Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Raymond James Airline Conference January 2008
17 slides from Allegiant Travel's conference presentation, Jan 31, 2008
Slide 1: Raymond James Airline Conference January 2008
Raymond James Airline Conference January 2008
Slide 2: Notice on Forward Looking Statements
1 Notice on Forward Looking Statements This presentation as well as oral statements made by officers or directors of Allegiant Travel Company, its advisors and affiliates (collectively or separately, the "Company") will contain forward-looking statements that are only predictions and involve risks a
Slide 3: Maury Gallagher, Chairman of the Board, President & CEO
Maury Gallagher Chairman of the Board, President & CEO
Slide 4: Investment Highlights
3 Investment Highlights Unique, expandable, and defensible niche strategy Profitable last 20 quarters (1) 2007 excellent results: – Grew revenues 48% to $360M – Doubled operating profits to $44M or 12% (Industry leading) – Pre-tax income increased 222% to $51M – Net income up 261% to $31M or $1.53/s
Slide 5: Current Environment – Good News
4 Current Environment – Good News Traffic: very good Q1 & Q2 historically strongest quarters Las Vegas adversely impacted by 2007 NBA All-Star Game LAS hotels seeing slow down, particularly California drive traffic Recent customer survey: – Average income > $90,000 – Number 1 reason to purchase - co
Slide 6: Expanding Operating Margins
5 Expanding Operating Margins 2007 Operating Margins 2007 Pre-Tax Margins Source: public filings of the respective companies. Southwest Hedge (7.4pp) Southwest Hedge (7.0pp)
Slide 7: Keys to Our Margin Growth
6 Keys to Our Margin Growth Baseline 2007 2006 Change Stage length 923 1006 -8.3% Load factor 83.1% 80.7% 2.4 pts Departures 25,088 16,634 50.8% Passengers (000) 3,018 1,940 55.5% Scheduled Service Air revenue (mm) $259 $178 45.2% Average fare $85.80 $91.91 -6.6% RASM (cents) 7.56 7.21 4.9% Ancillar
Slide 8: Industry-Leading Ancillary Revenue/Passenger
7 Industry-Leading Ancillary Revenue/Passenger Since 2002, Ancillary/Passenger has grown at over 80% CAGR
Slide 9: Cost Management Critical
8 Cost Management Critical Significant cost benefit per passenger from shorter haul and increased loads In 2007 our per-pax fuel cost was the same despite 9% increase in fuel cost/gal Total system cost/passenger was down: Non-fuel cost/passenger declined from 2006 to 2007 Non-fuel CASM – up 2% 2006:
Slide 10: Declining Costs and Low Utilization
9 Declining Costs and Low Utilization Daily Utilization (hrs) Cost/pax Declining Non-Fuel Cost/Pax Aircraft Price Utilization Cost/Pax Cost/Pax ex-fuel
Slide 11: Returning to Double Digit Margins
10 Returning to Double Digit Margins Reduce stage length – Already eliminated underperforming long-haul routes – Frequency reductions predominantly on longer-haul routes – Add more short-haul routes Temper growth: frequency reductions leverage pricing power Continue to drive loads Increase ancillary
Slide 12: National Footprint
11 National Footprint YE 2007 Five destinations, 53 small cities 105 routes (including seasonal) 32 MD-80 aircraft in operation Potential: At least 100 small cities = 100M+ people
Slide 13: Minimal Direct Competition
12 Minimal Direct Competition Delta Connection: – Greenville/ Spartanburg – Knoxville US Airways: – Colorado Springs US Airways/United: – Fresno – Palm Springs By Quarter-end, Head-to-head Competition on Only Five Routes Rarely Viewed as a Threat by Other Carriers
Slide 14: Cash Machine
13 Cash Machine MD80: financially out of favor, terrific operational aircraft. In 2007 generated $1.6M operating profit per aircraft – 3.1 year payoff. Exceptional cash flow (mm): Capital light entity in a capital intensive industry 2007 2006 2005 Operating Cash Flow (1) $63 $29 $14 Increased Air Tr
Slide 15: Pro Forma Capitalization
14 Pro Forma Capitalization (1) Adjusted for 7x LTM Rent Expense of $5.1M in 2006 and $3.0M in 2007 Capitalization As of As of 12/31/07 12/31/06 Cash, Cash Equivalents and Short-term Investments $186.8 $144.7 Total Assets 399.2 305.7 Total Debt Retained Earnings 72.1 50.1 72.8 19.1 Total Shareholder
Slide 16: Maury Gallagher, Chairman of the Board, President & CEO
Maury Gallagher Chairman of the Board, President & CEO
Slide 17: Managing Increased Fuel Costs
16 Managing Increased Fuel Costs Fuel cost/ASM since 2004 increased 88% – 2004: 2.10 cents – 2007: 3.94 cents 3Q to 4Q 2007: cost per gallon up $.32 or 12% At 3Q fuel price, our 4Q margins would have exceeded 12% Fuel cost per gallon > $2.80/gallon Planning on oil at $98/barrel Each penny of fuel ad
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