After a 60 Minutes investigation dubbed Allegiant Air potentially the “most dangerous” airline in the U.S., shares of the small, budget plane operator fell 3% Monday, adding to its 8.5% fall from when news of the takedown first came to light Friday — and the CEO’s net worth has also dropped by $52 million.
In total, Allegiant has shed $293 million in market value, or about $2.4 billion, as a result of the 60 Minutes segment, which aired Sunday. The nighttime news program raised serious concerns about the company’s track record, reporting that the airline suffered a high number of mid-flight breakdowns and unscheduled landings — about 100 serious incidents reported to the Federal Aviation Administration in the nearly two-year period between January 2016 and the end of October.
An engine caught on fire mid-flight during one incident, while in another, hazardous hydraulic fluid dubbed Skydrol 4 filled a cabin still full of passengers.
The net worth of Allegiant Travel Company CEO Maurice Gallagher Jr. has also taken a $52 million dip since Friday. Much of the executive’s compensation comes from shares of the company he helms. That 21% stake of the firm fell to $490 million Monday.
On the face of it, the report does have echoes to another from three years earlier. In 2015, a separate 60 Minutes piece digging into flooring maker, Lumber Liquidators, led to drawn-out investigations and the conclusion that some of its flooring could increase the risk of cancer. Even now, shares of the company remain below their price from before the news show publicly questioned the firm’s hardwood. That company, which was valued at $1.9 billion ahead of its 60 Minutes feature, is now valued at about $643 million — pointing to just how painful bad publicity, warranted or not, can leave lasting scars.
Allegiant later responded to the 60 Minutes segment, contesting several parts of the article.
“It is unfortunate and disappointing that CBS 60 Minutes has chosen to air a false narrative about Allegiant and the FAA,” Eric Gust, the firm’s vice president of operations said in a statement Monday. “Allegiant’s team members safely operate thousands of flights each week, which will transport more than 14 million passengers this year.”