Allegiant Air

Topics: Airline, Low-cost carrier, Southwest Airlines Pages: 10 (2809 words) Published: October 7, 2014

Allegiant Air Portfolio
Embry – Riddle Aeronautical University

Allegiant Air Portfolio
Introduction
Allegiant is more than an airline, it’s an innovative travel company dedicated to providing the best travel deals to its customers. Linking small U.S. cities to world-class leisure destinations such as Florida, Las Vegas, Phoenix, California, Hawaii, and Myrtle Beach, S.C. Allegiant provides low-cost travel packages that include not only air, but hotel, rental car and entertainment tickets (Lindsay, 2009). History Allegiant was founded in 1997 in Fresno, California. In 1999, the company began scheduled passenger service between Fresno and Las Vegas utilizing a DC-9 aircraft (AllegiantAirInformation, 2010). In December 2000, Allegiant filed for bankruptcy and Maurice J. Gallagher Jr., the major creditor of the airline, gained control of the business during reorganization (AllegiantAirInformation, 2010). In June 2001, Gallagher restructured the airline to a low cost model and moved the headquarters and operations to Las Vegas, where they remain today. Allegiant’s unique strategy has allowed the company to remain profitable every quarter since 2003 despite industry challenges that include fluctuating fuel costs and an unstable economy. Gallagher remains Chief Executive Officer and Chairman of Allegiant (AllegiantAirInformation, 2010). Today, the travel company continues its focus on linking travelers in small cities, generally at underserved airports that have limited or no airport service, to top leisure airports destinations. Allegiant is led by a team of successful airline industry veterans who take the proven attributes of the low cost airline business model and creatively adapt them to best serve the company’s targeted leisure clientele and destinations (AllegiantAirInfomation, 2010). Financial Performance

Allegiant Air common stock is quoted on the Nasdaq Global Select Market. On December 1, 2013 the last sale price of our common stock was $74.86 per share (Wright, 2012/stockchart). The following financial information for each of the five years ended December 31, 2012, has been derived from our consolidated financial statements. Table 1

Allegiant Travel Co Stock Prices For the year ended December 31 2012HighLow
1st Quarter$57.71$47.32
2nd Quarter$71.42$54.20
3rd Quarter$75.93$61.63
4th Quarter$77.97$63.40
Note: Adapted from “Stock Chart,” by Allegiant Travel Co. (Wright, 2012). Table 2

2011High Low
1st Quarter $52.35$39.21
2nd Quarter $52.29$38.95
3rd Quarter $49.93$40.31
4th Quarter $55.36$45.25
Note: Adapted from “Stock Chart,” by Allegiant Travel Co. (Wright, 2012).

As of December 1, 2013 there were approximately 191 holders of record of Allegiant’s common stock Table 3

20122011201020092008
Total Operating Revenue
$908,719$779,117$663,641$557,940$504,012
Total Operating Expense
$776,415$693,673$558,985$435,687$448,164
Operating Income
$132,304$85,444$104,656$122,253$55,848
Percent of Sales
90.9%88.8%88.8%86.3%86.4%
Every year Allegiant Air passengers are always increasing…. Passengers
6,591,7075,776,4625,609,8524,919,8263,894,968
Note: Adapted from “Stock Chart,” by Allegiant Travel Co. (Wright, 2012).

Route Structure & Hub
It's no accident that when you aboard an Allegiant flight all seats are taken, profits soared 200% in the first quarter to $28.2 million, and the number of passengers is up 18% during the worst recession in recent memory. While competitors furiously cut back, Allegiant has boosted capacity 30 % (Heard of Allegiant,” 2009, para.1). When flying with an airline, the customer wants to know that their getting the best services for the price they paid for their trip. Advertised on Allegiant Air’s Twitter account, the profile bio is: “We work hard to get you the best travel deal; all you have to do is go...

References: SCOTT MAYEROWITZ (2013). Tiny Allegiant Air thrives on low costs high fees. Associated Press. Retrieved from http://news.yahoo.com/tiny-allegiant-air-thrives-low-costs-high-fees-070304427.html
Fast Company Staff (2009)
Allegiant Air (2012). Annual Reports Retrieved from http://ir.allegiantair.com/phoenix.zhtml?c=197578&p=irol-reportsAnnual
Susan Carey (2013)
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Richard Vellotta (2012). VegasInc Allegiant Air projecting double-digit capacity growth. Retrieved July 9, 2012 from http://www.vegasinc.com/business/2012/jul/09/allegiant-air-projecting-capacity-gro/
Greg Lindsay (2009)
John Wright (2012). Irol Reports Annual. Retrieved from http://ir.allegiantair.com/phoenix.zhtml?c=197578&p=irol-reportsAnnual
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Jane Levere (2010). What Can Next Gen Do For You? Retrieved from. http://www.executivetravelmagazine.com/articles/what-can-nextgen-do-for-you
Adam Levine-Weinberg (2013)
Peter Pae (May 13, 2009). "Allegiant Air 's prudent ways help it soar amid slump in travel". Los Angeles Times, archived at webcite.org. Retrieved May 17, 2009.
Art Thomason (2008-08-26). “Allegiant funds Mesa airport expansion”. Arizona Republic, archived at website.org. http://www.webcitation.org/5gqmgP8CR. Retrieved 2008-09-18
http://allegiantairinformation.blogspot.com/2010/02/history-of-allegiant-air.html
Bruce Drum (2012). Allegiant Air Announces a New Route. Retrieved (April 17, 2012) from http://worldairlinenews.com/tag/allegiant-air/page/2/
Allegiant Air Flight Schedule
Las Vegas Review Journal (2013). Allegiant Air Flight Attendants Picket Headquarters. Retrieved (June 12, 21013) http://www.reviewjournal.com/business/aviation/allegiant-flight-attendants-picket-
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