The integration of Sun Country Airlines into Allegiant Travel Co. and the high cost of jet fuel pushed the company into a second-quarter net loss despite it generating record revenue for the quarter.
Las Vegas-based Allegiant closed on the acquisition of Sun Country of Minneapolis May 13 after announcing the deal in January.
“Our record quarterly revenue and strong second-quarter operating margin, achieved despite materially higher fuel costs, demonstrate the strength and resiliency of Allegiant’s business model,” CEO Greg Anderson said in a Tuesday second-quarter earnings call. “Despite a 6.8 percent capacity reduction, standalone Allegiant increased unit revenue 24.6 percent year over year and expanded adjusted operating margin 0.4 percentage points to 9 percent, keeping us on track to rank among the industry leaders in full-year operating margin.”
Several factors have contributed to Allegiant’s strong quarter and executives believe new enhancements will make performance even better beyond the quarter that ended June 30.
In July, the company entered a 12-month exclusive distribution agreement with Expedia Group, Allegiant’s first-ever authorized online travel agency partner, bringing the company’s nonstop network to all of Expedia Group’s U.S. brands and expanding reach to new leisure customers.
That month, the company also announced enhancements to the onboard experience, including complimentary inflight beverage service on all Allegiant flights which began Saturday, and Allegiant First, a new premium seating tier debuting on select aircraft in spring 2027, with seats anticipated to go on sale mid-August.
“Commercially, we are expanding customer choice through Allegiant First, which will debut on select aircraft next year; our new distribution agreement with Expedia, which is bringing in new customers to Allegiant; and our award-winning cobrand credit card, for which bank remuneration increased 23.6 percent year over year,” Anderson said.
Earlier this week, the company also said a new collective bargaining agreement with the International Brotherhood of Teamsters representing Allegiant pilots was ratified with nearly 80 percent of votes in favor.
For the quarter, Allegiant reported a net loss of $4.9 million, 21 cents a share, on revenue of $943.5 million. That compares with a net loss of $65.2 million, $3.62 a share, on revenue of $756.9 million a year earlier.
“June, our first full month post close (of acquiring Sun Country) in a peak summer demand period, was particularly strong for both companies,” Anderson said. “We are excited about what we can achieve together and we remain focused on disciplined growth from a strong operating foundation. And our performance shows we are doing just that. So while I’m pleased with the quarter’s results, I’m proud of why we believe they are sustainable. Our performance is supported by a distinct competitive mode that is difficult to replicate.”
The blending of the two air carriers provides Allegiant with a fleet of 171 jet aircraft with 22 more dedicated exclusively to air cargo operations. Together, the airlines operate more than 650 routes serving nearly 175 cities throughout the United States and select international destinations.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
