Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Day (November 2019)
133 slides from Allegiant Travel's investor day presentation, Nov 12, 2019
Slide 1: 2020 Investor Day – Maury Gallagher, Chairman and CEO
2020 Investor Day Maury Gallagher – Chairman and CEO 1
Slide 2: 2020 Investor Day – Scott Sheldon, EVP & COO
2020 Investor Day Scott Sheldon- EVP & COO 1
Slide 3: Operations overview
Operations overview Improved Operational Performance and Reliability Improved IROPS cost & Customer Experience Predictive Maintenance to Reduce IROPs and Maintenance Costs Self Service Initiatives to Reduce Call Center Volume 2
Slide 4: Substantial operational improvement - YTD operational KPIs
Substantial operational improvement - YTD Operational KPIs 2017 YTD vs 2019 YTD +133 bps 99.97% +800 bps +680 bps 88.3% +710 bps 80.8% 78.6% 98.64% 74.0% 71.5% 80.3% 2019E 2019E 2020E 2020E 2021E 2021E 2019E 2019E 2017 2019 2017 2019 2017 2019 2017 2019 Control. Comp. STAR D0 A14 Turn Perf. Slide3 3
Slide 5: Leading the industry: on-time performance and completion factor
Leading the industry On Time Performance Completion Factor 2017 YTD vs 2019 YTD 2017 YTD vs 2019 YTD +7.5 pts +1.1 pts 2019 vs 2017 2019 vs 2017 2017 84.6% 99.2% 81.8% 81.7% 2017 79.2% 78.9% 98.5% 77.4% 77.3% 98.1% 98.1% 98.1% 98.1% 97.6% 73.4% 73.0% 71.4% 97.0% 96.3% 96.2% DL WN AS NK G4 AA UA B6 F
Slide 6: Best in industry completion factor
Best in industry – 18 of the last 21 months Completion Factor 2017 – September 2019 100% 98% 96% 94% 92% 90% Industry average ex Allegiant Other airlines Slide5 5 Source: Flightstats.com Other airlines include: Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, JetBlue, Southwes
Slide 7: Operational improvement in a higher utilization environment
Operational improvement in a higher utilization environment A14 Trend % of Flights With Controllable Delays vs Blk Hr Utilization 2013 – 3Q19 2013 – 3Q19 85% 30% 10.0 9.0 80% 8.0 25% 79.9% 7.0 3Q19 +34.5% 75% 3Q19 vs 2013 6.0 20% 5.0 70% 4.0 3.0 Utilization Hour Block 15% 65% 11.6% 2.0 % of Flights
Slide 8: STAR D0 to A14 continues to flatten
STAR D0 to A14 continues to flatten A14 Degradation 2019 vs 2017 YTD 100% Block < Scheduled Hours 2017: 67.60% 6,000 95% 15:00, 89% 2019: 68.20% 5,000 90% 4,000 85% 21:00, 79% A14 3,000 80% # of of # Flights 2,000 75% 70% 1,000 65% 0 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:0
Slide 9: Small bases drive operational improvement
Small bases drive operational improvement with small efficiency cost Block Hours per Head 2020E Heads/AC Peak: 10.2 Off-Peak: 14.4 Midwest Bases Help with IROPs Heads/AC recovery Peak: 8.4 Off-Peak: 11.2 Color varies by total B.H. per head: Heads/AC Peak: 10.0 70 Off-Peak: 13.5 Heads/AC SFB 41 Peak:
Slide 10: Reduced cost of Irregular Operations (IROPs)
Reduced cost of Irregular Operations (IROPs) Estimated Cost of IROPs vs Cancellations % of Customers Impacted by IROPs vs Net Promoter Score (NPS) 2017 YTD – 2019 YTD 2017 – 2019 YTD 40 1000 $36.2 0 70.0% 900 35 909 59.28% 2.34% 60.0% 824 800 30 0 51.93% 700 $25.8 50.0% 25 600 41.61% 0 40.0% 20 500
Slide 11: Maintenance & engineering performance gains
Maintenance & engineering performance gains Operational Reliability vs Fleet Age 2017 – 2019 YTD 99.5 99.0 98.5 98.0 Operational Reliability (%) Reliability Operational 97.5 97.0 2 4 6 8 10 12 14 16 18 20 22 Average Age of Fleet Slide10 10 Source: Airbus “In-Service Data On-Line Services” (IDOLS)
Slide 12: Improved dispatch reliability vs. North American operators
Improved dispatch reliability vs. North American operators Allegiant vs North America Dispatch Reliability January 2017 – September 2019 99.0% 98.5% 98.0% 97.5% 97.0% 96.5% 96.0% 95.5% Jul-17 Jul-18 Jul-19 Oct-17 Oct-18 Apr-17 Apr-18 Apr-19 Jan-17 Jun-17 Jan-18 Jun-18 Jan-19 Jun-19 Mar-17 Mar-18 Mar
Slide 13: Skywise integration and long-term plan
Skywise integration and long-term plan Turn historically unscheduled maintenance events into scheduled maintenance events • Leverage aircraft connectivity, technical engineering expertise, and data modeling to build predictive models that can accurately forecast future component/system failure • AC
Slide 14: Does predictive maintenance work?
Does predictive maintenance work? • The Example: High temp detections at engine core on 302NV • Historically: HOT AIR LEAK / ENG EIU on ECAM • The Model: Identifying increasing temperatures at the nacelle core compartment to identify abnormal hot air leaks • Findings: Blown high pressure turbine duc
Slide 15: Does predictive maintenance work? The inspection
Does predictive maintenance work? The Inspection: High pressure manifold ducts partially blown, causing excessive core temperatures Slide14 14
Slide 16: Projected 2020 self help roadmap
Projected 2020 self help roadmap Three channels for customers to book and manage their travel experience SS Bag Changes: 1.0% SS DO Voucher Changes: 7.7% Call Center allegiantair.com Mobile app SS Cancels & Rebooks: 9.8% 125,000 Opportunity to eliminate calls/month 23,125 calls/month Self Service (S
Slide 17: Commercial Approach to Allegiant 2.0
Commercial Approach to Allegiant 2.0 Scott DeAngelo Chief Marketing Officer 1 1
Slide 18: Marketing Approach, Loyalty Programs, Strategic Partnerships
Marketing Approach Allegiant 2.0 Loyalty Programs Strategic Partnerships 2 2
Slide 19: 3 3
3 3
Slide 20: Marketing Approach
allegiant Marketing Approach
Slide 21: Overview of Allegiant's commercial approach
Overview of Allegiant’s commercial approach 5 5Source: based on trailing 12 months as of Sep ’19
Slide 22: Allegiant total basket ITN-level economics
Allegiant “total basket” ITN-level economics Selling “beyond the plane” with third party products (hotel, auto and cobrand credit card) drives game-changing impact on customer revenue and profitability levels Average Net Revenue EBITDA % Average EBITDA “Total Basket”; 2-PAX ITN “Total Basket”; 2 PAX
Slide 23: Low per PAX sales and marketing costs
Low per PAX sales and marketing costs Allegiant maintains industry-low marketing costs on a per-PAX basis, with a skew toward advertising to support direct business model Per PAX Sales and Marketing Costs $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 DL UA HA AA AS B6 WN F9 G4 NK Estimated Credit Card Fee
Slide 24: Allegiant.com visitation by referring channel
Allegiant.com visitation by referring channel Mobile App 15% Direct URL 17% New & Repeat PAX Focus OTA would average 74% via channels with $0 ~$6-$8/booking incremental, variable cost Email 22% Allocating total ad spend And limit air equates to $3.30/booking ancillary / drive dissatisfaction Organic
Slide 25: Data-driven, surgical approach to advertising
Data-driven, surgical approach to advertising • Seamless coordination across Planning, Revenue and Marketing • Advertising planning model and investment decisions based on: ‒ Historic demand ‒ Capacity changes ‒ Prior year performance ‒ Responsiveness • Bottoms-up build of plan to align with budget
Slide 26: Allegiant customer segments and insights
Allegiant customer segments and insights Allegiant understands who our customers are and how to engage them Total Leisure Trips per Year (Fly + Drive); Allegiant vs. Non “It makes travel more accessible…it means more money for hotels, food, and things to actually do when you get there.” Avid 35% Tra
Slide 27: 1111
1111
Slide 28: Expanded e-mail marketing program
Expanded e-mail marketing program Customer email universe has grown by 4.6M (+60%) in past 2 years; personalized email program with content/offers engineered to drive booking performance and engagement 12.3 M 628.7 K 776.6 K 737.5 K 637.8 K 589.2 K 692.9 K 555.5 K 7.7 M End of 1Q18 2Q18 3Q18 4Q18 1Q
Slide 29: Airline last flown among Allegiant customers
Airline last flown/usually flown among Allegiant customers Most Allegiant customers are non-ULCC flyers, having last flown or usually flown Southwest, Delta, American and United Airline Last 36% 22% 15% 11% 3% 5% 8% Allegiant Flown 34% 84% of new customers last flew or usually fly First-time Southwe
Slide 30: Strong repeat customer revenue growth
Strong repeat customer revenue growth Repeat customers are driving an increasing majority of total revenue, on top of continued growth in new customer acquisition New vs Repeat Customer Revenue 2013 – 2019 (Q3 YTD) $1200M $1000M 58% $800M 55% 49% 53% 48% $600M 46% 43% $400M 54% 52% 51% 47% 45% 42% $
Slide 31: Improved customer sentiment toward Allegiant
Improved customer sentiment toward Allegiant 2019 Change 2018 Brand 2019 2018 1 - 1 JetBlue 71.6 72.9 2 3 Alaska Air 70.5 70.6 3 2 Southwest 69.5* 72.4 4 - 4 Hawaiian 64.7 66.7 5 6 Delta 64.4 62.3 6 5 Allegiant 62.1 62.6 Allegiant NPS Performance +32 Average 61.9 63.1 2016 – 2019 points 7 -
Slide 32: Customer mix shift toward larger markets
Customer mix shift toward larger markets Allegiant has more than tripled the number of originating PAX from larger markets, materially changing the overall customer mix Large vs Small Market PAX Breakdown 2011 - 2018 16.0M 14.0M 12.0M 8.6M PAX 10.0M 61% 8.0M 6.0M 2.6M PAX 39% 4.0M 4.0M PAX 5.6M PAX
Slide 33: Allegiant 2.0
allegiant Allegiant 2.0
Slide 34: Allegiant 2.0 digital experience and supporting capabilities
Allegiant 2.0 digital experience and supporting capabilities Customer Platform Dynamic Digital UX Commerce Engine Package addressable customer audiences Presentation layer capable of consuming and Collection of capabilities driving the for internal and external monetization displaying personalized r
Slide 35: Transforming digital experience to be industry-leading
Transforming digital experience to be industry-leading Variable Real Estate Easy Navigation Shopping Cart Orientation Friction-less Checkout Native Device Functionality 1919
Slide 36: New web and mobile UX goes live in 2020
New web and mobile UX goes live in 2020 ~40% mobile ~60% desk-/ device users lap-top users ~6% of bookings “multi-channel” 2020
Slide 37: Loyalty Programs
allegiant Loyalty Programs
Slide 38: Allegiant World Mastercard overview
Allegiant World Mastercard overview Additional benefits include: no point expiration, no minimum points redemption, no blackout dates, no foreign transaction fees, dedicated member services line 2222
Slide 39: Allegiant World Mastercard performance
Allegiant World Mastercard performance 180K+ total active cardholders; 27% YOY new account growth in 2019 YTD 60%+ of total compensation TTM is variable/cardholder spend-based Total Active Cardholders Cobrand Compensation September 2016 – August 2019 September 2016 – August 2019 200,000 $4.5M 180,00
Slide 40: Customer frequent flyer program engagement
Allegiant customer frequent flyer program engagement Which of the below frequent flyer programs are you a member? SkyMiles (Delta) 37% AAdvantage (American) 30% 95% of all Allegiant customers surveyed said Rapid Rewards (Southwest) 28% they are interested in an Allegiant rewards program MileagePlus
Slide 41: Allegiant customer loyalty opportunity
Allegiant customer loyalty opportunity Significant opportunity to boost customer retention, even among those who fly with Allegiant YOY PY Customers and Revenue by Number of ITNs CY Change in Behavior/Value Attrited Less More 3+ ITNs 12% 29% 3+ 38% 3+ 43% 3+ 19% 2 ITNs 17% -$106M YOY -$119M YOY 20%
Slide 42: Allegiant's rewards program converges retail, tech and travel
Allegiant’s rewards program converges retail, tech and travel Fast, Transparent Earning on every purchase Quick Earn/Burn Proven Success with customers Tech Forward Personal Impact Easy to Redeem Special Offers in any amount all the time 2626
Slide 43: Allways
allways ‘ 9°) allegiant
Slide 44: Allways Rewards
Allways Rewards go all out for you. You're always earning, always redeeming, always getting something in return, all within 24 hours. That’s because these rewards are all the ways you enjoy the people and the places you love. On your own, with friends, and with family. They're about how you fly. whe
Slide 45: Allegiant Allways
allegiant ———_———_—_— Se SUNSEEKER RESORT allways
Slide 46: Allways Rewards Program overview
Allways Rewards Program overview Stimulate 5% off airfare • Points available 24 hours after a transaction is made Repeat % always Purchase • No blackout dates or point usage fees 1 point per $1 spent • Use points whenever, for 1x whatever at allegiant.com Maximize at allegiant.com • No minimum point
Slide 47: Retail-inspired offers and experiential rewards
Retail-inspired offers and experiential rewards 3131
Slide 48: Strategic Partnerships
Strategic Partnerships 3232
Slide 49: Strategic marketing partnerships
Strategic marketing partnerships Strategic partnerships, including national film/TV opportunities as well as Allegiant Nonstop locations and city-specific sports sponsorships 3333
Slide 50: Allegiant Nonstop Family Entertainment Centers
Allegiant Nonstop Family Entertainment Centers Allegiant Nonstop presents a relevant, growth opportunity to achieve higher awareness, greater share of leisure wallet and more new customer relationships in key markets Current and Potential Markets Email Database Growth 45,000 40,000 35,000 77% of Non
Slide 51: Introducing Allegiant Stadium
Introducing allegiant stadi
Slide 52: Combined national exposure
COMBINED NATIONAL EXPOSURE
Slide 53: Allegiant Stadium – boosting relevant awareness
Allegiant Stadium – boosting relevant awareness 46 of 2018’s Top 50 • Greater top-of-mind brand awareness Most Viewed TV Programs and elevated brand perception were NFL Games • TV advertising challenged by lower live TV viewership and bypassing of ads • NFL most-consumed programming by far 23% • Cus
Slide 54: Allegiant Stadium – investment thesis
Allegiant Stadium – investment thesis • Expected 4B+ impressions annually, equivalent ~$90M advertising spend • 2020 Marketing expense, inclusive of stadium naming rights, flat YOY • Surgical elimination / reallocation • Boosted efficacy across all efforts • Mid-case return hurdle is 2.7M web visito
Slide 55: Allegiant Stadium – commercialization
Allegiant Stadium – commercialization • No team/venue in sports has ever relied more on fan travel • Raiders season ticketholders from Oakland and LA areas • 75M NFL fans say Las Vegas #1 city they would travel to • Additional commercial impact through sponsorship assets • Fan Travel Packages • Seas
Slide 56: 4040
4040
Slide 57: Network and Revenue – Drew Wells
Network and Revenue Drew Wells 1
Slide 58: Overview
Overview Components of Utilization EBIT Initiative Update Continual Experimenting Network Runway Slide2 2
Slide 59: Components of utilization
Components of utilization • Planning capacity / Scheduling the airline • Every market, every week • Components of Utilization • Comparing uses of aircraft • Profitability Forecasts • Fuel buffer • Saturdays & Geography • Seasonality • Spare Count • Revenue Initiatives • Network Slide 33
Slide 60: Components of utilization: weekly frequencies
Components of utilization Distribution of Number of Weekly Frequencies 2019 30.9% 41% of markets have four or more different frequencies1 throughout the year. 26.9% • Components of Utilization • Profitability Forecasts 21.4% • Saturdays & Geography • Seasonality • Spare Count 10.4% • Revenue Initiat
Slide 61: Components of utilization: weekly frequencies
Components of utilization Distribution of Number of Weekly Frequencies 2019 30.9% 41% of markets have four or more different frequencies1 throughout the year. 26.9% • Components of Utilization • Profitability Forecasts 21.4% • Saturdays & Geography Sample • Seasonality • Spare Count 10.4% • Revenue
Slide 62: Components of utilization: sample market
Components of utilization Sample Market 2019 • Components of Utilization Full Year Est. GP Difference from Baseline • Profitability Forecasts Baseline $2,000,000 • Saturdays & Geography 2x only $1,800,000 ($200,000) • Seasonality 5x only $1,650,000 ($350,000) • Spare Count • Revenue Initiatives Dyna
Slide 63: Components of utilization: comparing uses of aircraft
Components of utilization •Comparing Uses of Aircraft •Scheduled Service vs. Fixed Fee vs. Spare • Components of Utilization •Valuing each line of flying • Profitability Forecasts •LAS-IWA Ferry Results • Saturdays & Geography •$1.05 million in GP from mid-February through end of March (mostly March
Slide 64: Components of utilization
Components of utilization • Components of Utilization • Planning capacity / Scheduling the airline • Profitability Forecasts • Every market, every week • Saturdays & Geography • Comparing uses of aircraft • Seasonality • Fuel buffer • Spare Count • Revenue Initiatives • Immense economic benefit of A
Slide 65: MD80 vs A320/A319 fuel CPG
Components of utilization MD80 vs A320/A319 Fuel CPG* $3.00 • Components of Utilization $2.50 • Profitability Forecasts Airbus margin $2.00 profile better at • Saturdays & Geography all fuel CPG • Seasonality $1.50 • Spare Count CPG MD80 • Revenue Initiatives $1.00 A319 • Network A320 $0.50 $0.00 $0
Slide 66: MD80 vs A320/A319 fuel CPG
Components of utilization MD80 vs A320/A319 Fuel CPG* $3.00 Better positioned to respond to high fuel • Components of Utilization $2.50 • Profitability Forecasts $2.00 • Saturdays & Geography • Seasonality $1.50 • Spare Count CPG MD80 • Revenue Initiatives $1.00 • Network A320 $0.50 $0.00 $0.00 $1.0
Slide 67: MD80 vs A320/A319 fuel CPG
Components of utilization MD80 vs A320/A319 Fuel CPG* $3.00 • Components of Utilization $2.50 • Profitability Forecasts $2.00 • Saturdays & Geography • Seasonality $1.50 • Spare Count CPG MD80 • Revenue Initiatives $1.00 • Network A320 $0.50 Improved reliability enables us to better take advantage o
Slide 68: Components of utilization: days of week
Components of utilization • Components of Utilization •All days of week are not created equal Sundays = Good • Profitability Forecasts • •Tuesdays = Bad • Saturdays & Geography •Saturdays = Good and Bad • Seasonality •Fluid within network • Spare Count • Revenue Initiatives • Network Slide 1212
Slide 69: Saturday relevance 2012-2019
Components of utilization Saturday Relevance 2012-2019 16% 120% Non-Vegas steadily growing to >15% 14% 100% • Components of Utilization 12% • Profitability Forecasts 80% 10% • Saturdays & Geography 8% 60% • Seasonality of Sched Service ASMs Service Sched of 6% • Spare Count 40% 4% Vegas largely capp
Slide 70: Saturday relevance 2012-2019
Components of utilization Saturday Relevance 2012-2019 16% 35% 14% 30% • Components of Utilization 12% • Profitability Forecasts 25% 10% • Saturdays & Geography 20% 8% • Seasonality of Sched Service ASMs Service Sched of 15% • Spare Count 6% 10% 4% • Revenue Initiatives ASMs system of % as Vegas 5%
Slide 71: Components of utilization: seasonality
Components of utilization • Components of Utilization •All seasons are not created equal • Profitability Forecasts •The ability to flex utilization up and down is core to the • Saturdays & Geography business model • Seasonality • Spare Count • Revenue Initiatives • Network Slide 1515
Slide 72: Aircraft utilization 2016-2019
Components of utilization Aircraft Utilization 2016-2019 High Demand; Large utilization increase 10.5 Components of Utilization • 9.5 • Profitability Forecasts • Saturdays & Geography 8.5 • Seasonality 7.5 • Spare Count 6.5 • Revenue Initiatives System hours/AC/day block System • Network 5.5 Low Dem
Slide 73: Aircraft utilization 2018-2020
Components of utilization Aircraft Utilization 2018-2020 High Demand; Utilization remains high 10.5 Components of Utilization • 9.5 • Profitability Forecasts • Saturdays & Geography 8.5 • Seasonality 7.5 • Spare Count 6.5 • Revenue Initiatives System hours/AC/day block System • Network 5.5 Low Deman
Slide 74: Aircraft utilization 2018-2019
Components of utilization Aircraft Utilization 2018-2019 10.5 • Components of Utilization 9.5 • Profitability Forecasts • Saturdays & Geography 8.5 • Seasonality 7.5 • Spare Count 6.5 • Revenue Initiatives Over 50% of utilization increases System hours/AC/day block System Mar – Jul 2019 are driven b
Slide 75: Fleet productivity
Fleet productivity • 2/3 of days over summer 2019 saw incremental flying due to fewer spares • Components of Utilization • 100% of peak days had at least five more lines of flying • Profitability Forecasts • Saturdays & Geography • Benefit of roughly $24.0M expected for scheduled service flying in f
Slide 76: Fixed fee revenue
Fixed fee revenue Fixed Fee Revenue and Airbus AC Growth 2013-2020 $60M+ $60M+ $49M $50M • Components of Utilization • Profitability Forecasts $32M $20M • Saturdays & Geography $17M $17M • Seasonality • Spare Count 2013 2014 2015 2016 2017 2018 2019E 2020E • Revenue Initiatives # of Airbus AC 76 105
Slide 77: Pricing engine
Pricing engine • Evolving with business • Year 1: Load factor (LF) focus • Drove traffic LF up 1.4pts • Components of Utilization • Year 2 intention: Yield focus while holding LF • Profitability Forecasts • Air ancillary > $50/passenger shifted focus back toward improving LF • Saturdays & Geography
Slide 78: Pricing engine: same store TRASM by quartile
Pricing engine Same Store TRASM by Quartile1 14 pt 12 pt Components of Utilization • 10 pt • Profitability Forecasts 8 pt • Saturdays & Geography 6 pt • Seasonality 4 pt • Spare Count 2 pt Year 2 vs. Year 0 • Revenue Initiatives Network 0 pt • First Second Third Fourth • Revenue gains negatively cor
Slide 79: Round trip discount
Round trip discount Rolling 12M One Way % 2013-2019 • One way travel is disruptive to 8 pt twice a week markets 7 pt 6 pt • Components of Utilization • For example, a high 5 pt Sunday one way flight • Profitability Forecasts 4 pt • Saturdays & Geography results in four fewer 3 pt 2 pt • Seasonality
Slide 80: Bundled ancillaries
Bundled ancillaries • Rolled out system wide Oct 14, 2019 • Components of Utilization • Allegiant bonus testing various combinations • Profitability Forecasts • Saturdays & Geography • Very basic initial state with many criteria to be included • Seasonality over time • Spare Count • Forecasting impa
Slide 81: Continually experimenting
Continually experimenting • Allegiant Extra • Flight Pass • Finding more success on • First test concept being longer haul routes completed now for summer 2020 • Components of Utilization travel Continually testing price Testing two cities initially: • Profitability Forecasts • • points • Nashville
Slide 82: Network runway
Network runway • Continue to believe in 600+ incremental routes • Still true despite 100+ route announcements since 1/1/18 • Components of Utilization • Continually diversifying network portfolio • Profitability Forecasts • Both origination and destination cities • Saturdays & Geography • Small: Sta
Slide 83: Nashville (BNA)
Nashville (BNA) • Components of Utilization • Profitability Forecasts • Saturdays & Geography • Seasonality • Spare Count • Revenue Initiatives • Network Slide 2727
Slide 84: Mid-continent base strategy
Mid-continent base strategy • De-peaking largest destination bases • Better utilization of existing infrastructure • Increased fixed fee potential • Components of Utilization • Unique network opportunities • Profitability Forecasts • Including thinner demand destinations • Saturdays & Geography Mid-
Slide 85: Diversifying destination portfolio
Diversifying destination portfolio • 2013 – 2015: > 90% of routes touched one of Allegiant’s core traditional destinations* • Beginning 2016 the growth to non-traditional Allegiant destinations like • Components of Utilization Destin (VPS), Savannah (SAV) & Nashville (BNA) ramped up significantly •
Slide 86: Key takeaways
Key takeaways Many causes of 2019 utilization bump; should normalize over next few years Airbus economics, coupled with revenue initiatives, enhancing ability to schedule to profitability rather than unit revenues Seeking ways to create new lines of recurring revenue while improving customer experie
Slide 87: 2020 Investor Day – John Redmond, President
2020 Investor Day John Redmond– President 1
Slide 88: Sunseeker overview
Sunseeker overview Construction Overview Selling the Resort $-Re Revenue Discussion Opening and Operating 2
Slide 89: Sunseeker update: cumulative commitments vs spend
Sunseeker update Cumulative Project Commitments vs Spend (In millions) $470 $460 TPG $175 $155 Funding $335 ALGT $295 $295 Cash Flow $48 $120 $48 2018 2019E 2020E 2021E Commitments Spend Slide3 3
Slide 90: Slide 90
Slide 91: Selling the Resort
fon Selling the Resort allegiant
Slide 92: Sunseeker banner ad
Sunseeker banner ad 6 www.sunseekerresorts.com
Slide 93: Guests' interest inquiries questionnaire
Guests’ interest inquiries questionnaire 7 www.sunseekerresorts.com
Slide 94: Customer registrations and potential rooms sold
Customer registrations1 and potential number of rooms sold % of Registration by Age % of Registrations Number in Party Desired Season of Travel3 Length of Stay # of Avg. Length Length of Stay Semi- 5 or Over 65 55 - 65 46 - 55 Over 45 Retired Total 1-2 3-4 Winter Spring Summer Fall Preference Regist
Slide 95: Repeat Allegiant customers to PGD
Repeat Allegiant’s customers to PGD3 90% of repeat customers Repeat Customers by Trips originate from the (% of Total) highlighted states1 48% WI 2% NY MI 5% IA 7% 6% 22% PA 20% IL IN OH 8% 11% 13% 17% 10% MO 2% KY 8% TN NC 3% 4% 2 3 4 5+ # of itineraries Seasonal Distribution of Repeat Customer Tri
Slide 96: Revenue Discussion
Revenue Discussion allegiant
Slide 97: Southwest Florida resort market
Southwest Florida resort market Property Name City Class Open Date Age Rooms Upper Upscale & Luxury Properties with 150+ JW Marriott Marco Island Beach Resort Marco Island Luxury May 1979 40.5 809 Rooms between Sarasota & Marco Island Naples Grande Beach Resort Naples Upper Upscale Dec 1986 32.9 474
Slide 98: Favorable ADR environment in the market
Favorable ADR environment in the market Market Total ADR 2016 2017 2018 2019 Jan $307 $303 $320 $316 Feb $371 $367 $391 $381 Mar $438 $417 $457 $426 Apr $315 $360 $344 $362 May $244 $250 $255 $258 Jun $216 $224 $231 Jul $233 $236 $225 Aug $208 $210 $198 Sep $193 $197 $186 Oct $221 $214 $213 Nov $241
Slide 99: Market experiences heavy occupancy seasonality
Market experiences heavy occupancy seasonality Historical Occupancy (%) – Market Set 2016 2017 2018 2019 2016-2019 Jan 72% 70% 68% 66% 95% Feb 84% 84% 84% 82% 2016 2017 Mar 88% 88% 88% 86% 85% 2018 Apr 79% 82% 79% 75% 2019 75% May 66% 69% 64% 68% Jun 66% 67% 68% 65% Jul 73% 72% 72% Aug 56% 56% 48% 5
Slide 100: Sunseeker Resort competitive set
Sunseeker Resort competitive set Property Name City Class Open Date Age Rooms JW Marriott Marco Island Select set of properties representative of all key Marco Island Luxury May 1979 40.5 809 Beach Resort coastal Southwest Florida cities1 Upper Naples Grande Beach Resort Naples Dec 1986 32.9 474 Ups
Slide 101: Competing in a high ADR environment
Competing in a high ADR environment Market Total ADR Competitive Set ADR 2016 2017 2018 2019 Solid upside vs. 2018 Investor Day Forecast Jan $319 $318 $333 $340 Feb $376 $378 $402 $403 Modeled $185 Hotel Room ADR & $257 Total Property Mar $450 $429 $474 $455 ADR (Hotel & Suites) Apr $333 $383 $360 $
Slide 102: Competitive set outperforms overall market ADR
Competitive set outperforms overall market ADR Competitive Set ADR vs. Market ADR 2016 2017 2018 2019 Jan $13 $14 $12 $24 Feb $6 $12 $11 $23 Mar $12 $12 $17 $29 Apr $19 $23 $15 $31 May $9 $12 $14 $26 Jun $8 $14 $5 Jul $10 $11 $2 Aug $11 $11 $10 Sep $10 $7 $11 Oct $12 $14 $8 Nov $8 $13 $11 Dec $15 $1
Slide 103: Competitive set occupancy
Competitive set occupancy Competitive Set Occupancy Historical Occupancy – Market Set 2016 - 2019 2016 2017 2018 2019 100% Jan 70% 70% 67% 70% 90% Feb 83% 84% 83% 83% Mar 88% 88% 87% 87% 80% Apr 78% 83% 79% 77% 70% May 65% 68% 65% 68% Jun 64% 71% 70% 60% Jul 72% 72% 72% 50% Aug 55% 57% 50% Sep 56% 3
Slide 104: Capturing market share in off-peak months with favorable pricing
Ability to capture market share in off-peak months with favorable pricing Competitive Set: Sunseeker Occupancy Potential: Room Nights Sunseeker Occupancy: % of Competitive Set Rate Differential 2016 - 2018 Required Room Nights Median Avg. Sunseeker Sunseeker Rate vs. Avg. Occ. Room 80% 85% 90% 80% 8
Slide 105: Run high off-peak occupancy leveraging Allegiant distribution
Run high off-peak occupancy through capturing existing market & leveraging Allegiant distribution Sunseeker Occupancy Potential: Allegiant Take Rate Required with Fair Share Competitive Set Sunseeker Fair Allegiant Inbound Month Occupied Room 80% 85% 90% Share Itineraries Nights Jan 81,553 9,054 34,
Slide 106: Lift off-peak occupancy with Allegiant distribution
Lift off-peak occupancy with Allegiant distribution Sunseeker Occupancy Potential: Allegiant Take Rate Required for Occupancy Scenarios Allegiant Inbound Itineraries Allegiant Load Factor 80% Occupancy 85% Occupancy 90% Occupancy to PGD Jan 34,409 86% 7.4% 7.8% 8.3% May 29,521 81% 8.6% 9.1% 9.7% Jun
Slide 107: Drive occupancy through seasonal targeting of customer segments
Drive occupancy through seasonal targeting of customer segments Competitive Set Customer Segments as % of Total 2018 Other 26% •Transient business dominates in the peak 32% 32% 31% 39% 41% season 52% 50% 46% 50% Group 54% 56% •Group business overtakes transient business in the off-peak season 72% 66
Slide 108: Initial room pricing for occupancy outperformance
Initial room pricing for occupancy outperformance Competitive Set Rate vs Sunseeker Hotel Room Rate $600 $500 $480 $481 • Going to market with rates $430 below those of the $400 $377 $411 Competitive Set $330 $328 $401 $301 $359 $353 $276 $278 $300 $271 $264 $271 • Expect superior room product $290
Slide 109: Income statement from September 2018 investor day
Income statement from September 2018 investor day (000’s) Year 1 Year 2 Year 3 Year 4 Year 5 EBITDA Revenue (000’s) Hotel $ 32,854 $ 35,264 $ 37,473 $ 39,007 $ 40,600 Suites 24,825 27,241 29,280 30,598 31,728 Food & Beverage 25,900 29,254 32,134 33,828 35,420 $46,282 Golf & Marina 4,513 4,907 5,104
Slide 110: Significant ancillary revenue opportunity
Significant ancillary revenue opportunity Property Resort Fee Overnight Self Park Overnight Valet Park Day Self Park Day Valet Park $14 Ritz-Carlton Sarasota $37.00 None $30.00 None Waived with F&B purchase $18 $28 Naples Grande Beach Resort $37.00 $18.00 $28.00 Waived with F&B Purchase Waived with
Slide 111: Potential of extensive F&B offering
Competitive set data highlights potential of extensive F&B offering Potential Sunseeker Food & Beverage Revenue Under Various Annual Occupancy & Spend Per Occupied Room Scenarios (in millions except for Food & Beverage Spend per Occupied Room Night) Competitive Set Performance Heavy Food & Beverage
Slide 112: Limited dining options in PGD
Limited dining options in PGD Punta Gorda Restaurant Locations Restaurant Count1 October, 2019 Based on Yelp Categories Sandwiches 36 Pizza 35 Fast Food 34 American 33 Italian 28 Burgers 26 Breakfast 24 Coffee & Tea 22 Grocery 21 Frozen Yogurt 16 Chicken Wings 14 Seafood 11 Count by Price Bakeries 1
Slide 113: Opening and Operating
rs) Opening and Operating allegiant
Slide 114: Seasoned operations team with extensive opening experience
Seasoned operations team with extensive opening experience • The Sunseeker Resorts Operations Team has held leadership roles in the opening, or post- renovation repositioning of some of the premier resorts of the world, including: • MGM Grand & Signature (6,800 Rooms) • ARIA and ARIA SkySuites (4,00
Slide 115: Robust Southwest Florida labor market
Robust Southwest Florida labor market Leisure & Hospitality Jobs by County 2018 •Sunseeker Resort will compete in the market comprised of Manatee, Sarasota, Charlotte, Lee, and Collier Counties •Properties in the Market Set & Competitive Set are all located in these five counties •Similar service st
Slide 116: 2020 Investor Day – Greg Anderson, CFO
2020 Investor Day Greg Anderson - CFO 1
Slide 117: Overview
Overview Sustainable, cash generation per aircraft De-leveraging business post fleet transition CASM-ex goal hit a year early, expect further reduction going forward Well positioned for the future Slide2 2
Slide 118: A320 family is the right fleet type for Allegiant 2.0
A320 family is the right fleet type for Allegiant 2.0 Allegiant’s Fleet Plan by Configuration 2019-2022E 125 115 15 105 15 93 26 A320 30 177 seats 72 62 41 A320 186 seats 25 A319 38 38 38 38 156 seats 2019E 2020E 2021E 2022E Slide3 3
Slide 119: Strong cash generation per aircraft
Strong cash generation per aircraft Midpoint of EBITDA per Aircraft 2019 guide Fuel Sensitivity EBITDA/AC Fleet transition Fuel Adj. $2.12 cpg 2019E Actual $6.3M $6.4M 9.0 $6.0M $5.1M 8.0 $4.4M $4.4M $4.3M 7.0 $2.9M 6.0 5.0 EBITDA/AC ($millions/AC) EBITDA/AC $2.97 $2.12 $1.66 $2.12 $2.09 $2.12 $2.15
Slide 120: Reinvesting in the business for the right growth
Reinvesting in the business for the right growth Projected Airline CAPEX 2019-2022 $450M Other Airline $410M CAPEX $60M $395M $75M $75M $70M $320M Heavy MX $75M $110M $125M $115M Aircraft/ $320M Engine CAPEX $210M $210M $130M 2019E 2020E 2021E 2022E Aircraft/engine CAPEX Heavy MX Other Airline CAPEX
Slide 121: Strong free cash generation
Low asset price + higher % of variable cost = strong free cash generation1 Airline Free Cash Generation $760M $350M 2019-2022 $370M $690M $625M $230M $85M $535 $450M $395M $410M $320M 2019E CAPEX2019E & 2020E CAPEX2020E & 2021E CAPEX2021E & 2019E CAPEX2019E & EBITDA EBITDA EBITDA EBITDA Heavy MX Hea
Slide 122: Expect to continue de-leveraging post fleet transition
Expect to continue de-leveraging post fleet transition Airline Debt and Leverage Ratios 2016-2022E (Airline Only) Future debt² $1,450M $1,340M $1,279M $258M $1,285M $1,171M $1,105M $813M $890M $829M $755M $845M $721M $670M $363M $450M $450M $450M $450M $445M $440M $435M 2016 2017 2018 2019E 2020E 20
Slide 123: Sunseeker – 1st party products spend and cumulative spend
Sunseeker - 1st party products Spend and Cumulative Spend Sunseeker Project Costs ($) Annual Sunseeker Cap Interest1 ($) (in millions) (in millions) $470M Internal Cap $450M Interest Spend Cumulative Spend TPG TPG Cap interest $175M Funding $155M (Cumulative) TPG $13.6M $155M Funding ALGT Cash Flow
Slide 124: Returned 8.5% of total revenue to shareholders since 2012
Since 2012, we’ve returned 8.5% of total revenue to our shareholders Cumulative Cash Returned to Shareholders Cash Returns to Shareholders ($) 2012 – 2019E 2012 - 2019 YTD 1000 883M 191M 819M 181M 770M 750 634M 134M 136M 500M 129M 500 139M 66M 309M 84M 90M 64M Cumulative ($ millions)($ Cumulative 49
Slide 125: Limited cash tax payers through 2022 and beyond
Limited cash tax payers through 2022 and beyond Expected Cash Taxes to be Paid by Year 2018 – 2022E $15M $8M $4M $2M ($42M) 2018 2019E 2020E 2021E 2022E Income Tax Cash Outflow/(Inflow) Slide10 10
Slide 126: Improving economics in 2020 and beyond
Improving economics in 2020 and beyond Revenue optimization Airline CASM ex-fuel 1 2017-2020 Amazon of leisure travel Accelerated MD-80 retirement 2020 6.56¢ High EBIT initiatives Loyalty: Worldcard and allways reward programs 6.43¢ CASM-ex reduction = $65m (3.3%) Increased brand value and awareness
Slide 127: Increasing gauge with max pax configuration
Increasing gauge with max pax configuration A320s at 186 Passenger Configuration Expectation for used 186 seat A320s in 2020 (excluding 13 new AC) 2020 EBIT initiatives 28 ac X $500k = $14M 59 49 35 28 Expected2017 revised in 2020 2020E 2021E 2022E From ‘17 Investor Day Used A320 @ 186 seats Slide12
Slide 128: Significantly improved fuel efficiency
Significantly improved fuel efficiency Allegiant Fleet Fuel Efficiency 2016 - 2020 2020 275 EBIT initiatives 33M gal X $2.12 = $70M 250 33M - Difference 225 30M 200 17M Gallons (millions)Gallons 175 17.8B ASMs 16.2B 14.9B 12.4B 13.6B 150 71.8 72.9 77.8 82.7 83.0 ASMs/gal 125 2016 2017 2018 2019E 202
Slide 129: Contribution of initiatives
Contribution of Initiatives Previous Current Operating Earnings Annual Impact -$m 1 2020E 2020E Fuel benefit from ASM production $21 $70 Ex-fuel savings (costs) 73 65 Credit card program 50 53 Original eCommerce initiatives 92 35 Pricing engine 49 51 Fixed fee 20 20 186 seat modification 17 14 Fleet
Slide 130: 2020 guide
2020 guide Full year guidance 2019 2020 Fuel cost per gallon $2.15 $2.12 Available seat miles (ASMs) / gallon 82.5 to 83.0 82.5 to 83.5 Interest expense (millions)¹ $70 to $75 $75 to $80 Capitalized interest (millions) NA $16 to $19 Tax rate 23 to 24% 23 to 24% Share count (millions) 16.0 16.0 Syste
Slide 131: 2020 guide continued
2020 guide continued Full year guidance (millions) 2019 2020 Airline capital expenditures $375 to $380 $275 to $295 Capitalized Airbus deferred heavy maintenance $75 to $80 $100 to $120 Sunseeker expected full year project spend1 $90 to $100 $325 to $350 Other non-airline capital expenditures2 $15 t
Slide 132: Key takeaways from Investor Day
Key takeaways from Investor Day Well positioned to deliver industry-leading margins and meaningful EPS growth in 2020 and beyond Several airline initiatives to continue driving top line growth, operational efficiencies and brand value C Maintain momentum of CASM-ex trajectory and drive increased eff
Slide 133: EPS and EBITDA margin 2012–2020E
EPS and EBITDA Margin EPS and EBITDA Margin 2012 – 2020E 37.2% 34.9% 28.0% $17.75 25.0% 22.5% 22.4% 20.9% $14.32 $14.50 $12.95 $13.21 $10.00 $6.37 $4.82 $4.06 1 2 2012 2013 2014 2015 2016 2017 2018 2019E 2020E EPS EBITDA Margin Slide18 18 1Excluding B757 write down in 2014 2Excluding Non-recurring i