Vegas-based Allegiant sees income rise in quarter

By Cara McCoy (contact)

Monday, Oct. 19, 2009 | 8:04 p.m.

Las Vegas-based Allegiant Air's model of flying between smaller markets and large resort destinations paid off in the third quarter, according to earnings released Monday evening.

For the quarter that ended Sept. 30, Allegiant reported net income of $13.8 million, topping the $4.9 million the company brought in during the third quarter last year. Earnings per share rose from 24 cents to 68 cents per share. Total revenue rose nearly 14 percent, from $116.9 million to $133.1 million.

"We are pleased to report these very strong results in not only our historically weakest quarter, but also in what has been an exceptionally trying economic environment," Maurice J. Gallagher Jr., chairman and chief executive of Allegiant Travel Company, said in a statement. "Looking forward, we are cautiously optimistic that better times are in the offing.”

The total price of an average fare dropped from $118.60 to $100.44 and the average number of passengers per departure fell from 137 to 132. But, operating expenses per passenger dropped 25.6 percent, which the company attributed to a drop in fuel prices.

Additionally, the company announced that Andrew C. Levy, the company’s chief financial officer, has been appointed to president. Gallagher, who previously held the title, remains CEO and chairman, the company said.

Levy has served as an officer at Allegiant since June 2001 and was elected to the post of chief financial officer in August 2007. As president, he assumes responsibility for all sales and marketing initiatives in addition to current responsibilities that include planning, pricing, scheduling, in-flight and station operations, the company said.

Gallagher warned that the fourth quarter might not be as strong.

“Please note that last year we enjoyed a powerful combination of low fuel prices and air fares that had not declined, which makes the fourth quarter of 2008 a very difficult comp,” he said.

Since the third quarter of 2008, Allegiant has purchased seven new airplanes and has leased an additional two. Two of the planes have not yet been put into service, the company said.

Additionally, in the third quarter, Allegiant Air announced nine new routes starting in the fourth quarter, including five routes to Phoenix-Mesa and four to Florida, two to Orlando and one each to Tampa Bay/St. Petersburg and Fort Lauderdale.

The airline has 40 routes to Las Vegas, which is more than any other city (Orlando comes in second with 29.)

Shares of Allegiant finished up 98 cents to $39.63 before falling 3 cents in after-hours trading.