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Allegiant reports rare loss in 1st quarter

Updated May 8, 2024 - 7:22 pm

Executives of Las Vegas-based Allegiant Travel Co., operators of Allegiant Air, were disappointed with first-quarter earnings announced Tuesday.

“As you can see from our release, our results are not where we want them to be,” Allegiant Chairman and CEO Maurice Gallagher told analysts in the company’s earnings call with investors. “Historically, our Q1 is one of our strongest quarters.”

But not this year.

A combination of factors resulted in the company taking a nearly $1 million loss, 7 cents per share, for the quarter that ended March 31. Among them beleaguered Boeing Co., which promised to deliver 12 new 737 MAX jets in 2024, will only produce six. It’s part of an order of more than 100 jets first announced by Boeing and Allegiant in 2022.

Among the difficulties the company faced:

— Because Easter was earlier than normal this year, the spring travel season, usually a peak period for Allegiant, shrank. For the quarter, the company served 1.1 percent fewer passengers than last year’s 4.2 million.

— The airline paid the price for fixing pilot availability. This time last year, Allegiant was losing an average of a pilot a day as an industrywide pilot shortage took hold. To fix the attrition, the airline established agreements that paid pilots a bonus to sign an agreement to stay on. Through April, Allegiant paid $80 million without any corresponding offset of a new pilot agreement.

— Some employees are being paid more. The company signed new wage contracts and amendments with unions that have raised salaries for flight attendants, technicians and dispatchers.

— The company’s new Sunseeker Resort in Charlotte Harbor, Florida, opened in the fall, but isn’t fully ramped up and will be marketed more in 2024. While the resort has received good reviews and the average daily room rate of $330 a night, its occupancy rate was 40 percent for the quarter. Allegiant had special charges in 2023 and in the first quarter covering hurricane storm damage that occurred last year to the resort.

For the quarter, Allegiant reported a net loss of $919,000, 7 cents a share, on revenue of $656.4 million. That compared with net income of $56.1 million, $3.09 a share, on revenue of $649.7 million a year ago.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.

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