Allegiant Travel(ALGT) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $1.18 for Q4 2021, marking the third consecutive quarter of positive adjusted net income [25] - The full year adjusted operating margin was 6.6%, with adjusted net income of $35 million, indicating strong demand and revenue despite challenges [24] - Total revenue for Q4 was up 8% year-over-year, with a capacity increase of 13% [25] Business Line Data and Key Metrics Changes - Passenger revenue for Q4 exceeded 2019 levels by nearly 9%, while third-party revenue surpassed 2019 by nearly 54% [16] - The Allways Allegiant World MasterCard program saw a 27% increase in new card signups for the quarter, contributing to a 52% increase in brand compensation to Allegiant [17] Market Data and Key Metrics Changes - The company added nine cities to its network in 2021, broadening its reach and exposure [14] - The fourth quarter saw the introduction of 56 new routes and five new airports, with 10% of ASMs in their first year of operation [20] Company Strategy and Development Direction - Allegiant is focusing on enhancing its brand through investments in Allegiant Stadium and the Sunseeker project, which is expected to open with a revised budget of $585 million [10][15] - The company has placed a significant order with Boeing for 50 new aircraft, which will support its growth into international markets [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges posed by COVID-19 and rising input costs, emphasizing flexibility and opportunistic strategies [12][13] - The outlook for 2022 includes a comfortable full-year departure growth in the low double-digits compared to 2021, with expectations for earnings potential to improve as the environment normalizes [28] Other Important Information - The company has nearly $1.2 billion in cash, providing a strong balance sheet to support growth initiatives [10][29] - The average seat per departure is expected to increase, contributing to improved fuel efficiency and cost savings [32] Q&A Session Summary Question: Concerns about rising input costs and capacity growth - Management acknowledged the challenges posed by rising fuel prices and input costs, indicating that they are monitoring the situation closely and may adjust capacity accordingly [34][38] Question: Competitive routes and market dynamics - Management noted that 75% of their routes are non-competitive, allowing for greater pricing power and flexibility in capacity adjustments [47][50] Question: Impact of supply chain issues on operations - Management expressed uncertainty regarding the resolution of supply chain challenges but indicated that MRO activities are currently manageable [76][80]