Allegiant Travel Company Analysis

Topics: Revenue, Income, Balance sheet Pages: 14 (4438 words) Published: April 6, 2011
Executive Summary
Allegiant Travel Company, parent company of Allegiant Air, is a low-cost airline carrierthat caters exclusively to the leisure traveler. There are currently 980 employees that manage the whole company ( They are known for their innovative and sustainable business models based on keeping fares low and providing additional services for customers. Throughout the years, Allegiant has been operating by providing one-way tickets to and from its “focus centers” which are destinations as Orlando, St. Petersburg, Phoenix, Los Angeles, Tampa and Las Vegas ( However, Allegiant Travel Company purchased six Boeing 757s in March 2010 to expand their destinations to cities outside the USA ( The current routes generally include small, middle class areas populated by middle-aged people with high levels of disposable income. After analyzing their financial position, this report concludes that Allegiant is a satisfying target for investment. Allegiant has three main sources of revenue which include: service trips, ancillary revenues and fixed-free contracts called charters ( Even though the economic environment is not at its peak, Allegiant has managed sustained growth. Its low prices have kept demand buoyant, and it is one of the few airlines that saw profits go up in the face of skyrocketing fuel prices. Additionally, their stock prices have increased throughout the years and the values of their shares are increasing. Financially, Allegiant is not only maintaining their revenue, they are increasing it. Through the calculations of return on investments, return on sales, return on equity and operational efficiency, Allegiant showed consistent improvement. Cash reserves are plentiful, which means that the company has the opportunity to expand in the market. Investors should definitely invest in Allegiant Travel Company.

Allegiant Travel Company|
Table of Contents
Company Analysis- BADM190W|

Nicole Najjar

Executive Summarypg.1
Table of Contentpg.2
Introduction and Statement of Purposepg.3
Overview pg.3-pg.6
* The Allegiant Travel Companypg.3-pg.4
* Business Modelpg,4-pg.5
* Low Costspg.5-pg.6
* Competitiveness pg.6
Analysis pg.6-pg.9 * Financial Analysis pg.6-pg.8 * Allegiant’s Shares Value pg.8 * Allegiant’s Stock Price per Year pg.9

Recommendation pg.9-pg.10
Appendices pg.10-pg.13
* A. Annual Balance Sheet pg. 10-pg.11
* B. Annual Income Statement pg. 12-pg.13
* C. Composition of Ancillary Revenues pg.13 Works Cited pg.14-pg.15

Introduction and Statement of Purpose
Investors should invest in Allegiant Travel Company. This company is a low-cost airline servicing small markets throughout the United States. Allegiant is profitable with a positive outlook towards the future. Historically, this company has showed above average returns for the Airline industry and it is profitable with a positive outlook towards the future. Allegiant's most noteworthy attribute is that it is virtually unchallenged with the customers that they serve. One of the company's main aims is to attract vacationers on a budget instead of pursuing business travelers (5 Reasons to Love Allegiant). Allegiant has employed unique strategies along with unique ticketing, and seating practices. These features have allowed Allegiant to gain positive financial results, excellent customer satisfaction...
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