ALGT Q3 2021 Earnings

Call Details

• Call Title: Allegiant Travel Company Q3 2021 Earnings Call
• Date: October 27, 2021 at 8:30 PM UTC
• Management Team:
  • Maury Gallagher (Chairman and Chief Executive Officer)
  • John Redmond (Chief Executive Officer)
  • Greg Anderson (President)
  • Scott Sheldon (EVP and Chief Operating Officer)
  • Scott DeAngelo (EVP and Chief Marketing Officer)
  • Drew Wells (Chief Commercial Officer)
  • Sherry Wilson (Managing Director of Investor Relations)
  • Kristen Schilling-Gonzales (VP Planning & Revenue)

Call Summary

Financial Performance

• Third quarter adjusted earnings per share were $0.66 on an adjusted basis.
• Total revenue for 3Q came in 5.3% higher than 3Q 2019 on scheduled service ASM growth of 17%.
• Adjusted total costs increased 17.5% year over two years, and excluding $28 million of IROP costs the increase would have been under 10% on capacity growth of 14.2% year over two years.
• The company reported an IROP cost impact of around $28 million in 3Q, including approximately $15 million of passenger compensation.
• Third-party revenue was up nearly 35% versus 2019, outpacing scheduled service passenger growth of just over 2% versus 2019.
• As of the date of the call, total cash balances were stated at $1.2 billion and net debt around $400 million, reflecting improvement since the pandemic onset.

Guidance

• Full-year 2021 adjusted EVA DAB is expected to be in excess of $275 million with a margin around 17% on an adjusted basis assuming fuel at $2.17 per gallon.
• Full-year 2021 adjusted fully diluted EPS is expected to be in excess of $1.50 per share on an adjusted basis.
• The company expects year-end cash of around $1.3 billion and net debt around $300 million for 2021 on an adjusted basis.
• Fourth quarter 2021 scheduled service ASMs are expected to be up 12% to 16% and system ASMs up 10% to 14% versus the comparable period.
• Fourth quarter unit costs excluding fuel are expected to be slightly down to flat year over two years, implying full year 2021 adjusted CASM ex-fuel around 2019 levels.
• An increase of $0.10 per gallon in jet fuel is equivalent to roughly $5 million of incremental cost per quarter given current consumption.