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Allegiant's (ALGT) Traffic & Load Factor Fall in December

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Zacks Equity Research
·2 min read
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Thanks to coronavirus-led dwindling air travel demand, Allegiant Travel Company’s ALGT reports disappointing traffic numbers for December.

Traffic for scheduled service, measured in revenue passenger miles (RPMs), plunged 47.6% on a year-over-year basis to 611.4 million. Scheduled capacity, calculated in available seat miles (ASMs), also fell 20% to 1.13 billion in the month.

With traffic plunge exceeding capacity contraction, load factor (percentage of seats filled with passengers) was slashed by 2840 basis points year over year to 54.2%.

The number of departures for scheduled services fell 22.7%. However, the average stage length (average distance flown per aircraft departure) moved up 2.3% to 891 miles in the same month.

For the total system (including scheduled service and fixed fee contract), number of departures plunged 23.3% while the average stage length inched up 1.7%. Moreover, traffic and capacity for the total system declined 39.8% and 15.6%, respectively.

Meanwhile, the current scenario of low fuel cost is a positive and is expected to have driven the company’s fourth-quarter results, scheduled to be released on Feb 3. Evidently, the company expects fuel cost per gallon (system wide) to be $1.41, which suggests 35.3% decline from the figure reported in fourth-quarter 2019.

Zacks Rank & Stocks to Consider

Allegiant currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Transportation sector are FedEx Corporation FDX, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Landstar carries a Zacks Rank #2 (Buy), while FedEx and Herc Holdings sport a Zacks Rank #1 (Strong 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 FedEx, Landstar and Herc Holdings is pegged at 12%, 12% and 12.6%, respectively.

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FedEx Corporation (FDX) : Free Stock Analysis Report
 
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