#United States #Las Vegas #Passenger Traffic #Allegiant Travel #ALGT

Allegiant Travel Company Reports Increased Passenger Traffic for November 2024

Allegiant Travel Company (NASDAQ: ALGT) released its preliminary passenger traffic results for November 2024, and the figures suggest a solid rebound in demand, particularly following recent election trends. Drew Wells, the Chief Commercial Officer at Allegiant, remarked on the remarkable recovery in booking trends and the speed at which demand for destinations impacted by hurricanes has returned to expected levels.

Key Highlights Following Election Trends
In his statement, Wells noted that the demand for travel has notably exceeded expectations, especially to regions that were previously affected by hurricanes. According to reports, destinations hardest hit have rebounded quicker than anticipated, leading to a resurgence in traveler interest. This has been especially evident during the Thanksgiving week, where the Travel Revenue per Available Seat Mile (TRASM) has aligned closely with performance from the previous year.

Looking ahead, the airline has optimized its December capacity, planning for a 17% increase compared to the previous year, which serves as a strong indicator of resilient holiday travel interest. Early December bookings suggest substantial growth, surpassing initial projections.

Analytical Insights and Updated Projections
Allegiant's outlook for the fourth quarter of 2024 has also been adjusted, with Wells commenting on TRASM expectations. The anticipated decrease is estimated at 1.5% year-over-year, an improvement from the earlier projection of a 4.5% decline. This shift demonstrates an optimistic outlook amid expanding capacities which are projected to grow by 1.8% during the fourth quarter.

Robert Neal, the Chief Financial Officer, added that the company received two additional 737-MAX aircraft in November. The total fleet size is expected to hit 125 by the end of the year, exceeding earlier forecasts of only one new addition. This increased confidence in aircraft deliveries played a role in the company's strategic decision to sell some underutilized jet engines, yielding a significant $15 million profit.

Traffic and Financial Metrics
November 2024 brought variations in several key metrics compared to the previous year. We see the number of passengers dropping to 1,214,205 from 1,303,894, marking a 6.9% decrease. Revenue passenger miles also fell to 1,108,281, down by 5.9%. Measured capacity, indicated by available seat miles, saw a modest reduction of 1.7%.

Interestingly, the load factor decreased to 80.2%, down from the previous year's 83.8%. Departures saw a slight reduction too, going down by 2.0%. However, the average stage length took a small rise, indicating longer distances were being covered.

With fuel prices stabilizing at around $2.50 per gallon throughout November, Allegiant has adjusted its earnings per share guidance for the fourth quarter. The airline-only earnings per share are now projected between $2.50 and $3.00, a marked increase from prior estimates, indicating stronger profitability prospects for shareholders.

Final Thoughts
In conclusion, Allegiant Travel Company is experiencing an impressive turnaround as consumer confidence in travel continues to build following recent events. The strategic decisions focusing on fleet expansion coupled with increased capacity for the peak holiday season suggest that the airline is well-positioned to capitalize on the returning demand in the forthcoming months. As the travel landscape continues to evolve, Allegiant is navigating through with a blend of cautious optimism and responsive operational strategies.