Friday, October 29, 2010

Allegiant reports 3rd quarter loss

While nearly all US airlines saw their earnings rise in the third quarter, Allegiant Air parent Allegiant Travel Co. reported net income fell 4.5% to $13.2 million from $13.8 million in the year-ago quarter. The carrier cited the "effects of the slowdown in the general economy," for the lower result.

“Unlike business-oriented carriers, this slow down, combined with our substantial growth, led to smaller unit revenue increases than anticipated,” Allegiant Chairman and CEO Maurice Gallagher stated. “As we have done in the past, we have reduced capacity in the coming quarters to allow us to push unit revenues accordingly. This is critical as we continue to see increases in our energy costs per passenger.”

Revenue rose 22.9% to $163.6 million while expenses increased 29.7% to $144.1 million, producing an operating profit of $19.5 million, down 11.2% from $21.9 million in the prior-year quarter. Ancillary revenue totaled $50.1 million in the quarter, up 24.7% over last year and represented 31% of total revenues.

Scheduled traffic rose 23.8% to 1.36 billion RPMs on a 24.1% increase in capacity to 1.51 billion ASMs, producing a load factor of 89.6%, down 0.3 points. Yield lifted 3.8% to 7.68 cents as scheduled service RASM rose 3.6% to 6.89 cents. CASM was 8.75 cents, up 6.3% and CASM ex-fuel was 4.9 cents, down 0.6%.

Looking forward, Gallagher said Allegiant is continuing to expand the number of small cities served. On Wednesday, it announced it is consolidating its Orlando operation back to the original base at Orlando Sanford. “Our current plans for first quarter 2011 show modest capacity growth of 4% to 7%, but the change in same store capacity is forecast to be down almost 8% year-over-year during that period,” Gallagher said.

(Linda Blachly - ATWOnline News)

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