Core Insights - Allegiant (ALGT) is experiencing significant pressure from rising operating expenses and a complex economic environment, negatively impacting its investment attractiveness [1] Financial Performance - The Zacks Consensus Estimate for ALGT's current-quarter earnings has been revised downward by 84.68%, now projected at a loss of $2.05 per share [2] - The 2025 earnings estimate has also decreased by 30.86%, now standing at $2.42 per share [2] - ALGT's shares have declined by 36.6%, significantly underperforming the Transportation - Truck industry's decline of 4.6% [3][7] Operating Expenses - In Q2 2025, ALGT's consolidated operating expenses surged by 19.9% year over year, with airline-specific operating expenses increasing by 3.8% [4][7] - Key components of operating expenses include: - Aircraft lease rentals: up 91.7% - Maintenance and repairs: up 18.4% - Station operations: up 7.8% - Labor costs: up 2% [5][7] Market Position - ALGT currently holds a Zacks Rank of 5 (Strong Sell), indicating a lack of confidence from brokers [4] - The company is navigating a volatile macro environment characterized by economic uncertainty, shifting tariff regulations, and geopolitical tensions, which are forcing firms to delay investments and revise forecasts [5][8] Investment Alternatives - Investors in the Transportation sector may consider LATAM Airlines Group (LTM) and SkyWest (SKYW), both of which have a Zacks Rank of 1 (Strong Buy) [9][10] - LTM has an expected earnings growth rate of 45% for the current year, while SkyWest has an expected growth rate of 28.06% [10][11]

Group 1 - Allegiant Travel Company (NASDAQ: ALGT) stock has decreased by over 30% since a "Buy" rating was issued in February, significantly underperforming the S&P 500, which gained 6.6% during the same period [2] - The company is identified as one of the worst-performing airline stocks rated as a "Buy" [2] - The analysis is conducted by an expert with a background in aerospace engineering, focusing on investment opportunities in the aerospace, defense, and airline industry [2] Group 2 - The investing group provides access to data analytics monitors to support investment decisions [2] - The article emphasizes that past performance does not guarantee future results, and no specific investment recommendations are made [3]

Core Viewpoint - Allegiant Air pilots are preparing to hold a formal Vote of No Confidence against the current management team and Board of Directors due to years of poor strategic decisions and reckless spending that threaten the airline's long-term stability [1][4] Management Accountability - Allegiant's management team, led by Maury Gallagher and Greg Anderson, has been criticized for a series of failures, including a 50% drop in market value over six months and a $500 million loss from the failed Sunseeker Resort project [2] - The pilots express that if they had a similar level of failure in their roles, their careers would be jeopardized, indicating a demand for accountability from management [2] Leadership Culture - The Teamsters General President described Allegiant's management culture as toxic, characterized by arrogance and a lack of accountability [2] - Pilots have noted that recent extravagant expenditures, such as using private jets for base visits while claiming financial constraints, reflect a disconnect between management and operational realities [3] Call for Change - The upcoming Vote of No Confidence is framed as a necessary step to protect the airline's brand and ensure its long-term success, emphasizing the need for new leadership and improved corporate governance [4] - The pilots believe that a change in management is essential for the best interests of the airline, its employees, customers, and shareholders [4]

Core Insights - Allegiant Travel Company has announced the addition of Atlantic City, New Jersey to its network, enhancing its position in leisure travel with four new routes connecting popular coastal destinations [1][2] - The airline is offering introductory one-way fares as low as $39 to celebrate the new routes, reflecting its commitment to providing budget-friendly travel options [1][6] - Allegiant's growth strategy includes recent route expansions and an extended flight schedule through May 2026, allowing travelers to plan vacations in advance [4] Company Strategy - Allegiant focuses on connecting underserved communities with leisure destinations, emphasizing value-driven travel options [1][2] - The airline's business model is centered around all-nonstop flights, which enhances the travel experience by reducing time spent at airports [4] - The new routes aim to connect Atlantic City with several cities in Florida, catering to travelers seeking both entertainment and relaxation [2][3] Market Position - Atlantic City is highlighted as a top-tier destination known for its Boardwalk, nightlife, and casinos, appealing to a diverse range of travelers [2][3] - Allegiant's fleet serves small-to-medium cities across the nation, providing access to world-class vacation destinations at competitive prices [7][8] - The airline's average fares are reported to be less than half the cost of the average domestic roundtrip ticket, reinforcing its low-cost travel model [8]

Core Insights - Allegiant Travel Company announced five new nonstop routes connecting eight cities, including Huntsville, Alabama, with one-way fares starting at $39 to celebrate the launch [1][7] - The new routes aim to enhance Allegiant's presence in popular leisure destinations, catering to travelers seeking budget-friendly options [1][2] - The airline's business model focuses on connecting underserved markets to top vacation destinations, allowing for quick responses to consumer demand [2] Route Details - New route from Orlando, Florida (MCO) to Appleton, Wisconsin (ATW) starts January 16, 2026, with one-way fares as low as $69 [3] - New route from Sarasota/Bradenton, Florida (SRQ) to Rochester, New York (ROC) begins February 13, 2026, with one-way fares starting at $59 [3] - Additional routes include Fort Lauderdale, Florida (FLL) starting November 19, 2025, and St. Petersburg, Florida (PIE) beginning March 5, 2026, both with one-way fares as low as $39 [7] Business Model and Strategy - Allegiant's all-nonstop flight network enhances travel convenience, allowing passengers to spend less time at the airport [4] - The company has extended its flight schedule through May 2026, enabling travelers to plan vacations in advance [3] - Allegiant's average base airfares are less than half the cost of the average domestic roundtrip ticket, emphasizing its focus on affordability [6]

Core Insights - Allegiant Travel Company (ALGT) reported Q2 2025 earnings of $1.23 per share, exceeding the Zacks Consensus Estimate of 83 cents, but reflecting a 30.5% decline year-over-year [1][9] - Operating revenues reached $689.4 million, slightly below the Zacks Consensus Estimate of $698.4 million, yet showing a 3.5% year-over-year improvement [1][9] Revenue Performance - Passenger revenues, which constituted 89.6% of total revenues, increased by 3.9% year-over-year [2] - Air traffic, measured in revenue passenger miles, grew by 12% year-over-year, while capacity, measured in available seat miles (ASMs), increased by 16.1% [2] - The load factor decreased to 81.9% from 84.7% year-over-year, indicating that traffic did not keep pace with capacity growth [2] Cost Analysis - Operating costs per available seat mile, excluding fuel, decreased by 2.5% year-over-year to 8.29 cents [3] - The average fuel cost per gallon for scheduled services fell by 22.2% year-over-year to $2.49 [3] - Total scheduled service passenger revenue per available seat mile declined to 13.01 cents from 13.16 cents a year ago [3] Liquidity Position - As of June 30, 2025, Allegiant's total unrestricted cash and investments amounted to $852.7 million, down from $906.3 million in the previous quarter [5] - Long-term debt and finance lease obligations totaled $1.77 billion, slightly up from $1.74 billion in the prior quarter [5] Future Guidance - For Q3 2025, scheduled service ASMs are expected to increase by 10% year-over-year, with total system ASMs projected to rise by 9% [6] - Adjusted loss per share for the airline is anticipated to be in the range of $1.25 to $2.25, while the consolidated loss per share is expected between $1.75 and $2.75 [6] - For the full year 2025, scheduled service ASMs are projected to increase by 13% year-over-year, with adjusted EPS expected to exceed $2.25 [7] Capital Expenditures - Aircraft-related capital expenditures are expected to be in the range of $260-$280 million, with additional capitalized deferred heavy maintenance between $50 million and $70 million [8] - The company aims to expand its fleet size to 122 by the end of Q3 2025 [8]

PART I. FINANCIAL INFORMATION [ITEM 1. Consolidated Financial Statements](index=4&type=section&id=ITEM%201.%20Consolidated%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, equity, cash flows, and detailed accounting notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$4,389.141 million** by June 30, 2025, due to cash, investment, and Sunseeker Resort reclassification changes Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **CURRENT ASSETS** | | | | Cash and cash equivalents | $209,873 | $285,892 | | Short-term investments | 632,946 | 495,234 | | Assets held for sale | 194,650 | — | | **TOTAL CURRENT ASSETS** | **1,206,750** | **991,605** | | Property and equipment, net | 2,892,648 | 3,069,949 | | **TOTAL ASSETS** | **$4,389,141** | **$4,429,853** | | **CURRENT LIABILITIES** | | | | Current maturities of long-term debt and finance lease obligations | 183,063 | 454,769 | | **TOTAL CURRENT LIABILITIES** | **1,093,656** | **1,277,404** | | Long-term debt and finance lease obligations, net | 1,778,855 | 1,611,735 | | **TOTAL LIABILITIES** | **$3,333,220** | **$3,340,461** | | **TOTAL EQUITY** | **1,055,921** | **$1,089,392** | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **$4,389,141** | **$4,429,853** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net loss reported for Q2 and H1 2025, driven by significant special charges from Sunseeker write-down and corporate restructuring Consolidated Statements of Income (in thousands, except per share amounts) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **OPERATING REVENUES:** | | | | | | Total operating revenues | $689,384 | $666,283 | $1,388,458 | $1,322,688 | | **OPERATING EXPENSES:** | | | | | | Total operating expenses | 756,873 | 631,386 | 1,390,945 | 1,272,344 | | **OPERATING INCOME (LOSS)** | **(67,489)** | **34,897** | **(2,487)** | **50,344** | | **INCOME (LOSS) BEFORE INCOME TAXES** | **(88,564)** | **18,025** | **(46,624)** | **16,688** | | INCOME TAX PROVISION (BENEFIT) | (23,398) | 4,326 | (13,560) | 3,908 | | **NET INCOME (LOSS)** | **$(65,166)** | **$13,699** | **$(33,064)** | **$12,780** | | Earnings (loss) per share: Basic | $(3.62) | $0.75 | $(1.84) | $0.69 | | Earnings (loss) per share: Diluted | $(3.62) | $0.75 | $(1.84) | $0.68 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive loss widened significantly in Q2 and H1 2025, reflecting the net loss, partially offset by securities changes Consolidated Statements of Comprehensive Income (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | NET INCOME (LOSS) | $(65,166) | $13,699 | $(33,064) | $12,780 | | Other comprehensive income (loss): Change in available for sale securities, net of tax | 305 | (254) | (505) | (1,462) | | **TOTAL COMPREHENSIVE INCOME (LOSS)** | **$(64,861)** | **$13,445** | **$(33,569)** | **$11,318** | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased to **$1,055.921 million** by June 30, 2025, due to net loss and share repurchases Consolidated Statements of Shareholders' Equity (in thousands) | | Balance at December 31, 2024 | Share-based compensation | Shares repurchased | Stock issued under employee stock purchase plan | Other comprehensive loss | Net loss | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total shareholders' equity** | **$1,089,392** | **$6,302** | **$(11,470)** | **$5,266** | **$(505)** | **$(33,064)** | **$1,055,921** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to **$283.647 million** in H1 2025, but investing and financing outflows led to a net cash decrease Consolidated Statements of Cash Flows (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(33,064) | $12,780 | | Net cash provided by operating activities | 283,647 | 236,737 | | Net cash used in investing activities | (241,842) | (109,752) | | Net cash used in financing activities | (116,223) | (54,432) | | **NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH** | **(74,418)** | **72,553** | | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD | 302,319 | 159,584 | | **CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD** | **$227,901** | **$232,137** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, special charges, revenue, debt, income taxes, fair value, EPS, contingencies, segments, and Sunseeker sale [Note 1 — Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) Unaudited financial statements follow U.S. GAAP, relying on management estimates, with reclassifications for presentation conformity - Unaudited consolidated financial statements include Allegiant Travel Company and its majority-owned subsidiaries, with all intercompany balances and transactions eliminated[18](index=18&type=chunk) - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, and actual results may differ from these estimates[20](index=20&type=chunk) - Certain prior period amounts have been reclassified to conform to the current period presentation[21](index=21&type=chunk) [Note 2 — Special Charges](index=10&type=section&id=Note%202%20%E2%80%94%20Special%20Charges) Q2 2025 special charges totaled **$117.9 million**, mainly from Sunseeker write-down and corporate restructuring - In Q2 2025, the Company recorded **$102.2 million** in special charges related to the pending sale of Sunseeker Resort, including a **$100.4 million** write-down and **$1.8 million** for retention pay[22](index=22&type=chunk) - The Company recorded **$12.1 million** of special charges in Q2 2025 for corporate restructuring efforts, including voluntary separation packages and termination of marketing agreements, in response to softened air travel demand[26](index=26&type=chunk) Summary of Special Charges (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Accelerated depreciation on airframes identified for early retirement | $2,501 | $9,251 | $3,892 | $24,166 | | Flight attendant ratification bonus | — | 10,821 | — | 10,821 | | Organizational restructuring | 12,095 | — | 12,095 | — | | Airline special charges | 14,596 | 20,072 | 15,987 | 34,987 | | Sunseeker special charges, net of insurance recoveries | 103,328 | (1,958) | 100,382 | (3,775) | | **Total special charges** | **$117,924** | **$18,114** | **$116,369** | **$31,212** | [Note 3 — Revenue Recognition](index=11&type=section&id=Note%203%20%E2%80%94%20Revenue%20Recognition) Passenger revenue increased in Q2 and H1 2025, driven by ancillary charges and loyalty, while resort revenue also grew Passenger Revenue (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Scheduled service | $247,208 | $272,715 | $530,576 | $562,594 | | Ancillary air-related charges | 352,873 | 307,390 | 668,152 | 582,183 | | Loyalty redemptions | 17,827 | 14,394 | 35,930 | 29,657 | | **Total passenger revenue** | **$617,908** | **$594,499** | **$1,234,658** | **$1,174,434** | Resort Revenue (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Rooms | $8,732 | $6,653 | $24,163 | $16,610 | | Food and beverage | 7,766 | 7,643 | 17,728 | 18,415 | | Other | 4,136 | 2,515 | 9,431 | 5,673 | | **Total resort revenue** | **$20,634** | **$16,811** | **$51,322** | **$40,698** | - As of June 30, 2025, the air traffic liability balance was **$363.5 million**, with approximately **$322.9 million** related to forward bookings and **$40.6 million** to credit vouchers[29](index=29&type=chunk) [Note 4 — Property and Equipment](index=12&type=section&id=Note%204%20%E2%80%94%20Property%20and%20Equipment) Net property and equipment decreased to **$2,892.648 million** by June 30, 2025, due to Sunseeker Resort asset reclassification Property and Equipment, Net (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Airline Flight equipment | $3,487,636 | $3,345,458 | | Sunseeker Resort Land and buildings/leasehold improvements | — | 255,201 | | **Total property and equipment, net** | **$2,892,648** | **$3,069,949** | - As of June 30, 2025, all assets related to Sunseeker Resort and Aileron Golf Course are presented as 'Assets held for sale' on the balance sheet due to a pending sale agreement[35](index=35&type=chunk) - The Company had firm commitments to purchase **37 aircraft** as of June 30, 2025[35](index=35&type=chunk) [Note 5 — Long-Term Debt](index=13&type=section&id=Note%205%20%E2%80%94%20Long-Term%20Debt) Long-term debt decreased to **$1,961.918 million** by June 30, 2025, with new aircraft debt offset by significant principal repayments Long-Term Debt and Finance Lease Obligations (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed-rate debt and finance lease obligations due through 2032 | $1,336,800 | $1,481,186 | | Variable-rate debt due through 2037 | 625,118 | 585,318 | | **Total long-term debt and finance lease obligations, net of related costs** | **1,961,918** | **2,066,504** | | Less current maturities, net of related costs | 183,063 | 454,769 | | **Long-term debt and finance lease obligations, net of current maturities and related costs** | **$1,778,855** | **$1,611,735** | - During the six months ended June 30, 2025, the Company borrowed **$218.5 million** under credit agreements for new aircraft and drew down **$55.3 million** from a new **$221.3 million** facility[38](index=38&type=chunk)[39](index=39&type=chunk) - The Company fully repaid the **$100.0 million** Sunseeker construction loan in February 2025 and the **$130.5 million** unsecured credit facility during the six months ended June 30, 2025[43](index=43&type=chunk)[45](index=45&type=chunk) - As of June 30, 2025, the Company had **$275.0 million** available under revolving credit facilities and **$335.0 million** in undrawn aircraft and pre-delivery deposit financing commitments[46](index=46&type=chunk) [Note 6 — Income Taxes](index=14&type=section&id=Note%206%20%E2%80%94%20Income%20Taxes) Income tax benefit recorded in Q2 and H1 2025, with effective tax rate differing from statutory due to state taxes and Sunseeker write-down - For the three months ended June 30, 2025, the Company recorded a **$23.4 million** income tax benefit at a **26.4%** effective tax rate, compared to a **$4.3 million** income tax expense at **24.0%** in 2024[47](index=47&type=chunk) - For the six months ended June 30, 2025, the Company recorded a **$13.6 million** income tax benefit at a **29.1%** effective tax rate, compared to a **$3.9 million** income tax expense at **23.4%** in 2024[48](index=48&type=chunk) - The effective tax rate for both periods in 2025 differed from the statutory federal income tax rate of **21.0%** primarily due to state income taxes, permanent tax differences, and discrete items, mainly the Sunseeker write-down[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 7 — Fair Value Measurements](index=14&type=section&id=Note%207%20%E2%80%94%20Fair%20Value%20Measurements) Financial assets are measured at fair value using market approach (Level 2), while long-term debt uses discounted cash flow (Level 3) - The Company utilizes the market approach to measure the fair value of its financial assets, with Level 2 assets primarily using quoted market prices or models with market observable inputs[49](index=49&type=chunk) - The estimated fair value of long-term debt is determined using the discounted cash flow method and classified as Level 3, as certain inputs are unobservable[50](index=50&type=chunk) Financial Instruments Measured at Fair Value (in thousands) | (in thousands) | As of June 30, 2025 Total | As of June 30, 2025 Level 1 | As of June 30, 2025 Level 2 | As of December 31, 2024 Total | As of December 31, 2024 Level 1 | As of December 31, 2024 Level 2 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash equivalents:** | | | | | | | | Money market funds | $45,979 | $45,979 | $— | $41,494 | $41,494 | $— | | Commercial paper | 18,527 | — | 18,527 | 22,689 | — | 22,689 | | US Government and agency obligations | 17,992 | — | 17,992 | 81,535 | — | 81,535 | | **Total cash equivalents** | **94,012** | **45,979** | **48,033** | **160,150** | **41,494** | **118,656** | | **Short-term investments:** | | | | | | | | Corporate debt securities | 304,380 | — | 304,380 | 242,313 | — | 242,313 | | Commercial paper | 217,224 | — | 217,224 | 149,807 | — | 149,807 | | US Government and agency obligations | 99,939 | — | 99,939 | 94,295 | — | 94,295 | | **Total short-term investments** | **632,946** | **—** | **632,946** | **495,234** | **—** | **495,234** | | **Long-term investments:** | | | | | | | | US Government and agency obligations | 5,257 | — | 5,257 | 10,452 | — | 10,452 | | Corporate debt securities | 4,674 | — | 4,674 | 39,931 | — | 39,931 | | **Total long-term investments** | **9,931** | **—** | **9,931** | **51,725** | **—** | **51,725** | | **Total financial instruments** | **$736,889** | **$45,979** | **$690,910** | **$707,109** | **$41,494** | **$665,615** | [Note 8 — Earnings per Share](index=15&type=section&id=Note%208%20%E2%80%94%20Earnings%20per%20Share) Basic and diluted loss per share of **$(3.62)** and **$(1.84)** reported for Q2 and H1 2025, a significant decline from prior year - Basic and diluted earnings per share are computed using the two-class method, with unvested restricted stock awards considered participating securities[52](index=52&type=chunk) Earnings (Loss) Per Share (in thousands, except per share amounts) | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Basic:** | | | | | | Net income (loss) attributable to common stock | $(65,166) | $13,366 | $(33,064) | $12,162 | | Earnings (loss) per share, basic | $(3.62) | $0.75 | $(1.84) | $0.69 | | Weighted-average shares outstanding | 17,995 | 17,828 | 17,989 | 17,746 | | **Diluted:** | | | | | | Net income (loss) attributable to common stock | $(65,166) | $13,366 | $(33,064) | $12,162 | | Earnings (loss) per share, diluted | $(3.62) | $0.75 | $(1.84) | $0.68 | | Adjusted weighted-average shares outstanding under two-class method | 17,995 | 17,869 | 17,989 | 17,836 | [Note 9 — Contingencies](index=16&type=section&id=Note%209%20%E2%80%94%20Contingencies) Routine legal and administrative actions are not expected to materially impact financial position, liquidity, or operations - The Company is subject to certain legal and administrative actions considered routine to its business activities[55](index=55&type=chunk) - Management believes the ultimate outcome of any potential and pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity, or results of operations[55](index=55&type=chunk) [Note 10 — Segments](index=16&type=section&id=Note%2010%20%E2%80%94%20Segments) Operates Airline (profitable) and Sunseeker Resort (significant operating loss due to sale-related special charges) segments - The Company's two operating segments are Airline and Sunseeker Resort, with performance evaluated by the President and CEO based on operating income and pretax income[56](index=56&type=chunk) - The Airline segment includes scheduled service air transportation, ancillary air-related products, third-party products, and fixed-fee contract air transportation[57](index=57&type=chunk) - The Sunseeker Resort segment includes hotel rooms, group meeting facilities, food and beverage options, Aileron Golf Course, and other Resort amenities[58](index=58&type=chunk) Segment Operating Income (Loss) (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Airline Operating Income (Loss) | $43,157 | $46,956 | $104,009 | $71,172 | | Sunseeker Operating Income (Loss) | $(110,646) | $(12,059) | $(106,496) | $(20,828) | | **Consolidated Operating Income (Loss)** | **$(67,489)** | **$34,897** | **$(2,487)** | **$50,344** | [Note 11 — Sale of Sunseeker Resort](index=19&type=section&id=Note%2011%20%E2%80%94%20Sale%20of%20Sunseeker%20Resort) Agreement to sell Sunseeker Resort for **$200 million** led to a **$100.4 million** Q2 2025 write-down and 'held for sale' reclassification - In June 2025, the Company's board approved a plan for the sale of Sunseeker Resort and related Aileron Golf Course, meeting held-for-sale accounting requirements[63](index=63&type=chunk) - On July 3, 2025, the Company entered into an Agreement of Purchase and Sale for substantially all Resort assets for approximately **$200 million**, with closing anticipated in September 2025[64](index=64&type=chunk) - A **$100.4 million** write-down charge was recorded in Q2 2025 to reduce the Resort's carrying value to fair value less costs to sell, and its assets and liabilities were reclassified as 'held for sale'[65](index=65&type=chunk) Sunseeker Resort Assets and Liabilities Held for Sale (in thousands) | (in thousands) | As of June 30, 2025 | | :--- | :--- | | **Assets:** | | | Accounts receivable | $2,552 | | Inventories, net | 1,372 | | Prepaid expenses and other current assets | 5,260 | | Property and equipment, net | 284,587 | | Deposits and other assets | 1,290 | | Valuation allowance | (100,411) | | **Assets held for sale** | **$194,650** | | **Liabilities:** | | | Accrued liabilities | $5,355 | | Other noncurrent liabilities | 1,960 | | **Liabilities held for sale** | **$7,315** | [Note 12 — Subsequent Events](index=20&type=section&id=Note%2012%20%E2%80%94%20Subsequent%20Events) Post-June 30, 2025, Sunseeker Resort sale finalized, and **$210.1 million** borrowed for aircraft and debt prepayment - On July 3, 2025, the Company and its Sunseeker subsidiaries entered into an Agreement of Purchase and Sale with affiliates of Blackstone Real Estate Group for the sale of Sunseeker Resort Charlotte Harbor[66](index=66&type=chunk) - In July 2025, the Company borrowed **$210.1 million** on previously reported but undrawn credit facilities, collateralized by aircraft assets, to finance aircraft deliveries and prepay other outstanding debt[67](index=67&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial performance, condition, liquidity, capital, and trends, including Sunseeker sale impact [Second Quarter 2025 Review](index=21&type=section&id=Second%20Quarter%202025%20Review) Q2 2025 revenue grew **3.5%** to **$689.4 million**, but Sunseeker write-down caused a **$67.5 million** operating loss; airline operations were profitable - Total consolidated operating revenue was **$689.4 million**, up **3.5%** year-over-year, on capacity growth of **15.7%**[73](index=73&type=chunk) - The Company reported an operating loss of **$67.5 million** and a loss before income tax of **$88.6 million**, primarily due to the Sunseeker write-down charge[73](index=73&type=chunk) - Airline-only operating income was **$43.2 million**, yielding an airline-only operating margin of **6.5%**[73](index=73&type=chunk) - Airline-only operating cost per available seat mile (CASM), excluding fuel and special charges, decreased **6.7%** year-over-year to **7.68 ¢**[73](index=73&type=chunk) - In early July 2025, the Company entered into a contract to sell Sunseeker Resort and related properties for **$200.0 million**, with the transaction scheduled to close in September 2025[73](index=73&type=chunk) [Trends](index=22&type=section&id=Trends) Softened air travel demand, volatile fuel costs, ongoing pilot negotiations, and the pending Sunseeker sale are key operational trends - Consumer confidence fluctuations and macroeconomic uncertainty have contributed to softened demand for domestic leisure air travel, impacting fares, load factors, and profitability[77](index=77&type=chunk) - Aircraft fuel costs remain volatile, influenced by economic and geopolitical factors, and the Company does not use financial derivative products to hedge against fuel price volatility[78](index=78&type=chunk)[79](index=79&type=chunk) - The Company is focusing on increasing peak period aircraft utilization to 2019 levels, with June 2025 utilization at **8.7 hours** per aircraft compared to **9.7 hours** in June 2019[80](index=80&type=chunk) - Pilot union negotiations are ongoing, and the Company has accrued **$192.6 million** for a pilot retention bonus, payable upon ratification of a new collective bargaining agreement[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The VivaAerobus alliance application for antitrust immunity remains suspended by the US DOT due to measures forcing the Mexican Government to correct perceived violations of the air transport agreement[85](index=85&type=chunk)[86](index=86&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Revenue grew in Q2 and H1 2025, but significant special charges from Sunseeker write-down led to operating losses [Comparison of three months ended June 30, 2025 to three months ended June 30, 2024](index=25&type=section&id=Comparison%20of%20three%20months%20ended%20June%2030,%202025%20to%20three%20months%20ended%20June%2030,%202024) Q2 2025 total operating revenues rose **3.5%** to **$689.4 million**, but **$117.9 million** in special charges led to a **$67.5 million** operating loss Operating Revenue (in thousands) - Three Months Ended June 30 | Operating Revenues (in thousands) | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Passenger | $617,908 | $594,499 | 3.9% | | Third party products | 33,649 | 37,102 | (9.3)% | | Fixed fee contracts | 17,019 | 17,699 | (3.8)% | | Resort and other | 20,808 | 16,983 | 22.5% | | **Total operating revenues** | **$689,384** | **$666,283** | **3.5%** | - Passenger revenue increased by **$23.4 million (3.9%)** due to an **11.0%** increase in scheduled service passengers, with a **3.4%** increase in average ancillary fare offsetting a **16.9%** decline in average base fare[87](index=87&type=chunk) - Resort revenues increased by **$3.8 million (22.7%)** with occupancy rising to **51.0%** from **33.0%** in Q2 2024, partially offset by a decrease in average daily rate[90](index=90&type=chunk) Airline Unitized Costs (in cents) - Three Months Ended June 30 | Airline Unitized costs (in cents) | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries and benefits | 3.51 ¢ | 3.94 ¢ | (10.9)% | | Aircraft fuel | 2.86 | 3.39 | (15.6)% | | Station operations | 1.30 | 1.39 | (6.5)% | | Depreciation and amortization | 1.12 | 1.18 | (5.1)% | | Maintenance and repairs | 0.63 | 0.61 | 3.3% | | Sales and marketing | 0.43 | 0.52 | (17.3)% | | Aircraft lease rentals | 0.19 | 0.11 | 72.7% | | Other | 0.50 | 0.48 | 4.2% | | Special charges | 0.25 | 0.40 | (37.5)% | | **Airline operating CASM** | **10.79 ¢** | **12.02 ¢** | **(10.2)%** | | **Airline operating CASM, excluding fuel** | **7.93 ¢** | **8.63 ¢** | **(8.1)%** | | **Airline operating CASM, excluding fuel and special charges** | **7.68 ¢** | **8.23 ¢** | **(6.7)%** | - Airline operating CASM, excluding fuel and special charges, decreased **6.7%** to **7.68 ¢**, primarily due to a **15.7%** increase in ASMs and efficient capacity growth without increasing full-time equivalent employees[92](index=92&type=chunk) - Special charges totaled **$117.9 million**, including a **$100.4 million** write-down for Sunseeker Resort and **$14.6 million** for airline corporate restructuring efforts[104](index=104&type=chunk)[105](index=105&type=chunk) [Comparison of six months ended June 30, 2025 to six months ended June 30, 2024](index=28&type=section&id=Comparison%20of%20six%20months%20ended%20June%2030,%202025%20to%20six%20months%20ended%20June%2030,%202024) H1 2025 total operating revenues rose **5.0%** to **$1,388.5 million**, but **$116.4 million** in special charges resulted in a **$2.5 million** operating loss Operating Revenue (in thousands) - Six Months Ended June 30 | Operating Revenues (in thousands) | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Passenger | $1,234,658 | $1,174,434 | 5.1% | | Third party products | 68,852 | 70,501 | (2.3)% | | Fixed fee contracts | 33,271 | 36,560 | (9.0)% | | Resort and other | 51,677 | 41,193 | 25.5% | | **Total operating revenues** | **$1,388,458** | **$1,322,688** | **5.0%** | - Passenger revenue increased by **$60.2 million (5.1%)** due to a **9.9%** increase in scheduled service passengers, with a **4.4%** increase in average ancillary fare offsetting a **13.0%** decline in average base fare[108](index=108&type=chunk) - Resort revenues increased by **$10.6 million (26.1%)** with occupancy rising to **60.6%** from **36.1%** in H1 2024, partially offset by a decrease in average daily rate[111](index=111&type=chunk) Airline Unitized Costs (in cents) - Six Months Ended June 30 | Airline Unitized costs (in cents) | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries and benefits | 3.77 ¢ | 4.06 ¢ | (7.1)% | | Aircraft fuel | 2.95 | 3.48 | (15.2)% | | Station operations | 1.32 | 1.39 | (5.0)% | | Depreciation and amortization | 1.11 | 1.20 | (7.5)% | | Maintenance and repairs | 0.63 | 0.62 | 1.6% | | Sales and marketing | 0.43 | 0.56 | (23.2)% | | Aircraft lease rentals | 0.15 | 0.12 | 25.0% | | Other | 0.46 | 0.58 | (20.7)% | | Special charges | 0.14 | 0.36 | (61.1)% | | **Airline operating CASM** | **10.96 ¢** | **12.37 ¢** | **(11.4)%** | | **Airline operating CASM, excluding fuel** | **8.01 ¢** | **8.90 ¢** | **(10.0)%** | | **Airline operating CASM, excluding fuel and special charges** | **7.87 ¢** | **8.54 ¢** | **(7.8)%** | - Airline operating CASM, excluding fuel and special charges, decreased **7.8%** to **7.87 ¢**, driven by a **15.0%** increase in ASMs and efficient capacity growth[113](index=113&type=chunk) - Special charges totaled **$116.4 million**, including a **$100.4 million** write-down for Sunseeker Resort and **$16.0 million** for airline corporate restructuring and accelerated depreciation[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Comparative Airline-Only Operating Statistics](index=31&type=section&id=Comparative%20Airline-Only%20Operating%20Statistics) Airline operations in Q2 and H1 2025 saw significant capacity and passenger growth, with improved CASM excluding fuel and special charges Airline Operating Statistics - Three Months Ended June 30 | Airline operating statistics (unaudited) | 2025 | 2024 | Percent Change YoY | | :--- | :--- | :--- | :--- | | Passengers | 5,127,025 | 4,621,848 | 10.9 % | | Available seat miles (ASMs) (thousands) | 5,799,409 | 5,013,209 | 15.7 | | Airline operating CASM, excluding fuel and special charges (cents) | 7.68 ¢ | 8.23 ¢ | (6.7) | | Departures | 37,314 | 32,252 | 15.7 | | Average block hours per aircraft per day | 7.7 | 6.6 | 16.7 | | Average fuel cost per gallon | $2.42 | $2.83 | (14.5) | | Load factor | 81.9 % | 84.7 % | (2.8) ppt | | Average fare - total | $128.32 | $138.12 | (7.1) | Airline Operating Statistics - Six Months Ended June 30 | Airline operating statistics (unaudited) | 2025 | 2024 | Percent Change YoY | | :--- | :--- | :--- | :--- | | Passengers | 9,578,331 | 8,726,708 | 9.8 % | | Available seat miles (ASMs) (thousands) | 11,250,993 | 9,785,180 | 15.0 | | Airline operating CASM, excluding fuel and special charges (cents) | 7.87 ¢ | 8.54 ¢ | (7.8) | | Departures | 70,549 | 61,477 | 14.8 | | Average block hours per aircraft per day | 7.6 | 6.5 | 16.9 | | Average fuel cost per gallon | $2.51 | $2.92 | (14.0) | | Load factor | 81.2 % | 84.3 % | (3.1) ppt | | Average fare - total | $137.23 | $144.05 | (4.7) | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity increased to **$852.8 million** by June 30, 2025, with decreased net debt and suspended dividends for fleet investments - Cash, cash equivalents, and investment securities increased to **$852.8 million** as of June 30, 2025, from **$832.9 million** at December 31, 2024[133](index=133&type=chunk) - As of June 30, 2025, the Company had **$275.0 million** of undrawn capacity under revolving credit facilities and **$335.0 million** in undrawn borrowing capacity under aircraft financing facilities[133](index=133&type=chunk)[139](index=139&type=chunk) - Net debt (total debt less unrestricted cash, cash equivalents, and investments) decreased by **$124.5 million** to **$1.11 billion** as of June 30, 2025, from December 31, 2024[138](index=138&type=chunk) - The Company has indefinitely suspended its quarterly cash dividend in anticipation of upcoming capital needs related to fleet investments[136](index=136&type=chunk) - Approximately **68.1%** of the Company's debt and finance lease obligations are fixed-rate as of June 30, 2025[140](index=140&type=chunk) [Sources and Uses of Cash](index=33&type=section&id=Sources%20and%20Uses%20of%20Cash) Operating activities generated **$283.6 million** cash in H1 2025, while investing and financing activities resulted in significant outflows - Net cash provided by operating activities was **$283.6 million** for the six months ended June 30, 2025, compared to **$236.7 million** in 2024[141](index=141&type=chunk) - Net cash used in investing activities was **$241.8 million** for the six months ended June 30, 2025, compared to **$109.8 million** in 2024, primarily due to **$90.0 million** of net investment purchases and **$186.9 million** in capital expenditures[16](index=16&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Net cash used in financing activities was **$116.2 million** for the six months ended June 30, 2025, compared to **$54.4 million** in 2024, driven by **$432.6 million** in debt principal payments, partially offset by **$323.8 million** from new debt issuances[16](index=16&type=chunk)[147](index=147&type=chunk) - Operating cash flows are impacted by advance ticket sales (recorded as air traffic liability), salaries and benefits (including a **$192.6 million** pilot retention bonus accrual), and volatile fuel expenses[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=35&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Forward-looking statements involve risks and uncertainties, with actual results potentially differing materially due to various factors, including the Sunseeker sale - Forward-looking statements are based on management's beliefs and assumptions and involve risks, uncertainties, and assumptions, with actual results potentially differing materially[148](index=148&type=chunk)[149](index=149&type=chunk) - Important risk factors include regulatory reviews, aircraft issues, reliance on automated systems and Boeing, data security breaches, volatility of fuel costs, labor issues, economic conditions, government regulations, aircraft financing, the VivaAerobus alliance, terrorist attacks, competitive environment, and the Sunseeker Resort sale[149](index=149&type=chunk) - The Company undertakes no obligation to publicly update any forward-looking statements[150](index=150&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=35&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Critical accounting estimates focus on Sunseeker Resort assets held for sale, valued based on transaction price, subject to revision - Assets are classified as held for sale when all accounting requirements are met, presented at the lower of carrying amount or estimated fair value less costs to sell, with a valuation allowance if necessary[151](index=151&type=chunk) - Sunseeker Resort met held-for-sale criteria in Q2 2025, with its fair value estimated based on an agreed-upon transaction price, leading to a valuation allowance[152](index=152&type=chunk) - Subsequent revisions to these estimates could occur if the underlying transaction or terms change, or due to changing market conditions, industry, economy, or weather events[152](index=152&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risks include volatile fuel prices and interest rate fluctuations on variable-rate debt, with quantified impacts on expenses - Aircraft fuel expense represented **23.9%** of total operating expenses for the six months ended June 30, 2025, making the Company's results significantly impacted by changes in fuel prices[155](index=155&type=chunk) - A hypothetical **10%** increase in the average price per gallon of fuel would have increased fuel expense by approximately **$33.8 million** for the six months ended June 30, 2025[155](index=155&type=chunk) - As of June 30, 2025, the Company had **$629.1 million** of variable-rate debt; a hypothetical **100 basis point** change in interest rates would have affected interest expense by approximately **$3.3 million** for the six months ended June 30, 2025[156](index=156&type=chunk) - The Company does not hedge fuel price risk[155](index=155&type=chunk) [ITEM 4. Controls and Procedures](index=36&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025, ensuring timely and accurate reporting of required information[157](index=157&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ending June 30, 2025[158](index=158&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=37&type=section&id=ITEM%201.%20Legal%20Proceedings) Routine legal and administrative actions are not expected to materially impact financial position, liquidity, or operations - The Company is subject to certain legal and administrative actions considered routine to its business activities[159](index=159&type=chunk) - Management believes the ultimate outcome of any pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity, or results of operations[159](index=159&type=chunk) [ITEM 1A. Risk Factors](index=37&type=section&id=ITEM%201A.%20Risk%20Factors) No changes to risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - The Company has evaluated its risk factors and determined there are no changes to those set forth in Part I, Item 1A. of its Annual Report on Form 10-K for the year ended December 31, 2024[160](index=160&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, **6,980** shares were repurchased at **$50.36** average, mainly for tax withholding, with **$64.7 million** remaining authority Repurchases of Common Stock - Second Quarter 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs (in thousands) | | :--- | :--- | :--- | :--- | | April | 6,600 | $50.14 | | | May | 380 | $54.24 | | | June | — | $— | | | **Total** | **6,980** | **$50.36** | **$64,694** | - Shares repurchased were primarily from employees who vested a portion of their restricted stock grants, to satisfy income tax withholding requirements[161](index=161&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=37&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[162](index=162&type=chunk) [ITEM 4. Mine Safety Disclosures](index=37&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[162](index=162&type=chunk) [ITEM 5. Other Information](index=37&type=section&id=ITEM%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans in Q2 2025 - During the three months ended June 30, 2025, none of the Company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements[162](index=162&type=chunk) [ITEM 6. Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including corporate documents, officer certifications, and XBRL taxonomy - Exhibits include Articles of Incorporation, Bylaws, Rule 13a-14(a)/15d-14(a) Certifications of Principal Executive and Financial Officers, Section 1350 Certifications, and XBRL Taxonomy Extension Documents[165](index=165&type=chunk) [Signatures](index=39&type=section&id=Signatures) Report signed on August 6, 2025, by Robert J. Neal, Executive Vice President and Chief Financial Officer - The report was signed on August 6, 2025, by Robert J. Neal, Executive Vice President and Chief Financial Officer of Allegiant Travel Company[169](index=169&type=chunk)

Core Insights - Allegiant Travel reported revenue of $689.38 million for the quarter ended June 2025, reflecting a 3.5% increase year-over-year, but fell short of the Zacks Consensus Estimate of $698.37 million by 1.29% [1] - The company's EPS was $1.23, down from $1.77 in the same quarter last year, but exceeded the consensus estimate of $0.83 by 48.19% [1] Financial Performance Metrics - Airline operating CASM, excluding fuel, was reported at 7.68 cents, better than the average estimate of 8.32 cents [4] - Available seat miles (ASMs) were 5.63 billion, slightly above the estimated 5.59 billion [4] - Airline operating expense per ASM (CASM) was 10.79 cents, lower than the average estimate of 11.3 cents [4] - Revenue passenger miles (RPMs) reached 4.61 billion, in line with the average estimate of 4.6 billion [4] - Average fuel cost per gallon was $2.4, matching the average estimate [4] - Total passenger revenue per ASM (TRASM) was 11.57 cents, below the average estimate of 11.77 cents [4] - Load factor was reported at 81.2%, exceeding the estimated 80.6% [4] Revenue Breakdown - Operating Revenues from Other sources were $20.81 million, compared to the average estimate of $23.78 million, representing a year-over-year increase of 22.5% [4] - Operating Revenues from Passenger services totaled $617.91 million, slightly below the average estimate of $622.56 million, with a year-over-year increase of 3.9% [4] - Operating Revenues from Third-party products were $33.65 million, below the average estimate of $36.94 million, reflecting a year-over-year decrease of 9.3% [4] - Operating Revenues from Fixed fee contracts were $17.02 million, exceeding the average estimate of $15.57 million, but showing a year-over-year decrease of 3.8% [4] Stock Performance - Allegiant Travel's shares have returned -20.2% over the past month, contrasting with the Zacks S&P 500 composite's +0.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Allegiant Travel reported quarterly earnings of $1.23 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, but down from $1.77 per share a year ago, representing an earnings surprise of +48.19% [1] - The company posted revenues of $689.38 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.29%, compared to $666.28 million in the same quarter last year [2] - Over the last four quarters, Allegiant Travel has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Allegiant Travel shares have declined approximately 48.9% since the beginning of the year, while the S&P 500 has gained 6.1% [3] - The current consensus EPS estimate for the upcoming quarter is -$1.62 on revenues of $599.03 million, and for the current fiscal year, it is $2.70 on revenues of $2.67 billion [7] - The estimate revisions trend for Allegiant Travel was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Transportation - Airline industry, to which Allegiant Travel belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Allegiant Travel reported adjusted earnings per share (EPS) of $1.23, significantly exceeding the analyst estimate of $0.77, while GAAP revenue reached $689.4 million, slightly above expectations of $685.07 million [1][2] - The company's earnings outperformance was primarily driven by cost discipline, although key demand metrics such as yields and ancillary sales faced ongoing pressure [1][5] Financial Performance - Adjusted diluted EPS for Q2 2025 was $1.23, down 30.5% from $1.77 in Q2 2024 [2] - GAAP revenue increased by 3.5% year-over-year, from $666.3 million in Q2 2024 to $689.4 million in Q2 2025 [2] - Operating margin (Non-GAAP) decreased to 7.3%, down 3.0 percentage points from 10.3% in the previous year [2] - Adjusted net income fell by 30.2% to $22.7 million compared to $32.5 million in Q2 2024 [2] - Total revenue per available seat mile (TRASM) was 11.57¢, a decline of 11.2% year-over-year [6] Business Strategy - Allegiant operates as a low-cost carrier targeting leisure travelers in small and medium-sized cities, focusing on non-stop flights to popular vacation destinations [3] - The company aims to deepen its network in underserved markets and grow ancillary revenue through digital enhancements and loyalty programs [4] - Allegiant is refocusing on its core airline business, planning to divest the Sunseeker Resort, which has led to $103.3 million in special charges [8][10] Operational Highlights - The airline operated a record 37,000 flights in the quarter and added new nonstop routes while maintaining a focus on competition-light markets [8] - Ancillary revenue per passenger improved by $3 in the first half of 2025, attributed to enhanced digital pricing tools [7] - The company continued to invest in its fleet, adding more Boeing 737 MAX aircraft, which are expected to deliver operational and financial improvements [9] Future Outlook - For Q3 2025, Allegiant anticipates adjusted airline-only operating margins to turn negative, with projected adjusted diluted EPS losses between $1.25 and $2.25 [10] - The company expects full-year adjusted airline-only EPS above $3.25 and adjusted consolidated EPS above $2.25 [10] - System capacity is forecasted to increase by about 12% for the full year, but remain flat in fiscal 2026 [10]