Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (June 2009)
25 slides from Allegiant Travel's investor presentation, Jun 11, 2009
Slide 1: Investor Presentation June 2009
Investor 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: Allegiant Travel Company: Highly profitable airline
Allegiant Travel Company $mm Highly profitable airline 1Q09 31% operating, pre-tax Profitable last 25 quarters (1), including all quarters of 2008 $34 ancillary revenue/pax Lowest costs Adaptable & resilient Low fixed costs Flexible capacity management High growth Very strong balance sheet Negative
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 Service: 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 HA LUV JBLU CAL ALK AAI AMR LCC UAL
Slide 7: Best Costs
Best Costs Cost / pax vs. stage length (1) Cost / pax, ex- fuel vs. stage length (1) Cost leader among U.S. carriers (1) Data for LTM ended 3/31/2009, Red lines are the linear regressions of the points for the carriers 300 250 200 150 100 50 0 500 1000 1500 LUV HA AAI LCC ALGT $96 JBLU ALK AMR CAL U
Slide 8: Industry Leading RASM
Industry Leading RASM (1) Data for LTM ended 3/31/2009 Minimal direct competition Highly adaptable – provide service when we can make money Low network density makes us hard to hit World-class ancillary revenue Demonstrated pricing power Total system RASM (1) Source: Company filings (¢) 11.4 10.7 10
Slide 9: Minimal Direct Competition
Minimal Direct Competition Head-to-head competition on only six of 134 routes(1) Other airlines appear to see us as an annoyance, not a threat (1) As of June 30, 2009, according to published schedules
Slide 10: Highly Adaptable
Low fixed costs enable very flexible capacity management Highly Adaptable 2008 2007 2009 July 2008 High Fuel Price Avg. daily scheduled flights by month(1) Current aircraft values(2) ($MM) Source: AVITAS, AISI, ASG, and SHE (1) Published capacity schedules (2) 2008 year-end values, except for ALGT M
Slide 11: 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 12: Ancillary Revenue
Ancillary Revenue Charging extra for the extras Source: Company financials The average exchange rate during 2008 used to convert Ryanair figure nto USD Represents 1Q 2009 ancillary revenue per scheduled passenger for Allegiant and year-ended 2008 ancillary revenue per passenger for Ryanair Ancillary
Slide 13: Opportunity Amidst a Challenging Environment
Opportunity Amidst a Challenging Environment Change in mainline ASMs, April + May 2009 Source: April & May 2009 traffic releases Industry-leading margins validate our continued growth 26.4% 1.2% - 2.6% - 2.6% - 5.3% - 7.3% - 7.5% - 7.5% - 8.8% - 11.1% - 15% - 10% - 5% 0% 5% 10% 15% 20% 25% 30% ALGT
Slide 14: 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 15: Allegiant Resilience
Allegiant Resilience Unlike business travel, leisure travel can be stimulated by low airfares, hotel & rental car prices – never been a better time to travel for leisure VFR (visiting friends & relatives) component especially resilient We price to get potential customers to invest in transaction Hig
Slide 16: 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 17: Strong Balance Sheet: Liquidity
Quarter-end unrestricted cash including short-term investments All data based on reported FY08 & 1Q09 Strong Balance Sheet: Liquidity 1Q09 Cash as a % of LTM revenue(1)(2) Source: Company financials Well-positioned for growth 46.1% 29.3% 19.9% 19.7% 18.9% 18.1% 15.4% 12.8% 12.5% 10.8% 0% 5% 10% 15%
Slide 18: Strong Balance Sheet: Leverage
All data based on reported FY2008 & 1Q09 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 capital leases and owned aircraft on
Slide 19: 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 20: Appendix
A P| pend ix
Slide 21: 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 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 $20 $
Slide 22: 2008 Low Costs Despite Low Aircraft Utilization
2008 Low Costs Despite Low Aircraft Utilization Low ALGT aircraft utilization 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 Includes
Slide 23: Focus Flying On Days We Can Make Money
Substantial frequency variation even within a month Focus Flying On Days We Can Make Money Daily scheduled flights 160 140 120 100 80 60 40 20 0 Mon Tue Wed Thu Fri Sat Sun Week of 12/1/08 Week of 12/29/08 140 120 100 80 60 40 20 0 Avg Daily Sched Flights +45% Week of 12/1/08 Week of 12/29/08
Slide 24: Same Store Growth Significantly Lower Than Nominal
Same Store Growth Significantly Lower Than Nominal True same-store departure growth for a given month excludes: Routes flown in 2009 but not 2008 or vice versa Routes flown for a partial month in one or more of 2008 or 2009 Highest true same-store scheduled growth month for 2009 is behind us Nominal
Slide 25: Control the Customer
Control the Customer www.allegiantair.com Leverage direct relationship with customers Maximize e-commerce opportunities Instantly relevant to leisure customers in our small cities Accounts for 87% of sales in 1Q09 Generates email lists for future low-cost communication Significant untapped potential