Allegiant Travel CO Q1 FY2025 earnings call

• Greg Anderson announced Tyler Hollingsworth as Chief Operating Officer. - Team delivered 99.9% controllable completion rate on 32,000 departures, over 4.4 million passengers flew, with 75% repeat customers. - Airline operating margin was 9.3%, up 3 points vs prior year. - Adjusted capacity due to economic uncertainty, focusing on peak leisure demand. - MAX fleet outperformed, with 6% of ASMs flown by MAX in Q1, anticipating 16% by year-end. - Allegiant Extra on more than half of fleet, Navitaire improvements boosting revenue. - Sunseeker Resort EBITDA $4.8 million in Q1 vs negative $4.6 million in Q1 2024.

The Airline segment reported net income of $39 million, yielding airline-only earnings per share of $2.11. The airline generated $121 million in EBITDA during the quarter, resulting in an EBITDA margin of 18.1%. Non-fuel airline unit costs were $0.0807, down 9% year-over-year. The Airline segment is the primary revenue contributor.

• Second quarter airline-only operating margin expected at ~7% midpoint, consolidated EPS $0.50. - Q2 fuel cost assumption $2.40 per gallon. - Reduced full-year capital expenditure forecast by $80 million to $435 million, with aircraft-related CapEx down to ~$270 million. - Holds off on full-year projections for 2025.

• Economic uncertainty impacting consumer confidence and discretionary spending. - Demand softness in shoulder and off-peak periods. - Risks related to fleet delivery delays from Boeing affecting CapEx plans.

Q: Speak to margin trajectory and third quarter outlook?

A: Greg Anderson said true North is to drive margins, will aggressively manage capacity and costs in second half, third quarter historically soft but focusing on optimization.

Q: Update on Sunseeker process and F&B mix?

A: Greg Anderson said Sunseeker process on track for summer closure, Micah Richins said F&B ~70-30 split inside hotels to locals.

Q: Fuel assumptions and capacity outlook?

A: Robert Neal said fuel assumption $2.40 for rest of year, Drew Wells said capacity estimate ~13% annual with flexibility to cut more if demand doesn't improve.

Q: RASM expectations for Q2 and demand trends?

A: Drew Wells said Q2 RASM will be more pressured than Q1, demand improved last week but broad-based with stabilization in some regions.

Q: Capacity cuts and margin profile?

A: Drew Wells said targeting capacity to cover variable expenses to push margins, will aggressively manage second half capacity.