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What changed in Allegiant Travel CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Allegiant Travel CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+370 added−350 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-29)

Top changes in Allegiant Travel CO's 2024 10-K

370 paragraphs added · 350 removed · 287 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

129 edited+25 added−24 removed83 unchanged
Biggest changeWe have coined this next stage of our Company strategy as "Allegiant 2.0" which includes the following Company goals: • maintaining our foundation of providing affordably accessible all-nonstop air travel while refining and strengthening our air travel product; • expanding our already broad domestic network as we have identified more than 1,400 incremental routes of which approximately 77 percent currently have no nonstop service; • expanding our travel company focus and offerings with the operation of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort"); • seeking to offer (subject to government approval) transborder international scheduled service to premier beach destinations in Mexico through our partnership with VivaAerobus; • utilizing our customer data to capture accretive, asset-light direct-to-consumer revenue opportunities by offering vacation packages that include hotel stay and car rental; • transforming our eCommerce strategy to create a frictionless experience for our customers and drive increased air ancillary and third party revenue generation; • expanding our award-winning co-brand credit card program and our non-card loyalty program; • maximizing return from our marketing investment dollars by entering into dynamic agreements, such as the naming rights agreement with the Raiders of the National Football League for Allegiant Stadium in Las Vegas Our principal executive offices are located at 1201 N.
Biggest changeWe have coined this next stage of our Company strategy as "Allegiant ONE" which currently includes the following Company goals: • maintaining our foundation of providing affordably accessible all-nonstop air travel while refining and strengthening our air travel product • expanding our already broad domestic network as we have identified more than 1,400 incremental routes of which more than 75 percent currently have no nonstop service • earning the right to grow by seeking to restore historical margins and strengthening our balance sheet • taking advantage of the foundational technology we now have in place to leverage and embrace advancing technology (such as AI) to offer increased value to our customers and be able to scale more productively • increasing peak period service to 1,000 daily departures over time once we feel we have earned the right to grow • achieving at least 15 percent of new revenue from sources other than capacity growth • seeking to offer (subject to government approval) transborder international scheduled service to premier beach destinations in Mexico through our partnership with VivaAerobus • utilizing our customer data to offer personalized and more attractive product offerings • transforming our eCommerce strategy to create a frictionless experience for our customers and drive increased air ancillary and third party products revenue generation • expanding our award-winning co-brand credit card program and our non-card loyalty program • revisiting our marketing strategy to be more surgical and measured • seeking to remove Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") from our balance sheet through a sale or stake sale on acceptable terms 4 Our principal executive offices are located at 1201 N.
We are a participant in the Civil Reserve Air Fleet (“CRAF”) Program which affords the U.S. Department of Defense the right to charter our aircraft during national emergencies when the need for military airlift exceeds the capability of available military resources.
Civil Reserve Air Fleet . We are a participant in the Civil Reserve Air Fleet (“CRAF”) Program which affords the U.S. Department of Defense the right to charter our aircraft during national emergencies when the need for military airlift exceeds the capability of available military resources.
We have identified more than 1,400 additional domestic routes which we could target in the future to further expand our network. 6 In developing a unique business model, our ancillary offerings (ancillary air-related items included in passenger revenue as well as the sale of third party products and services) have been a significant source of our revenue growth.
We have identified more than 1,400 additional domestic routes which we could target in the future to further expand our network. In developing a unique business model, our ancillary offerings (ancillary air-related items included in passenger revenue as well as the sale of third party products and services) have been a significant source of our revenue growth.
These restrictions can include limiting nighttime operations, directing specific aircraft operational procedures during takeoff and initial climb, and limiting the overall number of flights at an airport. Few of the airports we serve currently impose such restrictions on the number of flights or hours of operation that have a meaningful impact on our operations.
These restrictions can include limiting nighttime operations, directing specific aircraft operational procedures during takeoff and initial climb, and limiting the overall number of flights at an airport. Few of the airports we serve 15 currently impose such restrictions on the number of flights or hours of operation that have a meaningful impact on our operations.
During the Persian Gulf War of 1990-91 and on other occasions, CRAF carriers were required to permit the military to use their aircraft in this manner. As a result of our CRAF participation, we are eligible to bid on and be awarded peacetime airlift contracts with the military on a preferential basis. 18
During the Persian Gulf War of 1990-91 and on other occasions, CRAF carriers were required to permit the military to use their aircraft in this manner. As a result of our CRAF participation, we are eligible to bid on and be awarded peacetime airlift contracts with the military on a preferential basis.
(2) Procurement - Adopt a responsible sourcing policy and embed the policy into existing governance and procurement management systems by the end of 2025 To determine material topics, a materiality assessment was conducted. This assessment benchmarked material ESG topics across our industry, global reporting frameworks and third-party rating and ranking methodologies.
(2) Procurement - Adopt a responsible sourcing policy and embed the policy into existing governance and procurement management systems by the end of 2025 To determine material topics, a materiality assessment was conducted. This assessment benchmarked material topics across our industry, global reporting frameworks and third-party rating and ranking methodologies.
In addition, our co-brand credit card is designed for the less frequent leisure traveler, with status benefits – such as priority check-in, priority boarding and a free drink onboard – from day one of having the card. 10 Competition The airline industry is highly competitive.
In addition, our co-brand credit card is designed for the less frequent leisure traveler, with status benefits – such as priority check-in, priority boarding and a free drink onboard – from day one of having the card. Competition The airline industry is highly competitive.
Our annual report, quarterly reports, current reports and amendments to those reports are 4 made available free of charge through the investor relations section on our website as soon as reasonably practicable after electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
Our annual report, quarterly reports, current reports and amendments to those reports are made available free of charge through the investor relations section on our website as soon as reasonably practicable after electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
In evaluating our cost performance, our management team typically compares to the following other publicly held domestic airlines: Delta Air Lines, American Airlines, United Airlines, Southwest Airlines, JetBlue Airways, Alaska Airlines, Hawaiian Airlines, Spirit Airlines, Frontier Airlines and Sun Country Airlines (which we refer to as the "Industry").
In evaluating our cost performance, our management team typically compares to the following other publicly held domestic airlines: Delta Air Lines, American Airlines, United Airlines, Southwest Airlines, JetBlue Airways, Alaska Airlines, Spirit Airlines, Frontier Airlines and Sun Country Airlines (which we refer to as the "Industry").
The authority of the federal government to collect most types of aviation taxes, which are used, in part, to finance the nation’s airport and air traffic control systems, and the authority of the FAA to expend those funds must be periodically reauthorized by the U.S. Congress.
Aviation Taxes and Fees . The authority of the federal government to collect most types of aviation taxes, which are used, in part, to finance the nation’s airport and air traffic control systems, and the authority of the FAA to expend those funds must be periodically reauthorized by the U.S. Congress.
We have consciously developed a business model which distinguishes us from the traditional airline approach: Traditional Airline Approach Allegiant Approach Customer Base: Business and leisure Leisure Network: Primarily large and mid-sized markets Primarily small/medium-sized under-served markets Flight Connections: Nonstop or connect through hubs All nonstop Competition: High Low Schedule: Uniform throughout the week Low frequency/variable capacity Distribution: Sell through various intermediaries Sell only directly to travelers Fare Strategy: High base fares/low ancillary revenue Low base fares/high ancillary revenue By separating base airfare from our air-related services and products such as baggage fees, advance seat assignments, travel protection, change fees, priority boarding, and food and beverage purchases, we are able to lower our airfares and target leisure travelers who are more concerned with price and the ability to customize their experience with us by only purchasing the additional conveniences they value.
We have consciously developed a business model which distinguishes us from the traditional airline approach: Traditional Airline Approach Allegiant Approach Customer Base: Business and leisure Leisure Network: Primarily large and mid-sized markets Almost all routes serve small/medium-sized under-served markets Flight Connections: Nonstop or connect through hubs All nonstop Competition: High Low Schedule: Uniform throughout the week Low frequency/variable capacity Distribution: Sell through various intermediaries Sell only directly to travelers Fare Strategy: High base fares/low ancillary revenue Low base fares/high ancillary revenue By separating base airfare from our air-related services and products such as baggage fees, advance seat assignments, travel protection, change fees, priority boarding, and food and beverage purchases, we are able to lower our airfares and target leisure travelers who are more concerned with price and the ability to customize their experience with us by only purchasing the additional conveniences they value.
In the wake of Hurricane Ian in 2022, we made a $100,000 donation to the organization to help restore critical resources in the community and we sponsored a month-long nationwide blood drive to further support relief efforts.
In the wake of Hurricane Ian in 2022, we made a $100,000 donation to the 12 organization to help restore critical resources in the community and we sponsored a month-long nationwide blood drive to further support relief efforts.
Additionally, federal funding to airports and/or airport bond financing could be affected through legislation, which could result in higher fees, rates, and charges at many of the airports we serve. Environmental.
Additionally, federal funding to airports and/or airport bond financing could be affected through additional legislation, which could result in higher fees, rates, and charges at many of the airports we serve. Environmental.
Insurance 15 We maintain insurance policies we believe are of types customary in the airline industry and as required by the DOT, and are in amounts we believe to be adequate to protect us against material loss.
Insurance We maintain insurance policies we believe are of types customary in the airline industry and as required by the DOT, and are in amounts we believe to be adequate to protect us against material loss.
Our 24 bases spread throughout the country provide us the flexibility to redeploy capacity to best match demand trends around the country. 5 The geographic diversity of our route network protects us from regional variations in the economy and helps insulate us from competitive actions, as it would be difficult for a competitor to materially impact our business by targeting one city or region.
Our 23 bases spread throughout the country provide us the flexibility to redeploy capacity to best match demand trends around the country. 5 The geographic diversity of our route network protects us from regional variations in the economy and helps insulate us from competitive actions, as it would be difficult for a competitor to materially impact our business by targeting one city or region.
It is possible one or more such airports or others may impose additional or future restrictions with or without advance notice, which may impact our operations. 17 Foreign Ownership .
It is possible one or more such airports or others may impose additional or future restrictions with or without advance notice, which may impact our operations. Foreign Ownership .
The alliance is anticipated to add new transborder routes and nonstop competition where currently only connecting service is available. More than 250 new potential nonstop route opportunities have been identified as part of the DOT application, though specific routes targeted for service wilI be announced at a later date, following the application's approval.
The alliance is anticipated to add new transborder routes and nonstop competition where currently only connecting service is available. More than 250 new potential nonstop route opportunities have been identified as part of the DOT application, though specific routes targeted for service will be announced at a later date, following the application's approval.
In connection with our leisure travel focus, we opened Sunseeker Resort Charlotte Harbor on December 15, 2023. The resort has 785 guestrooms (including suites) and 20 curated food and beverage outlets. Below is a brief description of the travel services and products we provide to our airline customers: Scheduled service air transportation.
In connection with our leisure travel focus, we opened Sunseeker Resort Charlotte Harbor on December 15, 2023. The resort has 785 guestrooms (including suites) and 18 curated food and beverage outlets. Below is a brief description of the travel services and products we provide to our airline customers: Scheduled service air transportation.
We believe we are operating in compliance with applicable DOT and FAA regulations, interpretations and policies and we hold all necessary operating and airworthiness authorizations, certificates and licenses. 16 The FAA periodically conducts extensive or targeted audits of our operations. We have satisfactorily responded to all findings on all Certificate Holder Evaluation Process and other inspections conducted. Security .
We believe we are operating in compliance with applicable DOT and FAA regulations, interpretations and policies and we hold all necessary operating and airworthiness authorizations, certificates and licenses. The FAA periodically conducts extensive or targeted audits of our operations. We have satisfactorily responded to all findings on all Certificate Holder Evaluation Process and other inspections conducted.
For example, we utilize predictive maintenance to identify necessary aircraft maintenance before a problem arises, thereby avoiding unscheduled maintenance events which are costly and disruptive to our schedule. In addition, our direct to consumer distribution method results in enhanced data which helps us deepen our relationship with our customers and increase sales. Simple product.
For example, we utilize predictive maintenance to identify necessary aircraft maintenance before a problem arises, thereby avoiding unscheduled maintenance events which are costly and disruptive to our operations. In addition, our direct to consumer distribution method results in enhanced data which helps us deepen our relationship with our customers and increase sales. Simple product.
We aim to build our scheduled service so that substantially all of our crews and aircraft return to base each night. This allows us to maximize crew efficiency, and more cost-effectively manage maintenance, spare aircraft and spare parts. Additionally, this structure allows us to add or subtract markets served by a base without incremental costs.
We aim to build our scheduled service so that substantially all of our crews and aircraft return to base each night. This allows us to optimize crew efficiency, and more cost-effectively manage maintenance, spare aircraft and spare parts. Additionally, this structure allows us to add or subtract markets served by a base without incremental costs.
This has resulted in our being able to generate a disporportionate portion of our operating income in the peak periods including March, summer (June and July) and the holiday seasons. Our core business model manages seat capacity by increased utilization of our aircraft during periods of high leisure demand and decreased utilization in low leisure demand periods.
This has resulted in our being able to generate a disproportionate portion of our operating income in the peak periods including March, summer (June and July) and the holiday seasons. Our core business model manages seat capacity by increased utilization of our aircraft during periods of high leisure demand and decreased utilization in low leisure demand periods.
This certificate, in combination with operation specifications issued to the airline by the FAA, authorizes the airline to operate at specific airports using aircraft certificated by the FAA. We have and maintain in effect FAA certificates of airworthiness for all our aircraft, and we hold the necessary FAA authority to fly to all the cities we currently serve.
This certificate, in combination with operation specifications issued to the airline by the FAA, authorizes the airline to operate scheduled service at specific airports using aircraft certificated by the FAA. We have and maintain in effect FAA certificates of airworthiness for all our aircraft, and we hold the necessary FAA authority to fly to all the cities we currently serve.
These optional air-related services and products include baggage fees, advance seat assignments, our own travel protection product, change fees, use of our call center for purchases, priority boarding, a customer convenience fee, food and beverage purchases on board, and other air-related services.
These optional air-related services and products include larger seats, baggage fees, advance seat assignments, our own travel protection product, change fees, use of our call center for purchases, priority boarding, a customer convenience fee, food and beverage purchases on board, and other air-related services.
Our widespread route network also contributes to the continued growth of our customer base. The below map illustrates our route network as of February 1, 2024, including service announcements as of that date. The orange dots represent leisure destinations and the blue dots represent origination cities.
Our widespread route network also contributes to the continued growth of our customer base. The below map illustrates our route network as of February 1, 2025, including service announcements as of that date. The orange dots represent leisure destinations and the blue dots represent origination cities.
This comprehensive report outlines our disclosures pertaining to material topics identified by key stakeholders and establishes the following ESG Goals: • Environmental: Emissions - Reduce tank-to-wake GHG emissions by 10 percent per revenue ton kilometer (RTK) by the end of 2030 from 2023 base year. • Social: (1) Safety - Earn the IATA Operational Safety Audit (IOSA) certification by the end of 2026.
This comprehensive report outlines our disclosures pertaining to material topics identified by key stakeholders and establishes the following Sustainability Goals: 16 • Environmental: Emissions - Reduce tank-to-wake GHG emissions by 10 percent per revenue ton kilometer (RTK) by the end of 2030 from 2023 base year. • Social: (1) Safety - Earn the IATA Operational Safety Audit (IOSA) certification by the end of 2026.
Despite the significant fuel efficiencies gained over the past decade, we recognize we have a responsibility to do more, and one of our ESG goals is to reduce emissions through the end of this decade. We have an internal Fuel Steering Committee that meets monthly to discuss various alternatives to conserve fuel.
Despite the significant fuel efficiencies gained over the past decade, we recognize we have a responsibility to do more, and one of our sustainability goals is to reduce our emissions intensity through the end of this decade. We have an internal Fuel Steering Committee that meets monthly to discuss various alternatives to conserve fuel.
The Resort consists of more than 500 hotel rooms, 189 one-, two- and three-bedroom suites with full kitchens and washer-dryers, 20 restaurants, including seven stand-alone restaurants, a food hall with 11 food and beverage concepts and two other poolside options. The two-bedroom suites can be separately locked allowing for up to 785 keys on the property.
The Resort consists of more than 500 hotel rooms, 189 one-, two- and three-bedroom suites with full kitchens and washer-dryers, 18 restaurants, including five stand-alone restaurants, a food hall with 11 food and beverage concepts and two other poolside options. The two-bedroom suites can be separately locked allowing for up to 785 keys on the property.
Allways Rewards®, with more than 17 million members at December 31, 2023, allows us to develop and maintain direct, long-term relationships with our customers. Similar to our cardholder program, we provide greater value to our Allways members through personalized promotions and targeted communications which we expect will result in customer loyalty and increased revenues over time.
Allways Rewards®, with more than 18 million members at December 31, 2024, allows us to develop and maintain direct, long-term relationships with our customers. Similar to our cardholder program, we provide greater value to our Allways members through personalized promotions and targeted communications which we expect will result in customer loyalty and increased revenues over time.
This practice of significantly reduced flying during the off-peak periods leads to consistently high load factors, and further enhances fuel efficiency. We offer all nonstop flights, directly from 123 cities as of February 1, 2024, providing service in many markets abandoned or under-served by larger carriers.
This practice of significantly reduced flying during the off-peak periods leads to consistently high load factors, and further enhances fuel efficiency. We offer all nonstop flights, directly from 122 cities as of February 1, 2025, providing service in many markets abandoned or under-served by larger carriers.
Based on survey and interview results, we identified the following topics as material to Allegiant: • Environmental - Emissions, Energy, Waste and Hazardous Materials 11 • Social - Product Quality and Safety, Accident and Safety Management, Human Rights, Benefits and Work-Life Balance, Non-Discrimination, Employee Health and Safety, Employment, Diversity, Equity and Inclusion, Employee Training and Development, Labor Management, Local Job Creation • Governance - Business Ethics and Integrity, Anti-Corruption, Competitive Behavior, Data Security, Customer Privacy These material topics will continue to guide the development of our annual ESG reports.
Based on survey and interview results, we identified the following topics as material to Allegiant: • Environmental - Emissions, Energy, Waste and Hazardous Materials • Social - Product Quality and Safety, Accident and Safety Management, Human Rights, Benefits and Work-Life Balance, Non-Discrimination, Employee Health and Safety, Employment, Employee Training and Development, Labor Management, Local Job Creation • Governance - Business Ethics and Integrity, Anti-Corruption, Competitive Behavior, Data Security, Customer Privacy These material topics will continue to guide the development of our annual sustainability reports.
We offer third party travel products such as hotel rooms and ground transportation (rental cars and hotel shuttle products) for sale to our passengers. The marketing component of revenue related to our co-brand credit card is also included in this category. Fixed fee contract air transportation.
We offer third party travel products such as hotel rooms, ground transportation (rental cars and hotel shuttle products) and travel insurance from a third party insurer for sale to our passengers. The marketing component of revenue related to our co-brand credit card is also included in this category. Fixed fee contract air transportation.
The Resort has 60,000 square feet of convention and meeting space which can accommodate up to 1,200 attendees. The convention area includes innovative technology and features two waterfront ballrooms. Accompanying the ballrooms are two executive boardrooms, 12 meeting rooms, and an ideation suite with separate breakout rooms. We are actively selling to groups.
The Resort has 60,000 square feet of convention and meeting space which can accommodate up to 1,200 attendees. The convention area includes innovative technology and features two waterfront ballrooms. Accompanying the ballrooms are two executive boardrooms, 12 meeting rooms, and an ideation suite with separate breakout rooms.
To effectively hedge against fuel cost increases, during periods of high fuel cost we will often pull back capacity, particularly in off peak periods, and focus our flying in peak periods which drives higher fares to offset the fuel cost increases.
To effectively hedge against fuel cost increases, during periods of high fuel cost we will often reduce capacity, particularly in off peak periods, and focus our flying in peak periods which drives higher fares to offset the fuel cost increases.
In many cases, we face competition from more than one other airline on the same route, resulting in a total of 127 competitive routes as of that date and 428 routes with no current nonstop competition. We may also experience additional competition based on recent route announcements of other airlines.
In many cases, we face competition from more than one other airline on the same route, resulting in a total of 145 competitive routes as of that date and 440 routes with no current nonstop competition. We may also experience additional competition based on recent route announcements of other airlines.
We expect to continue to acquire used aircraft as necessary to support planned growth and aircraft retirements. Low distribution costs. Our nontraditional marketing approach reduces distribution costs. We do not sell our product through outside sales channels, thus avoiding the fees charged by travel websites (Expedia, Orbitz or Travelocity) and traditional global distribution systems (“GDS”) (Sabre or Worldspan).
We continue to consider the acquisition of used aircraft as necessary to support planned growth and aircraft retirements. Low distribution costs. Our nontraditional marketing approach reduces distribution costs. We do not sell our product through outside sales channels, thus avoiding the fees charged by travel websites (Expedia, Orbitz or Travelocity) and traditional global distribution systems (“GDS”) (Sabre or Worldspan).
The FAA has the authority to investigate all matters within its purview, to modify, suspend or revoke our authority to provide air transportation, to approve or disapprove the addition of aircraft to our operation specifications, and to modify, suspend or revoke FAA licenses issued to individual personnel, for failure to comply with FAA regulations.
The FAA has the authority to investigate all matters within its purview, to modify, suspend or revoke our authority to provide air transportation, to approve or disapprove the addition of scheduled service to new cities and aircraft to our operation specifications, and to modify, suspend or revoke FAA licenses issued to individual personnel, for failure to comply with FAA regulations.
These topics are included in our ESG reports. • Publish ESG reports referencing the Global Reporting Initiative (GRI). • Provide ongoing carbon emissions reporting of Scope 1, 2 and 3 greenhouse gas (GHG) emissions. • Establish ESG targets and environmental target achievement plans, which we published in our 2022 ESG report. In 2023, we issued our second annual ESG report.
These topics are included in our sustainability reports. • Publish sustainability reports referencing the Global Reporting Initiative (GRI). • Provide ongoing carbon emissions reporting of Scope 1, 2 and 3 greenhouse gas (GHG) emissions. • Establish Sustainability targets and environmental target achievement plans, which we published in our 2022 sustainability report. In 2024, we issued our third annual sustainability report.
Only after this process has been exhausted may either party resort to self-help, such as a work stoppage by the union and its members. In 2023, we and the union that represents our pilots jointly requested the appointment of a mediator through the NMB. The NMB has appointed a mediator and the parties continue to participate in mediated negotiations.
Only after this process has been exhausted may either party resort to self-help, such as a work stoppage by the union and its members. In 2023, we and the union that represents our pilots jointly requested the appointment of a mediator through the NMB.
We have increased revenue related to these ancillary items from $5.87 per passenger in 2004 to $72.90 per passenger in 2023. We own and manage our own eCommerce platform, which gives us the ability to modify our system to enhance third party product offerings based on specific needs.
We have increased revenue related to these ancillary items from $5.87 per passenger in 2004 to $75.83 per passenger in 2024. We own and manage our own eCommerce platform, which gives us the ability to modify our system to enhance third party product offerings based on specific needs.
Our customers can only purchase air travel at our airport ticket counters or, for a fee, on our website or through our telephone reservation center. The purchase of air travel through our website is the least expensive form of distribution for us and accounted for 95.8 percent of our scheduled service revenue during 2023. Data driven.
Our customers can only purchase air travel at our airport ticket counters or, for a fee, on our website or through our telephone reservation center. The purchase of air travel through our website is the least expensive form of distribution for us and accounted for 93.6 percent of our scheduled service revenue during 2024. Data driven.
As a result, there is potential for increased competition on our routes. As of December 31, 2023, we face mainline non-stop competition on approximately 23 percent of our operating and announced routes.
As a result, there is potential for increased competition on our routes. As of December 31, 2024, we face mainline non-stop competition on approximately 25 percent of our operating and announced routes.
We offer various bundled ancillary products whereby customers can elect to purchase multiple ancillary products at a discount. 8 Revenue from ancillary items will continue to be a key component in our total average fare as we believe leisure travelers are less sensitive to ancillary fees than the base fare.
We offer various bundled ancillary products allowing customers to elect to purchase multiple ancillary products at a discount from the combined prices of the individual products. 8 Revenue from ancillary items will continue to be a key component in our total average fare as we believe leisure travelers are less sensitive to ancillary fees than the base fare.
The policies principally provide coverage for public liability, war-risk, passenger liability, baggage and cargo liability, property damage, including coverages for loss or damage to our flight equipment, directors and officers insurance and workers’ compensation. We also maintain what we believe to be customary insurance on Sunseeker Resort and as required by the terms of our construction loan.
The policies principally provide coverage for public liability, war-risk, passenger liability, baggage and cargo liability, property damage, including coverages for loss or damage to our flight equipment, directors and officers insurance and workers’ compensation. We also maintain what we believe to be customary insurance on Sunseeker Resort.
We seek to closely match our available capacity with demand trends in providing only nonstop service from under-served cities to leisure destinations.
We focus on leisure travel and seek to closely match our available capacity with demand trends in providing only nonstop service from under-served cities to leisure destinations.
For example, in 2023 during our peak demand period in July, we averaged 7.4 system block hours per aircraft per day while in September, we averaged only 4.5 system block hours per aircraft per day when leisure demand is seasonally lower.
For example, in 2024 during our peak demand period in June, we averaged 7.8 system block hours per aircraft per day while in September, we averaged only 4.5 system block hours per aircraft per day when leisure demand is seasonally lower.
Unlike many air carriers focused on business travel, our strategy is to provide access to affordable travel for leisure travelers who highly value their vacations and are likely to take vacations in any economic environment. We are a low utilization air carrier focusing on leisure travel.
Unlike many air carriers focused on business travel, our strategy is to provide access to affordable travel for leisure travelers who highly value their vacations and are likely to take vacations in any economic environment.
The CBAs covering our dispatchers and maintenance technicians do not become amendable until 2026 and 2028, respectively. The CBAs covering our pilots and flight attendants became amendable in 2021 and 2022, respectively, and we are currently engaged in collective bargaining with the respective representatives of those employees for successor agreements.
The CBAs covering our dispatchers, maintenance technicians, and flight attendants do not become amendable until 2026, 2028, and 2029, respectively. The CBA covering our pilots became amendable in 2021 and we are currently engaged in collective bargaining with the representatives of those employees for a successor agreement.
Marketing and Distribution Core to Allegiant’s business model is our direct-to-customer distribution. In lieu of the Global Distribution System (GDS) distribution points used by most airlines, allegiant.com is our primary distribution method. This low-cost strategy results in significant cost savings by avoiding fees associated with GDS.
Marketing and Distribution Core to Allegiant’s business model is our direct-to-customer distribution. In lieu of the Global Distribution System ("GDS") and online travel agency ("OTA") distribution systems used by most airlines, allegiant.com is our primary distribution method. This low-cost strategy results in significant cost savings by avoiding fees associated with the GDS or OTAs.
For five years in a row, Allegiant's co-brand credit card has been voted as the No. 1 Best Airline Credit Card and our non-card loyalty program Allways Rewards® was recently rated as the number two Best Frequent Flyer Program in USA Today's 10 Best Loyalty/Rewards Readers' Choice Awards.
For six years in a row, Allegiant's co-brand credit card has been voted as the No. 1 Best Airline Credit Card and in 2024, our non-card loyalty program Allways Rewards® was once again rated as the number one Best Frequent Flyer Program in USA Today's 10 Best Loyalty/Rewards Readers' Choice Awards.
Our agreement with Boeing and CFM International to purchase 50 Boeing 737 MAX aircraft powered by LEAP 1-B engines, with deliveries beginning in 2024, will provide us with new aircraft and more environmentally friendly engines.
Our agreement with Boeing and CFM International to purchase 50 Boeing 737 MAX aircraft powered by LEAP 1-B engines, with deliveries expected through 2027, will provide us with new aircraft and more environmentally friendly engines.
During this period, we saw significant improvement in fuel efficiency. During 2023, we consumed 225 million gallons of fuel averaging 83.4 ASMs per gallon of fuel, a 32 percent improvement when compared to 2012.
During this period, we saw significant improvement in fuel efficiency. During 2024, we consumed 227 million gallons of fuel averaging 83.5 ASMs per gallon of fuel, a 32.5 percent improvement when compared to 2012.
By way of illustration, in 2023, during our peak demand period in July, we averaged 7.4 system block hours per aircraft per day while in September, our lowest month for demand, we averaged only 4.5 system block hours per aircraft per day, which is almost 40 percent less than the average system block hours in July.
By way of illustration, in 2024, during our peak demand period in June, we averaged 7.8 system block hours per aircraft per day while in September, our lowest month for demand, we averaged only 4.5 system block hours per aircraft per day, which is approximately 42 percent less than the average system block hours in June.
We provide scheduled air transportation on limited-frequency, nonstop flights predominantly between under-served cities and popular leisure destinations. As of February 1, 2024, our operating fleet consisted of 126 Airbus A320 series aircraft. As of that date, we were selling travel on 555 routes to 124 cities.
We provide scheduled air transportation on limited-frequency, nonstop flights predominantly between under-served cities and popular leisure destinations. As of February 1, 2025, our operating fleet consisted of 119 Airbus A320 series aircraft and four Boeing 737 series aircraft. As of that date, we were selling travel on 577 routes to 122 cities.
Significant increases in fuel costs could materially affect our operating results and profitability. We do not use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future. Our largely variable cost structure allows us to adjust capacity accordingly based on the fuel environment.
We do not use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future. Our largely variable cost structure allows us to adjust capacity accordingly based on the fuel environment.
We cannot predict what other matters might be considered in the future by the FAA, the DOT, the TSA, other agencies, or Congress, nor can we judge what impact, if any, the implementation of any of these proposals or changes might have on our business. Civil Reserve Air Fleet .
We cannot predict what other matters might be considered in the future by the FAA, the DOT, the TSA, other agencies, or Congress or the impact of the current Presidential administration may have on existing initiatives, nor can we judge what impact, if any, the implementation of any of these proposals or changes might have on our business.
The scheduled service routes as of February 1, 2024 are summarized below (includes 543 active routes, and 12 newly announced routes as of February 1, 2024, which will begin service in 2024): Routes to Orlando (MCO & SFB) 72 Routes to Las Vegas 61 Routes to Tampa/St.
The scheduled service routes as of February 1, 2025 are summarized below (includes 533 active routes, and 44 newly announced routes as of February 1, 2025, which will begin service in 2025): Routes to Orlando (MCO & SFB) 72 Routes to Tampa/St.
As of February 1, 2024, we serve 543 active routes between 90 origination cities and 33 leisure destinations in 42 states, and as of that date, we had announced 12 new routes scheduled to begin service in 2024.
As of February 1, 2025, we serve 533 active routes between 86 origination cities and 36 leisure destinations in 42 states, and as of that date, we had announced 44 new routes scheduled to begin service in 2025.
Full-time equivalent employees consisted of approximately 1,200 pilots, 1,550 flight attendants, 650 airport operations personnel, 750 maintenance personnel, 200 reservation agents, 50 flight dispatchers, and 1,200 management and other personnel. Additionally, we employed 1,043 full-time equivalent employees at our newly opened Sunseeker Resort as of the same date.
Full-time equivalent employees consisted of approximately 1,375 pilots, 1,900 flight attendants, 775 airport operations personnel, 825 maintenance personnel, 200 reservation agents, 50 flight dispatchers, and 875 management and other personnel. Additionally, we employed approximately 700 full-time equivalent employees at Sunseeker Resort as of the same date.
Our airline operating CASM, excluding fuel, special charges, and Sunseeker Resort) was 8.12 ¢ in 2023, which we believe is significantly lower than the Industry average. We continue to focus on maintaining low operating costs through the following tactics and strategies: 7 Low aircraft ownership costs.
Our airline operating cost per available seat mile (CASM), excluding fuel, special charges, and Sunseeker Resort was 8.56 ¢ in 2024, which we believe is among the lowest in the industry and significantly lower than the legacy carriers. We continue to focus on maintaining low operating costs through the following tactics and strategies: Low aircraft ownership costs.
We achieve low aircraft ownership costs by opportunistically acquiring aircraft and by primarily owning our aircraft. As of February 1, 2024, we own or finance lease all but 17 of the aircraft in our operating fleet. In addition, we believe that we properly balance lower aircraft acquisition costs and operating costs to minimize our total costs.
We achieve low aircraft ownership costs by opportunistically acquiring aircraft and by primarily owning our aircraft. As of February 1, 2025, we own or finance lease all but 17 of the aircraft in our operating fleet.
Federal law recognizes the right of airport operators with special noise problems to implement local noise abatement procedures so long as those procedures do not interfere unreasonably with interstate and foreign commerce and the national air transportation system.
These or similar initiatives may also be modified by the current Presidential administration. Federal law recognizes the right of airport operators with special noise concerns to implement local noise abatement procedures so long as those procedures do not interfere unreasonably with interstate and foreign commerce and the national air transportation system.
In this effort, we have provided no-cost supply flights and volunteer transport to support Red Cross hurricane recovery efforts in Florida and Puerto Rico in recent years.
We also partner with the American Red Cross, supporting disaster preparedness, relief and recovery efforts in communities we serve. In this effort, we have provided no-cost supply flights and volunteer transport to support Red Cross hurricane recovery efforts in Florida and Puerto Rico in recent years.
Similarly, in December 2022, the EPA adopted particulate matter emission standards and test procedures for newly-designed aircraft, with immediate effect, and for in-production aircraft, effective 2028. In February 2024, the FAA adopted regulations implementing these EPA requirements. These new EPA and FAA standards and procedures harmonize with International Civil Aviation Organization ("ICAO") requirements.
Similarly, in December 2022, the EPA adopted particulate matter emission standards and test procedures for newly-designed aircraft, with immediate effect, and for in-production aircraft, effective 2028. In February 2024, the FAA adopted regulations setting fuel efficiency requirements for certification of certain airplanes implementing these EPA requirements.
Of these routes, 428 of them are unique routes which do not have any current nonstop competition. In this document, references to "Airbus A320 series aircraft" are intended to describe both Airbus A319 and A320 aircraft. Ancillary air-related products and services. We provide unbundled air-related services and products in conjunction with air transportation for an additional cost to customers.
Of these routes, 432 of them are unique city pairs which do not have any current nonstop competition with other airlines. In this document, references to "Airbus A320 series aircraft" are intended to describe both Airbus A319 and A320 aircraft. Ancillary air-related products and services.
We do this by flying only on days with sufficient market demand. In 2023, we were able to profitably fly a disproportionately low 11 percent of our scheduled ASMs on off-peak days (Tuesdays and Wednesdays).
In 2024, we were able to profitably fly a disproportionately low 11 percent of our scheduled ASMs on off-peak days (Tuesdays and Wednesdays).
The aircraft we currently operate are not affected by these standards, and those we have on order would be affected only if manufactured after December 31, 2027.
These new EPA and FAA standards and procedures harmonize with International Civil Aviation Organization ("ICAO") requirements. The aircraft we currently operate are not affected by these standards, and those we have on order would be affected only if manufactured after December 31, 2027.
As of December 31, 2023, the composition of our fleet included a mix of A319 and A320 aircraft with seat configurations ranging from 156 to 186 seats, some of which are fitted with fuel-efficient Sharklets. We expect to see further fuel efficiency once the 737 MAX aircraft are added to our fleet.
As of December 31, 2024, the composition of our fleet included a mix of A319 and A320 aircraft with seat configurations ranging from 156 to 186 seats, some of which are fitted with fuel-efficient Sharklets. We also received delivery of our first four 737 MAX aircraft in late 2024 and have begun to see improved fuel efficiency on those aircraft.
We strive to build and maintain a diverse environment that people want to join, and where team members want to stay to build their careers. Our total rewards philosophies support these objectives.
We have always hired and will continue to hire based on merit. We strive to build and maintain an environment that people want to join, and where team members want to stay to build their careers. Our total rewards philosophies support these objectives.
Department of Agriculture's Animal and Plant Health Inspection Service ("APHIS"). There are also FAA-approved Passenger Facility Charges ("PFCs") imposed by most of the airports we serve. Like FET, air carriers are required to collect these fees from passengers and pass them through to the respective federal agency or airport authority.
There are also FAA-approved Passenger Facility Charges ("PFCs") imposed by most of the airports we serve. Like FET, air carriers are required to collect these fees from passengers and pass them through to the respective federal agency or airport authority. These fees do not need to be reauthorized, although their amounts may be revised periodically.
Our proposed U.S.-Mexico alliance with Viva, described above, received approval by Mexico’s Federal Economic Competition Commission (COFECE) in October 2022; however, that approval will require renewal (which is not assured) in view of the suspension of DOT processing described above. International flights are also subject to U.S.
Our proposed U.S.-Mexico alliance with Viva, described above, received approval by Mexico’s Federal Economic Competition Commission (COFECE) in October 2022; and subsequent renewal in September 2024 while the U.S. DOT has continued their suspension of processing described above. International flights are also subject to U.S.
The TSA has enforcement powers similar to the DOT’s and FAA’s described above. It also has the authority to issue regulations, including in cases of emergency, the authority to do so without advance notice, including issuance of a grounding order as occurred on September 11, 2001. Aviation Taxes and Fees .
We operate in accordance with a TSA-approved security program. The TSA has enforcement powers similar to the DOT’s and FAA’s described above. It also has the authority to issue regulations and security directives, including in cases of emergency, without advance notice, which may encompass actions up to and including issuance of a grounding order as occurred on September 11, 2001.
Community Involvement We have worked with the Make-A-Wish® Foundation since 2012 by flying "wish kids" and their families to their desired destinations, at no cost, and donating a portion of proceeds from our in-flight Wingz Kids Snack Pack to the organization. To kick off 2023, we celebrated a special milestone welcoming our 2000th wish kid on board an Allegiant flight.
Community Involvement We have worked with the Make-A-Wish® Foundation since 2012 by flying "wish kids" and their families to their desired destinations, at no cost, and donating a portion of proceeds from our in-flight Wingz Kids Snack Pack to the organization. To date, we have flown more than 2,000 wish kids - along with their families - to their destinations.
We overlap with Southwest Airlines on 77 routes, Spirit Airlines on 34 routes, Frontier Airlines on 33 routes, American Airlines on 17 routes, Breeze Airways on 17 routes, Delta Airlines on 16 routes, United Airlines on nine routes, JetBlue Airways on seven routes, Sun Country Airlines on five routes and Alaska Airlines on three routes.
We overlap with Southwest Airlines on 78 routes, Spirit Airlines on 28 routes, Frontier Airlines on 30 routes, American Airlines on 17 routes, Breeze Airways on 30 routes, Delta Airlines on 15 routes, United Airlines on 11 routes, JetBlue Airways on seven routes, Sun Country Airlines on five routes and Alaska Airlines on two routes.
In our fixed fee operations, we compete with other scheduled airlines in addition to independent passenger charter airlines. We also compete with aircraft owned or controlled by large tour companies. The basis of competition in the fixed fee market is cost, equipment capabilities, service, reputation, and schedule flexibility.
In our fixed fee operations, we compete with other scheduled airlines in addition to independent passenger charter airlines. We also compete with aircraft owned or controlled by large tour companies.
We also provide $40,000 worth of flight vouchers on an annual basis to hundreds of local elementary and high school teachers as part of The Smith Center for the Performing Arts’ Heart of Education Awards program. Aircraft Maintenance We have a Federal Aviation Administration ("FAA") approved maintenance program, which is administered by our maintenance department headquartered in Las Vegas.
We also provide $40,000 worth of flight vouchers on an annual basis to hundreds of local elementary and high school teachers as part of The Smith Center for the Performing Arts’ Heart of Education Awards program.
Petersburg 59 Routes to Punta Gorda 49 Routes to Phoenix (AZA & PHX) 46 Routes to Destin 31 Routes to Sarasota 26 Other routes 211 Total routes 555 The number of routes served varies from time to time as some routes are offered seasonally or on a temporary basis.
Petersburg 62 Routes to Las Vegas 55 Routes to Punta Gorda 50 Routes to Phoenix (AZA & PHX) 47 Routes to Sarasota 35 Routes to Destin 33 Other routes 223 Total routes 577 The number of routes served varies from time to time as some routes are offered seasonally or on a temporary basis.
In December 2021, we opportunistically negotiated an agreement with The Boeing Company to purchase 50 newly manufactured 737MAX aircraft with options to purchase additional 737MAX aircraft. We amended this agreement in 2023 with revised terms that now provide us with options to purchase up to an additional 80 737MAX aircraft.
The process culminated with our entering into an agreement with The Boeing Company ("Boeing") and CFM International ("CFMI") to purchase 50 newly manufactured 737 MAX aircraft with options to purchase additional 737 MAX aircraft. We amended this agreement in 2023 with revised terms that now provide us with options to purchase up to an additional 80 737 MAX aircraft.
During the construction of our Sunseeker Resort in Charlotte Harbor, Florida, we implemented design features and strategies to promote environmental efficiency and resilience. We intend to keep ESG embedded within day-to-day operations and the guest experience.
The clubhouse was renovated at the same time and the 10,800 square foot facility offers a restaurant, bar, pro shop and event facilities. During the construction of our Sunseeker Resort in Charlotte Harbor, Florida, we implemented design features and strategies to promote environmental efficiency and resilience. We intend to keep ESG embedded within day-to-day operations and the guest experience.
Our third party product offerings give our customers the opportunity to purchase hotel rooms, rental cars and airport shuttle service. Our third party offerings are available to customers based on our agreements with various travel and leisure companies. For example, we have partnered exclusively with Enterprise Holdings Inc. for the sale of rental cars packaged with air travel.
Our third party product offerings give our customers the opportunity to purchase hotel rooms, rental cars and airport shuttle service as well as travel insurance from a third party. Our third party offerings are available to customers based on our agreements with various travel and leisure companies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

81 edited+16 added−12 removed69 unchanged
Biggest changeAlthough we have entered into agreements which had undrawn financing commitments of $25.1 million for our Boeing order at February 1, 2024, we have secured revolving lines of credit for up to $275.0 million to offset the risk that financing may not be available on acceptable terms when needed and while we believe debt financing will be available for the aircraft we will acquire, we cannot provide assurance that we will be able to secure such financing on terms attractive to us or at all.
Biggest changeWe typically finance our aircraft through debt financing. As of February 1, 2025, we have committed financing for our next four Boeing 737 MAX deliveries and we have secured revolving lines of credit for up to $275.0 million to offset the risk that financing may not be available on acceptable terms when needed.
We are subject to a Nevada statute (NRS 78.411 through 78.444) that prohibits us from engaging in certain “combinations,” including mergers, consolidations, sales and leases of assets, issuances of securities and similar transactions, with a stockholder who is the beneficial owner of 10 percent or more of our stock (an “interested stockholder”), for a period of up to four years after the date that person became an interested stockholder, unless either our board of directors approves, in advance, the transaction by which the person became an interested stockholder, or such combination is approved at a meeting by at least 60 percent of voting power of our stock that is not beneficially owned by the interested stockholder, or its affiliates or associates.
We are subject to a Nevada statute (NRS 78.411 through 78.444) that prohibits us from engaging in certain “combinations,” including mergers, consolidations, sales and leases of assets, issuances of securities and similar transactions, with a stockholder who is the beneficial owner of 10 percent or more of our stock (an “interested stockholder”), for a period of up to four years after the date that person became an interested stockholder, unless either our board of directors approves, in advance, the transaction by which the person became an interested stockholder, or such combination is approved at a meeting by at least 60 percent of voting power of our stock that is not beneficially owned by the interested stockholder or its affiliates.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including: • the impact of pandemics and other communicable diseases on air travel and any related government restrictions impacting air travel • fuel price volatility, and the effect of economic and geopolitical factors and worldwide oil supply and consumption on fuel availability • announcements concerning our competitors, new market entrants, the airline industry, or the economy in general • strategic actions by us or our competitors, such as acquisitions or restructurings • media reports and publications about the safety of our aircraft or the aircraft types we operate • new regulatory pronouncements and changes in regulatory guidelines • announcements concerning our business strategy • our ability to grow service in the future as rapidly as the market anticipates • general and industry-specific economic conditions • changes in financial estimates or recommendations by securities analysts • substantial sales of our common stock or other actions by investors with significant shareholdings • additional issuances of our common stock • labor costs or work actions • general market conditions The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including: • the impact of pandemics and other communicable diseases on air travel and any related government restrictions impacting air travel • fuel price volatility, and the effect of economic and geopolitical factors and worldwide oil supply and consumption on fuel availability • labor costs or work actions • announcements and developments concerning our competitors, new market entrants, the airline industry, or the economy in general • strategic actions by us or our competitors, such as acquisitions or restructurings • media reports and publications about the safety of our aircraft or the aircraft types we operate • airline accidents • new regulatory pronouncements and changes in regulatory guidelines • announcements concerning our business strategy • our ability to grow service in the future as rapidly as the market anticipates • general and industry-specific economic conditions • changes in financial estimates or recommendations by securities analysts • substantial sales of our common stock or other actions by investors with significant shareholdings • additional issuances of our common stock • general market conditions The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies.
In addition, another Nevada statute (NRS 78.378 through 78.3793) may eliminate the voting rights of shares of our stock to the extent the shares are acquired by a holder in connection with, or within 90 days prior to, an acquisition of a “controlling interest” 27 that causes such holder to exceed certain thresholds (one-fifth, one-third and a majority or more) of the total voting power of our stock.
In addition, another Nevada statute (NRS 78.378 through 78.3793) may eliminate the voting rights of shares of our stock to the extent the shares are acquired by a holder in connection with, or within 90 days prior to, an acquisition of a “controlling interest” that causes such holder to exceed certain thresholds (one-fifth, one-third and a majority or more) of the total voting power of our stock.
Our business could be harmed by any circumstances causing a reduction in demand for air transportation to one or more of these markets, or our other leisure destinations, such as adverse changes in local economic conditions, negative public perception of the particular city, significant price increases, or the impact of future terrorist attacks or natural disasters.
Our business could be harmed by any circumstances causing a reduction in demand for air transportation to one or more of these markets, or our other leisure destinations, such as adverse changes in local economic conditions, negative public perception of the city, significant price increases, or the impact of future terrorist attacks or natural disasters.
The future cost of complying with these and other laws, rules and regulations, including new federal legislative and DOT regulatory requirements in the consumer-protection area, cannot be predicted and could significantly increase our costs of doing business. Over the past 15 years the DOT has adopted revisions and expansions to a variety of its consumer protection regulations and policies.
The future cost of 24 complying with these and other laws, rules and regulations, including new federal legislative and DOT regulatory requirements in the consumer-protection area, cannot be predicted and could significantly increase our costs of doing business. Over the past 15 years the DOT has adopted revisions and expansions to a variety of its consumer protection regulations and policies.
As a result of these restrictive covenants, we may be limited in how we conduct business, and we may be unable to raise additional debt or equity financing to operate during difficult times or to take advantage of new business opportunities. Any inability to obtain financing for aircraft under contract could harm our fleet growth plan.
As a result of these restrictive covenants, we may be limited in how we conduct business, and we may be unable to raise additional debt or equity financing to operate during difficult times or to take advantage of new business opportunities. 22 Any inability to obtain financing for aircraft under contract could harm our fleet growth plan.
If we are unable to reach agreement on the terms of collective bargaining agreements in the future, or we experience wide-spread employee dissatisfaction, attrition in these work groups, difficulty in hiring sufficient personnel or work slow downs or stoppages could have an adverse effect on our operations and future results.
If we are unable to reach agreement on the terms of collective bargaining agreements in the future, or if we experience wide-spread employee dissatisfaction, higher attrition in these work groups, difficulty in hiring sufficient personnel or work slow downs or stoppages could have an adverse effect on our operations and future results.
Over a period of 20 months, the DOT’s review and 25 analysis progressed substantially, but on July 31, 2023, the DOT suspended processing of the joint application pending resolution of an aviation trade dispute between the governments of Mexico and the United States that arose earlier in 2023.
Over a period of 20 months, the DOT’s review and analysis progressed substantially, but on July 31, 2023, the DOT suspended processing of the joint application pending resolution of an aviation trade dispute between the governments of Mexico and the United States that arose earlier in 2023.
We cannot predict whether legislation to implement these goals will pass the Congress or, if enacted into law, how it ultimately would apply to our operations or the airline industry.
We cannot predict whether further legislation to implement these goals will pass the Congress or, if enacted into law, how it ultimately would apply to our operations or the airline industry.
FAA requirements cover, among other things, retirement of older aircraft, fleet integration of newer aircraft, safety management systems, collision avoidance systems, airborne windshear avoidance systems, noise abatement, aircraft weight and payload limits, assumed average passenger weight, employee drug and alcohol testing, pilot and flight attendant duty time limitations, and increased inspection and maintenance procedures to be conducted on aging aircraft.
FAA requirements cover, among other things, retirement of older aircraft, fleet integration of newer aircraft, safety management systems, collision avoidance systems, airborne windshear avoidance systems, noise abatement, aircraft weight and payload limits, assumed average passenger weight, employee drug and alcohol testing, pilot training and certification, pilot and flight attendant duty time limitations, and increased inspection and maintenance procedures to be conducted on aging aircraft.
The FAA is working with Boeing to address quality control procedures at Boeing and its suppliers in the aftermath of the recent emergency landing of an Alaska Airlines Boeing 737 MAX 9 aircraft and subsequent temporary grounding of all 737 MAX 9 aircraft pending inspections of the door plug which was the source of the issue.
The FAA is working with Boeing to address quality control procedures at Boeing and its suppliers in the aftermath of the 2024 emergency landing of an Alaska Airlines Boeing 737 MAX 9 aircraft and subsequent temporary grounding of all 737 MAX 9 aircraft pending inspections of the door plug which was the source of the issue.
We may have difficulty replacing management or other key personnel who leave and, therefore, the loss of the services of any of these individuals could harm our business. Our reputation and brand could be harmed if various stakeholders are not satisfied with our ESG disclosures, goals and progress.
We may have difficulty replacing management or other key personnel who leave and, therefore, the loss of the services of any of these individuals could harm our business. Our reputation and brand could be harmed if various stakeholders are not satisfied with our sustainability disclosures, goals and progress.
Non-U.S. citizens will be able to own and vote shares of our common stock only if the combined ownership by all non-U.S. citizens does not violate these requirements. 28 Item 1B. Unresolved Staff Comments None.
Non-U.S. citizens will be able to own and vote shares of our common stock only if the combined ownership by all non-U.S. citizens does not violate these requirements. 27 Item 1B. Unresolved Staff Comments None.
If we are unable to refinance our indebtedness or find alternative means of financing our operations, we may be required to take actions that are inconsistent with our current business practices or strategy. 22 Covenants in our senior secured notes, revolving credit facility and construction loan could limit how we conduct our business, which could affect our long-term growth potential.
If we are unable to refinance our indebtedness or find alternative means of financing our operations, we may be required to take actions that are inconsistent with our current business practices or strategy. Covenants in our senior secured notes and revolving credit facility could limit how we conduct our business, which could affect our long-term growth potential.
Like other airlines, we are subject to delays caused by factors beyond our control, including air traffic congestion at airports and en route, adverse weather conditions, increased security measures, and the outbreak of disease. Delays frustrate passengers and increase costs, which in turn could affect profitability.
Like other airlines, we are subject to delays caused by factors beyond our control, including air traffic congestion at airports and en route, air traffic controller staffing and limitations, adverse weather conditions, increased security measures, and the outbreak of disease. Delays frustrate passengers and increase costs, which in turn could affect profitability.
Our business could be harmed if we lose the services of key personnel. Our business depends upon the efforts of our chief executive officer, Maury Gallagher, president, Gregory Anderson, and a small number of executive management and operating personnel. We do not currently maintain key-man life insurance on Mr. Gallagher, Mr. Anderson or any other executives.
Our business could be harmed if we lose the services of key personnel. Our business depends upon the efforts of our chief executive officer and president, Gregory Anderson, and a small number of executive management personnel. We do not currently maintain key-man life insurance on Mr. Anderson or any other executives.
The extent of impact of any future pandemic or contagion on our business and our financial and operational performance will depend on the duration, spread, severity and recurrences of the disease; the possible imposition of testing requirements before domestic travel; the duration and scope of any federal, state and local government restrictions; the availability and effectiveness 24 of vaccines; the extent of the impact of the outbreak on overall demand for air travel; and our access to capital during the affected periods, all of which could be highly uncertain and cannot be predicted.
The extent of impact of any future pandemic or contagion on our business and our financial and operational performance will depend on factors such as the duration, spread, severity and recurrences of the disease; the possible imposition of testing requirements before air travel; the duration and scope of any federal, state and local government restrictions; the availability and effectiveness of vaccines; the extent of the impact of the outbreak on overall demand for air travel; and our access to capital during the affected periods, all of which could be highly uncertain and cannot be predicted.
In addition, such security related events could be widely publicized and could adversely affect our reputation with our customers, vendors and stockholders, could harm our competitive position particularly with respect to our ecommerce operations, and could thereby materially adversely affect our operations, revenues, results of operations and financial position.
In addition, such security related events could be widely publicized and could adversely affect our reputation with our customers, vendors and stockholders, could harm our competitive position particularly with respect to our e-commerce operations, and could thereby materially adversely affect our operations, revenues, results of operations and financial position.
In 2023, we implemented many of these systems. However, there is no assurance that these requirements will be met in time for the expected launch of these services. For Mexican routes to be operated by VivaAerobus, we will be relying on them to provide our customers with the quality flight experience our customers expect when traveling on our airline.
Although we have implemented many of these systems, there is no assurance that these requirements will be met in time for the expected launch of these services. For Mexican routes to be operated by VivaAerobus, we will be relying on them to provide our customers with the quality flight experience our customers expect when traveling on our airline.
As our aircraft age and as we add a new aircraft type, we will need to rely further on outside MRO (maintenance, repair, overhaul) facilities to complete the necessary work. Currently, there is a concern about whether the capacity of the MRO’s we use is sufficient to handle all of our needed maintenance as well as their other business.
As our aircraft age, we will need to rely further on outside MRO (maintenance, repair, overhaul) facilities to complete the necessary work. Currently, there is a concern about whether the capacity of the MRO’s we use is sufficient to handle all of our needed maintenance as well as their other business.
We cannot ensure that passengers will pay for additional ancillary products and services we offer in the future, or that they will continue to pay for the ancillary products and services we currently offer. Regulatory changes could also adversely affect our ancillary revenue opportunities.
We cannot assure investors that passengers will pay for additional ancillary products and services we offer in the future, or that they will continue to pay for the ancillary products and services we currently offer. Regulatory changes could also adversely affect our ancillary revenue opportunities.
Otherwise, the success of the joint alliance and our reputation may suffer. Increases in taxes could impact demand for our services. In 2024, Congress may consider legislation that could increase the amount of Federal Excise Tax (“FET”) and/or one or more of the other government fees imposed on air travel.
Otherwise, the success of the joint alliance and our reputation may suffer. Increases in taxes could impact demand for our services. At any time, Congress may consider legislation that could increase the amount of Federal Excise Tax (“FET”) and/or one or more of the other government fees imposed on air travel.
Moreover, a security compromise or ransomware event could require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to further upgrade the security measures we employ to guard personal and confidential information against cyberattacks and other attempts to access or otherwise compromise such information and could result in a disruption of our operations, particularly our digital operations.
Moreover, a security compromise or ransomware event could disrupt flight operations, e-commerce, in part or whole, and/or require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to further upgrade the security measures we employ to guard personal and confidential information against cyberattacks and other attempts to access or otherwise compromise such information and could result in a disruption of our operations, particularly our digital operations.
We are also counting on the timely addition of our firm 737 MAX order to meet environmental goals we have published in our 2022 sustainability report.
We are also counting on the timely addition of our firm 737 MAX order to meet environmental goals we have published in our sustainability reports.
We also have agreements with the International Brotherhood of Teamsters for the flight dispatchers and for maintenance technicians. In 2023, we entered into agreements with both groups to increase pay rates and extend all other terms of the agreement by two years, until 2026 for our flight dispatchers and until 2028 for maintenance technicians.
We also have agreements with the International Brotherhood of Teamsters for our flight dispatchers and for our maintenance technicians. In 2023, we entered into agreements with both groups to increase pay rates and extend all other terms of these agreements by two years, extending the CBA amendable dates until 2026 for our flight dispatchers and until 2028 for maintenance technicians.
These loan agreements as well as one of our revolving credit facilities contain covenants limiting our ability to, among other things, make certain types of restricted payments, including paying dividends, incur debt or liens, merge or consolidate with others, dispose of assets, enter into certain transactions with affiliates, engage in certain business activities or make certain investments.
This loan agreement and one of our revolving credit facilities contain covenants limiting our ability to, among other things, make certain types of restricted payments, including paying dividends, incur debt or liens, merge or consolidate with others, dispose of assets, enter into certain transactions with affiliates, engage in certain business activities or make certain investments.
We rely on Boeing and the owners of used aircraft under contract to be able to deliver aircraft in accordance with the terms of executed agreements in a timely manner. Delivery schedules for newly built aircraft frequently slip which could delay deliveries to us.
We rely on Boeing and, as applicable, the owners of used aircraft with whom we may contract in the future to be able to deliver aircraft in accordance with the terms of executed agreements in a timely manner. Delivery schedules for newly built aircraft frequently slip which could delay deliveries to us.
However, negative publicity from these or future events could reflect poorly on our planned 737 service and our Company. Increases in fuel prices or unavailability of fuel would harm our business and profitability. Fuel costs constituted approximately 30.4 percent of our total operating expenses in 2023.
However, negative publicity from these or future events could reflect poorly on our planned 737 service and our Company. Increases in fuel prices or unavailability of fuel would harm our business and profitability. Fuel costs constituted approximately 22.8 percent of our total operating expenses in 2024.
We are relying on Boeing to deliver our new 737 MAX aircraft to support airline growth and to replace aircraft we have designated for retirement.
We are relying on Boeing to deliver our new 737 MAX aircraft to support airline growth and to replace aircraft we have designated for retirement or whose leases are expiring.
As noted, however, we anticipate an ever-increasing legislative and regulatory focus on aviation’s impacts on the environment. These developments and any additional legislation or regulations addressing climate change are likely to increase our costs of doing business in the future and the increases could be material.
In the future, there may be an increasing legislative and regulatory focus on aviation’s impacts on the environment. These developments and any additional legislation or regulations addressing climate change are likely to increase our costs of doing business in the future and the increases could be material.
As part of the focused attention on Boeing’s production, inspection and quality assurance processes, the FAA has indicated that aircraft production rates will be capped until they are fully satisfied with Boeing's quality practices. These factors could delay deliveries to us.
As part of the focused attention on Boeing’s production, inspection and quality assurance processes, the FAA has indicated that aircraft production rates will be capped until they are fully satisfied with Boeing's quality practices.
Our debt and finance lease obligations as of December 31, 2023 totaled $2.26 billion net of related costs. In addition, in December 2021, we entered into a purchase agreement with The Boeing Company to purchase 50 Boeing 737 MAX aircraft which are expected to deliver in 2024, 2025, and 2026.
Our debt and finance lease obligations as of December 31, 2024 totaled $2.07 billion net of related costs. In addition, we are party to a purchase agreement with The Boeing Company to purchase 50 Boeing 737 MAX aircraft, of which 46 are expected to deliver in 2025, 2026 and 2027.
Delays in delivery will likely delay our ability to capitalize on the expected profitability from the addition of these aircraft to our fleet and increase our interest costs for funds borrowed for pre-delivery deposits.
Delays in delivery will likely delay our ability to capitalize on the expected profitability from the addition of these aircraft to our fleet, increase maintenance costs for aircraft that would have otherwise been retired and increase our interest costs for funds borrowed for pre-delivery deposits.
The inability to attract and retain qualified flight crew and other airline personnel could limit our growth plans and operations and adversely affect our business and results of operations. We compete against other U.S. airlines for pilots, aircraft maintenance technicians and other labor.
The inability to attract and retain qualified flight crew and other airline personnel could limit our growth plans and adversely affect our business and results of operations. We compete against other U.S. airlines for pilots, aircraft maintenance technicians and other labor. In 2023 and early 2024, there was a scarcity of pilots for hire.
The successful operation of the project will be subject to the usual risks of any new business, including risks of gaining sufficient interest from vacationers to stay in our hotel and suites, the desirability of the project’s location, competition, retention of the management team, unfavorable weather, the ability to attract, train and retain sufficient numbers of suitable line employees and the ability to profitably operate the hotel and related offerings at the rates offered.
The successful operation of the project will be subject to the usual risks of any new business, including risks of gaining sufficient interest from vacationers to stay in our hotel and suites, the desirability of the project’s location, competition, retention of the management team, unfavorable weather, the ability to attract, train and retain sufficient numbers of suitable line employees and the ability to profitably operate the hotel and related offerings at the rates offered. 20 We have announced that we are in the process of seeking a capital partner to purchase the Resort or an interest in the Resort.
Such suits are costly to defend and could result in sizeable liability exposure for any air carrier. 26 Airlines are often affected by factors beyond their control, including air traffic congestion, weather conditions, increased security measures, and a reduction in demand to any particular market, any of which could harm our operating results and financial condition.
Airlines are often affected by factors beyond their control, including air traffic congestion, weather conditions, increased security measures, and a reduction in demand to any particular market, any of which could harm our operating results and financial condition.
Additionally, from time to time legislative proposals have been made to re-regulate the airline industry in varying degrees - for example, to specify minimum seat-size and legroom requirements - which if adopted could affect our costs materially. Such legislation may be proposed and could be adopted in 2024, particularly in the course of FAA reauthorization.
Additionally, from time to time legislative proposals have been made to re-regulate the airline industry in varying degrees - for example, to specify minimum seat-size and legroom requirements - which if adopted could affect our costs materially.
Our planned initiation of service with these aircraft in the future could be adversely affected if Boeing or other third parties fail to perform as contractually obligated.
Our planned induction into service of aircraft under contract for delivery in the future could be adversely affected if Boeing or other third parties fail to perform as contractually obligated.
DOT approval has now been held up indefinitely pending the outcome of diplomatic engagement on broader treaty issues. 21 Many of the U.S. airports from which we hope to offer this service do not currently qualify to offer international service.
DOT approval has now been held up indefinitely pending the outcome of diplomatic engagement on broader treaty issues. We cannot assure investors that the change in Presidential administration will bring a resolution to this matter. Many of the U.S. airports from which we hope to offer this service do not currently qualify to offer international service.
Federal funding to airports and/or airport bond financing could be affected through future deficit reduction legislation, which could result in higher fees, rates, and charges at many of the airports we serve.
Even if our actions or practices are found to be compliant, we could incur substantial costs defending our actions or practices. Federal funding to airports and/or airport bond financing could be affected through future deficit reduction legislation, which could result in higher fees, rates, and charges at many of the airports we serve.
As of December 31, 2023, the principal balance of our Senior Secured Notes due 2027 (the "Senior Secured Notes") was $550.0 million and the principal balance of our Sunseeker construction loan was $350.0 million.
As of December 31, 2024, the principal balance of our Senior Secured Notes due 2027 (the "Senior Secured Notes") was $550.0 million.
Aircraft fuel availability is also subject to periods of market surplus and shortage, and is affected by demand for heating oil, gasoline, and other petroleum products.
Meteorological events may also result in short-term disruptions in the fuel supply. Aircraft fuel availability is also subject to periods of market surplus and shortage, and is affected by demand for heating oil, gasoline, and other petroleum products.
During difficult economic times, we may be unable to raise prices in response to fuel cost increases, labor, or other operating costs, which could adversely affect our results of operations and financial condition. The successful operation of our Sunseeker Resort is dependent on commercial and economic factors, some of which are beyond our control.
During difficult economic times, we may be unable to raise prices in response to fuel cost increases, labor, or other operating costs, which could adversely affect our results of operations and financial condition.
Any subsequent FAA action or any future adverse 737 MAX events or safety concerns might disproportionately impact us as we rely on these new aircraft to augment our fleet as well as to replace aircraft to be retired. Our firm order with Boeing calls for the delivery of a mix of 737 MAX-8200 aircraft and 737 MAX-7 aircraft.
Any subsequent FAA action or any future adverse 737 MAX events or safety concerns might disproportionately impact us as we rely on these new aircraft to augment our fleet as well as to replace aircraft to be retired.
With respect to aircraft weight and balance, consumer protection, climate change, taxation, and other matters affecting the airline industry, whether the source of new requirements is legislative or regulatory, increased costs will adversely affect our profitability if we are unable to pass the costs on to our customers or adjust our operations to offset the new costs.
With respect to aircraft weight and balance, consumer protection, climate change, taxation, and other matters affecting the airline industry, whether the source of new requirements is legislative or regulatory, increased costs will adversely affect our profitability if we are unable to pass the costs on to our customers or adjust our operations to offset the new costs. 25 Existing and proposed state-specific labor laws could affect our ability to schedule and operate flights efficiently, and as a result could increase our operating costs and liability exposure.
In addition, the loan agreements contain financial covenants, including requiring us, at the end of each calendar quarter, to maintain a maximum total leverage ratio and to maintain a minimum aggregate amount of liquidity of $300.0 million.
In addition, one of our revolving credit facilities contains financial covenants, including requiring us, at the end of each calendar quarter in which the facility is drawn to a certain extent, to maintain a maximum total leverage ratio and to maintain a minimum aggregate amount of liquidity of $300.0 million.
Our indebtedness, debt service obligations and other commitments could adversely affect our business, financial condition and results of operations as well as limit our ability to react to changes in the economy or our industry and prevent us from servicing our debt and operating our business.
Although there are no generic restrictions on growth in place at the current time, future limitations from the FAA could potentially hinder our growth. 21 Our indebtedness, debt service obligations and other commitments could adversely affect our business, financial condition and results of operations as well as limit our ability to react to changes in the economy or our industry and prevent us from servicing our debt and operating our business.
According to a September 2021 White House announcement, civil aviation accounts for 11 percent of emissions by the U.S. transportation sector as a whole. The FAA has announced a U.S. aviation sector goal of net-zero greenhouse gas (“GHG”) emissions by 2050, consistent with the broader federal objective of achieving net-zero GHG emissions economy-wide by 2050.
The FAA has announced a U.S. aviation sector goal of net-zero greenhouse gas (“GHG”) emissions by 2050, consistent with the broader federal objective of achieving net-zero GHG emissions economy-wide by 2050.
During periods of fog, snow, rain, storms or other adverse weather conditions, flights may be canceled or significantly delayed. Cancellations or delays due to weather conditions, traffic control problems, and breaches in security could harm our operating results and financial condition. A substantial proportion of our scheduled flights have Las Vegas, Orlando, Phoenix, Tampa/St.
During periods of fog, snow, rain, storms or other adverse weather conditions, flights may be canceled or significantly delayed and travel to certain markets could be impacted during and for a period of time after the weather event. Cancellations or delays due to weather conditions, traffic control problems, and breaches in security could harm our operating results and financial condition.
These provisions may also adversely affect prevailing market prices for our common stock. We have not opted out of either of these statutes. Our corporate charter and bylaws include provisions limiting voting by non-U.S. citizens.
These Nevada statutes could discourage or make more difficult a takeover attempt that certain stockholders may consider in their best interests. These provisions may also adversely affect prevailing market prices for our common stock. We have not opted out of either of these statutes. Our corporate charter and bylaws include provisions limiting voting by non-U.S. citizens.
We cannot assure investors our maintenance costs will not exceed our expectations. 23 We rely on third parties to provide us with aircraft, facilities and services that are integral to our business.
In addition, we may be required to comply with any future law changes, regulations, or airworthiness directives. We cannot assure investors our maintenance costs will not exceed our expectations. We rely on third parties to provide us with aircraft, facilities and services that are integral to our business.
Between two and four years after the date the person first became an interested stockholder, a combination may also be permitted if the interested stockholder satisfies certain requirements with respect to the aggregate consideration to be received by holders of outstanding shares in the combination.
Between two and four years after the date the person first became an interested stockholder, a combination may also be prohibited unless approved by our board of directors and stockholders holding at least a majority of the stock not owned by the interested stockholder and its affiliates or unless the interested stockholder satisfies certain requirements with respect to the aggregate consideration to be received by holders of outstanding shares in the combination.
The FAA could suspend or restrict the use of our aircraft in the event of actual or perceived mechanical problems or safety issues while it conducts its own investigation, whether involving our aircraft or another U.S. or foreign airline’s aircraft.
In-flight emergencies affecting our aircraft, and resulting media attention, could also contribute to a public perception regarding safety concerns and a loss of business. 18 The FAA could suspend or restrict the use of our aircraft in the event of actual or perceived mechanical problems or safety issues while it conducts its own investigation, whether involving our aircraft or another U.S. or foreign airline’s aircraft.
Flight crews have filed class action lawsuits against air carriers in a number of states with varied results and, in many cases, the results have been appealed.
Flight crews have filed class action lawsuits against air carriers in a number of states with varied results and, in many cases, the results have been appealed. Such suits are costly to defend and could result in sizeable liability exposure for any air carrier.
We operate in a public-facing industry dependent on fossil fuels to a large extent. ESG (environmental, social and governance) has become a more prominent focus for public companies and the SEC has proposed rules which will mandate certain ESG disclosures.
We operate in a public-facing industry dependent on fossil fuels to a large extent. Sustainability has become a more prominent focus for public companies and the SEC has proposed rules (now paused) and the State of California has adopted rules which will mandate GHG emissions reporting and climate risk assessment disclosures.
Our business could also be significantly harmed if the public avoids flying our aircraft due to an adverse perception of the aircraft we utilize because of safety concerns or other problems, whether real or perceived, or in the event of an accident involving these aircraft. 20 A breach in the security of personal information, breach in credit card data or system disruptions caused by security breaches or cyberattacks – including attacks on those parties we do business with – could harm our ability to conduct our operations and could have a material adverse effect on our financial position or results of operations.
A breach in the security of personal information, breach in credit card data or system disruptions caused by security breaches or cyberattacks – including attacks on those parties we do business with – could harm our ability to conduct our operations and could have a material adverse effect on our financial position or results of operations.
We have made a business decision not to purchase financial derivatives to hedge against increases in the cost of fuel. This decision may make our operating results more vulnerable to the impact of fuel price increases. Increased labor costs could result from industry conditions and could be impacted by labor-related disruptions.
We have made a business decision not to purchase financial derivatives to hedge against increases in the cost of fuel. This decision may make our operating results more vulnerable to the impact of fuel price increases. Our reputation and financial results could be harmed in the event of an accident or restrictions affecting aircraft in our fleet.
Congress, including a proposal to require transportation fuel producers and importers to acquire market-based allowances to offset the emissions resulting from combustion of their fuels. Similarly, as recently as February 2021, legislation was introduced in the U.S. Congress to incentivize the production of sustainable aviation fuel (also known as biofuel) and to assist the aviation industry in reducing emissions.
In the past, legislation to address climate change issues as they relate to the transportation industry has been introduced in the U.S. Congress, including a proposal to require transportation fuel producers and importers to acquire market-based allowances to offset the emissions resulting from combustion of their fuels. Similarly, the U.S.
Although we have insurance to cover these claims up to policy limits, these lawsuits or similar litigation could result in substantial costs, divert management’s attention and resources, and harm our business or results of operations.
Although we have insurance to cover these claims up to policy limits, these lawsuits or similar litigation could result in substantial costs, divert management’s attention and resources, and harm our business or results of operations. 26 Other companies may be deterred from attempting to acquire us or our stock, even at prices in excess of current market prices, due to the effects of Nevada statutes.
We have pledged our assets to secure the Senior Secured Notes and revolving credit facility with the exceptions of aircraft and aircraft engines, the Sunseeker Resort and certain other exceptions. The Sunseeker Resort is pledged to secure the $350.0 million construction loan agreement to finance the construction of the Resort.
We have pledged our assets to secure the Senior Secured Notes and revolving credit facility with the exceptions of aircraft and aircraft engines, Sunseeker Resort and certain other exceptions. This will limit our ability to obtain debt secured by these pledged assets while these loans are outstanding.
These regulations can directly impact the frequency of inspections as an aircraft ages, and vary by aircraft or engine type, depending on the unique characteristics of each aircraft and/or engine. In addition, we may be required to comply with any future law changes, regulations, or airworthiness directives.
FAA regulations, including aging aircraft airworthiness directives, require additional and enhanced maintenance inspections for older aircraft. These regulations can directly impact the frequency of inspections as an aircraft ages, and vary by aircraft or engine type, depending on the unique characteristics of each aircraft and/or engine.
Although we are working with a recognized consultant in this area and we intend to comply with any SEC requirements, our brand and reputation may suffer if our stakeholders are not satisfied with our ESG disclosures, the goals we have set in that area or our progress toward meeting those goals.
Although we intend to comply with any legal requirements, our brand and reputation may suffer if our stakeholders are not satisfied with our sustainability disclosures, the goals we have set in that area or our progress toward meeting those goals. 23 Failure to achieve our environmental, social and governance goals and public pressure from investors or policy groups' perception of the environmental impact of air travel could also adversely impact our reputation and brand.
Proposed consumer-protection enhancements in reauthorization legislation include a requirement for fee-free family seating, a mandatory five-year validity of airline vouchers and credits, and substantially increased civil penalties for noncompliance by airlines with consumer-protection and other regulatory requirements.
While we do not anticipate such legislation from the current U.S Congress, a mandatory five-year validity of airline vouchers and credits, and substantially increased civil penalties for noncompliance by airlines with consumer-protection and other regulatory requirements became law in 2024.
This would result in increased overall costs and may adversely impact our results of operations. Our reputation and financial results could be harmed in the event of an accident or restrictions affecting aircraft in our fleet.
This would result in increased overall costs and may adversely impact our results of operations.
Both the cost and availability of aircraft fuel are subject to many economic and political factors and events occurring throughout the world over which we have no control. Meteorological events may also result in short-term disruptions in the fuel supply.
Significant increases in fuel costs have negatively affected our operating results in the past, and future fuel cost volatility could materially affect our financial condition and results of operations. Both the cost and availability of aircraft fuel are subject to many economic and political factors and events occurring throughout the world over which we have no control.
The average age of our aircraft as of February 1, 2024, is 15.5 years, which is older than the fleets of many other carriers. In general, the cost to maintain aircraft increases as they age, and exceeds the cost to maintain newer aircraft. FAA regulations, including aging aircraft airworthiness directives, require additional and enhanced maintenance inspections for older aircraft.
While we have introduced new Boeing 737 MAX aircraft to our fleet in late 2024, the average age of our Airbus aircraft as of February 1, 2025, is 16.0 years, which is older than the fleets of many other carriers. In general, the cost to maintain aircraft increases as they age, and exceeds the cost to maintain newer aircraft.
The success of our alliance with VivaAerobus will depend on our ability to obtain necessary government approvals and other factors. We will be able to implement the joint alliance with VivaAerobus as planned only if the DOT grants us antitrust immunity and we receive similar approval from Mexican authorities.
We will be able to implement the joint alliance with VivaAerobus as planned only if the DOT grants us antitrust immunity, and assuming the continued approval from Mexican authorities. Although we believe we should qualify for these approvals, there can be no assurance when or if we will be able to obtain them.
We are subject to fines or other enforcement actions if the DOT believes we are not in compliance with these or other rules or regulations or with the federal consumer protection laws administered by the DOT. Even if our actions or practices are found to be compliant, we could incur substantial costs defending our actions or practices.
While we do not currently anticipate significant new consumer protection rules or legislation during the current Presidential administration and Congress, we are subject to fines or other enforcement actions if the DOT believes we are not in compliance with current regulations or with the federal consumer protection laws administered by the DOT.
Because we are smaller than most airlines, an accident would likely adversely affect us to a greater degree than a larger, more established airline. In-flight emergencies affecting our aircraft, and resulting media attention, could also contribute to a public perception regarding safety concerns and a loss of business.
Because we are smaller than most airlines, an accident would likely adversely affect us to a greater degree than a larger, more established airline. In addition, any other airline accident would receive national attention and could depress demand for air travel in general for a period of time.
Our board of directors may, however, exempt any acquisition of a controlling interest by certain existing or future stockholders by amending the corporation’s bylaws (or articles of incorporation) within 10 days following such acquisition. These Nevada statutes could discourage or make more difficult a takeover attempt that certain stockholders may consider in their best interests.
The statute also provides a mechanism for us to force the redemption of the control shares at the average price paid therefor. Our board of directors may, however, exempt any acquisition of a controlling interest by certain existing or future stockholders by amending the corporation’s bylaws (or articles of incorporation) within 10 days following such acquisition.
Additionally, the airline industry, including our third party vendors, has experienced and may continue to experience challenges in hiring and retaining other labor positions, such as aircraft maintenance technicians, ground handling and customer service agents, and flight attendants.
The lack of a new collective bargaining agreement with our pilots (under negotiation since 2021) could exacerbate the challenge to maintain sufficient numbers of pilots to fly our published schedule and to grow our network. 19 Beyond pilot staffing, the entire airline industry, including our third party vendors, experienced the same challenges during that period of unprecedented growth, and may continue to experience challenges in hiring and retaining other labor positions, such as aircraft maintenance technicians, ground handling and customer service agents, and flight attendants should that trend resurface.
As with all scheduled airlines, the FAA must approve each aircraft we utilize and each airport we serve. Although there are no generic restrictions on growth in place at the current time, future limitations from the FAA could potentially hinder our growth.
As with all scheduled airlines, the FAA must approve each aircraft we utilize and each airport we serve.
We anticipate that in 2024 and thereafter, legislative and regulatory concern with the environmental impacts of the air transportation industry will increase, and that the longer-term effects on our fleet and operating costs may be substantial. In the past, legislation to address climate change issues as they relate to the transportation industry has been introduced in the U.S.
At the current time, it appears unlikely that the current Presidential administration and U.S Congress will continue the prior legislative and regulatory concern with the environmental impacts of the air transportation industry. However, such concerns may again increase at some point in the future, in which case, the longer-term effects on our fleet and operating costs could be substantial.
Additional expanded regulations have been proposed by DOT and may take effect in 2024 or thereafter, as may new consumer protection legislation proposed in Congress. We are not able to predict the impact of new consumer protection rules on our business, though we monitor the progress of potential laws and rulings.
Additional expanded regulations proposed by DOT took effect in 2024 and January 2025 as did new consumer protection legislation passed by Congress. These new consumer protection rules and legislation have imposed additional costs on our business by requiring the development of new technological and operational systems.
In such event, the holder will only obtain such voting rights in the “control shares” so acquired as may be approved by a resolution of our stockholders of the corporation at a special or annual meeting. The statute also provides a mechanism for us to force the redemption of the control shares at the average price paid therefor.
In such event, the holder will only obtain such voting rights in the “control shares” so acquired as may be approved by stockholders owning at least a majority of the stock of the Company (excluding stock held by the interested stockholder).
Labor costs constituted approximately 30.0 percent of our total operating costs in 2023, our second largest expense line item. Labor costs are generally rising and there is much competition for qualified candidates. Further, we have four employee groups (pilots, flight attendants, flight dispatchers and maintenance technicians) which have elected union representation.
Increased labor costs could result from industry conditions and could be impacted by labor-related disruptions. Labor costs constituted approximately 29.8 percent of our total operating costs in 2024, our largest expense line item. Labor costs are generally rising and there is much competition for qualified candidates.
Petersburg, Punta Gorda, Destin or Sarasota as either their destination or origin.
A substantial proportion of our scheduled flights have Las Vegas, Orlando, Phoenix/Mesa, Tampa/St. Petersburg, Punta Gorda, Destin or Sarasota as either their destination or origin.
These groups represent approximately 53.4 percent of our employees. 19 In 2016, we reached a collective bargaining agreement with the International Brotherhood of Teamsters, representing our pilots. The pilot agreement is now amendable and in 2022 the parties jointly sought mediation through the National Mediation Board.
Further, we have four employee groups (pilots, flight attendants, flight dispatchers and maintenance technicians) which have elected union representation. These groups represent approximately 61.8 percent of our employees (full-time equivalent). In 2016, we reached a collective bargaining agreement with the International Brotherhood of Teamsters, representing our pilots.
Failure to achieve our environmental, social and governance goals and public pressure from investors or policy groups' perception of the environmental impact of air travel could also adversely impact our reputation and brand. Our ability to meet our environmental goal depends on various actions from third parties outside of our control.
Our ability to meet our environmental goal depends on various actions from third parties outside of our control.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+2 added−1 removed17 unchanged
Biggest changeThe CISO, who has more than 30 years of experience reports daily to our chief information officer (CIO), monthly to the risk and compliance committee (consisting of the president and executive leadership) and quarterly to our board. 30
Biggest changeThe CISO, who has more than 30 years of experience reports regularly to our chief executive officer (CEO), monthly to the risk and compliance committee (consisting of executive leadership) and quarterly to our board. 29
For a detailed discussion of our cybersecurity related risks, see Item 1A Risk Factors – “ A breach in the security of personal information, breach in credit card data or system disruptions caused by security breaches or cyberattacks – including attacks on those parties we do business with 29 – could harm our ability to conduct our operations and could have a material adverse effect on our financial position or results of operations .” Board Oversight of Cybersecurity Risks: Our board is responsible for overseeing our enterprise risk management activities in general, the appropriate committees assist the board in the role of risk oversight.
For a detailed discussion of our cybersecurity related risks, see Item 1A Risk Factors – “ A breach in the security of personal information, breach in credit card data or system disruptions caused by security breaches or cyberattacks – including attacks on those parties we do business with 28 – could harm our ability to conduct our operations and could have a material adverse effect on our financial position or results of operations .” Board Oversight of Cybersecurity Risks: Our board is responsible for overseeing our enterprise risk management activities in general, the appropriate committees assist the board in the role of risk oversight.
Removed
To certify our policies and processes to International Standards Organization (ISO)/ International Electrotechnical Commission (IEC) 27001, we are engaging a third-party consulting firm to conduct a gap analysis on our cybersecurity compliance. After achieving compliance, we expect to engage a third-party auditor to ensure we are compliant on an annual basis.
Added
As a publicly traded company and given the industry in which we operate, we have established a risk-based strategy informed by numerous cybersecurity frameworks from regulatory bodies such as PCI, SOX, FAA, TSA, DOT, NIST and DoD.
Added
We use the National Institute of Standards and Technology Cybersecurity Framework ("NIST CSF") as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. This does not imply that we meet all of the technical standards, specifications or requirements under any of these frameworks.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed4 unchanged
Biggest changeFord International Airport Grand Rapids, Michigan Indianapolis International Airport Indianapolis, Indiana Lehigh Valley International Airport Allentown, Pennsylvania Los Angeles International Airport Los Angeles, California Harry Reid International Airport Las Vegas, Nevada McGhee Tyson Airport Knoxville, Tennessee Nashville International Airport Nashville, Tennessee Orlando Sanford International Airport Sanford, Florida Phoenix-Mesa Gateway Airport Mesa, Arizona Pittsburgh International Airport Pittsburgh, Pennsylvania Provo Airport Provo, Utah Punta Gorda Airport Punta Gorda, Florida Sarasota Bradenton International Airport Sarasota, Florida Savannah/Hilton Head International Airport Savannah, Georgia St.
Biggest changeFord International Airport Grand Rapids, Michigan Harry Reid International Airport Las Vegas, Nevada Indianapolis International Airport Indianapolis, Indiana Lehigh Valley International Airport Allentown, Pennsylvania Los Angeles International Airport Los Angeles, California McGhee Tyson Airport Knoxville, Tennessee Mesa Gateway Airport Mesa, Arizona Nashville International Airport Nashville, Tennessee Orlando Sanford International Airport Sanford, Florida Pittsburgh International Airport Pittsburgh, Pennsylvania Provo Airport Provo, Utah Punta Gorda Airport Punta Gorda, Florida Sarasota Bradenton International Airport Sarasota, Florida Savannah/Hilton Head International Airport Savannah, Georgia St.
We also lease or own warehouse space in Las Vegas, Orlando Sanford, St. Petersburg-Clearwater, Punta Gorda, and Phoenix-Mesa for aircraft spare parts and supplies. Our primary corporate offices are located in Las Vegas, where we own approximately 11 acres of property containing approximately 211,000 square feet of office space.
We also lease or own warehouse space in Las Vegas, Orlando Sanford, St. Petersburg-Clearwater, Punta Gorda, and Mesa for aircraft spare parts and supplies. Our primary corporate offices are located in Las Vegas, where we own approximately 11 acres of property containing approximately 211,000 square feet of office space.
We also lease and/or own other facilities in Las Vegas and Florida, with approximately 350,000 square feet of space used for training and other corporate purposes. These leases expire between 2024 and 2048.
We also lease and/or own other facilities in Las Vegas and Florida, with approximately 350,000 square feet of space used for training and other corporate purposes. These leases expire between 2025 and 2048.
We lease additional space in cargo areas at Harry Reid International Airport (Las Vegas), Nashville International Airport, Orlando Sanford International Airport, Phoenix-Mesa Gateway Airport, Punta Gorda Airport, Sarasota Manatee Airport, Savannah/Hilton Head International Airport, Cincinnati/Northern Kentucky International Airport, and St. Petersburg-Clearwater International Airport for our primary line maintenance operations.
We lease additional space in cargo areas at Harry Reid International Airport (Las Vegas), Nashville International Airport, Orlando Sanford International Airport, Mesa Gateway Airport, Punta Gorda Airport, Sarasota Bradenton International Airport, Savannah/Hilton Head International Airport, Cincinnati/Northern Kentucky International Airport, and St. Petersburg-Clearwater International Airport for our primary line maintenance operations.
Additionally, we own a golf course (Aileron Golf Course) consisting of 156 acres in Lake Suzy, Florida, which serves as an amenity to the Resort. 32
Additionally, we own a golf course (Aileron Golf Course) consisting of 156 acres in Lake Suzy, Florida, which serves as an amenity to the Resort. 31
The following details the airport locations we utilize as operational bases as of February 1, 2024: Airport Location Asheville Regional Airport Fletcher, North Carolina Appleton International Airport Appleton, Wisconsin Austin-Bergstrom International Airport Austin, Texas Bellingham International Airport Bellingham, Washington Cincinnati/Northern Kentucky International Airport Hebron, Kentucky Des Moines International Airport Des Moines, Iowa Flint Bishop International Airport Flint, Michigan Destin-Fort Walton Beach Airport Destin, Florida Ft.
The following details the airport locations we utilize as operational bases as of February 1, 2025: Airport Location Appleton International Airport Appleton, Wisconsin Asheville Regional Airport Fletcher, North Carolina Bellingham International Airport Bellingham, Washington Cincinnati/Northern Kentucky International Airport Hebron, Kentucky Des Moines International Airport Des Moines, Iowa Destin-Fort Walton Beach Airport Destin, Florida Flint Bishop International Airport Flint, Michigan Ft.
Petersburg-Clearwater International Airport St. Petersburg, Florida We believe we have sufficient access to gate space for current and presently contemplated future operations at all airports we serve. 31 We use leased facilities at our operational bases to perform line maintenance, overnight parking of aircraft, and other operations' support.
Petersburg-Clearwater International Airport St. Petersburg, Florida We believe we have sufficient access to gate space for current and near-term operations at all airports we serve. 30 We use leased facilities at our operational bases to perform line maintenance, overnight parking of aircraft, storage of parts and supplies, and other operations' support.
Properties Aircraft The following table summarizes our total in-service aircraft as of December 31, 2023: Aircraft Type Number of In-Service Aircraft Seating Capacity (per aircraft) Age Range (years) Average Age in Years Airbus A319 34 156 17-20 18.4 Airbus A320 92 177/180/186 5-26 14.4 Total aircraft 126 Ground Facilities We lease facilities at the majority of our leisure destinations and several other airports we serve.
Properties Aircraft The following table summarizes our total in-service aircraft as of December 31, 2024: Aircraft Type Number of In-Service Aircraft Seating Capacity (per aircraft) Age Range (years) Average Age in Years Airbus A319 34 156 17-20 19.4 Airbus A320 87 177/180/186 5-27 14.7 Boeing 737-8200 4 190 Total aircraft 125 Ground Facilities We lease facilities at the majority of our leisure destinations and several other airports we serve.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+2 added−0 removed7 unchanged
Biggest changeAbsent an event of default, this restriction does not constrain the continued payment of a quarterly dividend at the current level. 34 Our Repurchases of Equity Securities The following table reflects repurchases of our common stock during the fourth quarter of 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of our Publicly Announced Plan Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs (in thousands) (2) October 9,196 $ 73.92 None November 181,693 64.98 162,115 December 10,427 70.95 29,386 Total 201,316 $ 65.70 191,501 $ 75,697 (1) Includes shares repurchased from employees who vested a portion of their restricted stock grants.
Biggest changeOur Repurchases of Equity Securities The following table reflects repurchases of our common stock during the fourth quarter of 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of our Publicly Announced Plan Approximate Dollar Value of Shares that May yet be Purchased Under the Plans or Programs (in thousands) (2) October 12,606 $ 60.54 None November 142 73.72 None December 913 79.90 None Total 13,661 $ 61.97 None $ 75,697 (1) Represents shares repurchased from employees who vested a portion of their restricted stock grants.
The stock price performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this annual report on Form 10-K into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such Acts. 35 Item 6.
The stock price performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this annual report on Form 10-K into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 34 1934, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such Acts. 35 Item 6.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2018 and that all dividends are reinvested. Stock price performance for the historical periods presented is not necessarily indicative of future results.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2019 and that all dividends are reinvested. Stock price performance for the historical periods presented is not necessarily indicative of future results.
Stock Price Performance Graph The following graph compares the cumulative total shareholder return on our common stock with the cumulative total return on the Nasdaq Composite Index and the NYSE ARCA Airline Index since December 31, 2018.
Stock Price Performance Graph The following graph compares the cumulative total shareholder return on our common stock with the cumulative total return on the Nasdaq Composite Index and the NYSE ARCA Airline Index since December 31, 2019.
As a result, a maximum of 242,843 shares of restricted stock are remaining for future issuance under the 2022 Long-Term Incentive Plan. Dividend Policy We paid a quarterly dividend from 2015 through first quarter 2020 when we suspended all cash dividends upon the onset of the pandemic.
As a result, a maximum of 173,964 shares of restricted stock are remaining for future issuance under the 2022 Long-Term Incentive Plan. Dividend Policy We paid a quarterly dividend from 2015 through first quarter 2020 when we suspended all cash dividends upon the onset of the pandemic.
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information regarding options, warrants and other rights to acquire equity securities under our equity compensation plans as of December 31, 2023: Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (3) Equity compensation plans approved by security holders (1) 28,000 $ 245.54 485,686 (1) There are no securities to be issued under any equity compensation plans not approved by our security holders.
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information regarding options, warrants and other rights to acquire equity securities under our equity compensation plans as of December 31, 2024: Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (3) Equity compensation plans approved by security holders (1) — N/A 347,928 (1) There are no securities to be issued under any equity compensation plans not approved by our security holders.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market for our common stock Our common stock is quoted on the Nasdaq Global Select Market (symbol: ALGT). On February 1, 2024, the last sale price of our common stock was $79.92 per share.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market for our common stock Our common stock is quoted on the Nasdaq Global Select Market (symbol: ALGT). On February 14, 2025, the last sale price of our common stock was $83.26 per share.
Our board established the annual dividend rate at $2.40 per share and dividends of $0.60 per share per quarter were declared, and paid, in the third and fourth quarters, bringing total regular cash dividends declared, and paid, in 2023 to $1.20 per share. Certain of our credit agreements limit the amount of dividends we may pay.
Our board established the annual dividend rate at $2.40 per share and dividends of $0.60 per share per quarter were declared, and paid, in the third and fourth quarters, bringing total regular cash dividends declared, and paid, in 2023 to $1.20 per share.
(2) The shares shown as to be issued under equity compensation plans exclude 573,560 shares of unvested restricted stock awards as all restricted stock awards are deemed to have been issued.
(2) The shares shown as available for future issuance under equity compensation plans exclude 362,378 shares of unvested restricted stock awards as all restricted stock awards are deemed to have been issued.
Period High Low 2023 1st Quarter $ 105.51 $ 68.31 2nd Quarter 129.00 86.91 3rd Quarter 130.93 73.96 4th Quarter 85.91 54.87 2022 1st Quarter $ 195.66 $ 132.03 2nd Quarter 176.56 109.82 3rd Quarter 122.36 72.97 4th Quarter 84.89 62.94 As of February 23, 2024, there were approximately 200 holders of record of our common stock.
Period High Low 2024 1st Quarter $ 83.82 $ 65.59 2nd Quarter 75.21 46.90 3rd Quarter 58.55 36.09 4th Quarter 94.53 53.62 2023 1st Quarter $ 105.51 $ 68.31 2nd Quarter 129.00 86.91 3rd Quarter 130.93 73.96 4th Quarter 85.91 54.87 As of February 18, 2025, there were approximately 180 holders of record of our common stock.
Added
In 2024, the quarterly dividend of $0.60 per share was paid during the first and second quarters, until the dividend was suspended on July 8, 2024, for an indefinite period of time, bringing the total regular cash dividends declared, and paid, in 2024 to $1.20 per share. 33 Certain of our credit agreements limit the amount of dividends we may pay.
Added
Absent an event of default, this restriction would not constrain the continued payment of a quarterly dividend at the levels paid in 2023 and 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

54 edited+38 added−26 removed16 unchanged
Biggest changePlease refer to the section entitled “Disclosure Regarding Forward-Looking Statements” at the beginning of this annual report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. 37 2023 Highlights • Total operating revenue was a company record of $2.5 billion, up 9.0 percent as compared to 2022, on a total system capacity increase of 1.9 percent. • Full-year TRASM was 13.38 cents, a record annual TRASM, up 7.0 percent as compared to 2022 on scheduled service capacity increases of 1.7 percent. • Average total fare was $142.15, up 5.6 percent compared to 2022, including total average ancillary revenue of $72.90, up 7.6 percent from 2022. • Recorded highest fixed fee revenue in company history of $68.5 million. • Extended the collective bargaining agreement for flight dispatchers through May 2026 and the collective bargaining agreement for maintenance technicians through October 2028. • Opened Sunseeker Resort at Charlotte Harbor on December 15, 2023. • Ranked number 3 amongst major US carriers in the Wall Street Journal's "The Best and Worst Airlines of 2023". • Made great progress to strengthen our system and operations by: ◦ Adding more than 1,300 full-time equivalent employees, including approximately 1,000 newly hired Sunseeker Resort team members ◦ Investing in the systems implementations discussed in the Business section. ◦ Planning to induct our new Boeing aircraft • Acquired over 140 thousand new Allegiant co-brand credit card holders during the year, with over 485 thousand active cardholders at year end. • Received $119.6 million in total co-brand credit card remuneration from Bank of America, up 18 percent from 2022 • Added 2.1 million Allegiant Allways Rewards ® members during 2023, with more than 17 million total members at year end, a 13 percent increase over the year-end 2022 number. • Allegiant co-brand credit card and Allegiant Allways Rewards ® were voted as the No. 1 Best Airline Credit Card and No. 2 Best Frequent Flyer Program in USA Today's 10 Best 2023 Loyalty/Rewards Readers' Choice Awards.
Biggest changePlease refer to the section entitled “Disclosure Regarding Forward-Looking Statements” at the beginning of this annual report on Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. 37 2024 Highlights • Took delivery of our first four newly manufactured Boeing 737 MAX aircraft and inducted them into service with promising early performance • Total operating revenue of $2.5 billion, up 0.1 percent year-over-year • Record total average ancillary fare of $75.83 per passenger, up 4.0 percent from 2023 • Average third party products fare was $8.48 per passenger, up 29.1 percent year-over-year • Restored utilization to near 2019 levels during the peak December 2024 holiday period • Ancillary revenue increased as a result of progress on commercial initiatives such as Allegiant Extra, third party travel insurance and restoration of a third bundle of ancillary products • Recorded $80.7 million in fixed fee revenue, up 17.7 percent compared to the prior year's Company record breaking high • $134.7 million in total co-brand credit card remuneration, up 12.7 percent from the prior year • As of December 31, 2024, we had approximately 545,000 total Allegiant Allways Rewards Visa cardholders • Ended 2024 with approximately 18 million total active Allways Rewards members • In April 2024, ratified a new five-year agreement with the Transport Workers Union of America, AFL-CIO Local 577, representing Allegiant's flight attendants ◦ Agreement includes wage increases, certain quality-of-life improvements and a ratification bonus • Published the 2023 Sustainability Report reaffirming the Company's sustainability goals • Ranked third on the American Customer Satisfaction Index for Airlines, moving up from seventh in 2023 • Named best low-cost carrier in North America by Skytrax, the international air transport rating organization • Named the number one Best Airline Credit Card for the sixth consecutive year and Best Frequent Flyer program in USA TODAY's 10Best 2024 Readers' Choice Awards • Ranked number 4 among major US carriers in the Wall Street Journal's "The Best and Worst Airlines of 2024" • Announced 44 new nonstop routes during the fourth quarter, tying the record for the largest expansion in Company history, including three new cities, of which 39 routes had no prior nonstop service • Gregory Anderson assumed the role of chief executive officer and president in September 2024 • Completed our first full year of operations of Sunseeker Resort and engaged experienced hospitality advisors to pursue strategic alternatives with potential partners 38 AIRCRAFT Operating Fleet The following table sets forth the number and type of aircraft in service and operated by us as of the dates indicated.
We believe this new aircraft purchase is complementary with our low cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, expected fuel savings and operational reliability from the use of these new aircraft.
We believe this new aircraft purchase is complementary with our low-cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, and expected fuel savings and operational reliability from the use of these new aircraft.
Also included are fees for repairs performed by third party vendors. Sales and marketing expense includes all advertising, promotional expenses, sponsorships, travel agent commissions, debit and credit card processing fees associated with the sale of scheduled service and air-related ancillary charges, costs related to advertising and marketing for the Sunseeker Resort, and credit card processing fees for Resort bookings.
Also included are fees for repairs performed by third party vendors. Sales and marketing expense includes all advertising, promotional expenses, sponsorships, travel agent commissions, debit and credit card processing fees associated with the sale of scheduled service and air-related ancillary charges, costs related to advertising and marketing for Sunseeker Resort, and credit card processing fees for Resort bookings.
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short term investment balances, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months.
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short term investment balances, financing commitments, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months.
Also included is the amortization of major maintenance expenses on our aircraft and engines, which are capitalized under the deferral method of accounting and amortized as a component of depreciation and amortization expense over the estimated period until the next scheduled major maintenance event. Maintenance and repairs expense includes all parts, materials and spares required to maintain our aircraft.
Also included is the amortization of heavy maintenance expenses on our aircraft and engines, which are capitalized under the deferral method of accounting and amortized as a component of depreciation and amortization expense over the estimated period until the next scheduled major maintenance event. Maintenance and repairs expense includes all parts, materials and spares required to maintain our aircraft.
“Block hours” represents the number of hours during which the aircraft is in revenue service, measured from the time of gate departure until the time of gate arrival at the destination. 46 “ Load factor ” represents the percentage of aircraft seating capacity utilized (revenue passenger miles divided by available seat miles).
“Block hours” represents the number of hours during which the aircraft is in revenue service, measured from the time of gate departure until the time of gate arrival at the destination. “ Load factor ” represents the percentage of aircraft seating capacity utilized (revenue passenger miles divided by available seat miles).
Unless otherwise expressly stated, for discussion and analysis of 2022 and a comparison of our 2022 results to 2021 results, please refer to our Annual Report on Form 10-K for the year ended December 31, 2022, under Part II Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
Unless otherwise expressly stated, for discussion and analysis of 2023 and a comparison of our 2023 results to 2022 results, please refer to our Annual Report on Form 10-K for the year ended December 31, 2023, under Part II Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
Also discussed is our financial position as of December 31, 2023 and 2022. Investors should read this discussion in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report. This discussion and analysis contains forward-looking statements.
Also discussed is our financial position as of December 31, 2024 and 2023. Investors should read this discussion in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this annual report. This discussion and analysis contains forward-looking statements.
We and VivaAerobus have submitted a joint application to the DOT requesting approval of and antitrust immunity for the alliance.
We and VivaAerobus submitted a joint application to the DOT requesting approval of, and antitrust immunity for, the alliance.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis presents factors that had a material effect on our results of operations during the years ended December 31, 2023 and 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis presents factors that had a material effect on our results of operations during the years ended December 31, 2024 and 2023.
“Airline o perating expense per ASM ” or “ CASM ” represents airline only operating expenses excluding Sunseeker divided by total system available seat miles. “Airline o perating CASM, excluding fuel ” represents airline only operating expenses excluding Sunseeker, less aircraft fuel expense, divided by total system available seat miles.
“Airline o perating expense per ASM ” or “ CASM ” represents airline only operating expenses excluding Sunseeker divided by total system available seat miles. “Airline o perating CASM, excluding fuel and special charges ” represents airline only operating expenses excluding Sunseeker, less aircraft fuel expense and special charges, divided by total system available seat miles.
Network Expansion We have identified more than 1,400 incremental routes as opportunities for future network growth, with approximately 77 percent of these additional routes having no current nonstop service. Our ability to add significant numbers of new routes has been temporarily stymied by flight crew staffing, high fuel costs, economic conditions and other factors.
Network Expansion We have identified more than 1,400 incremental routes as opportunities for future network growth, with approximately 77 percent of these additional routes having no current nonstop service. Our ability to add significant numbers of new routes has been constrained in recent years by flight crew staffing, high fuel costs, economic conditions and other factors.
“Total passenger revenue per ASM” or “TRASM” represents total passenger revenue divided by scheduled service available seat miles. 47 LIQUIDITY AND CAPITAL RESOURCES Current liquidity Cash, cash equivalents and investment securities (short-term and long-term) decreased to $870.7 million at December 31, 2023, from $1,018.4 million at December 31, 2022. Investment securities represent highly liquid marketable securities which are available-for-sale.
“Total passenger revenue per ASM” or “TRASM” represents total passenger revenue divided by scheduled service available seat miles. 47 LIQUIDITY AND CAPITAL RESOURCES Current liquidity Cash, cash equivalents and investment securities (short-term and long-term) decreased to $832.9 million at December 31, 2024, from $870.7 million at December 31, 2023. Investment securities represent highly liquid marketable securities which are available-for-sale.
All of the aircraft in our fleet as of December 31, 2023 are owned by us except as indicated in the footnotes to the table: As of December 31, 2023 2022 2021 A320 (1)(2) 92 86 73 A319 (3) 34 35 35 Total 126 121 108 (1) Does not include one aircraft of which we have taken delivery as of December 31, 2023 and which was not in service as of that date.
All of the aircraft in our fleet as of December 31, 2024 are owned by us except as indicated in the footnotes to the table: As of December 31, 2024 2023 2022 A320 (1)(2) 87 92 86 A319 (3) 34 34 35 737-8200 4 — — Total 125 126 121 (1) Does not include one aircraft of which we have taken delivery as of December 31, 2023 and which was not in service as of that date.
“ Average fuel cost per gallon ” represents total aircraft fuel expense for our total system divided by the total number of fuel gallons consumed in our total system. “ Average stage length ” represents the average number of miles flown per flight.
“ Average fuel cost per gallon ” represents total aircraft fuel expense for our total system or scheduled service (as applicable) divided by the total number of fuel gallons consumed in our total system or scheduled service. “ Average stage length ” represents the average number of miles flown per flight.
(2) Includes aircraft and engine acquisition obligations under existing purchase agreements. These amounts are not reflected on our balance sheet. 49 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
These amounts are not reflected on our balance sheet. 49 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
As of February 1, 2024, and including service announcements through that date, we were selling seats on 555 routes serving 124 cities in 42 states.
As of February 1, 2025, and including service announcements through that date, we were selling seats on 577 routes serving 122 cities in 42 states.
(2) Includes 23 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2023, 20 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2022, and 11 aircraft under finance lease and 11 aircraft under operating lease as of December 31, 2021.
(2) Includes 23 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2024 and December 31, 2023, and 20 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2022. (3) Includes four aircraft under operating lease as of December 31, 2024, December 31, 2023, and December 31, 2022.
The amount being accrued is 35 percent of current pay for a minimum of 85 pay credit hours per month except for first year first officers for whom the percentage is 82 percent.
The amount being accrued is 35 percent of current hourly pay rates, except for our first year first officers for whom the percentage is 82 percent, in each case, calculated at a minimum of 85 pay credit hours per month.
Separately from the ongoing collective bargaining agreement negotiations, and in an attempt to begin to address pilot pay issues, effective in May 2023, we are recognizing a retention bonus for pilots who continue employment with us until a new labor agreement is approved.
Separately from the ongoing collective bargaining agreement negotiations, to address retention and pilot pay issues and increase pilot staffing levels, effective in May 2023, we began accruing a retention bonus, with IBT's agreement, for pilots who continue employment with us until a new labor agreement is approved.
Other expense includes travel and training expenses for crews and ground personnel, facility lease expenses, professional fees, personal property taxes, information technology consulting, other expenses for non-airline initiatives (including Sunseeker Resort, and the now discontinued Allegiant Nonstop family entertainment centers and Teesnap), the cost of passenger liability insurance, aircraft hull insurance and all other insurance policies, excluding employee welfare insurance.
Other expense includes travel and training expenses for crews and ground personnel, facility lease expenses, professional fees, personal property taxes, information technology consulting, other expenses for Sunseeker Resort, the cost of passenger liability insurance, aircraft hull insurance and all other insurance policies, excluding employee welfare insurance.
We will continue to consider raising funds through debt financing to finance aircraft purchases and also on an opportunistic basis. Debt Our debt and finance lease obligations balance, without reduction for related issuance costs, increased from $2.12 billion as of December 31, 2022 to $2.28 billion as of December 31, 2023.
We will continue to consider raising funds through debt financing to finance aircraft purchases and also on an opportunistic basis. Debt Our debt and finance lease obligations balance, without reduction for related issuance costs, decreased from $2.28 billion as of December 31, 2023 to $2.08 billion as of December 31, 2024. During 2024, we borrowed $387.0 million at variable rates.
As of February 1, 2024, we have $275.0 million of undrawn capacity under revolving credit facilities plus another $25.1 million of undrawn capacity under a PDP financing facility and $215.7 million under a prearranged aircraft financing facility.
As of December 31, 2024, we had $275.0 million of undrawn capacity under revolving credit facilities plus another $25.1 million of undrawn capacity under a PDP financing facility and $218.5 million under prearranged aircraft financing facilities.
In the interest of increased quality control at Boeing and its suppliers, the FAA has indicated that aircraft production rates will be capped until they are fully satisfied with Boeing's quality practices. These factors could delay deliveries to us.
In the interest of increased quality control at Boeing and its suppliers, the FAA has indicated aircraft production rates will be capped until they are satisfied with Boeing's quality practices. These factors, other delays in Boeing obtaining needed regulatory approvals, and other factors impacting Boeing could delay deliveries to us even further than management's current expectations.
The following terms used in this section and elsewhere in this annual report have the meanings indicated below: “ Available seat miles ” or “ ASMs ” represents the number of seats available for passengers multiplied by the number of miles the seats are flown.
(3) Reflects division of passenger revenue between scheduled service and air-related charges in our booking path. 46 The following terms used in this section and elsewhere in this annual report have the meanings indicated below: “ Available seat miles ” or “ ASMs ” represents the number of seats available for passengers multiplied by the number of miles the seats are flown.
In making these determinations, we utilize certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated future cash flows expected to be generated by those assets which are based on additional assumptions such as (but not limited to) asset utilization, average fare, block hours, fuel costs, length of service the asset will be used in operations, and estimated salvage values.
In making these determinations, we exercise judgment in making certain assumptions, including, but not limited to: (i) estimated fair value of the assets; and (ii) estimated future cash flows expected to be generated by those assets which are based on additional assumptions such as (but not limited to) the overall effect of trends in the airline and hospitality industries and the economy, asset utilization, average fare, block hours, fuel costs, fixed fee contracts, average daily rates, occupancy, cost of goods sold, group bookings, reserve for capital replacement, length of service the asset will be used in operations, and estimated salvage values.
We continually adjust our network through the addition of new markets and routes, adjusting the frequencies into existing markets, and exiting under-performing markets, as we seek to achieve and maintain profitability on each route we serve.
We continually adjust our network through the addition of new markets and routes, adjusting the frequencies into existing markets, and exiting under-performing markets, as we seek to achieve and maintain profitability on each route we serve. We paused network growth in 2023 and 2024 due to flight crew constraints and aircraft delivery delays among other factors.
Although the DOT process has progressed substantially, their review of our application is currently suspended pending the outcome of diplomatic 41 engagement on broader treaty issues and, as a result, the timing of commencement of this service is uncertain as it will depend on when or if the DOT will ultimately approve the grant of antitrust immunity.
The DOT's review of our application is currently suspended pending the outcome of diplomatic engagement on broader treaty issues and, as a result, the timing of commencement of this service is uncertain as it will depend on when or if the DOT will ultimately approve the grant of antitrust immunity. 42 Our Operating Expenses A brief description of the items included in our operating expense line items follows.
Aircraft fuel expense decreased $118.9 million, or 14.6 percent, in 2023 compared to 2022. This was primarily driven by a 17.2 percent decrease in average fuel cost per gallon offset by a 2.9 percent increase in gallons consumed on a 1.9 percent increase in ASMs. Salaries and benefits expense.
The decrease was primarily driven by a 10.7 percent decrease in average fuel cost per gallon, offset by a 1.0 percent increase in gallons consumed on a 1.1 percent increase in total system ASMs. Salaries and benefits expense. Airline salaries and benefits expense increased $98.2 million, or 14.6 percent, in 2024 compared to 2023.
We will be reporting annually on our progress toward meeting those goals. VivaAerobus Alliance In December 2021, we announced plans for a fully-integrated commercial alliance agreement with VivaAerobus, designed to expand options for nonstop leisure air travel between our markets in the United States and Mexico.
These efforts are subject to many uncertainties and may not be successful. VivaAerobus Alliance In December 2021, we announced plans for a fully-integrated commercial alliance agreement with VivaAerobus, designed to expand options for nonstop leisure air travel between our markets in the United States and Mexico.
The timing of these deliveries is based on management's best estimates and differs from the contract in place. Refer to Part I - Item 2. Properties for further detail regarding our aircraft fleet. 39 NETWORK We manage capacity and route expansion through optimization of our flight schedule to, among other things, better match demand in certain markets.
Properties for further detail regarding our aircraft fleet. 39 NETWORK We manage capacity and route expansion through optimization of our flight schedule to, among other things, better match demand in certain markets.
Year Ended December 31, Percent Change Unitized costs (in cents) 2023 2022 YoY Aircraft fuel 3.71 ¢ 4.42 ¢ (16.1) % Salaries and benefits 3.66 3.00 22.0 Station operations 1.37 1.39 (1.4) Maintenance and repairs 0.66 0.64 3.1 Depreciation and amortization 1.19 1.07 11.2 Sales and marketing 0.61 0.55 10.9 Aircraft lease rentals 0.13 0.13 — Other 0.71 0.61 16.4 Special charges, net of insurance recoveries 0.15 0.19 (21.1) CASM 12.19 ¢ 12.00 ¢ 1.6 Operating CASM, excluding fuel 8.49 ¢ 7.58 ¢ 12.0 Airline special charges CASM 0.19 — NM Sunseeker Resort CASM 0.18 0.25 (28.0) Airline operating CASM, excluding fuel and Sunseeker Resort activity 8.12 ¢ 7.33 ¢ 10.8 NM Not meaningful Aircraft fuel expense.
Year Ended December 31, Percent Change Airline Unitized Costs (in cents) 2024 2023 YoY Salaries and benefits 4.06 ¢ 3.58 ¢ 13.4 % Aircraft fuel 3.31 3.71 (10.8) Station operations 1.44 1.37 5.1 Depreciation and amortization 1.22 1.18 3.4 Maintenance and repairs 0.66 0.66 — Sales and marketing 0.52 0.58 (10.3) Aircraft lease rentals 0.12 0.13 (7.7) Other 0.54 0.62 (12.9) Special charges 0.24 0.19 26.3 Airline operating CASM 12.11 ¢ 12.02 ¢ 0.7 Airline operating CASM, excluding fuel 8.80 ¢ 8.31 ¢ 5.9 Airline operating CASM, excluding fuel and special charges 8.56 ¢ 8.12 ¢ 5.4 44 Airline operating CASM, excluding fuel and airline special charges.
Excluding special charges and Sunseeker operating costs allows management and investors to better compare our airline unit costs with those of other airlines.
Both the cost and availability of fuel are subject to many economic and political factors beyond our control. Excluding special charges allows management and investors to better compare our airline unit costs with those of other airlines.
Additionally, this expense includes gain and loss on disposals of aircraft and other equipment disposals, and all other administrative and operational overhead expenses not included in other line items above. Special charges include charges taken in 2023 for accelerated retirements of 21 airframes for early retirement to coincide with planned 737 MAX aircraft deliveries.
Additionally, this expense includes gain and loss on disposals of aircraft and other equipment, and all other administrative and operational overhead expenses not included in other line items above.
The effective tax rates for 2023 and 2022 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of ASU 2016-09 related to share-based payments. 2022 compared to 2021 The comparison of our 2022 results to 2021 results is included in our Annual Report on Form 10-K for the year ended December 31, 2022, under Part II Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 45 For the Year Ended December 31, Airline operating statistics (unaudited): 2023 2022 2021 2020 2019 Total system statistics: Passengers 17,342,236 16,796,544 13,637,405 8,623,984 15,012,149 Available seat miles (ASMs) (thousands) 18,772,110 18,419,045 17,490,571 13,125,533 16,174,240 Airline operating expense per ASM (CASM) (cents) 12.02 ¢ 11.75 ¢ 8.21 ¢ 8.56 ¢ 9.08 ¢ Fuel expense per ASM (cents) 3.71 ¢ 4.42 ¢ 2.52 ¢ 1.69 ¢ 2.65 ¢ Airline operating CASM, excluding fuel (cents) 8.31 ¢ 7.33 ¢ 5.69 ¢ 6.87 ¢ 6.43 ¢ Departures 120,525 118,069 117,047 87,955 110,542 Block hours 285,453 278,792 264,628 196,849 248,513 Average stage length (miles) 882 884 856 862 855 Average number of operating aircraft during period 125.2 114.2 103.0 97.4 85.6 Average block hours per aircraft per day 6.2 6.7 7.0 5.9 8.0 Full-time equivalent employees at end of period 5,643 5,306 4,432 3,819 4,130 Fuel gallons consumed (thousands) 224,996 218,606 204,689 149,479 196,442 ASMs per gallon of fuel 83.4 84.3 85.4 87.8 82.3 Average fuel cost per gallon $ 3.09 $ 3.73 $ 2.15 $ 1.48 $ 2.18 Scheduled service statistics: Passengers 17,143,870 16,630,138 13,509,544 8,553,623 14,823,267 Revenue passenger miles (RPMs) (thousands) 15,639,329 15,224,346 11,963,715 7,626,470 13,038,003 Available seat miles (ASMs) (thousands) 18,208,820 17,909,190 17,027,902 12,814,080 15,545,818 Load factor 85.9 % 85.0 % 70.3 % 59.5 % 83.9 % Departures 116,044 114,066 113,121 85,276 105,690 Block hours 276,313 270,516 256,991 191,732 238,361 Average seats per departure 176.3 175.7 174.2 172.8 171.1 Yield (cents) (1) 7.59 ¢ 7.31 ¢ 6.61 ¢ 5.88 ¢ 7.00 ¢ Total passenger revenue per ASM (TRASM) (cents) (2) 13.38 ¢ 12.50 ¢ 9.78 ¢ 7.40 ¢ 11.28 ¢ Average fare - scheduled service (3) $ 69.25 $ 66.88 $ 58.50 $ 52.45 $ 61.58 Average fare - air-related charges (3) $ 66.33 $ 61.67 $ 58.33 $ 53.02 $ 51.96 Average fare - third party products $ 6.57 $ 6.07 $ 6.40 $ 5.43 $ 4.72 Average fare - total $ 142.15 $ 134.62 $ 123.24 $ 110.91 $ 118.26 Average stage length (miles) 888 890 862 867 859 Fuel gallons consumed (thousands) 218,129 212,466 198,891 145,528 188,596 Average fuel cost per gallon $ 3.09 $ 3.72 $ 2.13 $ 1.48 $ 2.18 Percent of sales through website during period 95.8 % 96.0 % 94.7 % 93.1 % 93.3 % Other Data: Rental car days sold 1,377,710 1,447,708 1,361,123 1,132,173 1,921,930 Hotel room nights sold 249,933 282,854 261,158 199,059 415,593 (1) Defined as scheduled service revenue divided by revenue passenger miles (2) Various components of this measure do not have a direct correlation to ASMs.
For the Year Ended December 31, Airline operating statistics (unaudited): 2024 2023 2022 Total system statistics: Passengers 16,982,836 17,342,236 16,796,544 Available seat miles (ASMs) (thousands) 18,984,711 18,772,110 18,419,045 Airline operating expense per ASM (CASM) (cents) 12.11 ¢ 12.02 ¢ 11.75 ¢ Fuel expense per ASM (cents) 3.31 ¢ 3.71 ¢ 4.42 ¢ Airline special charges per ASM (cents) 0.24 ¢ 0.19 ¢ — ¢ Airline operating CASM, excluding fuel and special charges (cents) 8.80 ¢ 8.31 ¢ 7.33 ¢ Departures 121,580 120,525 118,069 Block hours 288,407 285,453 278,792 Average stage length (miles) 887 882 884 Average number of operating aircraft during period 124.7 125.2 114.2 Average block hours per aircraft per day 6.3 6.2 6.7 Full-time equivalent employees at end of period 5,991 5,643 5,306 Fuel gallons consumed (thousands) 227,345 224,996 218,606 ASMs per gallon of fuel 83.5 83.4 84.3 Average fuel cost per gallon $ 2.76 $ 3.09 $ 3.73 Scheduled service statistics: Passengers 16,765,283 17,143,870 16,630,138 Revenue passenger miles (RPMs) (thousands) 15,303,737 15,639,329 15,224,346 Available seat miles (ASMs) (thousands) 18,314,867 18,208,820 17,909,190 Load factor 83.6 % 85.9 % 85.0 % Departures 116,441 116,044 114,066 Block hours 277,626 276,313 270,516 Average seats per departure 176.0 176.3 175.7 Yield (cents) (1) 7.11 ¢ 7.59 ¢ 7.31 ¢ Total passenger revenue per ASM (TRASM) (cents) (2) 12.88 ¢ 13.38 ¢ 12.50 ¢ Average fare - scheduled service (3) $ 64.89 $ 69.25 $ 66.88 Average fare - air-related charges (3) $ 67.35 $ 66.33 $ 61.67 Average fare - third party products $ 8.48 $ 6.57 $ 6.07 Average fare - total $ 140.72 $ 142.15 $ 134.62 Average stage length (miles) 893 888 890 Fuel gallons consumed (thousands) 219,061 218,129 212,466 Average fuel cost per gallon $ 2.76 $ 3.09 $ 3.72 Percent of sales through website during period 93.6 % 95.8 % 96.0 % Other Data: Rental car days sold 1,306,775 1,377,710 1,447,708 Hotel room nights sold 196,605 249,933 282,854 (1) Defined as scheduled service revenue divided by revenue passenger miles (2) Various components of this measure do not have a direct correlation to ASMs.
Salaries and benefits expense includes wages, salaries, and employee bonuses, sales commissions for in-flight personnel and Sunseeker Resort personnel, as well as expenses associated with employee benefit plans, stock compensation expense related to equity grants, and employer payroll taxes.
Salaries and benefits expense includes wages, salaries, employee bonuses and pilot retention bonus accruals, as well as expenses associated with employee benefit plans, stock compensation expense related to equity grants, and employer payroll taxes. The CARES Act employee retention tax credit was recorded as an offset to salaries and benefits expense in 2022.
Boeing Agreement Since December 2021, we have signed an agreement and multiple amendments with The Boeing Company to purchase 50 newly manufactured 737 MAX aircraft with options to purchase an additional 80 737MAX aircraft.
Boeing Agreement We have signed an agreement and amendments with Boeing to purchase 50 newly manufactured 737 MAX aircraft with options to purchase up to an additional 80 737 MAX aircraft. We took delivery of four MAX aircraft in 2024, with the aircraft entering revenue service before the end of the year.
During 2023, our operating activities provided $423.1 million of cash compared to $303.1 million during 2022. This change was primarily attributable to a $115.1 million increase in net income compared to 2022 with offsets for changes in individual current asset and liability items. Investing Activities.
This change was primarily attributable to a $109.3 million decrease in airline operating income as well as a full-year operating loss from Sunseeker Resort compared to 2023 with offsets for changes in individual current asset and liability items. Investing Activities. Cash provided by investing activities was $5.6 million during 2024 compared to cash used of $721.9 million in 2023.
These figures are provided on a per ASM basis so as to facilitate comparisons with airlines reporting revenues on a per ASM basis. (3) Reflects division of passenger revenue between scheduled service and air-related charges in our booking path.
These figures are provided on a per ASM basis so as to facilitate comparisons with airlines reporting revenues on a per ASM basis.
The CARES Act employee retention tax credit was recorded as an offset to salaries and benefits expense in both 2021 and 2022. Station operations expense includes the fees charged by airports for the use or lease of airport facilities and fees charged by third party vendors for ground handling services, commissary expenses, and other related services.
Aircraft fuel expense includes the cost of aircraft fuel, fuel taxes, into plane fees and airport fuel flowage, storage or through-put fees. Station operations expense includes the fees charged by airports for the use or lease of airport facilities and fees charged by third party vendors for ground handling services, commissary expenses, and other related services.
Union Negotiations The collective bargaining agreement with our pilots is currently amendable and the parties have jointly requested the involvement of the National Mediation Board ("NMB") to assist with the negotiations. The mediation process with the NMB began in early 2023 and is continuing.
We and the International Brotherhood of Teamsters jointly requested the mediation services of the National Mediation Board in January 2023 to assist with the negotiations. The mediation process with the NMB is continuing.
The prepayments are escrowed and are recorded as restricted cash with a corresponding amount reflected as air traffic liability until the flight is completed. We suspended share repurchases and our quarterly cash dividend in first quarter 2020, as part of cash conservation efforts in response to the effects of COVID-19 on our business.
The prepayments are escrowed and are recorded as restricted cash with a corresponding amount reflected as air traffic liability until the flight is completed. We reinstituted a regular cash dividend in third quarter 2023 at an annual rate of $2.40 per share, payable quarterly. The quarterly cash dividend was subsequently suspended in July 2024 for an indefinite period of time.
Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control.
Operating Expenses The following table presents airline only operating unit costs on a per ASM basis, defined as Operating CASM, for the indicated periods. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility.
Including this revolving credit facility, we had $275.0 million undrawn and available under our revolving credit facilities as of December 31, 2023. Sources and Uses of Cash Operating Activities. Operating cash inflows are primarily derived from providing air transportation and related ancillary products and services to customers.
Operating cash inflows are primarily derived from providing air transportation and related ancillary products and services to customers. During 2024, our operating activities provided $338.5 million of cash compared to $423.1 million during 2023.
In connection with our receipt of financial support under the payroll support programs, we agreed not to repurchase shares or pay cash dividends through September 30, 2022. We resumed our share repurchases in fourth quarter 2022 and have $75.7 million of unused authority at December 31, 2023.
We resumed our share repurchases in fourth quarter 2022 but we did not repurchase any shares on the open market during 2024. We had $75.7 million of unused authority at December 31, 2024.
The following table shows the number of leisure destinations and cities served as of the dates indicated (includes cities served seasonally): As of December 31, 2023 2022 2021 Leisure destinations 33 32 33 Origination cities 91 93 99 Total cities 124 125 132 Total routes 544 572 595 40 TRENDS Strong Demand Momentum While demand has normalized since the post-pandemic period, peak period demand remains at or near all-time highs.
The following table shows the number of leisure destinations and cities served as of the dates indicated (includes cities served seasonally): As of December 31, 2024 2023 2022 Leisure destinations 34 33 32 Origination cities 87 91 93 Total cities 121 124 125 Total routes 541 544 572 40 TRENDS Aircraft Fuel The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict.
The change was the result of a $220.8 million decrease in principal payments on long term debt and finance lease obligations and $102.3 million of cash disbursed to us from funds held in a construction loan deposit trust account during 2023, compared to $92.7 million of funds deposited into the construction deposit trust account (which are considered to be both cash proceeds from the issuance of debt and cash outflows to the deposit trust account) in 2022.
Cash used in financing activities for 2024 was $201.3 million, compared to cash provided by financing activities of $212.9 million in 2023. The change was primarily the result of a $104.7 million increase in principal payments on long term debt and finance lease obligations and a decrease of $255.6 million in proceeds from issuance of debt and finance leases.
Income tax expense . We recorded a $41.5 million tax expense compared to a $2.5 million tax expense during 2023 and 2022 respectively.
Refer to Note 15 in the consolidated financial statements for additional information regarding the impairment charge. 45 Income tax expense . We recorded a $68.2 million tax benefit in 2024 compared to a $41.5 million tax expense during 2023.
(3) Includes four aircraft under operating lease as of December 31, 2023, December 31, 2022, and December 31, 2021. As of December 31, 2023, we are party to forward purchase agreements for 51 aircraft with 13 deliveries expected in 2024, approximately 24 in 2025 and the remainder thereafter.
As of December 31, 2024, we are party to forward purchase agreements for 46 aircraft with nine deliveries expected in 2025, approximately 14 in 2026 and the remainder in 2027. The timing of these deliveries is based on management's best estimates and differs from the contract in place. Refer to Part I - Item 2 .
Passenger revenue increased 8.7 percent in 2023 compared with 2022 as scheduled service passengers increased by 3.1 percent on a 1.7 percent increase in departures. In addition, stronger passenger demand resulted in a 3.5 percent increase in scheduled service base fares in 2023 compared to 2022. Ancillary air-related revenues also increased by 10.9 percent in 2023 over 2022.
Passenger revenue decreased 4.6 percent in 2024 compared to 2023 related to a 2.2 percent decrease in scheduled service passengers on a slight increase in capacity and a 6.3 percent decrease in scheduled service base fares which more than offset a 1.5 percent increase in air-related ancillary revenue per passenger. Third party products revenue.
The increase in cash provided by these factors in 2023 was offset by a $213.9 million decrease in proceeds from the issuance of debt and finance lease obligations, net of issuance costs, and $22.1 million used to pay cash dividends in 2023, compared to none in the prior year. 48 OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTRACTUAL OBLIGATIONS The following table discloses aggregate information about our contractual cash obligations and off-balance sheet arrangements as of December 31, 2023 and the periods in which payments are due: Contractual obligations (in thousands) Less than 1 year 2-3 years 4-5 years More than 5 years Total Long-term debt obligations (1) $ 545,598 $ 478,024 $ 1,059,107 $ 143,782 $ 2,226,511 Finance lease obligations 51,408 102,516 117,016 336,168 607,108 Operating lease obligations 25,912 37,746 21,686 42,615 127,959 Aircraft acquisition obligations (2) 866,545 833,291 — — 1,699,836 Total future payments under contractual obligations $ 1,489,463 $ 1,451,577 $ 1,197,809 $ 522,565 $ 4,661,414 (1) Long-term debt obligations (including variable interest entities) include scheduled interest payments, using applicable reference rates as of December 31, 2023, and excludes debt issuance costs.
The remaining change relates to an $84.0 million decrease in Sunseeker construction financing disbursements, which are the proceeds of Sunseeker insurance recoveries disbursed to us. 48 OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTRACTUAL OBLIGATIONS The following table discloses aggregate information about our contractual cash obligations and off-balance sheet arrangements as of December 31, 2024 and the periods in which payments are due: Contractual obligations (in thousands) Less than 1 year 2-3 years 4-5 years More than 5 years Total Long-term debt obligations (1) $ 539,160 $ 957,638 $ 227,054 $ 289,067 $ 2,012,919 Finance lease obligations 51,408 102,216 170,304 231,772 555,700 Operating lease obligations 24,532 25,584 20,024 32,590 102,730 Aircraft acquisition obligations (2) 399,895 1,178,214 — — 1,578,109 Total future payments under contractual obligations $ 1,014,995 $ 2,263,652 $ 417,382 $ 553,429 $ 4,249,458 (1) Long-term debt obligations (including variable interest entities) include scheduled interest payments, using applicable reference rates as of December 31, 2024, and exclude debt issuance costs.
Third party products revenue. Third party products revenue for 2023 increased 11.5 percent over 2022. The increase was primarily the result of an increase in marketing revenue from our co-brand credit card program, offset by a 4.8 percent decrease in rental car days sold and an 11.6 percent decrease in hotel room nights sold. Fixed fee contract revenue.
Third party products revenue increased $29.5 million, or 26.2 percent, in 2024 compared to 2023. The increase was driven by a $21.1 million increase in marketing revenue from our co-brand credit card and $10.1 million from a travel insurance offering introduced during 2024, partially offset by declines in revenues from sales of hotel rooms and rental cars.
Capitalized software development costs related to the 44 implementations of SAP and Navitaire and the opening of Sunseeker Resort also contributed to higher depreciation and amortization expense as these assets were placed in service during the year. Maintenance and repairs expense. Maintenance and repairs expense during 2023 increased by $6.0 million or 5.1 percent compared to 2022.
Sunseeker Resort depreciation and amortization increased by $24.2 million in 2024 compared to 2023 as the result of only a partial year of expense in 2023 due to the Resort opening in December 2023. Maintenance and repairs expense.
Once these conditions allow, we should be able to achieve meaningful growth with greater utilization of our fleet (and, in particular, during peak demand periods), and with projected growth of the fleet. Establishment of ESG Goals In our 2022 sustainability report, we established ESG goals in the areas of environmental, social and governance.
During 2025 and future periods, we expect to add meaningful capacity growth with greater utilization of our fleet (and, in particular, during peak demand periods) and with projected growth of the fleet after 2025. 41 Sunseeker Resort Sunseeker Resort at Charlotte Harbor opened in December 2023.
Removed
Allegiant's co-brand credit card was named the best airline co-brand credit card for the fifth consecutive year. • Published the company's second annual ESG report, which includes five company-wide targets, including an emissions intensity reduction goal. 38 AIRCRAFT Operating Fleet The following table sets forth the number and type of aircraft in service and operated by us as of the dates indicated.
Added
We aim to achieve meaningful growth with greater utilization of our fleet. In November 2024, we announced 44 new routes and three new cities beginning in 2025 as we begin to pursue network growth in 2025 and after.
Removed
Demand continues to compare favorably to 2019 as scheduled service load factors and total revenue per available seat mile ("TRASM") in 2023 were above 2019 and 2022 levels. Aircraft Fuel The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict.
Added
Increasing Utilization We are in the midst of an initiative to increase aircraft utilization back to 2019 levels by adding service to our schedule in our most profitable peak periods. By way of example, our aircraft utilization rate was 9.8 hours per aircraft per day in July 2019 compared to 7.7 hours per aircraft per day in July 2024.
Removed
The cost per gallon of fuel began to increase significantly in 2021, and the increases were exacerbated by the geopolitical impact of the war in Ukraine. Increases in refinery costs also added to our fuel cost.
Added
During the December 2024 holiday period, we matched our daily utilization from the corresponding period in 2019 and expect to continue the momentum to achieve this goal during our busiest periods of March, June and July 2025. However, this effort is subject to various risks, some of which may not be under our control.
Removed
Although the average fuel cost per gallon declined in 2023 when compared to 2022, the average fuel cost per gallon in 2023 remained 43.7 percent higher than in 2021. We expect high fuel costs will continue to impact our total costs and operating results.
Added
Although the contract provides for more deliveries, at this time, we currently expect nine aircraft to be delivered to us in 2025. Further delays in aircraft deliveries will impact our ability to schedule additional growth in late 2025 and beyond. New Reservation System During 2023, we converted to the Navitaire reservation system to replace our legacy home-grown system.
Removed
We are also in the process of negotiating a new contract with the union representing our flight attendants after a tentative agreement negotiated with the union was rejected by the work group. The terms of any new collective bargaining agreement will increase our costs over the term of the contract.
Added
While we expect incremental passenger revenue once this system is fully implemented, we suffered some per passenger air ancillary revenue degradation (in the area of bundled ancillary products in particular) as certain functionality was unavailable during the transition. We restored functionality around our third bundled product offering in late 2024 and will continue to devote resources to the transition issues.
Removed
Until new agreements are in place, attrition and difficulty hiring sufficient personnel in the affected work groups could have an adverse effect on our operations and growth. Pilot Scarcity The supply of pilots necessary for airline industry growth may be a limiting factor. The ability to hire and retain pilots will be critical to our and the industry’s growth.
Added
We currently expect to regain all the lost per passenger revenue and begin to achieve some of the expected incremental per passenger revenue in 2026. Union Negotiations The collective bargaining agreement with our pilots has been amendable since 2021.
Removed
Sunseeker Resort Sunseeker Resort at Charlotte Harbor opened in December 2023. Its success will depend on our ability to attract sufficient hotel occupancy through groups and transient bookings at acceptable daily rates and to profitably operate our food and beverage options. 42 Our Operating Expenses A brief description of the items included in our operating expense line items follows.
Added
Our implementation of the retention bonus has allowed us to effectively increase pay rates for our pilot team members (by way of the accrual of the retention bonus), add pilots through hiring and significantly slow attrition.
Removed
Aircraft fuel expense includes the cost of aircraft fuel, fuel taxes, into plane fees and airport fuel flowage, storage or through-put fees.
Added
For the year ended December 31, 2024, we recorded estimated pilot retention bonus accruals of $91.5 million bringing the total accrual to $146.1 million at year end, including the related payroll taxes. The bonus will be paid to all pilots remaining employed with us after ratification of a new collective bargaining agreement.
Removed
Other special charges in 2023 and the special charges in 2022 relate to the estimated loss incurred by Sunseeker from the impact of Hurricane Ian and Hurricane Idalia and subsequent insured losses. The amounts of the Sunseeker special charges are offset by amounts recovered under our insurance policies. 43 RESULTS OF OPERATIONS 2023 compared to 2022 Operating Revenue Passenger revenue.
Added
As with many new hotels or resorts, Sunseeker's booking and occupancy rates are lower than more established properties. In addition, occupancy during 2024 was compromised by three major hurricanes impacting the area in summer and fall 2024. Sunseeker incurred significant operating losses in its first year of operations in 2024.
Removed
Fixed fee contract revenue for 2023 increased 12.5 percent compared with 2022 as a result of a 19.8 percent increase in fixed fee departures. Operating Expenses The following table presents operating unit costs on a per ASM basis, defined as Operating CASM, for the indicated periods.
Added
Although we are seeing improvement in recent months, we expect losses to continue in 2025. Our customer reviews continue to be positive and we hope to build on that favorable customer sentiment to achieve better financial performance of the Resort in the future.
Removed
Salaries and benefits expense increased $135.4 million, or 24.5 percent, in 2023 compared to 2022.
Added
We have hired experienced advisors to begin a process to seek a capital partner to purchase the Resort or an interest in the Resort. In the meantime, we have engaged experienced hospitality advisors to identify areas for improvement in an effort to optimize the value of this asset and evaluate strategic alternatives with potential partners.
Removed
The increase is largely due to pilot retention bonuses that we began to accrue in May 2023 and other increases in crew pay, a 6.4 percent year-over-year increase in the number of full-time equivalent airline employees, and Sunseeker pre-opening expenses attributable to the hiring of more than 1,000 team members for its opening in December 2023. Station operations expense.
Added
Special charges include charges taken in 2024 for a bonus paid to flight attendants upon ratification of a new collective bargaining agreement, costs related to an organizational restructuring of certain administrative personnel, and an impairment charge taken on Sunseeker Resort and the related Aileron Golf Course.
Removed
Station operations expense during 2023 increased $1.4 million or 0.5 percent over 2022 due to increased costs associated with airport and landing fees and a 2.1 percent increase in departures, which were offset by a decrease in costs associated with irregular operations. Depreciation and amortization expense.
Added
Other special charges in 2024, 2023, and 2022 relate to accelerated retirements of 21 airframes for early retirement to coincide with planned 737 MAX aircraft deliveries and losses incurred by Sunseeker from the impact of hurricanes and other weather related events, net of insurance recoveries. 43 RESULTS OF OPERATIONS 2024 compared to 2023 Operating Revenue Year Ended December 31, Percent Change Operating Revenues (in thousands) 2024 2023 YoY Passenger $ 2,217,059 $ 2,324,397 (4.6) % Third party products 142,128 112,579 26.2 Fixed fee contracts 80,660 68,548 17.7 Resort and other 72,742 4,333 NM Total operating revenues $ 2,512,589 $ 2,509,857 0.1 NM - not meaningful Passenger revenue.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed2 unchanged
Biggest changeBased on our fuel consumption during 2023, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately $69.1 million. We have not hedged fuel price risk for many years.
Biggest changeBased on our fuel consumption during 2024, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately $63.4 million. We do not hedge fuel price risk.
Interest Rates As of December 31, 2023, we had $429.6 million of variable-rate debt, including current maturities and without reduction for $4.7 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $3.9 million during 2023. 52
Interest Rates As of December 31, 2024, we had $588.2 million of variable-rate debt, including current maturities and without reduction for $2.9 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $4.4 million during 2024. 52
Aircraft fuel expense during 2023 represented 30.4 percent of our total operating expenses. Increases in fuel prices, or a shortage of supply, could have a material impact on our operations and operating results.
Aircraft fuel expense during 2024 represented 22.8 percent of our total operating expenses. Increases in fuel prices, or a shortage of supply, could have a material impact on our operations and operating results.

Other ALGT 10-K year-over-year comparisons