Allegiant Travel profits tumble

Despite revenue growth from fare increases, Allegiant Travel Co. saw its first-quarter profits drop by one-fourth.

A fuel bill that rose 38 percent, sharp increases in employee pay and increases in maintenance resulted in a 24.1 percent drop in net income to $17.2 million, or 89 cents a share, from $22.6 million, or $1.12 per share, a year earlier.

The average of nine analysts polled by Yahoo Finance predicted earnings of 87 cents a share.

Revenues rose 13.9 percent from a year earlier to $193.2 million, as Allegiant Travel's Las Vegas-based airline, Allegiant Air, followed the rest of the industry by raising ticket prices to try to offset rapidly escalating fuel expenses. The number of passengers it carried rose 7.2 percent.

Allegiant Air, which flies relatively old fuel-guzzling jets, does not hedge fuel purchases, a form of insurance against higher costs.

The airline forecast that it will shrink its scheduled service in the second and third quarters as another response to fuel costs. Allegiant has already trimmed previously planned increases in flying time.