Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (March 2009)
20 slides from Allegiant Travel's investor presentation, Mar 9, 2009
Slide 1: Management Presentation March 2009
Management Presentation March 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: Nationwide
Nationwide Expected at June 1, 2009: 71 cities, 132 routes, 43 operating aircraft
Slide 4: Minimal Direct Competition
Minimal Direct Competition Head-to-head competition on only three of 132 routes(1) To date, only one airline has entered our routes That attempt lasted a year and has not been repeated Other airlines appear to see us as an annoyance, not a threat Routes with competition today Routes that had competi
Slide 5: Low Frequency
Low Frequency We don’t fly much on any one route even in high season
Slide 6: We focus flying on days we can make money
We focus flying on days we can make money Substantial Frequency Variation by Day, Week, Month Average daily scheduled flights, by month 2008 2007 2009E +45%
Slide 7: Best Costs
Best Costs 2008 cost per passenger vs length of haul, in miles 2008 cost per passenger, ex-fuel vs length of haul, in miles Source: public filings of the respective companies.
Slide 8: Exceptional Performance
Exceptional Performance Strong profit growth despite difficult economic environment 4Q08 4Q07 Change EPS $0.88 $0.23 283% Operating margin 23% 6% 17pp Fuel cost/passenger $37 $55 ($18) Scheduled: Base air fare $83 $87 ($4) Average fare – ancillary 33 24 9 Average fare – total $116 $111 $5 Load facto
Slide 9: Best Operating Margins
Best Operating Margins 2008 operating margins 2008 pre-tax margins Source: public filings of the respective companies. Without Southwest Hedge (11.8 pp)
Slide 10: Capitalization
Capitalization (mm, except number of owned aircraft) YE2008 Sep 30, 2008 YE2006(1) Cash, cash equivalents and Short-term investments $174.8 $138.6 $136.1 Net of Air traffic liability 105.8 60.8 90.8 Total assets 424.0 402.6 305.7 Total debt 64.7 70.1 72.8 Owned aircraft (including capitalized leases
Slide 11: Allegiant Resilience
Allegiant Resilience Low prices stimulate leisure – 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 Pricing the
Slide 12: Allegiant Resilience
Allegiant Resilience We “lock down” one variable – aim for scheduled load factors > 90% Hit LF target by capacity planning (long-term) and pricing (close in) Leisure customers are flexible, making >90% LF feasible $33/pax of ancillary revenue incentive to run high LF High LF also spreads costs – inc
Slide 13: Growth
Growth Bottom up approach: Route-by-route, week-by-week, keep margins high, maximize EPS Assume $2 fuel, 7-10% reduction in total revenue/flight We’ve added back some flying dropped last summer We’ve added 40 new routes since 3Q08 Growth guidance (system) 1Q09 2Q09 3Q09 Departures 5% 20% 40% ASMs 5%
Slide 14: Growth
Growth Selling schedule reflects ~60% growth in departures and ASMs Unusual reduction in 3Q08 capacity due to incredibly high fuel prices Capacity seasonality for 2009 is in-line with 2006 & 2007 If the facts change, so will our capacity – and no one can pull down capacity with less cost consequence
Slide 15: Growth
Growth 20 New routes started/announced since Jan 1, 2009 Two new routes between existing cities 18 new routes involving five new cities New routes to new cities Connect the dots
Slide 16: We Love LA
We Love LA A dozen routes announced from existing small cities to LAX SoCal leisure traffic has two legs: Huge vacation destination (Hollywood, Disney, beaches, etc) Huge VFR - 2nd largest MSA in the country, after NYC Phoenix works very well, we see LA as a bigger Phoenix – including excellent long
Slide 17: The Las Vegas "Problem"
The Las Vegas “Problem” Casinos are in trouble, we’re not LAS is doing fine (for us)! Casinos have the problem – not ALGT 90% of traffic on LAS routes generated in small cities Room prices down 40% stimulates travel Sell ~40,000 rooms/month in Las Vegas, one of largest wholesalers Current “Fly free”
Slide 18: Guidance
Guidance Estimated fuel cost/passenger for Jan & Feb 2009 - $27.10 1Q09E 1Q08 Scheduled load factor >90% 87% Total scheduled RASM (cents) >10.61 10.61 Scheduled total average fare $105-108 $113 Cost/passenger, ex-fuel ~$50 $48 Cost/passenger, fuel <$30 $55 EPS ? $0.47 We re-iterate 1Q09 guidance fro
Slide 19: ALGT Features
ALGT Features No international exposure No premium travel exposure No pension issues No fuel hedge overhang Minimal debt, minimal capex Best profits, balance sheet, liquidity Facing fewer issues than most
Slide 20: Management Presentation March 2009
Management Presentation March 2009
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