Allegiant Air’s parent company is suspending construction of its Florida resort and slashing other costs to cope with the national fallout over the new coronavirus.
Just days after saying construction would not be affected, Las Vegas-based Allegiant Travel Co. on Wednesday unveiled a slate of measures in response to the virus, with Chairman and CEO Maurice “Maury” Gallagher calling the public health crisis an “unprecedented situation” that is “changing daily.”
The deep-discount carrier said it already slashed flying capacity and that more cuts were on the way. It also said it would “immediately cease activity on non-airline projects.”
Allegiant is shelving construction of its $470 million Sunseeker Resort Charlotte Harbor project; tabling the planned renovation of its Florida golf course, Kingsway Country Club; and closing its two arcades — one in Utah, another in Michigan — until further notice.
It also put a moratorium on nonessential capital spending, froze hiring for nonessential positions, suspended stock buybacks and dividends, and said “avenues for additional borrowing will be explored.”
Gallagher and Allegiant President John Redmond do not take a base salary, but other corporate officers will take a 50 percent salary cut, the airline said.
All told, the measures “could defer as much as $300 million” in planned cash spending this year, Chief Financial Officer Greg Anderson said in the release.
Allegiant will “bring forward additional measures as needed,” he added.
The carrier — known for flying from small, underserved cities to warm-weather vacation spots, usually without competition on its routes — said over the weekend it will close Sunseeker’s preview center for two weeks starting Monday because of the new coronavirus.
Allegiant broke ground on Sunseeker a year ago and has said it expects to finish the hotel in the second quarter of 2021.