Allegiant Travel(ALGT) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported an adjusted consolidated net income of $2.4 million and an adjusted earnings per share (EPS) of$0.11 for Q4 2023, including approximately $12.8 million in preopening expenses for Sunseeker Resort [30] - For the full year 2023, adjusted consolidated net income was roughly$137 million, yielding an adjusted EPS of $7.31, which included approximately$33 million in expenses related to Sunseeker [31] - EBITDA for the full year was $472 million, a 45$500 million in EBITDA excluding special items [31][32] - The airline recorded an adjusted net income of $165 million for the year, yielding an adjusted airline full year EPS of$8.82, slightly ahead of initial expectations [31] Business Line Data and Key Metrics Changes - The airline's controllable completion factor was reported at 99.8%, an industry-leading performance [13][12] - The airline's TRASM (Total Revenue per Available Seat Mile) for Q4 was $0.1316, down 6.2$0.338, nearly 6% better than any prior year, with record ancillary performance exceeding $5 year-over-year [24] Market Data and Key Metrics Changes - The company retained nearly one-third of customers who flew in the prior year, accounting for nearly half of total revenue for 2023, with a year-over-year customer retention rate that was 16$15 million in EBITDA in 2024 [17] - The company ended 2023 with over $1.1 billion in total liquidity, including$870 million in cash and investments [33] Q&A Session Summary Question: Can you provide more color on historical Q-over-Q unit revenue and expected unit costs for the first quarter? - The historical Q-over-Q unit revenue has been around 2.5% from 2011 to 2019 [39] - The first quarter is expected to have elevated unit costs year-over-year, primarily driven by wage increases for frontline labor groups [40] Question: Is there any improvement in off-peak pricing? - The spread between peak and off-peak pricing appears to be returning to pre-pandemic levels, indicating normal leisure seasonality [42] Question: How do you view margin seasonality going into Q2? - The second quarter is expected to have the best operating margin, with a clear path to increase peak capacity in the summer [45] Question: What are the financing plans for capital spending this year? - The company is exploring various financing options, including bank markets and finance leases, to support capital expenditures [49] Question: Can you provide an update on labor discussions? - The company is in federal mediation for pilot agreements and is working to address flight attendant contract issues [52] Question: What is the expected contribution from Sunseeker Resort? - The resort is still in its early stages, but management is optimistic about its performance and expects it to improve as awareness grows [56]