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Allegiant (ALGT) Posts Bland August Traffic, Load Factor Tanks

Zacks Equity Research
·3 mins read

Allegiant Travel Company ALGT reported dull traffic numbers for August, primarily due to weak air travel demand stemming from the COVID-19 pandemic. Traffic for scheduled service, measured in revenue passenger miles (RPMs), plunged 48.4% on a year-over-year basis to 540.3 million. Scheduled capacity, calculated in available seat miles (ASMs), fell 0.3% to 1226.4 million in the month.

Since the decline in traffic exceeded capacity reduction, load factor (percentage of seats filled with passengers) plunged 4110 basis points year over year to 44.1%. Moreover, number of passengers carried declined 49% year over year to 633.2 million.

Number of departures for scheduled service declined 3.6% on a year-over-year basis. However, average stage length (average distance flown per aircraft departure) moved up 1.6% to 835 miles in the same month. For the total system (including scheduled service and fixed fee contract), number of departures fell 6.7%, while the average stage length inched up 1.1% to 833 miles. The average fuel cost per gallon (estimated) for August was $1.34.

Average daily bookings for August were approximately $2 million per day. The company expects average daily cash burn to exceed $1 million for the September quarter. The same is expected to be lower than $1 million for the final quarter of the year, in the event of current booking trends remaining stable.

Zacks Rank & Stocks to Consider

Allegiant currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Canadian Pacific Railway Limited CP and Werner Enterprises, Inc. WERN. Knight-Swift sports a Zacks Rank #1(Strong Buy), while Canadian Pacific and Werner carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Canadian Pacific and Werner is pegged at 15%, 8% and 8.5%, respectively.

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KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
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Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
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