Allegiant Air’s decision to switch to an all-Airbus fleet continued to pay off in the second quarter as the airline’s net income jumped 41% despite having six fewer aircraft from the year-ago period.
The Las Vegas-based LCC reported a second-quarter net income of $70.5 million, up from $50 million in the year-ago quarter. Revenue was up 12.6% to $491.8 million for 2Q; operating income was up 45.7% to $108.1 million.
Total fuel gallons increased 4.9%, while ASMs rose 13.4%. CASM-ex declined 6.1% and is expected to be down about 3.5% for the full year.
Allegiant achieved a 99.9% completion factor, leading the industry for the second straight quarter. The carrier only had 16 maintenance cancellations, compared to 129 last year, a reduction of 88%.
“The increased productivity of this aircraft is self-evident,” Allegiant chairman and CEO Maury Gallagher said of the Airbus fleet during an earnings call. “We burned virtually the same amount of fuel for 4,400 additional departures and over 600,000 additional passengers during the past six months.”
“The almost 20% increase in utilization this year during Q1 and Q2 and 25% in March and June was extremely accretive,” Gallagher said. “We have more flexibility economically to operate this aircraft at the edges.”
Allegiant retired more than 30 MD-80s in 2018, leaving it with 76 aircraft at the start of 2019—13 fewer than it had in January 2018. The LCC’s 90-aircraft fleet currently consists of 53 A320ceo and 37 A319ceo aircraft, according to Aviation Week Fleet Data Services. The carrier plans to reach 93 aircraft by year-end and 102 by 2021.
“We continue to learn how powerful and highly reliable an all-Airbus fleet can be for us,” Allegiant VP-revenue and planning Drew Wells said.
“Allegiant is running a significantly better operation than they did in the past two summers,” Cowen analyst Helane Becker wrote in a July 25 research note. “Shifting to the A320 from the MD-80 was a great choice from a reliability and operational perspective.”