Despite earnings dip, Allegiant Travel notches another profitable quarter

Allegiant Travel Co. recorded its 47th straight profitable quarter despite a decline in earnings for the third quarter that ended Sept. 30.

The Las Vegas-based company that operates Allegiant Air reported earnings of $14.2 million, 80 cents a share, on revenue of $265 million. That compares with earnings of $17.1 million, 91 cents a share, on revenue of $228.9 million in the same quarter a year ago.

The company’s results were reported in a conference call with analysts Wednesday afternoon.

Revenue jumped 15.8 percent, thanks in part to beginning flights to the Cincinnati market, the fastest-growing origination city in the company’s history.

Analysts will be watching the competitive landscape in Cincinnati as Frontier Airlines, a Denver-based carrier that recently adopted a business model similar to Allegiant’s, began scheduling flights there.

Allegiant also reported it had more passengers in the third quarter than it had in the comparable quarter in 2013, but the average fare declined 0.8 percent to $130, mostly because of a decline in third-party ancillary revenue from fees.

The company is expecting ancillary revenue to increase after it introduced a new $5 fee for passengers to print their boarding passes at the airport. Executives acknowledged the move as an effort to lessen their presence in airports and as a change to modify passenger behavior by forcing customers to print boarding passes at home or to check in with Allegiant’s mobile app.

Airline officials said the Allegiant app has been downloaded by 1 million customers.

During the call, Allegiant CEO Maurice Gallagher acknowledged the resignation of President Andrew Levy earlier this month and announced that Kris Bauer, the former senior vice president of operations for Allegiant, would return in that role and as chief operating officer until a successor to Levy is found.

Bauer retired in September 2013 and is not considered a candidate for the job. Gallagher said he hopes to announce Levy’s successor before the end of the year.

Gallagher said Levy’s departure has slowed Allegiant’s efforts to develop a brand-centered credit card and to expand the airline’s route network into Latin America. But he added that 70 percent of Levy’s responsibilities were the day-to-day operation of the airline and that there would be only a slight slowdown tied to automation issues on the other company initiatives.

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