Allegiant Travel Company First Quarter 2014 Financial Results

LAS VEGAS. April 23, 2014 -Allegiant Travel Company (NASDAQ: ALGT) today reported the following financial results for the first quarter 2014, as well as comparisons to prior year equivalents.

“We are very proud to report our 45th consecutive profitable quarter,” stated Maurice J. Gallagher, Jr., Chairman and CEO of Allegiant Travel Company. “We are pleased to produce another profitable quarter despite significant operational challenges and unusually high one-time costs that impacted our overall financial performance. This was a very difficult operational quarter as we navigated through significant flight crew availability issues stemming from external factors that occurred last year. I am happy to report that our Team Members overcame this adversity and pulled together another solidly profitable quarter.”

Notable company highlights

Integrated A320 aircraft into scheduled operations. Ended the quarter operating three A319 and seven A320 aircraft

A319 and A320 fleet accounted for 17.9 percent of total ASM production during the quarter

Integrated two MD-80 aircraft configured with 166 seats to the fleet in March. Ended the quarter operating 53 166 seat MD-80 aircraft

Completed the reconfiguration of the 757 fleet from 223 seats to 215 seats and added six Giant Seats per aircraft

Announced a seasonal base in Myrtle Beach, SC, which will support two aircraft beginning in late May

Announced 12 new routes to begin operation in the second quarter

Returned $114 million to shareholders through share repurchases and a special dividend paid in January

In April, prepaid $121.3 million term loan facility using unrestricted cash and proceeds from a new $45.3 million loan through Wells Fargo Bank, collateralized by 53 MD-80 aircraft

Re-elected John Redmond to the Board of Directors in April. Mr. Redmond previously served on the board from Oct 2007 to June 2013

First quarter 2014 cost performance

Total operating expense per ASM (CASM) increased one percent

CASM ex fuel was substantially impacted by nonrecurring expenses related to training and crew availability delays. These delays drove an additional $12 million in incremental expense in the form of labor inefficiencies, aircraft sub-service, crew training and displacement costs

Fuel expense per ASM declined 8.8 percent due to a four percent increase in ASMs per gallon, and a five percent decrease in average cost per gallon

Salaries and benefits expense increased 12.8 percent versus last year primarily due to a 13.1 percent increase in the number of full time equivalent employees. Headcount growth was mostly attributable to flight crews to support a 7.3 percent increase in average number of aircraft in service year over year and flight operations and maintenance staff to support increasing Airbus operations

Station operations expense increased approximately 14.9 percent on a 9.4 percent increase in departures, due primarily to an increase in airport fees at one of the Company’s primary leisure destinations

Maintenance and repairs expense increased 13.6 percent due to a 7.3 percent increase in fleet size and a larger number of heavy maintenance events versus a year ago

Sales and marketing expense increased approximately two million dollars or 34.6 percent from the prior year due to a combination of increased credit card interchange fees and increased advertising to launch 12 new routes in the second quarter

Second quarter 2014 cost trends

CASM is expected to increase between three and five percent. This guidance assumes first quarter’s average cost per gallon of $3.20

CASM ex fuel is expected to increase between five and seven percent

Increase in salaries and wages to support growth, higher maintenance expenses due to more aircraft heavy checks, and higher aircraft lease rental expense due to sub-service arrangements

On a full year basis the company continues to expect monthly maintenance and repairs expense per aircraft between $100 and $110 thousand

Balance sheet highlights

Returned $42 million to shareholders through a special dividend of $2.25 per share

Repurchased 730,162 shares of common stock for $72 million in the first quarter. The company has $68 million in repurchase authority remaining

$302 million in unrestricted cash and $149 million in total debt as of April 22, 2014