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Allegiant's (ALGT) Load Factor Up, Traffic Down in January

Zacks Equity Research

Allegiant Travel Company ALGT reported disappointing traffic figures for January. Traffic for the total system including scheduled service and fixed fee contract — measured in revenue passenger miles (RPMs) — dipped 1.5% on a year-over-year basis to 864.22 million. System capacity, calculated in available seat miles (ASMs), also slid 1.6% to 1.08 billion in the month.

As capacity declined more than the fall in traffic, load factor (percentage of seats filled with passengers) inched up 10 basis points year over year to 80%.

Allegiant’s passenger count slipped 0.8% in January. Its system-wide average fuel cost per gallon was approximately $2.01 in the month, lower than $2.07 in December 2018.

Allegiant Travel Company Price

 

Allegiant Travel Company Price | Allegiant Travel Company Quote


Last month, the company reported fourth-quarter earnings results with both earnings and revenues surpassing estimates. While the bottom line declined year over year due to high costs, the top line increased 8.7% on the back of a 10.1% rise in passenger revenues.

For the first quarter of 2019, the company expects scheduled and system ASMs to increase between 4% and 6%. Among the four quarters ahead, the company predicts ASM growth to be the lowest in the first quarter. Meanwhile, it anticipates ASM growth to be the highest in the second quarter due to shift in timings of the Easter. (Read more: Allegiant Stock Up 3% on Q4 Earnings & Revenue Beat)

Zacks Rank & Other Key Picks

Allegiant carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the same space are Azul SA AZUL, Air France-KLM SA AFLYY and SkyWest, Inc. SKYW, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Azul and Air France-KLM have rallied more than 63% and 18%, respectively, in the past six months. Meanwhile, the SkyWest stock boasts an encouraging earnings history, having outpaced the Zacks Consensus Estimate in each of the trailing four reported quarters, the average being 16.9%.

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