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Allegiant hopes to rebound after a disappointing first quarter
By Justin Wier
YOUNGSTOWN
Allegiant Travel Co., the only commercial airliner in operation at the Youngstown-Warren Regional Airport, announced quarterly earnings that show a significant decline in income from the first quarter of 2016 for several reasons.
Lukas Johnson, vice president of network and pricing for Allegiant, said the company raised fares and turned positive year-over-year yield in both February and March.
“We hope to see continued strength throughout the rest of 2017,” Johnson said in a call with investors.
The company reported income of $72.9 million in the first three months of 2017 compared with $121.1 million in the same period last year – a 39.8 percent decrease. Net income dropped from $72 million in 2016 to $41.6 million in 2017 – a 42.2 percent decrease.
Earnings per share were $2.50 for the first quarter compared with $4.29 in the same quarter of 2016.
The company is currently transitioning to an all-Airbus fleet, which chairman and CEO Maurice J. Gallagher, Jr. said should be complete by the end of 2019. The company currently has several McDonnell Douglas planes.
“One-time expenses associated with this transition will be lumpy,” Gallagher said in a news release.
Scott Sheldon, senior vice president and chief financial officer for Allegiant, said nonfuel costs increased by 11.6 percent. Eight percent of that was due to a new agreement with pilots.
“We will continue to be challenged by historically low pilot productivity,” Sheldon said in the call with investors.
The news release also notes that Easter moving into April negatively affected the company’s first- quarter earnings.
The number of passengers served by Allegiant increased from 2.6 million in the first quarter of 2016 to 2.9 million in the first quarter of 2017 – an 11.1 percent increase.
Allegiant is operating 358 routes now versus 298 at the same time year, and it expects to begin 23 new routes in the second quarter of 2017 including the new city of Louisville, Ky.