Allegiant Travel Company · NASDAQ:ALGT
Allegiant Travel — Investor Presentation (August 2009)
24 slides from Allegiant Travel's investor presentation, Aug 27, 2009
Slide 1: Investor Presentation August 2009
Investor Presentation August 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 2Q09 25.5% operating margin Profitable last 26 quarters (1), including all quarters of 2008 > $30 ancillary/pax Lowest costs Adaptable & resilient Low fixed costs Flexible capacity management High growth Very strong balance sheet Negative net de
Slide 4: Nationwide Network
Nationwide Network Published October 31, 2009 schedule: 69 cities, 129 routes, 44 operating aircraft
Slide 5: Exceptional Performance
Exceptional Performance Strong profit growth despite difficult economic environment 2Q09 2Q08 Change EPS $1.17 $0.13 818% Pre-tax margin 25% 3% 22pp Total cost / passenger Fuel cost / passenger $75 $28 $110 $62 ($35) ($34) Scheduled Service: Base air fare $65 $84 ($18) Average fare – ancillary $32 $
Slide 6: Best Margins
Best Margins Source: Company filings (%) LTM ended 6/30/09 pre-tax margins Industry-leading margins 22.3 7.0 0.1 -3.3 -4.7 -4.9 -6.3 -8.2 -9.7 -13.0 -13.9 (15) (10) (5) 0 5 10 15 20 25 ALGT HA JBLU LUV AAI AMR CAL ALK DAL LCC UAUA
Slide 7: Best Costs
Best Costs Cost / pax vs. stage length (1)(2)(3) Cost / pax, ex- fuel vs. stage length (1)(2)(3) Cost leader among U.S. carriers Data for LTM ended 6/30/2009, Red lines are the linear regressions of the points for the mainline only LTM 3/31/2009 average stage length for UAUA, AMR, and HA Special cha
Slide 8: Industry Leading RASM
Industry Leading RASM (1) Data for LTM ended 6/30/2009 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 (¢) 11.0 10.5 10
Slide 9: Minimal Direct Competition
Minimal Direct Competition Head-to-head competition on only five of 133 routes(1) Other airlines appear to see us as an annoyance, not a threat (1) As of September 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 = 3.5 / wk) (%) 0 5 10 15 20 25 30 35 40 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 (1) The average exchange rate for LTM ending 6/30/2009 used to convert Ryanair figure into USD (2) Represents 2Q09 ancillary revenue per scheduled passenger for Allegiant and quarter-ended June 30, 2009 ancillary revenue per
Slide 13: Opportunity Amidst a Challenging Environment
Opportunity Amidst a Challenging Environment Change in mainline ASMs, 2Q09 Source: April, May, & June 2009 traffic releases Industry-leading margins validate our continued growth 30.3% 1.8% -1.7% -3.0% -5.6% -6.2% -7.3% -7.6% -7.6% -10.8% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% ALGT HA JBLU LUV
Slide 14: Growth
Growth 22 new routes started/announced since 1/1/09 5 new routes between existing cities 17 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 ~52,000 rooms/month in Las Vegas, one of largest wholesalers Substantial new room supply anticipated LAS ~ 1/3 o
Slide 17: Strong Balance Sheet: Liquidity
(1) Quarter-end unrestricted cash including short-term investments (2) All data based on reported LTM ending 6/30/2009 Strong Balance Sheet: Liquidity 2Q09 Cash as a % of LTM revenue(1)(2) Source: Company financials Well-positioned for growth 43.1% 36.5% 26.9% 23.1% 20.7% 20.2% 16.0% 14.4% 13.3% 13.
Slide 18: Strong Balance Sheet: Leverage
(1) All data based on reported LTM ending 6/30/2009 (2) 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 (3) End of the period data; includes aircraft on capital leases and
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 6/30/09
Cost per Passenger for LTM Ended 6/30/09 Aircraft Total MD-80: reasonable cost aircraft Source: Company filings (1) Ownership includes Depreciation and Amortization plus Aircraft Rent (2) “Other” excludes special items and other one-time charges (1) (2) $36 $36 $40 $51 $6 $13 $9 $16 $9 $7 $9 $6 $1 $
Slide 22: 2008 Low Costs Despite Low Aircraft Utilization
2008 Low Costs Despite Low Aircraft Utilization Low ALGT 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)
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 180 160 140 120 100 80 60 40 20 - Mon Tue Wed Thu Fri Sat Sun Week of 12/7/09 Week of 12/28/09 140 120 100 80 60 40 20 0 Avg Daily Sched Flights +42% Week of 12/7/09 Week of 12/28/09
Slide 24: 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 85% of sales in 2Q09 Generates email lists for future low-cost communication Significant untapped potential
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