Allegiant loses $25m in Q3 amid ‘modest demand decline’

Allegiant Travel Company posted a $25.1m loss during a Q3 that increasingly appears to have been a slow period for US low-cost carriers. In the same three months last year, the parent of Las Vegas-based discount carrier Allegiant Air lost $46.5m. Q3 revenues stood at $565m, the company said on 2 November, an increase of about 1% from $560m last year. Expenses were down 1.4% compared with the same period of 2022. Frontier Airlines, JetBlue Airways and Spirit Airlines all recently reported Q3 losses amid idling domestic demand and broad operational difficulties. But Allegiant says it maintains an advantage over its competitors with its out-and-back routes and flexible capacity strategy, boasting a 99.8% controllable completion factor during Q3. “Our variable-cost model gives us a competitive advantage as we adjust capacity to the environment,” says president Greg Anderson. “Whether day of week, month of year, or route-by-route, our planning teams are expertly matching capacity with leisure demand.” The carrier is doubling down on that strategy. As seasonal demand becomes “more normalised”, Anderson says, Allegiant is taking a “measured approach to take utilisation higher during peak demand periods”. “For instance, average aircraft utilisation was 7h this summer,” he says. “Increasing that by even one hour would drive roughly $50m more in earnings.” Allegiant flew fewer passengers during the quarter, down to 4.29m from 4.36m passengers in the same period the previous year. Total network departures were down to 29,251 from 29,432, while block hour flying increased slightly. <br/>