ALLEGIANT TRAVEL COMPANY ANNOUNCES THE PURCHASE OF 14 A320 SERIES AIRCRAFT AND THE CONVERSION OF EXISTING LEASE AGREEMENT TO AN AIRCRAFT PURCHASE TRANSACTION
LAS VEGAS. June 13, 2014 -Allegiant Travel Company (NASDAQ: ALGT) today announced three separate aircraft transactions for 14 additional growth aircraft and a fourth transaction for the purchase of two leased aircraft and the conversion of future operating lease obligations to forward purchases.
"We continue to find purchase transactions for high quality Airbus aircraft to secure our future growth," said Andrew C. Levy, Allegiant Travel Company President and Chief Operating Officer. "We will now have 32 Airbus series aircraft, all owned, in our fleet by the end of 2018. We expect to use debt financing along with cash reserves to purchase these aircraft. Importantly, the additional A320/A319 aircraft are all sister ships to aircraft we currently operate. We remain active in the used Airbus market and hope to add more aircraft to our fleet during 2016 and 2017."
The company has agreed to purchase twelve A319 aircraft currently leased to a European carrier until 2018. This purchase transaction is expected to be completed by the end of June. As each aircraft lease expires, Allegiant will transition the aircraft into its operating fleet. Allegiant expects to recognize approximately $30 million in annual lease revenue beginning in June 2014 through 2018 and plans to assume $142 million of secured debt under this transaction. The remaining two growth aircraft - one A319 and one A320 - will be purchased in 2015 and 2016 upon aircraft delivery.
The company has also agreed to purchase the two currently leased A319 aircraft in its fleet. This purchase is expected to be completed in July. The remaining six aircraft under the lease agreement executed in 2012 will be purchased at the time of delivery to Allegiant, expected to be in late 2014 through 2015.
The company expects its capital expenditures (CAPEX) to be approximately $315 million in 2014 and approximately $220 million in 2015. Upon completion of the above transactions, the company`s fleet plan will be as follows:
|Aircraft - (seats per AC)||YE14||YE15||YE16||YE17||YE18|
|Aircraft listed above are in service aircraft and end of period|
|Guidance, subject to revision|
Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management`s beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future unit revenue, future operating expense, ASM growth, departure growth, fixed-fee and other revenues, expected capital expenditures, number of contracted aircraft to be placed in service in the future, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "guidance," "anticipate," "intend," "plan," "estimate", "project", "hope" or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov . These risk factors include, without limitation, volatility of fuel costs, labor issues, the effect of the economic downturn on leisure travel, terrorist attacks, risks inherent to airlines, our introduction of an additional aircraft type, demand for air services to our leisure destinations from the markets served by us, our dependence on our leisure destination markets, our competitive environment, problems with our aircraft, our reliance on our automated systems, economic and other conditions in markets in which we operate, aging aircraft and other governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
Allegiant, Travel is our deal.®
Las Vegas-based Allegiant Travel Company (ALGT) is focused on linking travelers in small cities to world-class leisure destinations. The company operates a low-cost, high-efficiency, all-jet passenger airline through its subsidiary, Allegiant Air, while also offering other travel-related products such as hotel rooms, rental cars, and attraction tickets. All can be purchased through the company website, allegiant.com. The company has been named one of America`s 100 Best Small Companies by Forbes Magazine for four consecutive years. For downloadable press kit, including photos, visit: http://gofly.us/17bZ4xO.
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Source: Allegiant Travel Company via GlobeNewswire