Allegiant’s quarterly earnings rise modestly

For a company typically placed in the fast-growth category, third-quarter results released Wednesday proved relatively plodding for Allegiant Travel Co.

The Las Vegas-based airline reported that revenues rose 5.5 percent from one year ago to $228.9 million as the gains in scheduled service were diminished by a shrinking charter business and fewer hotel bookings. With certain cost categories creeping up, the net income grew only 1 percent to $17.1 million, or 91 cents a share.

By comparison, the nine-month-to-date revenues increased 10.5 percent to $757.7 million, with net income up 17.2 percent to $74.8 million, or $3.90 a share.

Still, the third quarter results beat the consensus estimate of 90 cents a share among nine analysts polled by Yahoo Finance.

The stock in after-hours trading remained even with the close of $106.49; despite some stumbles in the past four months, investors have retained confidence in Allegiant and pushed the stock nearly back to its all-time high of $109.72 on July 1.

During a conference call with analysts, Allegiant President and Chief Operating Officer Andrew Levy said the near-term outlook was dampened by an undefined amount because the federal government shutdown delayed putting seven Airbus A320 aircraft into service. The planes operate more cheaply than the MD-80 aircraft that form the backbone of Allegiant’s fleet and hold a few more seats.

“The shutdown couldn’t have come at a worse time,” said Chairman and CEO Maurice Gallagher Jr. “We were all prepped and ready to just work with (the Federal Aviation Administration), and they stopped.”

For example, one A320 was left stranded in Ireland because it did not have the airworthiness certificate necessary to operate in the U.S.

“As you know, that’s a pretty simple thing,” Levy said. “But it’s not so simple when the FAA is not working.”

Originally, Allegiant expected to have the planes start carrying passengers next month, with all of them flying by the end of the year. That schedule will likely slip by an undefined time, but the new routes will be flown with other planes.

In addition, the company said the operational disarray created when an FAA inspection found that emergency slides were not inspected as often as the manufacturer recommended cost $2 million. This included overtime pay, cost of accommodating passengers knocked off their original itineraries and emergency leases of replacement planes while the slides were brought into compliance.

The schedule to start flights next year between McCarran International Airport and Los Cabos and Hermosillo in Mexico is up in the air. Previously, Levy acknowledged, the company talked about a second-quarter launch but is now looking at a launch before the heavy travel period for the year-end holidays.

“Issues with Mexico service are related 100 percent to automation and commercial issues as well,” Levy said, in particular the computer programs needed to properly display items such as taxes and handle the accounting. While not complicated, the task takes up time for an information technology staff that also faces other tasks, he said.

Although Allegiant bills itself as a vacation company and not just an airline, the number of hotel rooms booked through its website dropped 11.6 percent during the third quarter compared with 2012. When Allegiant dropped the discounted airfare that came with the purchase of a package, some passengers looked elsewhere for lodging. However, Levy said, the current strategy produces stronger overall profits.

Levy was promoted to the company’s board of directors Wednesday. Until now, he was the unusual case of a president who did not hold a board seat.

In addition, he was named chief operating officer, replacing senior vice president of operations Kris Bauer, who opted for an early retirement.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or at 702-387-5290.

ad-high_impact_4
Business
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center will showcase 13 small businesses in November and December and seven in January. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
T-Mobile uses ticketing data to plan for event
T-Mobile Executive Director of Arena Operations explains how ticket sales data and demographics help plan staffing, vendors, parking and operations for an event.
Costco opens its doors in southwest Henderson
Costco has opened its fifth Las Vegas-area location near the intersection of St. Rose Parkway and Amigo Street. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas strip mall and office park
The Krausz Cos. and WG Group bought a strip mall and an office park in Las Vegas for nearly $80 million total. They acquired a portion of Tropicana Beltway Center in the southwest valley for $59 million. They also acquired the Westbay office complex in the Las Vegas Medical District. The buyers are former owners of The Gramercy, a once-mothballed mixed-use project in the Las Vegas suburbs. They sold The Gramercy in phases for more than $100 million.
Mario Barth talks about the growth of the tattoo industry
Celebrity tattoo artist and business owner Mario Barth talks about the growth of the tattoo industry at The World of Tattoo industry trade show at Planet Hollywood in Las Vegas
$7.5M Las Vegas pot dispensary opens near Las Vegas Strip
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. It has entertainment including an interactive floor and floating orbs. (K.M. Cannon/Las Vegas Review-Journal)
Caesars CEO to step down next year
Caesars Entertainment Corp. CEO Mark Frissora will leave the casino company in February. Frissora has been CEO since July 2015. He was named CEO right after Caesars' operating company filed for Chapter 11 bankruptcy protection Caesars Entertainment emerged from bankruptcy protection in October 2017 Before Caesars, Frissora spent seven years as chairman and CEO of Naples, Fla.,-based Hertz He led the consolidation of the rental-car industry through Hertz‘s acquisition of the Dollar Thrifty Automotive Group.
Planet 13 in Las Vegas adds twist to marijuana dispensary look
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. The dispensary is located near the intersection of Desert Inn Road and Sammy Davis Jr. Drive, near Trump International, in Las Vegas. Planet 13 has plans in the future for a coffee shop, a tasting room for marijuana-infused beer and wine, a lounge for consuming marijuana on site if that is legalized and space for food.
Caesars Entertainment opening 2 resorts in Dubai
Cove Beach will open on Meraas’ Bluewaters Island in Dubai in November and Caesars Palace Bluewaters Dubai and The Residences at Caesars Palace Bluewaters Dubai will open in December. (Caesars Entertainment)
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like