US ultra-low-cost carrier Allegiant Air has published its results for the first quarter of 2022, revealing revenue of over $500 million. This represents a 10.7 % increase compared to the same period in 2019.
Passenger numbers and load factors were up too. The airline carried a total of 3,709,104 passengers in the period January to March of this year, an increase of 8.4 % compared to 2019. Average load factor rose by 0.4 percentage points to 86.5 %.
Drew Wells, Allegiant Air’s senior vice president, stated,
"Demand began picking up in earnest mid-February resulting in load factors for the month of March above levels observed in 2019. Demand strength has continued into the second quarter with booking growth exceeding planned forward capacity growth for the quarter.”
Building on last year’s return to profitability
Following the impact of the pandemic, Allegiant Air returned to profitability in 2021, recording a profit of $152 million. If both passenger and revenue growth continue on the upward trend shown in Q1, 2022 could well be even more successful for the ultra-low-cost carrier.
However, the airline has already started to feel the pinch of rising fuel costs. Chief financial officer, Gregory Anderson, commented,
"'Our average fuel cost per gallon was $3.07, which was further pressured as we closed out the quarter by paying $3.46 during the month of March. The sudden spike in fuel resulted in $22 million more in fuel expense than expected during the quarter and was the primary driver of our loss per share of $0.44 cents.”
About Allegiant Air
Allegiant Air was founded in January 1997 under the name WestJet Express. Due to similarities with Canada’s WestJet, the decision was made to rebrand to Allegiant Air the following year.
Today the airline has a fleet of 121 aircraft, and is the fourteenth largest commercial airline in North America by passengers carried. After saying goodbye to the last of its MD-80s in 2018, its fleet currently consists of Airbus A319 and A320 aircraft. It also has 50 Boeing 737 MAX aircraft on order, with deliveries expected to begin in 2023.
Allegiant Air operates flights from 22 bases across the US, including Orlando Sanford International Airport, where it is the largest carrier, and Las Vegas Harry Reid International Airport.
The airline’s CEO, Maurice Gallagher, has announced he will be stepping down from the role this summer, after leading the airline for more than 20 years. The company’s president since 2016, John Redmond, will take the reins on June 1st.
While passenger and revenue figures look promising so far, Allegiant Air’s new CEO will have to face the challenge of rising fuel costs, and attempt to minimize any impact this could have on the airline’s financial performance going forward.
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