On this page of StockholderLetter.com we present the latest annual shareholder letter from Allegiant Travel CO — ticker symbol ALGT. Reading current and past ALGT letters to shareholders can bring important insights into the investment thesis.

 •  5/8/2025 Letter Continued (Full PDF)
 •  5/10/2023 ALGT Stockholder Letter
 •  5/10/2024 ALGT Stockholder Letter
 •  More "Airlines" Category Stockholder Letters
 •  ALGT Benford's Law Stock Score = 57

ALGT Shareholder/Stockholder Letter Transcript:

ANNUAL
REPORT
2024

April 27, 2025
Dear Allegiant Shareholders:
As a long-standing tradition, our Founder and former CEO, Maury Gallagher, has
authored an annual shareholder letter recapping our achievements and providing a
glimpse into our strategic priorities. I am privileged to continue that tradition. With
over 15 years of experience at our company, I have gained a profound appreciation for
Maury   s vision and leadership that has forged the strong foundation we have today. It
is both an honor and a responsibility to build on his legacy and advance our mission
for the benefit of all stakeholders.
As I approach the eight-month mark in my tenure as CEO, I want to take this
opportunity to reflect on our progress and share my vision for the future of our
company. My goal is to build on the core strengths of our airline, make sure we
continue to deliver exceptional service, and drive long-term shareholder value.
This letter comes at a pivotal moment in our industry   s history, one marked by unique
challenges and transformative opportunities that will reshape the future of air travel.
Only a few months ago, I, along with many of my industry peers, were bullish on the
prospects for 2025. The economy was healthy and demand was strong.
The fluctuations in tariff and broader U.S. government initiatives, combined with
softening consumer confidence surveys     recent readings have been the weakest
observed in several years     have resulted in significant uncertainty across the broader
market and the airline industry, in particular. Together, that makes it especially
difficult to have confidence in near-term demand projections.
The good news is Allegiant has a long track record of outperforming in uncertain
economic environments. We will continue to manage to our proven playbook and
adjust our capacity to what we believe is most appropriate for the current
environment while ensuring we appropriately address the items under our control.
In this letter I will review the progress made in 2024 and outline our strategic priorities
for the coming years. I will also present the future direction for Allegiant and how we
plan to navigate this dynamic environment, ensuring our airline not only adapts but
leads in the face of ongoing challenges.
A Review of 2024
Allegiant made great progress during the year delivering strong operational
performance and notable margin improvements. These gains were driven by the
successful induction of the Boeing MAX into our fleet (after multi-year delays),
increased aircraft utilization, enhancements to our booking and revenue
management platforms, and the expansion of our premium offering, Allegiant Extra.
Let me start with our strong operating performance. As an airline, everything begins
and ends with safety and operations. We hosted a near record 17 million passengers
with over 122,000 departures as they traveled to 120 communities. I   m most proud of
our 99.7% controllable completion rate - with 77% of those flights arriving on time.

Those performance metrics put Allegiant near the top of the industry, and we are
pleased to be recognized by the Wall Street Journal as their top ULCC carrier. We were
ranked fourth among all US airlines, behind only Delta, Southwest and Alaska. That   s
good company to be in!
That level of service underscores why we have maintained strong net promoter scores,
with nearly 75% of our customers being repeat fliers. Relatedly, it has driven robust
engagement in our award-winning loyalty program, with nearly $600 million of
revenue generated since our Bank of America credit card was launched in 2016.
Beyond our airline operations, we also showed improving profitability.
Airline-only Adjusted Operating Margin was 7.7% in 2024, improving over the course of
the year and reaching 13.2% in the fourth quarter, up nearly 8 percentage points
versus the prior-year quarter.
There were four key factors that drove the fourth quarter   s performance, giving us
confidence that we are on the path to returning to our historic margins in the years
ahead.
First, in September we took delivery of the first of our much-delayed Boeing MAX
aircraft. These aircraft are significantly more fuel efficient with higher reliability. We
expect substantial improvements to our fleet economics with the addition of MAX
aircraft in 2025 and beyond.
The second is improving aircraft utilization. December   s peak holiday period utilization
was the highest since COVID, matching our strong 2019 results. As we started
receiving our new MAX aircraft, we were finally able to move forward with type rating
the more than 100 pilots we had offline for this new to Allegiant fleet type. As those
pilots were trained and back flying, coupled with stabilized labor staffing levels, our
utilization rates started to improve meaningfully.
Third, we continue to enhance our new Navitaire reservation management system,
adding new features and capabilities. Those efforts were a key reason why we were
able to steadily increase our per passenger ancillary revenue over the course of the
year to an all-time high of $75.83 per passenger in the fourth quarter 2024. We are
working on further enhancements for our customers that will allow them to select the
ancillary options that are most appropriate for them.
Lastly, we ended the year with Allegiant Extra deployed on approximately one-third of
our fleet. Allegiant Extra is our premium offering that includes additional legroom as
well as priority boarding, dedicated overhead bin space, and complimentary snacks
on board. We expect to have 75% of our fleet with this seating configuration by the
end of 2025, including all MAX aircraft. We are encouraged by results that highlight
how this product should continue to improve our unit revenues by providing more
options for passengers looking for a premium service.
Importantly, we have consistently demonstrated our ability to navigate nature   s
toughest challenges, as evidenced by our response to two devastating hurricanes this
past October that affected more than 40% of our network. Despite that significant

disruption, we closed the year on a high note, achieving a swift operational recovery
and continued margin improvements.
Time and again, Team Allegiant has proven its resilience   responding effectively to
unforeseen events, prioritizing our customers, and restoring normal operations
quickly, all while maintaining an unwavering commitment to safety. This resilience is a
true testament to the strength and dedication of our team.
Industry Backdrop: A Tale of Two Cities
The industry has experienced significant changes since the pandemic, presenting
major challenges for a number of value carriers. These pressures have culminated in
Spirit   s recent bankruptcy, highlighting the difficulties faced by carriers that lack clear
differentiation.
Let me provide some context on how we view those changes and why we remain
confident in Allegiant   s bright future.
Over the past several years, legacy carriers have leveraged their expansive
international networks and large-scale rewards programs to capture outsized benefits
from the surge in international travel and premium products. As travelers increasingly
prioritized global destinations and upgraded to premium cabins, these airlines saw
demand for their higher-margin products outpace that for lower-fare domestic flying,
reinforcing their strengths in a shifting market.
Simultaneously, legacy carriers have enhanced their competitive edge in low-fare
markets by implementing cabin segmentation and leveraging their premium
offerings to upsell customers. That has allowed them to drive load factors, lower unit
costs, and improve market share in key locations. Furthermore, with airport expenses
rising considerably post pandemic, their dominance in key hub cities has afforded
them the ability to better absorb these escalating costs.
This evolution has made it difficult for several airlines that compete head-to-head with
those legacy carriers and it is a key reason why some of them have run into financial
difficulties.
Allegiant is Very Different
Let me say that again. We are very different. We don   t meaningfully overlap with the
legacy carriers (or really any carrier for that matter) and our tactical utilization
approach and design of our network puts us in a class by ourselves. There are four key
attributes I want to highlight.
Limited overlap with other carriers
We have the least competitive overlap of any domestic airline, with no direct
alternatives on 75% of our routes. We have established ourselves as an essential travel
provider across the United States. For most of the 120 different communities we serve,
we are the only nonstop option.
To put it simply, we address underserved markets and offer our customers the
significant advantage of affordable nonstop travel, allowing them to bypass higher

airfares and the frequent delays and hassles often associated with connections at
major hubs.
We are extremely agile
Because we focus on leisure rather than business travelers, our network and
operations are purpose-built for maximum flexibility and variable costs     more so
than any other airline. We strategically concentrate our flights on high-demand
   peak    travel days and minimize operations during low-leisure    off-peak    days. As a
result, our aircraft typically fly an average of just 6   8 hours per day   well below the
industry average.
While this may seem unconventional, this approach has consistently allowed us to
better match capacity with leisure demand. Our commitment to adaptability has
been a cornerstone of our success since going public nearly twenty years ago and has
honed our ability to respond quickly to shifting demand and market conditions,
including what we are seeing today.
We have a significant cost advantage
Because most leisure travelers are motivated by lower fares, maintaining industryleading unit costs is absolutely essential. Cost management isn   t just a strategy for
us   it   s part of our DNA. One of our key advantages is our focus on 23 strategically
chosen bases (soon to be 22 pending our exit from LAX), enabling efficient out-andback flying with no crew overnights. Our lower aircraft utilization schedule allows for
regular, proactive maintenance.
We constantly review our cost structure and deploy new technology to boost
productivity, streamline decision-making, and enhance customer interactions. These
investments are all centered around delivering an excellent service to our customers
at an attractive price while keeping costs low.
As a result, we enjoy a significant unit cost advantage, as measured by cost per
available seat mile excluding fuel (CASM ex-fuel) that is significantly lower than what
the legacy airlines incur.
This disciplined approach has made us one of the few airlines to remain consistently
profitable on an operating basis   through recessions and geopolitical disruptions,
with the first year of the global pandemic being the only exception.
How we manage our fleet
Our fleet strategy is central to our ability to adapt to changing economic conditions.
With aircraft values rising sharply due to supply chain disruptions and limited
availability, our approach of directly owning our fleet has proven especially valuable.
During the pandemic, we seized the opportunity to order 50 Boeing MAX 8200/8
aircraft (with 80 options), powered by the latest GE/CFM Leap Engines   a deal we
believe is a once-in-a-generation opportunity given its favorable terms and strong
support from Boeing and GE/CFM.
After two years of delays, we took delivery of our first MAX aircraft in September and
are currently operating nine of them. Encouragingly, early results show both



 5/8/2025 Letter Continued (Full PDF)