Allegiant 2014 net profit down 6.1% to $86.7 million

Allegiant 757-204 (27235/598) N905NV rolls for take-off on Rwy 25R at Las Vegas McCarran International (LAS/KLAS) on November 14, 2012.

(Photo by Michael Carter)

Las Vegas-based Allegiant Travel Co., parent of Allegiant Air, posted 2014 net income of $86.7 million, down 6.1% from a net profit of $92.3 million in 2013.

The ultra-low cost carrier specializing in flights from smaller US cities to US vacation destinations has now been profitable for every quarter for 12 consecutive years. But a $43.3 million charge taken in the 2014 fourth quarter for the write down on the value of Allegiant’s fleet of six Boeing 757s almost broke the company’s streak of 48 quarters in a row in the black: the December quarter net profit was just $4.8 million, down 72.6%. Allegiant blamed the full-year and fourth-quarter profit declines on the 757 write down, noting that net profit for the quarter and year would have improved absent the one-time charge.

Allegiant’s 2014 revenue was $1.14 billion, up 14.1% year-over-year, while expenses rose 16.4% to $979.7 million, producing operating income of $157.4 million, up 1.7% from an operating profit of $154.7 million in 2013. The carrier’s 2014 traffic increased 9.8% to 7.83 billion RPMs on a 9.8% rise in capacity to 8.95 billion ASMs, producing a load factor of 87.5%, the same as 2013.

Allegiant chairman and CEO Maurice Gallagher told analysts he was pleased with the 2014 results, but acknowledged that the company needs to improve in some basic areas. “Frankly, we don’t answer our calls as fast as we’d like,” he said, noting that carriers such as Southwest Airlines make it a priority to rapidly respond to consumer issues. In terms of Allegiant’s place in the US airline industry landscape, “we’re still in short pants and trying to become the adult,” Gallagher said. “We’ll get a lot of these things cleaned up around the edges.”

Allegiant also appears to have put on hold plans to start international flying. Former president and COO Andrew Levy had said the carrier was eyeing flights to Mexico as early as this year, but Gallagher last week sounded less enthusiastic about flying beyond the US. “The low hanging fruit is certainly domestic [expansion],” he said. “It’s just easier operationally … As long as we can keep growing in this market, we don’t feel like we’re missing anything south of the border or in the Caribbean.”

(Aaron Karp - ATWOnline News)