Amid rumblings of strike, Allegiant posts record first-quarter profits

Allegiant Travel Co. had record first-quarter earnings, but it’s the prospect of a pilot strike that held most financial analysts’ attention in Wednesday’s company conference call.

Las Vegas-based Allegiant, parent company of Allegiant Air, reported an 89.8 percent earnings increase of $64.9 million on revenue of $329.2 million compared with first-quarter 2014 earnings of $34.2 million on revenue of $302.5 million. Earnings per share more than doubled from $1.86 to $3.74.

A survey of 10 analysts anticipated the company would report earnings of $3.53 per share for the quarter that ended March 31.

Chairman and CEO Maurice Gallagher offered no preliminary remarks on the company’s 49th straight profitable quarter and the first question he fielded was on the company’s icy relations with the Airline Professionals Association Teamsters Local 1224, which has threatened to walk off the job in a dispute over pilot scheduling procedures.

“That is the elephant in the room,” Gallagher told analysts on the call.

The bottom line for company management is that it is confident it will prevail in its dispute with the union.

The company and the pilots are awaiting a decision from U.S. District Judge Andrew Gordon on Allegiant’s bid for an injunction preventing the pilots from striking.

The union and Allegiant management argued three days in court. After both sides completed their court testimony on Thursday, Gordon said he would “rule expeditiously, but not overnight.” Company officials said they are anticipating a decision from Gordon next week or the week after.

By then, the two sides presumably would be back to scheduled mediated bargaining sessions. The two sides haven’t met on a contract for six months.

The pilots are equally confident they’ve convinced Gordon that Allegiant has not returned to status-quo work rules he ordered in July 2014, particularly on pilot scheduling. The company deployed a new trip bidding system that pilots say moved it from a seniority-based preferential system to a line system that gives the pilots less say on when they fly.

The pilots also publicized a report from the Aviation Mechanics Coalition stating that Allegiant aircraft barely pass acceptable safety standards and that 38 incidents involving schedule disruptions resulting from mechanical issues have been reported in the first three months of 2015.

The company addressed the report and also stated that pilots would be eligible for pay increases as a result of the company’s financial results.

The Federal Aviation Administration has stepped up inspections in light of the company’s labor tensions — a procedure Gallagher said is routine during labor spats.

“We are not aware of any findings from the FAA related to this increased surveillance,” Gallagher said in a statement. “However, the FAA has indicated their heightened focus and surveillance associated with the labor activity will continue until the outcome of the litigation is known. While this increased surveillance is in place, the FAA has indicated it will not process any current or additional requests for work that may relate to our planned growth. At the current time, we do not expect any immediate effect on our operations.”

Gallagher also said pilots would be eligible for pay increases of 5 percent to 7 percent per hour on May 1.

“As part of our pilots’ variable pay band structure, pilot pay scales will increase,” Gallagher said.

As for Allegiant’s operations, the company is growing its East Coast market while Las Vegas route expansion is flat.

In the conference call, company officials said the rollout of Cincinnati service has been the most successful launch in the airline’s history.

The company also announced it is acquiring three used Airbus A320 series jets that will enter service for the company this year.

Allegiant stock closed down $1.10, less than 1 percent, to $167.85 on average volume trading Wednesday.

Contact reporter Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find @RickVelotta on Twitter.

ad-high_impact_4
Business
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Hooters owner talks about room upgrades at his hotel-casino
George Ruff, founder and senior principal of Trinity Hotel Investors L.L.C., owner of Hooters Hotel and Casino in Las Vegas, talks about recent room upgrades at the hotel. K.M. Cannon/Las Vegas Review-Journal
Passengers Discuss Allegiant Air
Allegiant Air passengers voice their views on the airline at McCarran International Airport on April 16, 2018. (Bailey Schulz/Las Vegas Review-Journal)
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
Trump Slams Amazon for Not Paying Enough in Taxes
Trump Slams Amazon for Not Paying Enough in Taxes Trump tweeted his concerns about the company on Thursday. This isn't the first time Trump commented on the issues via Twitter. August 2017 December 2017 Amazon did hold back on paying state taxes in 1995, but the company has been routinely collecting state sales taxes since then. In 2016, the company's report from the Securities and Exchange Commission confirmed it paid $412 million in taxes.
David Copperfield in court after man injured during magic trick
The attorney for a British man who is suing illusionist David Copperfield said his client suffered serious injuries after being called on stage during Copperfield's show at MGM Grand.
eyecandylab CEO shows augmented reality during NAB
Robin Sho Moser, CEO and co-founder of eyecandylab gives an augmented reality demonstration at his booth during the National Association of Broadcaster Show at the Las Vegas Convention Center. K.M. Cannon/Las Vegas Review-Journal
Trends in access to capital for local black business owners
Denette Braud, owner of Braud’s Funnel Cake Cafe, talks about what owning her own business means to her.
Sir Richard Branson announces purchase of Hard Rock Hotel
Sir Richard Branson, founder of the Virgin Group, has acquired the Hard Rock Hotel with partners and plans to turn it into a Virgin-branded property by the end of 2019.
Calvary Christian Learning Academy, “There was no fair warning.”
Samantha O’Brien, whose three-year-old daughter attended the Calvary Christian Learning Academy daycare, found out Monday night when her daughter’s teacher called about the school closing.
Adobe unveils #HackTheBracket application for March Madness
Adobe unveiled their #HackTheBracket application at the Adobe Summit trade show at Sands Expo. People can use data from Adobe Analytics to make their bracket for March Madness. K.M. Cannon/Las Vegas Review-Journal
Adidas Signs Yankees' Star Aaron Judge
Adidas Signs New York Yankees Star Aaron Judge The slugger is set to don a new set of stripes this season after signing with the apparel company. Aaron Judge Terms of the deal were not disclosed. The deal includes branding on his batting gloves and wristbands. Judge, the AL's reigning Rookie of the Year, was previously under contract with Under Armour since 2014. Judge won the American League Rookie of the Year award last season after setting an MLB record for most homers in a rookie season (52).
Esports athletes are sponsored, too
Meet Red Bull-sponsored professional esports player Daryl S. Lewis, better known by his in-game name Snake Eyez. Nicole Raz Las Vegas Review-Journal.
Bettor Investments turned into a bad bet
Bettor Investments formerly operated a Nevada-licensed entity betting operation. The company promised “conservative growth, profits and stability for our investors.” Matt Stuart, who ran the fund, shut it down in late 2016 and never made good on an agreement with shareholders.
TOP NEWS
News Headlines
Events
Home Front Page Footer Listing
Circular
You May Like

You May Like