Allegiant Air's chairman and CEO has addressed the shareholders, highlighting the significant changes in the airline industry since the pandemic. In the shareholder letter, the CEO provided insights into various aspects of the company's performance.
Financial Performance: Allegiant Air reported a 10% operating margin in 2023, generating earnings of $6.29 per share. Sunseeker Resort, which opened in December 2023, reported a $30 million loss for the year due to pre-opening costs. * The company achieved a 99.8% controllable completion factor, ranking third in the Wall Street Journal's annual review of the airline industry.
Sunseeker Resort: * The resort, with 785 rooms, twenty food and beverage outlets, and 60,000 square feet of convention space, is located in the west coast of Florida, an area deemed a premier vacation destination in the U.S.
Route Expansion: Allegiant Air serves 124 cities, with 33 labeled as 'destination cities' and 77% of its 552 routes having no direct nonstop competition. The company operates from 24 Bases, each self-contained with dedicated aircraft, pilots, mechanics, and flight attendants, using a non-stop, point-to-point flight model.
Technology Upgrades: * The company has upgraded its systems, including installing SAP for financial management, Navitaire for reservations and station operations, and the planned implementation of Trax as the maintenance management system.
Boeing MAX Aircraft: * Allegiant Air's introduction of Boeing MAX aircraft has been delayed, with the original plan of 20+ deliveries in 2024 revised to six aircraft. The company has fifty firm MAX-7s (163 seats) and MAX 8200s (190 seats), with options for another 80 aircraft.
Pilot Challenges: * The CEO highlighted challenges related to pilot shortages, industry movements, and the negotiation process with the pilot union, Teamsters Local 2118.
Future Outlook: * The CEO expressed the company's expectation to return to its historic growth model and revert to its rhythm, aiming to overcome the challenges faced in the post-pandemic period.
Following these announcements, the company's shares moved -0.6%, and are now trading at a price of $53.44. For the full picture, make sure to review Allegiant Travel's 8-K report.
