Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (June 2009)
25 slides from Allegiant Travel's investor presentation, Jun 8, 2009
Slide 1: Management Presentation June 2009
Management Presentation June 2009
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: Investment Highlights
Investment Highlights One of the most profitable airlines in the world Profitable last 25 quarters (1), including all four quarters of 2008 1Q09 pre-tax margin of 31% Industry leading low-cost structure Ancillary revenues above $30 per passenger Direct relationship with customers Highly adaptable Lo
Slide 4: Nationwide Network
Nationwide Network Published June 30, 2009 schedule: 71 cities, 134 routes, 43 operating aircraft
Slide 5: Exceptional Performance
Exceptional Performance Strong profit growth despite difficult economic environment 1Q09 1Q08 Change EPS $1.37 $0.47 192% Pre-tax margin 31% 11% 20pp Total cost / passenger Fuel cost / passenger $75 $26 $103 $55 ($27) ($29) Scheduled Services: Base air fare $75 $87 ($12) Average fare – ancillary $34
Slide 6: Best Margins
Best Margins Source: Company filings (%) LTM ended 3/31/09 pre-tax margins Industry-leading margins (30) (25) (20) (15) (10) (5) 0 5 10 15 20 ALGT LUV JBLU CAL ALK AAI AMR LCC UAL
Slide 7: Best Costs
(1) LTM ended 3/31/09; excludes special charges Best Costs Source: Company filings ($) ($) Cost / pax vs. stage length (1) Cost / pax, ex- fuel vs. stage length (1) Cost leader among U.S. carriers UAL CAL AMR LCC ALK JBLU ALGT $51 AAI LUV 0 25 50 75 100 125 150 175 200 500 700 900 1100 1300 1500 ALG
Slide 8: Low Cost Drivers
Low Costs Drivers Aircraft, efficiency, technology Single fleet type: MD-80, low acquisition costs Simplified, highly efficient product Cost-based scheduling Labor efficiencies – 35 full-time equivalent employees per aircraft Technology leadership – recent acquisition of travel applications of our s
Slide 9: Industry Leading RASM
Industry Leading RASM (1) Data for LTM ended 3/31/2009 Minimal direct competition Highly adaptable – provide service when we can make money Low network density makes us hard to hit World-class ancillary revenue Demonstrated pricing power Total system RASM (1) Source: Company filings (¢) 11.4 10.7 10
Slide 10: Minimal Direct Competition
Minimal Direct Competition Head-to-head competition on only six of 134 routes(1) Other airlines appear to see us as an annoyance, not a threat (1) As of June 30, 2009, according to published schedules
Slide 11: Highly Adaptable
Low fixed costs allow us to focus flying on days we make money Highly Adaptable 2008 2007 2009 July 2008 High Fuel Price Avg. daily scheduled flights by month(1) Current aircraft values(2) ($MM) Source: AVITAS, AISI, ASG, and SHE (1) Published capacity schedules (2) 2008 year-end values, except for
Slide 12: Dispersed, Low-Density Network
Dispersed, Low-Density Network We don’t fly much on any one route Proportion of routes by peak summer 2009 frequency (average = 4.0 / wk) (%) 0 5 10 15 20 25 30 35 2/wk 3/wk 4/wk 5/wk 6/wk 7/wk 8+/wk
Slide 13: Ancillary Revenue
Ancillary Revenue Charging extra for the extras Source: Company financials (1) The average exchange rate corresponding to the duration of the line item in the income statement is used to convert into USD (2) Represents 1Q 2009 ancillary revenue per scheduled passenger for Allegiant and year-ended 20
Slide 14: Opportunity Amidst a Challenging Environment
Opportunity Amidst a Challenging Environment Change in mainline departures Source: Earnings releases and U.S. Department of Transportation - RITA Industry-leading margins validates our continued growth (1Q09 vs. 1Q08) 6% 1% (4%) (5%) (5%) (7%) (7%) (7%) (7%) (15%) (10%) (5%) 0% 5% 10% ALGT JBLU AMR
Slide 15: Growth
Growth 24 new routes started/announced since Jan 1, 2009 Three new routes between existing cities 21 new routes involving five new cities New routes to new cities Connecting existing cities
Slide 16: Allegiant Resilience
Allegiant Resilience Low prices stimulate leisure travel – unlike business travel VFR (visiting friends & relatives) component especially resilient – you’re still going to visit Mom Need to have the cost and pricing structures to support leisure Low fixed cost structure enables more flexibility Pric
Slide 17: Allegiant Resilience
Allegiant Resilience We “lock down” one variable – aim for scheduled load factors > 90% Hit load factor target by capacity planning (long-term) and pricing (close-in) Leisure customers are flexible, making >90% load factor feasible Over $30 of ancillary revenue incentive to run high load factor High
Slide 18: We Love Southern California
We Love Southern California A baker’s dozen of routes announced from (mostly) existing small cities to SoCal (plus Bentonville, Arkansas) SoCal leisure traffic has two legs: Huge vacation destination (Hollywood, Disney, beaches, etc.) Huge VFR - 2nd largest MSA in the country, after NYC Phoenix work
Slide 19: Las Vegas Is Doing Great for Us
Las Vegas Is Doing Great for Us Casinos are in trouble, we’re not 90% of traffic on our LAS routes generated in small cities Up to ~40% decline in hotel room prices stimulates travel Sell ~40,000 rooms/month in Las Vegas, one of largest wholesalers Substantial new room supply anticipated LAS ~ 1/3 o
Slide 20: Strong Balance Sheet: Liquidity
(1) Unrestricted cash including short-term investments (2) All data based on reported FY2008 Strong Balance Sheet: Liquidity Cash as a % of FY08 revenue(1)(2) Source: Company financials (%) Well-positioned for growth 12.1 10.1 8.7 34.7 29.4 17.3 16.9 16.4 13.1 0 5 10 15 20 25 30 35 40 ALGT ALK CAL J
Slide 21: Strong Balance Sheet: Leverage
(1) All data based on reported FY2008 (2) Adjusted debt equals total debt plus aircraft rent capitalized at 7.0x; Adjusted net debt equals adjusted debt less unrestricted cash and short-term investments (3) End of the period data; includes aircraft on capital leases and owned aircraft on lease to th
Slide 22: Summary
Summary No international exposure No premium travel exposure No pension issues No fuel hedge overhang No liquidity issues Minimal debt, minimal capex Creating shareholder value Atypical US carrier Sustained profitability Highly adaptable business model High growth Strong balance sheet Experienced ma
Slide 23: Appendix
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Slide 24: Cost per Passenger for LTM Ended 3/31/09
Cost per Passenger for LTM Ended 3/31/09 $97 $123 $106 (1) $63 $90 $61 $66 Aircraft Total MD-80: reasonable cost aircraft Source: Company filings (1) Ownership includes Depreciation and Amortization plus Aircraft Rent $158 $45 $44 $42 $58 $6 $12 $9 $16 $10 $9 $6 $18 $20 $39 $32 $7 $10 $2 $3 $1 $23 $
Slide 25: Low Costs Despite Low Aircraft Utilization
2008 Low Costs Despite Low Aircraft Utilization Low aircraft utilization (1) All data based on reported FY2008 mainline metrics, except Delta which is included in the legacy average and is based on 4Q08, the first quarter after its merger with Northwest for which mainline data is available (2) Inclu