Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (January 2010)
22 slides from Allegiant Travel's investor presentation, Jan 28, 2010
Slide 1: Management Presentation January 2010
Management Presentation January 2010
Slide 2: Notice on Forward Looking Statements
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 and
Slide 3: Highlights
Highlights $mm Highly profitable: 2009 21.6% pre-tax margin Profitable last 28 quarters(1) $152mm 2009 EBITDA(2) Growth: 2009 passengers up 24% Very strong balance sheet: More cash than debt Ample liquidity 2009 free cash flow $120mm(2) Revenue Pre-tax Profit Pre-tax Margin Excluding non-cash mark-t
Slide 4: A Travel Company
A Travel Company 57 small cities (~50K to over ½ mm population) 11 destinations Six are bases (aircraft, crews, maintenance): Las Vegas, Orlando, Phoenix, Tampa Bay, Ft. Lauderdale, Southern California Five are notyet: Palm Springs, Myrtle Beach, San Diego, Bay Area, Southwest Florida Nonstop, low-f
Slide 5: Nationwide Network
Nationwide Network Published(1) February 28, 2010 schedule: 68 cities, 135 routes, 46 operating aircraft 1) As of January 22, 2010
Slide 6: Nationwide Network: Geographic diversity
Nationwide Network Geographic diversity Destination Markets 1Q10 departures Las Vegas 39 33.9% Orlando 31 23.4% Phoenix 20 14.7% St. Petersburg 20 14.3% SoCal 11 5.9% Other 14 8.0%
Slide 7: Network Growth
Network Growth Current fleet, strategy: 15% CAGR over the next five years Over 300 more potential routes in the US, Canada, Mexico & Caribbean Further growth possible with additional fleet type to access markets such as longer-haul (e.g. Hawaii) short-runway airports ASMs (bn) Large remaining unaddr
Slide 8: Network Growth: Four ways to grow
Network Growth Add new small cities Currently at 57 in US – believe we can get to around 100 in US and Canada Add new destinations Relatively riskless because once we’re established in a small city it’s relatively easy to start new route in that city to new destination Connect the dots – existing sm
Slide 9: Best Costs – 2009 Per Pax
Best Costs – 2009 Per Pax Cost / pax vs. stage length (1)(2) Cost / pax, ex-fuel vs. stage length (1)(2) Cost leader among US LCCs Source: Financial reports of the companies, with the exception of Spirit, which is DOT Form 41 Special charges and other one-time items are excluded Vertical axis= cost
Slide 10: Low Cost Drivers
Low Cost Drivers Aircraft, efficiency, distribution Single fleet type - MD-80, low acquisition costs, avoid flying when we can’t make money (low utilization, 6.3 hrs/day 2009 compared to, say, Southwest at ~11 hrs per day) Simple, efficient product – one class, no connections Cost-based scheduling,
Slide 11: Unique Revenue Approach
Unique Revenue Approach Minimal direct competition Capacity management Pricing philosophy Ancillary revenue Pricing power
Slide 12: Minimal Direct Competition
Minimal Direct Competition Head-to-head competition on only eight of 135 routes(1) Other airlines appear to see us as an annoyance, not a threat (1) As of January 22, 2010, according to published schedules
Slide 13: Vary Supply, Not Price
Avg. daily scheduled flights by month(1) Vary Supply, Not Price 2008 2007 2009 July 2008 High Fuel Price (1) Published schedules thru April 2010 2010E
Slide 14: Price for Load
Price for Load 2009 scheduled load factor 90.4%, lowest month was 89.0% Las Vegas casinos price to fill rooms to maximize casino traffic – Allegiant prices to fill seats to maximize ancillary revenue Capacity plan (over long-term) & revenue plan (in short-term) to hit ~90% load factor $30+/pax ancil
Slide 15: Not Just An Airline
Not Just An Airline 3.5% of 2009 revenues, 16.4% of pre-tax Merchant model – wholesale price from hotel or rental car, we set the retail price Opaque – consumer never sees “naked” hotel price, only price combined with airfare Our unique route system means we are genuinely a source of new consumers f
Slide 16: Las Vegas Is Doing Great for Us
Las Vegas Is Doing Great for Us Opportunity for Allegiant, challenging for casinos 90% of traffic on our Las Vegas routes generated in small cities Up to ~40% decline in hotel room prices stimulates travel We plan to grow Las Vegas in 2010 2009 monthly passenger growth @ Las Vegas ALGT LAS passenger
Slide 17: Las Vegas Airline Seat & Hotel Capacity
Las Vegas Airline Seat & Hotel Capacity 2010 scheduled seat capacity down 5% over 2009 YE09 rooms +6% from YE08 YE10E rooms +9% from YE08 Don’t assume airline seats will magically show up Industry has changed, at least in near-medium term If we’re wrong, and room rates do firm, we’ll do even better!
Slide 18: Best Margins
Best Margins Source: Company filings 1) Data from YE3Q09 (%) LTM ended 2009 pre-tax margins Industry-leading margins
Slide 19: Strong Balance Sheet
All data based on reported LTM ending 12/31/2009 except JetBlue & AirTran Quarter-end adjusted debt equals total debt plus LTM aircraft rent capitalized at 7.0x; Adjusted net debt equals adjusted debt less unrestricted cash and short-term investments End of the period data; includes aircraft on capi
Slide 20: Summary
Summary Superior results Sustained profitability Highly adaptable High growth Strong balance sheet Experienced management team Creating shareholder value
Slide 21: Appendix
A P| pend ix
Slide 22: GAAP Reconciliation
GAAP Reconciliation 2009 Free Cash Flow $120mm = Operating Income of $122mm + Depreciation & Amortization of $30mm - Capital expenditures of $32mm $mm 2009 2008 2007 2006 Net Income 76 35 32 9 +Provision for Income Taxes 44 20 19 7 +Other Expenses 2 1 -7 7 +Depreciation and Amortization 30 23 16 10
Allegiant Travel — Investor Presentation (January 2010) on 6ix