Parent company of Las Vegas’ Allegiant Air sees profit drop

Allegiant Air’s parent company has booked another steep drop in quarterly profit despite a bump in revenue.

Las Vegas-based Allegiant Travel Co. on Wednesday said it earned $22.3 million in net income for the three months ending Sept. 30, down 51 percent from the same period last year.

Revenue climbed 4.6 percent year-over-year to $348.8 million in the third quarter, and its passenger count rose 3.6 percent to 3 million.

But operating expenses jumped 19.2 percent year-over-year, to almost $306 million.

Among other things, Allegiant spent $80.4 million on jet fuel, up 16 percent from the same period last year; $88.8 million on salaries and benefits, up 20.9 percent; and $13.9 million on sales and marketing, more than twice what it spent a year earlier.

The deep-discount carrier flies largely from small, underserved cities to warm-weather vacation spots, including Las Vegas. Allegiant has been profitable for 59 consecutive quarters, or almost 15 years, but its earnings have been sliding.

It booked $48.5 million in profit for the second quarter, down 20 percent from the same period last year, and $41.6 million for the first quarter, down 42 percent from a year earlier.

Meanwhile, Allegiant also said on Wednesday that it plans to retire its last MD-80 airplane by the end of 2018 as it transitions to younger Airbus jets.

“This is the end of an era for our company,” Chairman and CEO Maurice “Maury” Gallagher said in a news release. “The ‘80’ has been critical to our success and growth for the past 15 years — it will be missed.”

By the end of the third quarter, Allegiant’s fleet of 89 planes consisted of 40 McDonnell Douglas MD-80s, two Boeing 757s, 21 Airbus A319s and 26 Airbus A320s. By the end of 2018, its fleet of 82 planes will consist entirely of Airbus jets, according to Wednesday’s earnings report.

Gallagher said Allegiant canceled 444 flights due to Hurricane Irma, which pummeled Florida and Caribbean islands last month. But the airline “quickly got back to work, providing our team members and customers with needed transportation to their abandoned homes in Florida,” he said.

He also addressed the Oct. 1 shooting that killed 58 people at the Route 91 Harvest music festival on the Las Vegas Strip, saying:

“Our hearts go out to all of those involved in the tragic mass shooting in our home community. While we mourn the victims we praise the heroes who always emerge from these tragedies, including a number of our Las Vegas maintenance personnel who provided shelter for more than 30 concert goers fleeing the melee of the shooting scene.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.