Allegiant Travel Company, the parent of ultra-low-cost carrier Allegiant Air, posted a healthy profit in the second three months of the year as the company has returned to business levels last seen before the global health crisis.
“The second quarter marked the return of leisure demand to pre-pandemic levels,” chief executive Maury Gallagher tells analysts on the company’s quarterly earnings results call on 28 July. “These results suggest we are close if not back to ‘normal’, where we were in the early days of 2020.”
“We continue to lead the industry out of this covid black hole,” he adds.
The Las Vegas-based airline reports it earned $95 million in the second quarter of 2020, compared to a $93 million loss for the same quarter in 2020, just as the coronavirus pandemic was beginning to make itself felt in the industry and around the world.
In the first quarter of 2021, the company had reported a profit of $6.9 million.
Revenue for the three months that ended on 30 June was $472 million, up from $133 million in the same quarter in 2020 and just slightly below the $492 million it reported in the second quarter of 2019.
In the second quarter of the year, capacity - measured in available seat miles - 3.3% above that of pre-pandemic 2019, and 37% over last year, Gallagher adds.
System-wide load factor was at 70.8%, up nearly 16 percentage points from the first quarter of 2021.
In the third quarter, the airline expects revenue to rise further, between 3.5% and 7.5 % over 2019 figures, leading Allegiant’s management team to have “cautious optimism for the remainder of this year and into 2022”, Gallagher says. Capacity is expected to rise between 16% and 20% over 2019 levels, the airline says.
The current environment has a bit of a “wild, wild west” feel, Gallagher says, after mainline airlines have tried to take a slice of the domestic point-to-point leisure traveller market from low-cost and ultra-low-cost carriers like Allegiant - for which point-to-point flights have been their bread-and-butter for years. Mainline airlines are trying to make up for below normal levels of corporate and international long-haul travel.
Allegiant Air ended the quarter with 103 aircraft in its all-Airbus fleet, up from 100 at the end of the first quarter. By the end of the year the airline will have 108 aircraft in its fleet, executives say.
Gallagher says that the company will restart and completing construction on its Sunseeker resort in southwest Florida, which it had abandoned in May 2020 in an effort to reduce costs. At the time it was unclear how long the pandemic-driven crisis would last, or how catastrophic it would be. The company says it will take a $350 million loan to complete the resort.
He adds that the company will reveal further details on the resort, including its opening date, next week.