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Allegiant Air parent squeaks out profit in year ‘fraught with challenges’

Updated February 1, 2023 - 7:36 pm

Allegiant Air’s parent company squeaked out a profit last year following a big jump in fuel costs and other increased expenses, in a year “fraught with challenges.”

Las Vegas-based Allegiant Travel Co. on Wednesday said it earned $2.5 million in net income in 2022, or $0.14 per share, down from $151.9 million in profit in 2021, or $8.68 per share.

Revenue grew almost 35 percent to $2.3 billion last year, though expenses climbed 53 percent to more than $2.2 billion. Within that, it spent $814.8 million on jet fuel last year, up 85 percent.

The airline recently announced several leadership changes as well.

Allegiant CEO John Redmond said in a news release that 2022 was “fraught with challenges” but this year will be “transformational for the company.”

“I’m excited for what is on the horizon in 2023,” he said.

An ultra-low-cost carrier, Allegiant is known for flying from small, underserved cities to warm-weather vacation spots, often without competition on its routes.

Its fourth-quarter financial results were in stark contrast to its full-year numbers.

Allegiant said Wednesday it booked $52.5 million in net income for the three months ended Dec. 31, up from $10.7 million for the same period in 2021.

Redmond said in an earnings call with analysts that the company’s operations were hit with “countless challenges” last year, including COVID-19 spikes, a hurricane and winter storms. But he thanked employees for stepping up and making sure customers “were taken care of.”

He also pointed to changes in Allegiant’s leadership ranks, saying the new president, Greg Anderson, has been with the company for more than a decade and is respected internally and in the industry.

Allegiant announced Jan. 27 that President and Chief Operating Officer Scott Sheldon had resigned, effective April 1, and that Anderson would “assume oversight of the company’s operational teams.”

Sheldon said in the news release he was leaving to “pursue more entrepreneurial opportunities.”

Redmond also said Wednesday that construction crews are “back in full force” at Allegiant’s Sunseeker Resort Charlotte Harbor project.

The company said in November that the under-construction resort in southwest Florida sustained $35 million in damages from Hurricane Ian, after cranes fell on the project and water got in. The hurricane devastated the region in late September with widespread flooding and destruction.

On Wednesday, Redmond cited an additional $5 million in losses to Sunseeker from the hurricane after further investigation. He added the company continues to believe “all Hurricane Ian damage” will be fully covered by insurance.

He also said that a “significant thunderstorm” followed Ian in early November and there was a “small elevator fire” that month, causing $10 million and $1.2 million in losses, respectively.

“Both events are covered by insurance,” he noted.

The resort is slated to open in late 2023, the company indicated.

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

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