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Allegiant Air: The Airline to Watch Post-Pandemic
As more places continue to lift restrictions and airline demand slowly recovers from the coronavirus pandemic, Allegiant Air saw an overall improvement in passenger and cash burn figures, positioning the airline above many of its competitors in the current industry climate. While some of these improvements are relatively small when compared to April’s numbers, it is a sign of small positives for the aviation industry.
According to chief financial officer Gregory Anderson, the airline’s case burn per day was down to about $1.75 million, an improvement on the prediction of a cash burn of $2.1 million per day. Anderson also mentioned that “for the entire month we averaged over $2 million in gross bookings per day.” The average gross bookings per day for May were originally estimated to be just $750 thousand.
Even though the low-cost carrier saw load factors for the month of May down 36.3% when compared to last year, it still managed to average a 47.3% load factor for the month. This is a significant increase from the 19.3% load factors seen during the month of April.
The increased load factors seen by the airline also coincided with a total of 4,654 total scheduled departures and a total of 362,528 passengers carried. While the departure numbers were 48.5% lower than May 2019 and passenger numbers were down 71.4% compared to the same month, the difference was staggering when compared to these same numbers in April.
In April the airline flew a total of 1,089 scheduled departures, over three thousand less than in May. Passenger numbers for April were extremely low at 36,342 passengers carried. This number was nearly nine times higher in May.
The Las Vegas-based carrier will also look for numbers to improve throughout June as vacation destinations, including Las Vegas, continue to open up and attract customers that are willing to travel. The airline operated nearly 70% of its usual schedule for the first week in June.
In a press release, Vice President of Revenue Drew Wells said, “Even with the increases in capacity, we were able to maintain load factors just shy of 50 percent. With Las Vegas opening early June, we expect modest improvements to continue throughout the month.”
Allegiant isn’t the only low-cost carrier that is expecting for a significant uptick in travel in the next few months. Both Frontier Airlines and Spirit Airlines have announced significant increases in service over the next few months, along with the introduction of new routes to be started throughout the summer.
The carrier’s investor report shows a trend in the aviation industry in the U.S. TSA checkpoint traveler numbers have steadily increased weekly since bottoming out in mid-April. This past weekend passenger numbers nationwide reached 430,000, a count not seen since March 22 when 454,516 people passed through TSA checkpoints. Also, airlines are adding flights as summer demand increases, as well as stay-at-home orders, are lifted.
For context, American Airlines is planning to operate 55% of its domestic flights in July as passenger demand returns. The airline also saw an increase in passenger numbers, averaging 110,000 passengers a day in May, compared to just 32,000 passengers a day in April. However, the airline is remaining flexible stating that it is easier for them to reduce operations on short notice, rather than add flights to an existing schedule. Airlines are also returning aircraft to service, with American, in particular, adding 64 mainline aircraft to its fleet from storage.
Although the numbers from Allegiant and American provide a glimmer of hope for a decimated airline industry, the numbers are significantly down from the pre-COVID-19 numbers. Many experts agree that it will take years for passenger demand to return to levels seen during 2019. Business travel will likely lag behind leisure demand as companies will be less likely to allow expenditure on travel as well as risk employees’ health. Also, the use of teleconferencing will likely impact travel in the short-term as well.
AirlineGeeks’ Jace Moseley and Daniel Morley contributed to this story.
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