ALGT Q3 2024 Earnings

Call Details

• Call Title: Allegiant Travel Company Q3 2024 Earnings Call
• Date: October 30, 2024 at 8:30 PM UTC
• Management Team:
  • Greg Anderson (President and CEO)
  • Drew Wells (Chief Commercial Officer)
  • Robert Neal (Chief Financial Officer)
  • Sherry Wilson (Managing Director of Investor Relations)
  • Micah Richins (President, Sunseeker Resorts)

Call Summary

Financial Performance

• Consolidated net loss for Q3 2024 was $36.1 million on a reported basis and consolidated loss per share was $2.02.
• Consolidated EBITDA for Q3 2024 was $46.3 million, representing an EBITDA margin of 8.2% (non-GAAP).
• Airline segment produced $56.6 million in EBITDA in Q3 2024 for an adjusted airline EBITDA margin of 10.3% (non-GAAP).
• Airline-only net loss in Q3 2024 was $8.8 million, or $0.49 loss per share, and the quarter included an approximate $0.40 per share headwind from the July CrowdStrike outage.
• Third quarter airline revenue was $549 million, which management described as down slightly year-over-year due to crew hour constraints, the outage, and hurricane disruption.
• Average fuel cost per gallon finished the quarter at $2.69 versus the initial expectation of $2.80, providing a favorable cost tailwind late in the quarter.

Guidance

• Company expects fourth quarter airline operating margin of roughly 7%, which includes an estimated four-point hurricane headwind.
• Consolidated EPS midpoint guidance for Q4 2024 is $0.50, and airline earnings per share guidance for Q4 is approximately $1.00 before the $1.25 hurricane headwind noted by the CFO.
• Current revenue forecast for scheduled service ASMs in Q4 2024 anticipates ASMs up approximately 1.5% and TRASM down approximately 4.5% year-over-year.
• The company estimates the total revenue impact from the hurricanes to Q4 2024 will be roughly $30 million to $40 million, or about 5% to 7% of total revenue.
• For 2025 initial fleet plan assumes 11 737 MAX deliveries and 10 A320-family retirements, resulting in fleet count up by one at year-end, although Boeing strike uncertainty could alter delivery timing.
• Company now expects net leverage to have peaked in Q3 2024 (consolidated net leverage 4.1x) and to begin modest deleveraging thereafter, versus prior expectation of a mid-2025 peak.