Allegiant Travel CEO says company a ‘cash machine’
30 January 2013
Las Vegas-based Allegiant Travel, parent company of Allegiant Air, reported its 40th consecutive profitable quarter today, closing 2012 with double-digit percentage increases in revenue, earnings and earnings per share.
“We’re just going to be a cash machine going forward,” Allegiant CEO Maurice Gallagher said in today’s earnings conference call.
Much of the growth was the result of Allegiant’s new service to Hawaii, which began in June.
Allegiant reported fourth-quarter earnings of $14.8 million, 76 cents a share, on revenue of $222.8 million compared with 2011 fourth-quarter earnings of $10.8 million, 56 cents a share, on revenue of $193.9 million.
Among the company’s fourth-quarter highlights:
• Allegiant announced plans to acquire nine Airbus A320 twin-engine jets from Spain-based Iberia and will take delivery of seven of them this year and two in 2014. The planes are expected to improve profitability because they use less fuel and have larger capacities than the existing fleet.
• As of today, the airline has converted 47 of its 51 MD-80 jets to add 16 seats and giving them capacity for 166 passengers.
• In December, the airline paid a special dividend of $2 a share to shareholders, returning $38 million to investors.
• Allegiant expects its biggest growth in 2013 will be in its Hawaii, Orlando and Tampa Bay markets. The company looks to cut capacity in Las Vegas and optimize schedules to take advantage of peak flying periods.
• Since the opening of Terminal 3 at McCarran International Airport, Allegiant’s expenses in Las Vegas have increased by $3 million to $3.5 million a year, and the company is in negotiations with the Clark County Aviation Department to reduce costs.
• The company is still exploring branded credit cards and a travel club similar to Spirit Airlines’ $9 Fare Club that could be rolled out by the middle of 2013.
• Allegiant is looking forward to potential charter business in March during NCAA basketball tournaments, a niche in which the company has been strong for years.
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