Allegiant projects Q2 unit revenues to grow up to 4%

Washington DC
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Las Vegas-based Allegiant Air expects passenger revenue per available seat mile (PRASM) to grow in the 2-4% range in the second quarter, and 9-10% in April.

In guidance released today with its first quarter financial results, Allegiant forecasts that total revenue per available seat mile will grow 0.5-2.5% in the second quarter and 6-7% in April.

The carrier's scheduled capacity is expected to increase in the 7-9% range in the second quarter, 9-13% in the third and 9-13% for the full year of 2014.

Cost per available seat mile (CASM) excluding fuel is forecasted to grow by 5-7% in the second quarter, and 4-7% for the full year. The airline attributes the second quarter CASM ex-fuel hike to higher salaries and maintenance expenses due to more heavy checks, as well as higher aircraft lease expenses due to sub-service arrangements.

Overall CASM will rise 3-5% in the second quarter, adds Allegiant. The airline says the second quarter CASM guidance assumes the first quarter's fuel cost of $3.20 per gallon.

Allegiant's president Andrew Levy says in an earnings call today that the airline is pleased with forward bookings in the remainder of the second quarter. "April has performed extremely well," he says. "May is a shoulder month, and June will represent more than a third of the total ASMs for the quarter."

Levy adds that the third quarter beyond June "looks very good".