Allegiant Posts Q1 Earnings – It’s Like They’re in a Different Industry

Allegiant posted strong financial results for the first quarter, earning $1.37 per share in a miserable demand environment.  I don’t usually talk about financials here, but if you care about this stuff, it’s worth reading their release (which I linked to above).  A few highlights:

They bring in $34 in anciallary revenue for each passenger on top of the $74 average fare (though that average fare is down $12.50 from last year’s Q1 average fare).  Their planes fly 90% full, and they have a 31% operating margin.  Their cash reserves actually grew $61 million over the year.

Sure, they’re facing the same fare pressures as everyone else.  But they’ve stayed out of the way of competition, and developed an ancillary revenue stream that continues to grow.  They can buy MD-80 aircraft for next-to-nothing.  And while that was hurting them a bit when fuel was expensive, it doesn’t hurt them at all anymore.  

Great job all around.

(BTW – I used to own ALGT shares.  I don’t anymore).

Comments are closed.