Financial Data and Key Metrics Changes - The company reported a fourth-quarter net income of $50.1 million, resulting in airline-only earnings of $2.72 per share, exceeding the guided range of $2 per share [21] - Full-year 2025 consolidated net income was $70.3 million or $3.80 per share, with airline earnings at $93.8 million, yielding $5.07 per share [21] - Adjusted operating margin for the fourth quarter was 12.9%, among the best in the industry, with unit costs falling more than 6% for the year [6][8] Business Line Data and Key Metrics Changes - Total airline revenue for 2025 was over $2.5 billion, up approximately 4.3% year-over-year, with fourth-quarter revenue at approximately $656 million, up 7.6% compared to Q4 2024 [12][13] - The airline segment produced an EBITDA margin of nearly 22% in the fourth quarter, underscoring the earnings power of the model in a favorable leisure demand environment [21] - Fixed fee revenue contribution in Q4 was a record $25.5 million, despite increased scheduled service utilization [13] Market Data and Key Metrics Changes - Current leisure demand is strong, with significant improvement observed over the holiday period, continuing into January [9] - The company expects a 13.5% adjusted operating margin in Q1 2026, indicating strong demand trends [9] - The company anticipates a slight decline in capacity for 2026, with a focus on leveraging existing infrastructure to drive revenue per available seat mile (TRASM) improvement [27] Company Strategy and Development Direction - The company is committed to balancing growth with profitability, focusing on "earning the right to grow" [9] - The acquisition of Sun Country is seen as a strategic move to build a leading leisure airline in the U.S., with a thoughtful integration plan underway [10] - The company aims to leverage modern technology platforms to enhance operational efficiency and customer experience [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties, with a focus on maintaining a strong financial position [27][28] - The company is optimistic about the demand environment, with expectations for continued revenue growth and margin expansion [9][27] - Management highlighted the importance of operational excellence and team dedication in achieving strong performance [11] Other Important Information - The company ended the year with total available liquidity of $1.1 billion and reduced net leverage to 2.3x, nearing pre-COVID levels [24] - Capital expenditures for 2026 are expected to be approximately $750 million, with a focus on aircraft-related spending [25] - The company has a healthy order book with over 100 new technology aircraft, positioning it well for future growth [29] Q&A Session Summary Question: What is driving the exceptional demand in January? - Management noted that improved visitation and bookings are contributing to strong demand, with expectations for continued strength through spring break and Easter [31][32] Question: How does the company view RASM and CASM for the year? - Management expects TRASM to improve more than CASM, reinforcing margin expansion [35] Question: What is the outlook for the first quarter versus the full year? - Management indicated that current strong trends are not fully assumed in the full-year guidance, reflecting a conservative approach [40][41] Question: How is the company planning to finance the merger with Sun Country? - Management stated that cash balances are ahead of schedule and could be used for the cash consideration of the merger, with options for refinancing existing debt [51][52] Question: What opportunities exist with the MAX aircraft and the merger? - Management expressed excitement about the flexibility and potential synergies from the combined fleet, emphasizing the strategic advantages of owning their aircraft [57][93]

Financial Data and Key Metrics Changes - The fourth quarter financial results exceeded original expectations, with a total airline revenue of approximately $656 million, up 7.6% compared to Q4 2024, marking a record high for the company [12][13] - For the full year 2025, consolidated net income was $70.3 million, or $3.80 per share, while airline-only earnings were $93.8 million, yielding $5.07 per share [21] - The adjusted operating margin for the fourth quarter was 12.9%, among the best in the industry, with unit costs falling more than 6% for the year [6][8] Business Line Data and Key Metrics Changes - The airline segment produced net income of $50.1 million in Q4, driven by lower-than-expected salaries and benefits, and a stronger revenue environment [21] - The fixed fee revenue contribution in Q4 was $25.5 million, another quarterly record, despite increased scheduled service utilization [13] - The airline generated over $143 million of EBITDA during Q4, producing an EBITDA margin of nearly 22% [21] Market Data and Key Metrics Changes - Current leisure demand is strong, with significant improvement observed over the holiday period, continuing into January [9] - The company expects a 13.5% adjusted operating margin in Q1 2026, indicating strong demand and operational efficiency [9] - The demand environment observed in Q4 2025 extended into early January, with winter storms impacting bookings but a recovery beginning to take shape [26] Company Strategy and Development Direction - The company plans to focus on existing infrastructure and commercial initiatives to drive TRASM improvement and margin expansion in 2026, without fleet growth [9] - The acquisition of Sun Country is seen as a strategic step to build a leading leisure airline in the U.S., with a thoughtful integration plan underway [10] - The company aims to maintain a net leverage ratio between 2 and 2.5 turns, with a focus on refinancing opportunities and maintaining cash balances for operational flexibility [82][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate various demand environments and enhance customer experiences, supported by a strong financial position [29] - The company is cautious about the continuation of strong demand trends observed in January, indicating a conservative approach to full-year guidance [40][41] - Management highlighted the importance of balancing growth with profitability, emphasizing the need to earn the right to grow [9] Other Important Information - The company successfully integrated the MAX aircraft into its fleet, which is expected to provide a 20% fuel burn advantage compared to the A320 [7] - The company ended the year with total available liquidity of $1.1 billion and reduced total debt to just under $1.8 billion [24] - Capital expenditures for 2026 are expected to be approximately $750 million, including significant investments in aircraft-related CapEx [25] Q&A Session Summary Question: What is driving the exceptional demand in January? - Management noted that improved visitation and bookings are contributing to strong demand, with expectations for continued strength through spring break and Easter [31][32] Question: How does the company view RASM and CASM for the year? - Management expects TRASM to improve more than CASM, reinforcing margin expansion [35] Question: What is the outlook for the first quarter and full year? - The company is guiding for Q1 EPS of approximately $3, with a conservative full-year EPS expectation of at least $8 [26][27] Question: How is the company approaching the merger with Sun Country? - Management indicated that the merger is expected to close in the second half of 2026, with plans to finance the cash component through a combination of cash balances and potential refinancing [50][51] Question: What are the expectations for new market development? - Historically, new markets have a unit revenue drag of 10%-15% relative to the rest of the system, and this is expected to remain consistent [91]

Financial Data and Key Metrics Changes - The company reported a fourth-quarter net income of $50.1 million, resulting in airline-only earnings of $2.72 per share, exceeding the guided range of $2 per share at the midpoint [19] - Full-year 2025 consolidated net income was $70.3 million or $3.80 per share, with airline earnings of $93.8 million yielding $5.07 per share [19] - Adjusted operating margin for the fourth quarter was 12.9%, among the best in the industry, with unit costs falling more than 6% for the year [4][7] Business Line Data and Key Metrics Changes - Total airline revenue for 2025 was over $2.5 billion, up approximately 4.3% from 2024, with fourth-quarter revenue of approximately $656 million, up 7.6% year-over-year [11][12] - Scheduled service ASMs grew 10.5% year-over-year in the fourth quarter, while CASM decreased 2.6% to $0.1267 [12][20] - The fixed fee revenue contribution in the fourth quarter was a record $25.5 million [11] Market Data and Key Metrics Changes - Current leisure demand is strong, with significant improvement observed over the holiday period, continuing into January [8] - The company expects a 13.5% adjusted operating margin in the first quarter of 2026, indicating strong demand and operational efficiency [8][25] - The company plans to maintain a flat fleet count in 2026 while focusing on existing infrastructure and commercial initiatives to drive revenue improvements [8][24] Company Strategy and Development Direction - The company is committed to balancing growth with profitability, referring to this as "earning the right to grow" [8] - The acquisition of Sun Country is seen as a strategic move to build a leading leisure airline in the U.S., with a focus on capturing synergies efficiently [9] - The company is transitioning to modern technology platforms to enhance operational capabilities and customer experience [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties while maintaining strong operational performance [25] - The company anticipates continued improvements in TRASM relative to CASM, reinforcing margin expansion for 2026 [33] - Management highlighted the importance of leveraging the MAX aircraft for operational efficiency and cost savings [5][20] Other Important Information - The company ended the year with total available liquidity of $1.1 billion and reduced net leverage to 2.3 times, nearing pre-COVID levels [22][23] - Capital expenditures for 2026 are expected to be approximately $750 million, including significant investments in aircraft [24][80] Q&A Session Summary Question: What is driving the exceptional demand in January? - Management noted that improved visitation and bookings are contributing to strong demand, with expectations for continued strength through spring break and Easter [30] Question: How does the company view RASM and CASM for the year? - Management expects TRASM to improve more than CASM, reinforcing margin expansion [33] Question: What is the outlook for the first quarter and full year? - The company is guiding for earnings per share of approximately $3 in the first quarter and at least $8 for the full year, with a conservative approach due to macro uncertainties [25][39] Question: How is the company deploying the MAX aircraft? - The company has shifted to longer-haul flying with the MAX aircraft, contributing positively to performance [54] Question: What is the strategy regarding the merger with Sun Country? - Management indicated that the merger is expected to close in the second half of 2026, with plans to finance the cash component through a combination of cash balances and potential refinancing [49][81]

Financial Data and Key Metrics Changes - The company reported a consolidated net loss of $37.7 million for a loss of $2.09 per share, with a net loss in the airline segment of $29.5 million for a loss of $1.64 per share [20][21] - Airline EBITDA for the quarter was $41.5 million, resulting in an EBITDA margin of 7.5% [22] - Non-fueled unit costs decreased by 4.7% year-over-year, with CASM ex-fuel down nearly 7% year to date [22][24] Business Line Data and Key Metrics Changes - Airline revenue for Q3 was $553 million, approximately 0.5% above the prior year, with a travel cost of 11.19 cents, down 8.4% year-over-year [12][20] - The airline segment generated a negative 3.1% operating margin, which was at the better end of the original guidance range [20] - The Allegiant Extra product is now available on 70% of planes, exceeding expectations in demand and customer satisfaction [7] Market Data and Key Metrics Changes - The company anticipates a flat capacity outlook for 2026, with a focus on higher peak day flying [9][26] - The fourth quarter is expected to show improved bookings, with an operating margin projected at 11% [26] - The company is seeing improvement in leisure demand, particularly around the holidays, with expectations for a full-year airline operating margin of approximately 7% [8][26] Company Strategy and Development Direction - The company aims to return to solid double-digit operating margins and is focused on balancing growth with margins [4][9] - The integration of the MAX aircraft is expected to comprise over 20% of ASMs in 2026, providing strong returns on investments [7][27] - The company is investing in technology initiatives to enhance customer experience and operational efficiency, including AI applications [8][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting margin expansion and improved earnings in 2026 and beyond [28][59] - The company is confident in its ability to manage through industry challenges and is focused on cost structure improvements [28][58] - Management noted that the leisure customer base remains resilient, supporting ongoing travel demand [66] Other Important Information - The sale of Sunseeker Resort closed on September 4, marking a significant milestone for balance sheet improvement [21] - The company ended the quarter with total available liquidity of $1.2 billion, consisting of $991.2 million in cash and investments [24] Q&A Session Summary Question: Thoughts on balance sheet stability post-Sunseeker sale - Management indicated that cash levels could be reduced as stability returns, with plans to invest in the business for 2025 and 2026 [31][33] Question: Implementation of AI and data infrastructure - Management highlighted ongoing efforts to leverage AI for operational efficiency and productivity, emphasizing a gradual approach to change management [34][35] Question: Capacity outlook for 2026 - Management expects low- to mid-single-digit declines in capacity for the first half of 2026, with a higher percentage of peak capacity planned [39][40] Question: Performance of new routes - Management noted that some new routes did not meet expectations, but they are willing to discontinue underperforming routes and focus on new opportunities [64] Question: Update on the Vegas market - Management acknowledged that while Vegas is underperforming, improvements are being seen, and there is potential for recovery [60]

Core Insights - Allegiant Travel Company reported a third-quarter 2025 GAAP diluted loss per share of $(2.41) and an adjusted airline-only loss per share of $(1.64) [1][3][14] - The airline maintained a controllable completion factor of 99.9% while achieving record departures and passenger transport [2][3] - The company expects a double-digit operating margin for the fourth quarter, raising its full-year airline-only EPS guidance to over $4.35 per share [3][13] Financial Performance - Total operating revenue for Q3 2025 was $561.9 million, a slight decrease of 0.1% from $562.2 million in Q3 2024 [1][14] - Total operating expenses increased to $589.1 million, up 0.1% from $588.5 million year-over-year [1][14] - The operating loss for Q3 2025 was $(27.2) million compared to $(26.3) million in Q3 2024, reflecting a 3.4% increase in loss [1][14] Operational Highlights - The airline transported 4.6 million passengers in Q3 2025, an increase of 8.8% from 4.3 million in Q3 2024 [2][26] - The average fuel cost per gallon decreased to $2.56, down 4.8% from $2.69 in the previous year [26] - The adjusted airline-only operating margin for Q3 2025 was (3.1)%, compared to 0.1% in Q3 2024 [14][26] Strategic Initiatives - The company is focusing on cost discipline, achieving a 4.7% decrease in CASM excluding fuel year-over-year [3][14] - Allegiant has expanded its network by announcing 12 new nonstop routes and two new cities [14] - The promotion of Robert "BJ" Neal to president is expected to strengthen the airline's operational and strategic capabilities [5] Guidance and Future Outlook - For Q4 2025, the company anticipates an adjusted operating margin of 10.0% to 12.0% and adjusted earnings per share between $1.50 and $2.50 [13][15] - Full-year 2025 guidance includes a system ASMs year-over-year change of approximately 12.5% and an adjusted airline-only earnings per share of over $4.35 [13][15] - Total available liquidity at the end of Q3 2025 was $1.2 billion, including $991.2 million in cash and investments [14]

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]

Financial Data and Key Metrics Changes - The company reported consolidated net income of $22.7 million and earnings per share of $1.23 for Q2 2025, with airline segment net income at $34.3 million and airline earnings per share at $1.86, exceeding initial expectations [24] - The airline operating margin was 8.6%, ahead of guidance, with a first half operating margin close to 9%, an improvement compared to 2024 [5][24] - Total airline revenue for Q2 was $669 million, approximately 3% above the prior year, with TRASM at $0.157, down 11.2% year over year [17] Business Line Data and Key Metrics Changes - The airline segment's EBITDA was $122.5 million, yielding an EBITDA margin of 18.3% [24] - Fixed fee revenue was down 4% year over year, but ahead of internal estimates [17] - The MAX aircraft accounted for roughly 10% of ASMs in Q2, expected to exceed 15% by year-end [7] Market Data and Key Metrics Changes - Domestic leisure demand was softer than anticipated during the first half of the year, impacting overall performance [6] - The company experienced a decline in TRASM during shoulder and off-peak periods, but managed to maintain profitability due to being one of the lowest cost providers in the industry [7][9] - The company is cautiously optimistic about a modest strengthening of leisure demand in the second half of the year, despite the third quarter typically being the weakest for leisure travel [10][11] Company Strategy and Development Direction - The company is focusing on enhancing its commercial offerings and simplifying its business by exiting non-core operations like Sunseeker [9][10] - Plans for 2026 include a flat capacity outlook, with expectations to improve yields through enhanced Navitaire capabilities and a more mature route network [12][13] - The company aims to divest some Airbus fleet and increase the usage of MAX aircraft, which are expected to be more than 20% of ASMs in 2026 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed pride in the operational performance, achieving a 99.9% controllable completion rate and record passenger numbers [5] - The company remains focused on cost control and operational efficiency, with a commitment to earning the right to grow [12][15] - Management anticipates a consolidated loss per share of $2.25 for Q3, including a loss of approximately $0.50 from Sunseeker, but expects a healthy operating profit for the full year [30][31] Other Important Information - The company ended the quarter with total liquidity of $1.1 billion, including $853 million in cash and investments [26] - The company is planning to retire eight A320 family aircraft and induct nine MAX aircraft into the operating fleet next year [31] - The sale of Sunseeker Resort for $200 million is expected to close in early September, with proceeds used for debt repayment [30] Q&A Session Summary Question: Clarification on full year earnings guidance - Management clarified that the guidance excludes Sunseeker's impact moving forward, with expectations for airline-only EPS around $1.02 for Q3 [36] Question: Details on the Sunseeker sale - The sale is a clean transaction with $200 million in cash proceeds to Allegiant upon closing [39] Question: Outlook for 2026 cost execution - Management indicated that they are not prepared to guide for 2026 yet, as they are still assessing capacity and cost structures [41] Question: Impact of growth headwinds on RASM - Management confirmed that the growth headwind to RASM was approximately five points year-to-date, consistent with Q2 performance [51] Question: Cost leverage from MAX investments - Management stated that there is still significant cost leverage to achieve from the MAX investments, with expectations for improved fuel efficiency [56][58] Question: Booking curve and demand outlook - Management noted that July bookings are complete, with 35-40% left to book for August and September, while 85% remains for Q4 [93]

Financial Data and Key Metrics Changes - The company reported consolidated net income of $22.7 million and earnings per share of $1.23 for Q2 2025, with airline segment net income at $34.3 million and airline earnings per share at $1.86, exceeding initial expectations of approximately $1.00 [27][28] - The airline operating margin was 8.6%, ahead of guidance, and the first half operating margin was close to 9%, an improvement compared to 2024 [5][27] - Total airline revenue for Q2 was $669 million, approximately 3% above the prior year, with a TRASM of $0.157, down 11.2% year over year [18][27] Business Line Data and Key Metrics Changes - The airline segment's EBITDA was $122.5 million, yielding an EBITDA margin of 18.3% [28] - Fixed fee revenue was down 4% year over year, but ahead of internal estimates [18] - The MAX aircraft accounted for roughly 10% of ASMs in Q2, expected to exceed 15% by year-end [8] Market Data and Key Metrics Changes - Domestic leisure demand was softer than anticipated during the first half of the year, impacting overall performance [6][11] - The company noted that peak TRASM performed relatively well, while shoulder and off-peak periods experienced demand softness [10] Company Strategy and Development Direction - The company is exiting the Sunseeker business to simplify operations and focus on its core airline [10] - Plans for the second half of the year include cautious optimism regarding leisure demand, with adjustments to capacity growth expectations due to macroeconomic uncertainties [11][12] - The company aims to enhance revenue through initiatives like Allegiant Extra and improved Navitaire capabilities, expecting to drive incremental revenue [14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recent bookings suggesting a modest strengthening of leisure demand, despite the third quarter typically being the weakest for leisure travel [11][12] - The company expects to incur an operating loss in Q3 but anticipates a healthy operating profit for the full year, with Q4 expected to be stronger [12][35] - Management emphasized the importance of operational excellence in driving cost efficiencies and maintaining competitive advantages [51] Other Important Information - The company ended the quarter with total liquidity of $1.1 billion, including $853 million in cash and investments [31] - The company plans to retire eight A320 family aircraft and induct nine MAX aircraft in 2026, with no expected fleet count-driven capacity growth next year [35] Q&A Session Summary Question: Clarification on full-year earnings guidance - Management clarified that the guidance for earnings excludes Sunseeker's impact post-sale, which is expected to close in early September [42][45] Question: Thoughts on 2026 cost execution - Management indicated that they are not ready to guide for 2026 yet, as they are still assessing capacity and pilot deal impacts [47][49] Question: Growth headwinds to RASM - Management acknowledged that the growth profile contributed to headwinds in RASM, similar to previous quarters [56] Question: Booking curve status - Management stated that July bookings are fully booked, with 35-40% left to book for August and September, and 85% left for Q4 [101][102] Question: Margin targets for future growth - Management did not specify margin targets but emphasized the need to earn the right to grow based on operational performance and cost management [106]

Aircraft Utilization & Operations - Aircraft utilization was approximately 20% below 2019 levels during July [4] - December aircraft utilization is scheduled to be within 6% of 2019 levels [4, 8] - March aircraft utilization is expected to be within 5% of 2019 levels [4, 8] - The company received its first Boeing 737 MAX in September 2024 and entered revenue service in mid-October 2024 [4, 14] Financial Performance & Outlook - The company expects 2024 cobrand remuneration to exceed $140 million with continued growth in 2025 [4] - Hurricane impact is expected to reduce 4Q24 Airline EPS by $1.25, from $2.25 to $1.00 [17] - Total liquidity at the end of the quarter was $1.1 billion, including $805 million in cash and investments and $275 million in undrawn revolver capacity [24] - The company made principal payments totaling $107 million, including $60.6 million prepayment of debt on PDP loans [24] - The company anticipates interest expense between $150 million and $160 million for FY 2024 [26] Fleet & Efficiency - The 737-8200 offers a 26% increase in ASMs per gallon compared to the A320 [12] - The 737-8200 adds 10 seats per departure compared to the A320 [12] Sunseeker Resort - Sunseeker is expected to have an EBITDA loss between $(25) million and $(30) million for FY 2024, excluding special charges [29]