Allegiant reports successful fourth quarter

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February 5, 2012

â Company shows 20% increase in total operating revenue

DAN HEATH Press-Republican The Press Republican Sun Feb 05, 2012, 02:28 AM EST

PLATTSBURGH — Allegiant Travel Company's fourth quarter of 2011 was its 36th consecutive profitable quarter.

In its full-year financial statement, Allegiant reported total operating revenue for the fourth quarter increased $31.9 million to $193.9 million, a 20 percent increase. Its 2011 total operating revenue increased $115.5 million to $779.1 million, a 17.4 percent increase.

Allegiant started service at Plattsburgh International Airport in 2007. It offers flights from Plattsburgh to Fort Lauderdale, Orlando and Tampa/St. Petersburg.

Allegiant Travel Company Chairman and CEO Maurice Gallagher said company officials were proud to report their 36th consecutive profitable quarter.

"We had an excellent December and fourth quarter. (The year) 2011 was another monstrous year for us, our fifth in a row with double-digit operating margins," he said in a press release.

"While fuel put a dent in the operating results for the year, we made excellent progress in our ongoing projects including introduction of our (Boeing) 757 aircraft, beginning our 166-seat conversion and automation upgrades."

Gallagher said the company has announced eight new routes in the past 30 days and a new base in Oakland. Allegiant will soon serve 76 cities, including 11 leisure destinations, with 178 routes.

The company has a fleet of 53 aircraft, including one 757. It expects to have at least 16 166-seat MD-80 aircraft in service by the end of the first quarter of 2012.

HAWAII FLIGHTS

The company expects to receive Federal Aviation Administration extended operations (ETOPS) certification this year, after which it will be able to offer flights to Hawaii.

Allegiant Travel President Andrew Levy said the company had another successful quarter of offsetting fuel costs.

"In fourth quarter 2011, fuel expense per passenger increased almost $9 versus 2010, but we were able to successfully raise our average scheduled fare by $10," he said.

"This increase comes despite an 8 percent growth in available seat miles as compared to fourth quarter 2010. We have worked very hard this year to adapt our pricing and scheduling to higher fuel prices, and the results have been strong."

Levy said the company is carrying good momentum into 2012.

"Our January PRASM (passenger revenue per available seat mile) is projected to increase between 9 and 11 percent, and we are expecting first quarter PRASM to be up between 1 and 3 percent on a year-over-year basis," he said.

Allegiant saw its operating income decrease 3.2 percent to $20.2 million in the fourth quarter of 2011 compared to the previous year and 18.4 percent to $85.4 million for the full year.

EXPECTS GROWTH

Allegiant Travel Senior Vice President and Chief Financial Officer Scott Sheldon said fuel, maintenance and depreciation expense continued to stress its cost structure during the fourth quarter.

"Consistent with prior quarters, fuel expense continued to be the largest contributor to the decrease in operating income. Our fuel cost per passenger increased nearly $9, or 19.7 percent, to $54 during the quarter," he said.

Levy said the company continues to see strength in its third-party ancillary business, such as travel packages.

"Third party ancillary net revenue increased 23 percent in both the fourth quarter of 2011 and the full year. As we have said in the past, third-party products will continue to be an area of focus, and we expect to see strong growth continue into 2012," he said.

Email Dan Heath at:

dheath@pressrepublican.com