SOURCE: Allegiant Travel Company

Allegiant Travel Company

December 22, 2014 21:33 ET

Allegiant Travel Company Announces a $43.2 Million Non-Cash Impairment Charge on Its 757 Fleet

LAS VEGAS, NV--(Marketwired - December 22, 2014) - Allegiant Travel Company (NASDAQ: ALGT) today reported that it is taking a $43.2 million write-down on the value of its Boeing 757 aircraft fleet. The charge will occur in the fourth quarter of 2014.

"This non-cash impairment charge resulted from a recent review of the value of the Company's Boeing 757 assets," stated Maurice J. Gallagher Jr., Chairman and CEO of Allegiant Travel Company. "We evaluate factors such as our ability or intent to operate fleet types through their estimated useful lives, potential changes to fleet residual values based on changes in market conditions for used aircraft, spare engines and parts and potential changes to our scheduled revenue network based on competition trends and operational performance. Based on our review the Company concluded that the estimated future cash flows for its six 757-200 series aircraft, spare engine and parts pool did not support the net book values on our balance sheet. This decision reflects the Company's view that our 757 fleet will be held for a period less than their current expected useful lives, which is currently seven years or through 2021. In addition, residual values for 757 aircraft will be reduced from $6 million to $3 million based what we believe is a permanent decline in the used 757 market. The Company will continue to operate 757 aircraft on longer-haul routes, including Hawaii, in the near term." 

With this write down, the Company expects fourth quarter CASM ex fuel to increase between 40 and 41 percent versus last year. Prior to the charge, the fourth quarter was trending towards the lower end of the range provided on October 22, 2014. 

At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.

Capacity guidance, subject to revision  Year over Year Growth
Departures  ASMs
1st Quarter 2015      
 System  +6 to 10%  +2 to 6%
 Scheduled  +6 to 10%  +2 to 6%
       
ASMs - Available seat miles      
     
     
     
Cost guidance, subject to revision   
   4th quarter 2014
Cost per available seat mile excluding fuel (CASM-ex fuel) - year over year change  40 to 41%
   
CASM-ex fuel (excluding non-cash aircraft impairment charge) - year over year change  9 to 10%
   
   Full year 2015
CASM-ex fuel - year over year change  (10) to (6)%
   
CASM-ex fuel (excluding non-cash aircraft impairment charge) - year over year change (4) to 0%
   
   

Allegiant, Travel is our deal. ®
Las Vegas-based Allegiant Travel Company (NASDAQ: ALGT) is focused on linking travelers in small cities to world-class leisure destinations. The company operates a low-cost, high-efficiency, all-jet passenger airline through its subsidiary, Allegiant Air, while also offering other travel-related products such as hotel rooms, rental cars, and attraction tickets. All can be purchased through the company website, Allegiant.com. The company has been named one of America's 100 Best Small Companies by Forbes Magazine for five consecutive years. In 2014, AVIATION WEEK ranked Allegiant the Top-Performing Airline in North America for the third consecutive year. For downloadable press kit, including photos, visit: http://gofly.us/FiYDS.

ALGT/G

Note: This news release was accurate at the date of issuance. However, information contained in the release may have changed. If you plan to use the information contained herein for any purpose, verification of its continued accuracy is your responsibility.

For further information please visit the company's investor website: http://ir.allegiant.com

Reference to the Company's website above does not constitute incorporation of any of the information thereon into this news release.

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, statements in this press release that are not historical facts are forward-looking statements. These forward-looking statements are only estimates or predictions based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include our statements regarding future departure and capacity growth. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "guidance","believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "hope" or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov.

Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

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