LAS VEGAS - Allegiant Travel Company (NASDAQ: NASDAQ:ALGT), the Las Vegas-based integrated travel company, disclosed its preliminary passenger traffic results for July 2024, which showed a slight decrease in the number of passengers and load factor compared to the same month last year.
The data indicates that in July 2024, Allegiant had 1,897,963 passengers on scheduled services, a 1.9% decrease from the 1,934,464 passengers in July 2023. Revenue passenger miles also fell by 1.7% year over year, from 1,711,901 in July 2023 to 1,683,321 in the same month this year. Despite a 2.4% increase in available seat miles to 1,923,205, the airline's load factor, which measures how much of an airline's passenger carrying capacity is used, dropped by 3.7 percentage points from 91.2% to 87.5%.
For the total system, which includes both scheduled service and fixed fee contract flying, there was a 1.8% decrease in passengers from 1,943,900 in July 2023 to 1,908,813 in July 2024. Departures for the total system increased by 3.6%, and the average stage length, which is the average non-stop distance flown per departure, saw a marginal increase of 0.2%.
Allegiant also provided preliminary financial results, estimating the average fuel cost per gallon for the system at $2.84 for July 2024.
Allegiant, known for connecting travelers in small-to-medium cities with nonstop flights to vacation destinations, operates with a focus on low base airfares. The company's financial and operational performance is a key indicator of its market position, especially as it competes with other carriers in offering affordable travel options.
The information is based on a press release statement from Allegiant Travel Company and reflects the company's performance for the month of July 2024.
In other recent news, Allegiant Travel Company has been the subject of several financial revisions from analyst firms. Susquehanna lowered its price target for Allegiant from $55 to $40, citing a potential supply and demand imbalance in the U.S. domestic market and a decrease in demand for Allegiant's Sunseeker resort in Florida. The firm also adjusted Allegiant's second-half 2024 revenue estimate downwards by approximately 8%. Meanwhile, TD Cowen reduced its price target for Allegiant to $33, expressing concerns about challenges at the Sunseeker resort.
These adjustments come in the wake of Allegiant's Q2 financial results, which reported a consolidated net income of $32.5 million and earnings per share of $1.77. Despite these strong results, both firms remain cautious about Allegiant's future performance. Allegiant is currently integrating new MAX aircraft into its fleet and refining its Navitaire reservation system, as well as collaborating with Prospect Hotel Advisors to improve Sunseeker's performance.
These are recent developments for Allegiant. The company's strategic review of its Sunseeker Resort Charlotte Harbor with Prospect Hotel Advisors is aimed at maximizing the resort's value. Allegiant is also preparing for the integration of new Boeing (NYSE:BA) aircraft into its fleet, as part of its growth strategy and efforts to improve financial returns. Despite these initiatives, some analysts remain skeptical about their potential to excite the market.
InvestingPro Insights
As Allegiant Travel Company (NASDAQ: ALGT) navigates a slight downturn in passenger traffic, a closer look at InvestingPro data and tips reveals a broader financial perspective. The company's market capitalization stands at $705.98 million, with a notable Price / Book multiple of just 0.53 as of Q2 2024, indicating that the stock may be trading at a low valuation relative to its book value. Despite a challenging operational period, Allegiant offers a generous dividend yield of 6.01%, marking a compelling incentive for income-focused investors.
InvestingPro Tips suggest that Allegiant operates with a significant debt burden and is quickly burning through cash. These factors are critical for investors to consider, especially in the volatile airline industry where cash reserves and debt management are pivotal for weathering downturns. Additionally, with 9 analysts revising their earnings downwards for the upcoming period, the market sentiment appears cautious regarding Allegiant's near-term profitability.
Investors looking for deeper insights can find a comprehensive list of 15 InvestingPro Tips on Allegiant's financial health and market performance at https://www.investing.com/pro/ALGT. These tips provide a more detailed analysis that can aid in making informed investment decisions.
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