot on Andrew, early real but I'm front it's of I'll give have I in kind of 'XX. sorry, say CASM guidance Yes. me,

on Just there's call, by of time little delivery like each pilots moving a of And in the you we've then the XXXs. next the doing throughout more will actual schedule around the I how many ASM year? mentioned got period different what producing are retirements bit a determine hope the of lot you. which of the at we color to are useful with parts, MAX, share

just apologies kind give a that of little So to early guidance.

Andrew Didora

one bit. And I down in. maybe housekeeping interest little one I expense your a sneak in Got came it. guidance, saw more could

your bit as a take the you remarks, MAXs said that on prepared year-end in you're to were think, through delivered. I more going debt

driver was of what interest the curious there? the lowest lower Just expense --

John Redmond

driver of interest the lower expense The this year, yes.

million quarters which So prepaid the of relief us opening my million this a final secured end making quarter, aircraft as of a little just the set the debt will that remarks we end -- of of in And it $XX And of comment then we bit second leverage year. little there's -- bit some the MAX the delivery gives of X in at at $XX the the expectations, is continue in then bit still of I was debt year-end still quarters X PDP to just wanted payments we add year. year. final a X on

Gregory Anderson

very is and that bonus and an And Andrew, go and received. I'm and me, we the to the I X it's out on efficient Street add -- our team comfortable deal able and financing. of B.J. effective equity the remind that. it finance nature and the particularly We're going The XXX those and just timing investors the XXX But our that in to law around gives just appreciation tax in just put opportunistic day want value to else piggyback excuse to aircraft meaningful, opportunity the depreciation, aircraft. being those something

-- by essence, government $XXX this mean, in loan to forward deal. from I million free estimate we're receive moving rate the we in with interest roughly going

will offset future. that the taxes cash in So

Operator

[Operator comes Morgan with Stanley. next Ravi Instructions]. The question from Shanker

Katherine Kallergis

during to this a in Kallergis time. that some But which previous was you and I follow said on This to is Katherine Ravi. airlines comment, I periods, for on favor peak done started up for could than wanted Florida have Allegiant if has color dynamics in dynamics specifically. just be what curious industry peers? might might if if And be periods. competitive around curious Also some these peak provide the market consider different you these different you

Drew Wells

time we leisure carriers I holidays, your bit bit talking peak, as which a are of mean, I are spring When speculating Drew to traditionally is And holiday most I'm peak, having around working. I right? refer more summer peak Yes. would coming around So to school exclusively leisure describe the those frame, leisure think and here, we're break, here. how domestic as They're same. -- exposure. dynamics a think about and kind

the change if peaks peak pretty peak in a peak reason. capacity I And The the quite generally. -- things of capacity pre-pandemic an is sorry, One even well. up in that demand -- there to soak a periods excess thinking about anticipate particularly offpeak capacity don't so great demand dynamics are competitive was when meaningfully. of could for elevated,

demand XX-plus a so Allegiant the well mentioned we And to patterns model just in that thing, and general, good the but we've believe it's I exceedingly like something years. for fit cater

for So kind of this we're built dynamic. exactly

Katherine Kallergis

And just as a quick follow-up.

XX% how of Your economic have conditions no will impact surveyed interesting. stat was about those stated flying on

the how And you all perform curious past do it think see -- is? Just recessionary what in demand really inelastic you've maybe environments? you seen

Scott DeAngelo

No, thanks question. for that

inelastic doing and/or staying pretty frequent the their homes. second it those traveling from answer because is vacation from For is flyers, they're they're where to and family and

instances, casino. right, not Vegas interest it's many park an as rates, Orlando as or a a meaningful of theme those family high in So Las say, inflation, to vacation

to it's a flying from customers, and core and/or fairly our because second amongst inelastic home. they're So family

Drew Wells

so broadly, from. the certainly, thicker serve generally But peaks to is customer peaks still Yes. the that off-peaks, a see a very more pool general, we have price-sensitive choose that. when or summer in demand Less still in in you customer. And we

passenger $XX bit ancillary right, especially Just build face by to through ability closer the of we're way pass per example, we're that to taking inelasticity was a relative more already load. will, muted, balance the of trying in, we you plus of in higher, pricing as advantage if

can where it's between place cabin, that of So customer there's premium our right on a versus differentiate of mix I help the balance we our And Allegiant Extra experience like think really to find a and aircraft right that have can that for all main pretty heavy manage. a tricky that's Allegiant revenue the customers. be type product segments

Operator

[Operator Instructions]. The comes from Helane Cowen. question with next Becker TD

Unidentified Analyst

having some been of just be And what more Would year, you're given you that just any that of providing performance seeing the learnings taking -- on with for the of next drivers [indiscernible] Helane. operational have of on in happening a would great? you're any buffer, challenges you is runway any Vegas, the some that beyond there? This Las color just mind then for

Drew Wells

ago and and periods we X.X%. X question. struggles well in April -- performed turned impact. of pockets were But Yes. that June portion had had days that I went July Vegas summer. well months of And called materially Vegas as there of exceedingly that exceedingly Yes, some May of the and still outsized kind around concentrated an through out great think and

anybody there's think happy reviewing So about outside some lot churn how and especially but if how broadly, a the every not we viewing to Thinking that forward, more adding pretty the concerns slack a matter. in out. you about with there at panned through as Vegas from that thunder moving minutes schedule do We can entirety, into afternoon. extended some where coming and extremely recoverability, firebreak things about firebreaks and provides about heat-related schedule Florida X:XX think balanced routine storms were thinking that actually those its better times relates

airline to impactful least start the the ourselves to most time so that think every in of chance and a crews plane gate getting we time at to things, correctly me, touch about succeed. and our the on for overnight one the could mechanics give But morning perhaps,

on we and start think day through could starting So the when time to awry. go both things recover how about

the got the more lot for year, top but to we close refine place maintain this I industry. think continue the our us to to right towards work of answer there's do and a to

Gregory Anderson

commentary year But add the feel the staffing about Wilper I and the heading are really to the And quick coordination too. from , And where very we talked on between and Keny levels sit confident moving the Drew, comment second up. here, half Yes. solid. and planning we about, of we just a that ops today, that's just want

seen In that's we've fact, XXXX. with best the exception pilot the of since

encouraged we're So by that.

debrief game and and be As to the the flying, the around get ways we come together for a corner, the of will in a out and as all -- to do can. exit that any better, around postmortem process look we peak step that summer we'll summer gauntlet continue efficiencies will get teams up the and our they way be of -- and we

Unidentified Analyst

If just squeeze in. I could one more

the for can mentioned revenue outlook fares the what that in on I little wondering ancillaries can the base for on the and of was you and just you for you color any now. unpack bit rest year. if from Just cadence a see right

John Redmond

related, order. cadence and second was bit And disappoint year's 'XX months kind the not probably third set how cadence. last comp of the and second, last X maybe towards communicated quarter previously well I'll the I'll about one even out or think guide a X look fourth of that we talked as the get Yes. about I little One, into you enough and you the things point of ASM we I point kind maybe appreciated I'll as cadence out. would help to

there that of from the was we that to the in amount little still they bolster the probably bit. fair a helped relative variant a quarter. half the first And there recovery experienced Not disparage of TRASM I year-over-year think XQ

you concurrent in kind of pieces X totality. as the about of X months I think last So think in those

Operator

comes next Linenberg [Operator with The question Instructions]. from Michael Deutsche Bank.

Michael Linenberg

that we there rates. on I Sunseeker How margin? ballpark quick a here. of just of if of a about in plan, range. think reasonable you Just profit back think where Duane's that response it to with Is ones referring EBITDA cost numbers the we about in original from sort the you still the the few talking John, guide kind the were question to to just go inflation and margins XX% was better, all were should sort

John Redmond

do. I Michael,

or doable. the kind outpacing with is when EBITDA air I think CASM-X side, like CASM-X revenue the see on even still the happen margins Well, those are -- right, It's of you CapEx growth. increasing.

in by same more increases world, offset the the on the the rate where thing way are seeing -- you're in room increases that cost market. the than So resort happen

encouraging. very So

U.S. just shining star industry Obviously, when been, And Florida, strong. the hotel has it's comes on. it extremely throughout to in particular, the it's going what's been a but Florida,

that margins at potential there on EBITDA think think looking much early there's under those projections, even to out I So and be I we're a stronger. for we were

Michael Linenberg

Is then one just We've Frontier a and maybe Spirit for Very to the seen JetBlue in they've assets good. that the looks well already the this Lauderdale, Allegiant. take And divest they up be lot second that at indicated to an team. of as Gates more like of in there's at still its of and would proposed willing that by It runway of to potentially a Greg announcement assets space John, they interest divest, you, some probably merger Newark, Obviously, any timings Fort slots. it's Boston. maybe point. would that

Gregory Anderson

Greg. with it's you. to chat Michael, Good

in continue situation. -- certainly think to we airports team continue of his report to But today, sit aware all the I nothing opportunities As really on that where the look and there's team Drew and front. at

Michael Linenberg

if one I Very just could Scott. good. And quick in then squeeze last one for

where United this We spending base summer are and you do time surveys than and surveyed where your something domestically that have you're that lot a rather lot a different the people you base, Any heard are flow their very What of other to customer carriers know amongst talk some this you're have Scott, I which and going said going more electing flying they've about own customer of carriers just they're would Are traffic other be are percentage a lot of on patterns Europe to to? go because similar seeing outside States? seeing color close to losing Europe. great. maybe you

Scott DeAngelo

exactly you, asked we thank Michael, several have that. weeks, And the last because Absolutely.

to I'm tell So you. prepared

make internationally. we're First, ability seeing travel Allegiant some to a others the reported. and than we have But sure ask had about our have that of XX% customer Frontier base they passport. out to what different customers very Turns

travel in you and XX% or not next customers, months? yes. no you of When have asked, have like last months between to both our internationally the That X X same internationally the and in do The vast is means say, have answer traveled the XXXX. internationally plan traveled the in XX% majority XX% plans

John Redmond

XX% the maybe, elaborating to think changed XX% Scott, talking about hasn't year-over-year. you're it's on to worth I And

Scott DeAngelo

additional hasn't taken That's it's now open, an right. trip. as been much and as a they've It zero-sum

John Redmond

Great Yes. point.

For us, are displacement year it's out. all. a in at The argument year not percentages consistent and

Operator

with from Melius The question Conor comes next Research. Cunningham

Conor Cunningham

I doubling card On credit of remarks, spend. there. trying the to growth contribution, mentioned and of that's the prepared potential the just cadence But the assume Allways in Sunseeker contributing. card both your you understand

about curious Just ramp forward. going the there

Scott DeAngelo

Absolutely.

will, comment that at next post where million, Sunseeker double X $XX going in we roughly the So to effect, in years ended last assumed over based year from It's million. the $XXX without in it. largely

cardholder compounded key at you we cardholder and same So that above it is achieve spend the the per right spend Increased cardholder. from mentioned. portfolio things or grows growth, as

opening. So could it Sunseeker based My I beginning goodness, on represent absolutely think faster. which additional were make in any we'll comments that comments from upside get John's even the not

John Redmond

Yes.

I think John. -- this is

a not program out has that were MasterCard think think, available available I huge at channels the the cardholder, Costco that past when is to a to that you -- are be a the significant. will notably I most a with look data point Scott pointed now cardholder is in or

But type necessarily number to expand require that significantly then So just planning of going the use channels to of that. are are with we of doesn't Visa. on although increase in increase the an moving

Conor Cunningham

the helpful. realized trying any great point and color is of Again, a I'm just ADRs kind I your That's still potential there it's could as Mike's on is, just just bookings. I question the but some thoughts on and helpful. get expect that around that profitability I Okay. we And early path When well towards opening. that be the you're point profitability, working to But realize on get, then on Sunseeker, there. to would contribution days, like over? maybe commentary inflection this

John Redmond

said basis, negative a quarterly talk contribution time, cash that to of turn, we -- contribution ever about negative would now I you're you intend a there's a no EBITDA. forecast we EBITDA, or you mean be any we don't about When period talking have on

added the standpoint, the So years. positive with they're I from be a throughout to year going upside out cash in the think

see and 'XX the purposely you there 'XX for we below market. So product priced out that

believe below new So it even new because brand a that these not, a and rates, market when we're property we're putting you market. see or into

when I'm open period not So at for a you we've I'm of look month. talking and a been time, after talking years,

start going that that You're those -- rate up. to to -- accelerate see rates

those even And purposely significantly with XX.X%. are underpricing, impressive, see have will up we that sure, ADRs but for underpriced. you those purposeful the ramp So

Operator

I back for to would like remarks. to Redmond John turn the closing call

John Redmond

we've An appreciate and been time. year. and Well, incredible here of management have our everyone's amount I over accomplish very balance proud And excited and resources what team of of year-to-date. of gone into years. the We're able about we're time the systems very to last this couple

all forward. starting of this You're sets the rollout that the really for backbone to see started time and to year, happen this company going will effort which

-- we going forward. So XXX is into system a move the everything to and I from have need we should aircraft us restrictions, as referred allowing we to, will have do you say that to limitations Greg to no environment, aircraft what do standpoint everything XX want or

agreements. tomorrow We're finishing agreements. and our up to we where And last focus going with today restrictions. by those no is now absolutely, where So we're labor very just the end are encouraged up

exciting bullish you the years Thank out stay much. again, times very Very company. very So tuned. for this about and ahead,

Operator

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

You may now disconnect.

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