Allegiant Travel(ALGT) - 2025 Q1 - Quarterly Report

Financial Performance - Total operating revenue for Q1 2025 was $699.1 million, a 6.5$65.0 million, resulting in an operating margin of 9.3%, with airline-only operating income at $60.9 million and a margin of 9.1$79.28, up 4.7% year-over-year, supported by the introduction of new ancillary product offerings[60] - Resort and other revenue increased by 27.5% to $30.9 million, with resort occupancy improving to 70.3$191.4 million in Q1 2025, up from $167.8 million in Q1 2024, attributed to a$33.0 million increase in net income[110] Cost Management - The airline operating cost per available seat mile (CASM) decreased by 12.6% to 11.14 cents, with CASM excluding fuel down 11.9% to 8.09 cents[84] - Airline operating CASM, excluding fuel and special charges, decreased 9.0% to 8.07¢ from 8.87¢ in Q1 2024, driven by a 14.2% increase in ASMs[85] - Aircraft fuel expense decreased by $3.8 million or 2.2$20.9 million or 10.5% compared to Q1 2024, mainly due to a new collective bargaining agreement and a 15.5% increase in total block hours flown[87] - Aircraft fuel expenses accounted for 26.2% of total operating expenses for the three months ended March 31, 2025[118] Fleet and Capacity - The fleet consisted of 127 aircraft as of March 31, 2025, with plans to retire 21 aging airframes by December 2026 to facilitate fleet renewal[58][59] - The company identified over 1,400 incremental domestic nonstop routes for future growth, with 78% currently lacking nonstop service[61] Future Outlook and Risks - The new Navitaire reservation system is expected to restore lost ancillary revenue and generate incremental passenger revenue by the first half of 2026[70] - The company is awaiting U.S. government approval for a commercial alliance with VivaAerobus, which is anticipated to enhance competition and increase nonstop service between the U.S. and Mexico[75][76] - The company has made forward-looking statements regarding future aircraft deliveries and the implementation of a joint alliance with VivaAerobus[113] - Risks include reliance on Boeing for timely aircraft delivery and potential impacts from regulatory reviews[114] - The potential impact of economic conditions on leisure travel is a significant risk factor for the company[114] - The company does not hedge fuel price risk, exposing it to volatility in fuel costs[118] Financial Position - Cash, cash equivalents, and investment securities increased to $906.3 million as of March 31, 2025, from$832.9 million at December 31, 2024[101] - Debt and finance lease obligations decreased from $2.08 billion as of December 31, 2024, to$2.03 billion as of March 31, 2025[107] - Cash used for investing activities was $121.9 million in Q1 2025, compared to$93.6 million in Q1 2024, primarily due to purchases of investment securities[111] - Interest expense increased by $5.6 million or 33.6$3.4 million loss on debt extinguishment related to the early repayment of the Sunseeker construction loan[97] - As of March 31, 2025, the company had $656.8 million of variable-rate debt, with a potential 100 basis point change in interest rates affecting interest expense by approximately$1.6 million[119] Accounting and Compliance - There have been no material changes to critical accounting estimates during the three months ended March 31, 2025[116] - The company is subject to market risks, particularly related to commodity prices such as aircraft fuel[117]