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Allegiant Travel CO (ALGT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered a clean turnaround in the airline segment: adjusted airline-only EPS of $3.00 and 13.2% adjusted airline-only operating margin, while GAAP EPS was a $(12.00) loss driven by a $322M Sunseeker impairment .
  • Management set an ambitious FY25 airline-only EPS target of $7.75–$10.25 (midpoint $9, >50% YoY), on ~16–17% ASM growth, lower unit costs, and 9 incremental 737-8200 deliveries; Q1’25 airline-only EPS guided to $1.75–$2.75 (consolidated $1.50–$2.50) .
  • Key positives: ancillary revenue per pax hit a record $78.43, CASM-ex fuel fell 2.5% YoY, and balance sheet deleveraging progressed (liquidity $1.1B; net debt $1.23B at 12/31) .
  • Overhangs/what to watch: unit revenue pressure from growth and Easter timing in 1H25, execution on MAX ramp, and Sunseeker (now EBITDA-positive in Q1’25; competitive process to sell a majority stake targeted by summer) .
  • Likely stock catalysts: delivery cadence and cost down > RASM down confirmation, ancillary uplift from Allegiant Extra/navitaire optimization, and a Sunseeker transaction announcement (timing “by summer”) .

What Went Well and What Went Wrong

What Went Well

  • Material airline margin recovery: Q4 adjusted airline-only operating margin 13.2% (+~6.6 pts YoY), driven by peak utilization (Dec ASMs +16.4% YoY) and ancillary strength .
  • Ancillary monetization: total ancillary per pax a record $78.43; Allegiant Extra retrofit expanded; cobrand remuneration $34.1M in Q4 and $134.7M FY .
  • Cost discipline and deleveraging: Q4 adjusted airline-only CASM-ex fuel 8.29¢ (−2.5% YoY) and total principal repayments $414.9M in Q4; total liquidity $1.1B .
  • Quote: “We finished the year strong… adjusted airline-only EPS of $3.00… progress on our three key initiatives… helped produce an adjusted airline-only operating margin of 13.2%” – CEO Greg Anderson .

What Went Wrong

  • GAAP loss due to non-cash impairment: $(12.00) GAAP diluted EPS in Q4 from a $321.8M Sunseeker impairment (and hurricane damages) .
  • Unit revenue headwinds ahead: management guides Q1’25 TRASM down >6% on growth + Easter shift; expects CASM down more than RASM, but RASM pressure persists as growth ramps .
  • Sunseeker still a drag (improving): Q4 Sunseeker operating loss; Q1’25 Sunseeker only ~+$2M EBITDA with ~$3M D&A; FY25 only quarterly guidance given amid sale process .

Financial Results

Headline P&L and Margins (Consolidated and Airline-only)

MetricQ2 2024Q3 2024Q4 2024
Total Operating Revenue ($M)$666.3 $562.2 $627.7
GAAP Diluted EPS ($)$0.75 $(2.05) $(12.00)
Adjusted Diluted EPS ($)$1.77 $(2.02) $2.10
Airline-only Adjusted Diluted EPS ($)$2.24 $(0.49) $3.00
Adjusted Operating Margin (Consol.)8.0% (3.1)% 10.2%
Adjusted Airline-only Operating Margin10.3% 0.1% 13.2%
Revenue YoY %(2.6%) (0.6%) +2.7%

Notes: Q4 GAAP loss reflects ~$322M Sunseeker impairment; adjusted results exclude specials and a $1.2M investment loss .

Segment Breakdown

MetricQ3 2024Q4 2024
Airline Operating Revenue ($M)$549.1 $609.7
Sunseeker “Resort and Other” Revenue ($M)$13.1 $18.0
Consolidated Operating Income (Loss) ($M)$(26.3) $(264.0)
Airline Operating Income ($M)$(7.0) $78.1
Sunseeker Operating Income (Loss) ($M)$(19.3) $(342.0)

Operating Statistics & KPIs

KPIQ2 2024Q3 2024Q4 2024
Scheduled TRASM (¢)13.03 12.21 13.01
Scheduled Yield (¢)6.99 5.88 7.70
Load Factor (%)84.7 85.6 80.2
Avg Fuel Cost/gal ($)2.83 2.69 2.49 (sched.)
Airline-only CASM ex-fuel (¢)8.23 8.89 8.29
Ancillary per Pax ($)75.34 74.02 78.43
Cobrand Remuneration ($M)36.1 36.5 34.1
Liquidity ($B)1.1 1.1 1.1
Net Debt ($B)1.37 1.38 1.23

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Airline-only EPS (Adj.)Q4 2024$0.50–$1.50 Actual $3.00 Beat vs guide
Consolidated EPS (Adj.)Q4 2024$0.00–$1.00 Actual $2.10 Beat vs guide
System ASMs YoYQ1 2025—~13.5% New
Operating Margin (Airline)Q1 2025—8–11% New
Airline-only EPS (Adj.)Q1 2025—$1.75–$2.75 New
Consolidated EPS (Adj.)Q1 2025—$1.50–$2.50 New
System ASMs YoYFY 2025—~16% (sched. ~17%) New
Fuel ($/gal)FY 2025—$2.60 New
Interest Expense ($M)FY 2025—$130–$140 New
Capitalized Interest ($M)FY 2025—($20)–($30) New
Interest Income ($M)FY 2025—$30–$40 New
Tax RateFY 2025—24% New
Share Count (000s)FY 2025—18,100 New
Airline-only EPS (Adj.)FY 2025—$7.75–$10.25 New
Airline CAPEX ($M)FY 2025—Aircraft $285–$315; DHM $85–$95; Other $115–$135 New
Recurring Principal ($M)FY 2025—$165–$175 New
Sunseeker EBITDA (Adj.)Q1 2025—~$2M; D&A ~$3M; Occ. ~60%; ADR ~$320 New
DividendOngoingSuspended 7/8/24 No changeMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2’24 and Q3’24)Current Period (Q4’24)Trend
Peak utilizationQ2: “On track to return to pre-pandemic utilization in 2025” ; Q3: December utilization nearing 2019; March within ~5% Dec ASMs +16.4% YoY; controllable completion 99.7% in Dec Improving
737-8200 MAX integrationQ2: first deliveries in Sep; 2025 to reduce inefficiencies ; Q3: first MAX in service mid-Oct; ~26% fuel efficiency gain est. 4 MAX in service YE; 9 deliveries planned in 2025 (planning conservatively vs Boeing’s 12) Scaling
Ancillary/Allegiant ExtraQ2: ancillary $75.34/pax; Extra retrofit ramp ; Q3: Extra on 50+ aircraft; third bundle restored (+$1/pax) Record $78.43/pax in Q4; Extra drives uplift; Allianz insurance contribution doubled/pax since Feb Strengthening
Navitaire optimizationQ2: 2025 bottom-line boost; 3rd bundle restored ; Q3: $1/pax restored; more in 2H25 Expect full recapture of $2 lost by 1H25; additional $2 upside early 2026 Positive
Sunseeker strategyQ2: strategic review launched ; Q3: hurricane demand impact; FY24 EBITDA loss ($25)–($30)M Majority-stake sale process active; aim to close by summer; Q1’25 EBITDA ~+$2M Monetization path
Balance sheet/leverageQ3: deleveraging started; total debt < $2.2B; liquidity $1.1B YE liquidity $1.1B; net leverage ~3.2x; Sunseeker debt repaid Improving
Macro/FX/timingQ3: Hurricanes Helene/Milton; Q4 TRASM cut; Q1’25 TRASM down >6% (Easter shift, stage, CAD FX) Near-term headwind
LaborQ2: pilot retention bonus accrual; FA CBA impact ; Q3: pilot mediation ongoing Pilot retention accrual ~$22.5M/quarter in 2025; mediation continues Watch

Management Commentary

  • “Collectively, these improvements are expected to result in a full-year, airline-only EPS, excluding special charges, of $9.00, an expected increase of over 50 percent compared to 2024.” – CEO Greg Anderson .
  • “We expect 1Q TRASM down slightly more than negative 6%, implying airline revenue, excluding fixed fee, up about 7% for the quarter.” – CCO Drew Wells .
  • “Net leverage improved almost a full turn from the end of the third quarter, down to 3.2x… we should continue deleveraging throughout 2025.” – CFO Robert (B.J.) Neal .
  • “We have launched a competitive process to sell at least a majority interest in [Sunseeker]… goal is to conclude this process by summer.” – CEO Greg Anderson .

Q&A Highlights

  • Capacity cadence and growth mix: Q1 ~14% ASM growth; Q2/Q3 low-20s; Q4 lowest; growth skewed to shoulder months; approach is to “grow into infrastructure” while testing new routes (44 added) .
  • CASM vs RASM: Company expects CASM (incl. CASM-ex) down more than RASM in 2025; Q1 CASM-ex down ~7% YoY vs TRASM down >6% .
  • Sunseeker process & proceeds: multiple high-quality investors; aim to “button up” by summer; primary use of cash would be balance sheet strengthening (pay down debt/pay for aircraft) .
  • Fuel shock playbook: reallocate away from shoulder/off-peak, prioritize flying MAX, potentially accelerate A320 exits; fixed-fee growth to offset .
  • Pilot costs: retention bonus accrual ~ $22.5M per quarter in 2025 (ended 2024 just under $140M cumulative) .

Estimates Context

  • Wall Street consensus (S&P Global) was unavailable at time of analysis due to SPGI rate limit; therefore, comparisons vs consensus are not included. Values would have been retrieved from S&P Global.
  • Against company guidance from Q3: ALGT beat Q4 airline-only EPS guidance ($3.00 vs $0.50–$1.50) and beat consolidated adjusted EPS ($2.10 vs $0.00–$1.00) .

Key Takeaways for Investors

  • Airline core inflecting: Q4 confirms execution on utilization, ancillary monetization, and cost control—setting up FY25 for >50% EPS growth if delivery/capacity plan holds .
  • Cost > revenue delta: Management intends to let CASM fall faster than RASM in 2025; watch Q1 print to confirm CASM-ex down ~7% vs TRASM down >6% .
  • Capacity growth is accretive (but lowers unit metrics): Expect unit revenue pressure from growth and holiday/Easter timing; focus on absolute earnings and cash generation .
  • Sunseeker is a self-help catalyst: Sale of a majority stake by summer could simplify the story, reduce volatility, and improve leverage; Q1’25 EBITDA turning positive .
  • Balance sheet optionality: $1.1B liquidity, net debt trending down; unencumbered assets and aircraft sales provide additional levers amid MAX ramp .
  • Route expansion and Allegiant Extra penetration should sustain ancillary tailwinds; Navitaire recapture ($2/pax by 1H25) adds underpinning to FY25–26 .
  • Key risks: delivery delays (Boeing), fuel spikes, macro/FX (CAD) pressures on certain origin markets, and labor cost trajectory (pilot deal) .

Supporting detail (select additional disclosures):

  • Q4 highlights included adjusted EBITDA $129.2M (20.6% margin), airline-only EBITDA $139.2M (22.8%), and operating CASM-ex fuel 8.29¢ .
  • YE’24 fleet plan: 125 aircraft in service; 2025 exit planned at 122 with 737-8200 at 13 and A319 down to 30 .
  • Sunseeker Q4 occupancy 54% at $238 ADR; Q1’25 guide ~60% at ~$320 ADR .