American low-cost carrier, Allegiant Air, celebrated a better than expected May 2020. After suffering a dismal April month, Allegiant notched over $2 million in gross bookings on average per day last month. This was far better than expected and will help reduce the carrier’s overall cash burn with the future looking bright.
A successful May for the times
In Allegiant’s May 2020 traffic results viewed by Simple Flying, Gregory Anderson, Executive Vice President, Chief Financial Officer, and Principal Accounting Officer of Allegiant noted that the airline averaged over $2 million in gross bookings per day. This figure will push down Allegiant’s average cash burn for the second quarter to be down to about $1.75 million per day.
Previously, Allegiant anticipated a $2.1 million daily cash burn. This figure was based on $750 thousand of daily gross bookings– much lower than what Allegiant actually recorded in May.
Another thing going for the carrier is that it has altered some of its operations. The airline received minimum service waivers and has delayed the opening of new bases and other routes. However, the carrier is drawing up plans to buy some used A320s.
Signs of a healthy future
Assuming about $2 million daily gross bookings to remain consistent, then Allegiant expects its daily cash burn to go down to less than $1 million in the third quarter. Previously, the third-quarter cash burn was expected to be at around $1.5 million per day.
One of the strongest weekends for Allegiant was the Memorial Day holiday. Drew Wells, Vice President of Revenue, said that Allegiant flew about eight percent of all travelers going through a TSA checkpoint this year. Last year, that figure was about two percent.
In the first week of June, Allegiant flew 70% of its schedules. In May, that number was about 50%. However, one thing that Allegiant has going for it is the reopening of major tourist destinations. With Las Vegas casinos opening up this month, Allegiant is anticipating improvements in the airline’s performance this month.
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May 2020 traffic
As for traffic, Allegiant’s numbers were low. In May 2020, the carrier flew 362,528 passengers compared to 1,269,429 in the same period last year– a decrease of over 70%. The airline had 4,654 departures the previous month compared to 9,086 in May 2019– a decrease of just under 50%. The load factor was at 47.3%.
Compared to April 2020, the numbers are staggering:
- Passengers: 36,342 in April compared to 362,528 in May
- Load Factor: 19.3% in April compared to 47.3% in May
- Departures: 1,089 in April compared to 4,654 in May
Passenger numbers increased about tenfold, while load factor went up just up 28 percentage points. Departures were up by over 3,500 for the month.
Why these results are not that surprising
While some people may be surprised to see Allegiant record a pretty substantial May in the middle of the current crisis, there were signs that Allegiant was going to do well. First off, since mid-April, passenger numbers have consistently grown– recently, week-upon-week growth averaged in the double digits.
At the same time, there is an appetite for leisure travelers– Allegiant’s primary customer base. Operating on a short- and medium-haul point-to-point system, Allegiant flies from secondary cities in the United States to tourist destinations.
With operating bases in Florida (Fort Walton Beach, Fort Lauderdale, Orlando, Punta Gorda, and St. Petersburg), Allegiant was in a strong position to capture leisure travelers as Florida’s beaches open up.
And, with the reopening of Las Vegas, another significant operating base for Allegiant, there is plenty of room for the carrier to reinstate more flights and capture bookings. From many secondary cities in America, Allegiant is the only nonstop option– and usually the cheapest.
Did you fly Allegiant in May? Do you have plans to fly Allegiant later this year? Let us know in the comments!