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What changed in Allegiant Travel CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Allegiant Travel CO's 2024 and 2025 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 2025 report.

+441 added−358 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-03)

Top changes in Allegiant Travel CO's 2025 10-K

441 paragraphs added · 358 removed · 234 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

108 edited+53 added−46 removed83 unchanged
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.
Biggest changeWe have coined 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 as we earn 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 • 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 In our pursuit of Allegiant ONE, on January 11, 2026, we entered into an agreement to acquire Sun Country Airlines Holdings, Inc.
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.
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 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 operate to more cities than any non-legacy U.S. carrier and with more than 75 percent of our routes not having nonstop competition. This makes us an important travel option for a large cross section of the country and protects us against overexposure to any one geographic location.
We operate to more cities than any non-legacy U.S. carrier and with 75 percent of our routes not having nonstop competition. This makes us an important travel option for a large cross section of the country and protects us against overexposure to any one geographic location.
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.
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 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.
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.
This comprehensive report outlines our disclosures pertaining to material topics identified by key stakeholders and establishes the following Sustainability 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.
Available commercial insurance in the future could be more expensive, could have material differences in coverage than is currently provided, and may not be adequate to protect us from risk of loss. 13 Government Regulation We are subject to federal, state and local laws affecting the airline industry and to extensive regulation by the DOT, the FAA, and other governmental agencies.
Available commercial insurance in the future could be more expensive, could have material differences in coverage than is currently provided, and may not be adequate to protect us from risk of loss. Government Regulation We are subject to federal, state and local laws affecting the airline industry and to extensive regulation by the DOT, the FAA, and other governmental agencies.
The basis of competition in the fixed fee market is cost, equipment capabilities, service, reputation, and schedule flexibility. 10 Aircraft Fuel The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict. Significant increases in fuel costs could materially affect our operating results and profitability.
The basis of competition in the fixed fee market is cost, equipment capabilities, service, reputation, and schedule flexibility. Aircraft Fuel The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict. Significant increases in fuel costs could materially affect our operating results and profitability.
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.
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. 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.
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.
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.
In addition, snacks and beverages are sold individually on the aircraft, allowing passengers to purchase only items they value. Our direct to consumer distribution method enables a variety of added revenue opportunities with direct “one-stop” shopping solutions and managed product offerings.
In addition, snacks and 9 beverages are sold individually on the aircraft, allowing passengers to purchase only items they value. Our direct to consumer distribution method enables a variety of added revenue opportunities with direct “one-stop” shopping solutions and managed product offerings.
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.
In addition, our co-brand credit card is designed for the less frequent leisure traveler, with 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.
The DOT monitors the continuing fitness of carriers and has the authority to promulgate regulations and to investigate (including by on-site inspections) and institute proceedings to enforce its regulations and related federal statutes, and may assess civil penalties, suspend or revoke operating authority, and seek criminal sanctions.
The DOT monitors the continuing fitness of carriers and has the authority to promulgate regulations and to investigate (including by on-site inspections) and institute proceedings to enforce its regulations and related federal statutes, and may assess civil penalties, suspend or 14 revoke operating authority, and seek criminal sanctions.
The revenue for ancillary air-related products and services is reflected in the passenger revenue income statement line item, along with scheduled service air transportation revenue and travel point redemptions from our co-brand Allegiant credit card and our non-card loyalty program. Third party products and services.
The revenue from ancillary air-related products and services is reflected in the passenger revenue income statement line item, along with scheduled service air transportation revenue and travel point redemptions from our co-brand Allegiant credit card and our non-card loyalty program. Third party products and services.
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.
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.
The FAA can negotiate the assessment of civil penalties with us for such failures and if we are unable to come to an agreement, institute proceedings to assess civil penalties unilaterally for such failures after notice and hearing. The FAA also has authority to seek criminal sanctions.
The FAA can negotiate the assessment of civil penalties with us for such failures and if we are unable to come to an agreement, institute proceedings to assess civil penalties unilaterally for such failures after notice and a hearing. The FAA also has authority to seek criminal sanctions.
We believe the control of our automation systems has allowed us to be innovators in the industry by providing our customers with a variety of different travel services and products, and allowing us to seek to increase revenues through testing of alternative revenue management approaches. 6 We believe the following strengths from our unique business model allow us to maintain a competitive advantage in the markets we serve: Focus on leisure traffic from under-served cities We believe small and medium-sized cities represent a large, under-served market, especially for leisure travel.
We believe the control of our automation systems has allowed us to be innovators in the industry by providing our customers with a variety of different travel services and products, and allowing us to seek to increase revenues through testing of alternative revenue management approaches. 7 We believe the following strengths from our unique business model allow us to maintain a competitive advantage in the markets we serve: Focus on leisure traffic from under-served cities We believe small and medium-sized cities represent a large, under-served market, especially for leisure travel.
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.
Additionally, federal funding to airports and/or airport bond 15 financing could be affected through additional legislation, which could result in higher fees, rates, and charges at many of the airports we serve. Environmental.
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.
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. Except for PFCs, these fees do not need to be reauthorized, although their amounts may be revised periodically.
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.
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, allegiantair.com is our primary distribution method. This low-cost strategy results in significant cost savings by avoiding fees associated with the GDS or OTAs.
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.
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 433 routes with no current nonstop competition. We may also experience additional competition based on recent route announcements of other airlines.
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.
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, 2026, including service announcements as of that date. The orange dots represent leisure destinations and the blue dots represent origination cities.
To this end, we are working to strengthen customer engagement, while affording a more elastic, reliable information technology infrastructure with significant development advantages for marketing as well as for other business units across the Company. Beyond allegiant.com, we market our products and services through a combination of traditional advertising, including radio, television as well as digital advertising.
To this end, we are working to strengthen customer engagement, while affording a more elastic, reliable information technology infrastructure with significant development advantages for marketing as well as for other business units across the Company. 10 Beyond allegiantair.com, we market our products and services through a combination of traditional advertising, including radio, television as well as digital advertising.
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.
We have identified more than 1,400 additional domestic routes with similar characteristics 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.
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.
We offer third party travel products such as hotel rooms, rental cars, and travel insurance from a third party insurer for sale to our passengers. The marketing component of revenue related to our co-brand Allegiant credit card is also included in this category. Fixed fee contract air transportation.
As such, we sell only nonstop flights; we do not currently code-share or interline with other carriers; we have a single class cabin; we do not provide any free catered items - everything on board is for sale; we do not provide cargo or mail services; and we do not offer other perks such as airport lounges. Under-served market airports.
As such, we sell only nonstop flights; we do not currently code-share or interline with other carriers; we have a single class cabin; we do not provide any free catered items - everything on board is for sale; and we do not offer other perks such as airport lounges. Under-served market airports.
The AI Council is also responsible for addressing potential risks associated with AI implementation, including data privacy, security, and ethical considerations. System Implementations Beginning in 2021, we have made significant investments to replace certain core proprietary systems with more advanced and integrated third party software solutions.
The AI Council is also responsible for addressing potential risks associated with AI implementation, including data privacy, security, and ethical considerations. System Implementations Since 2021, we have made significant investments to replace certain core proprietary systems with more advanced and integrated third party software solutions.
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.
Our 22 bases spread throughout the country provide us the flexibility to redeploy capacity to best match demand trends around the country. 6 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.
Above all else, safety is our number one core value, along with collaboration, focus, excellence, and sunshine that define our human capital mission. We are committed to create a culture and environment where team members are safe and can thrive.
Above all else, safety is our number one core value, along with collaboration, focus, excellence, and sunshine that define our human capital mission. 12 We are committed to creating a culture and environment where team members are safe and can thrive.
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.
Our airline operating cost per available seat mile (CASM), excluding fuel, special charges, and Sunseeker Resort was 8.04 ¢ in 2025, 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: 8 Low aircraft ownership costs.
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.
Allways Rewards®, with more than 21 million members at December 31, 2025, 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.
As of February 1, 2025, we are the only mainline domestic scheduled carrier operating out of the Orlando Sanford International Airport and at 12 other airports in our network. In each of Mesa Gateway Airport, Punta Gorda Airport, and St. Petersburg-Clearwater International Airport, we provide more than 97 percent of the scheduled service in these markets.
As of February 1, 2026, we are the only mainline domestic scheduled carrier operating out of the Orlando Sanford International Airport and at 10 other airports in our network. In each of Mesa Gateway Airport, Punta Gorda Airport, and St. Petersburg-Clearwater International Airport, we provide more than 97 percent of scheduled service in these markets.
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.
Despite the significant fuel efficiencies gained since 2012, 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 FAA primarily regulates flight operations and safety, including matters such as airworthiness and maintenance requirements for aircraft, pilot, mechanic, dispatcher and flight attendant training and certification, flight and duty time limitations, and air traffic control. The FAA requires each commercial airline to obtain and hold an FAA air carrier certificate.
The FAA primarily regulates flight operations and safety, including matters such as aircraft airworthiness and maintenance requirements, pilot, mechanic, dispatcher and flight attendant training and certification, flight and duty time limitations, and air traffic control. The FAA requires each commercial airline to obtain and hold an FAA air carrier certificate, as well as associated operation specifications.
We have chosen not to invest in facilities or equipment to perform our own major maintenance, engine overhaul or component work. Our management supervises all maintenance functions performed by our personnel and contractors employed by us, and by outside organizations. Employees As of December 31, 2024, the airline employed 5,991 full-time equivalent employees.
We have chosen not to invest in facilities or equipment to perform our own major maintenance, engine overhaul or component work. Our management supervises all maintenance functions performed by our personnel and contractors employed by us, and by outside organizations. Employees As of December 31, 2025, we employed 5,616 full-time equivalent employees.
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.
We have increased revenue related to these ancillary items from $5.87 per passenger in 2004 to $76.35 per passenger in 2025. 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 utilize competitive base salaries, performance-based bonuses, spot rewards, profit sharing, and equity as attraction and retention tools for our team members. As of December 31, 2024, the airline had more than 6,400 team members (including both full-time and part-time employees), of whom approximately 83 percent are in front line positions such as flight crew, mechanics or airport personnel.
We utilize competitive base salaries, performance-based bonuses, spot rewards, profit sharing, and equity as attraction and retention tools for our team members. As of December 31, 2025, we had more than 6,000 team members (including both full-time and part-time employees), of whom approximately 82 percent are in front line positions such as flight crew, mechanics or airport personnel.
One popular ancillary product offering is our extra legroom option, Allegiant Extra, which offers an additional six inches of seat pitch, reserved overhead bin space, and priority boarding on select routes. As of December 31, 2024, 56 of our aircraft have been fitted with the Allegiant Extra configuration.
One popular ancillary product offering is our extra legroom option, Allegiant Extra, which offers an additional six inches of seat pitch, reserved overhead bin space, priority boarding, and a complimentary snack on select routes. As of December 31, 2025, 87 of our aircraft have been fitted with the Allegiant Extra configuration.
Building on the dedicated efforts and teamwork of our pilots, dispatchers, and station personnel, we are actively advancing our fuel conservation practices across all flights, which include the following: • Single engine taxi in and out, as time permits • Constant descent angle approach, as permitted by air traffic • Flaps 3 for landing, an Airbus green procedure creating less drag during the landing process, conditions permitting • Idle thrust reverse for landing, conditions permitting • Auxiliary power unit fuel optimization • Route optimization • Data collection by aircraft to identify performance deterioration and rectify where necessary • Optimization of the amount of contingency and dispatch fuel • Deployment of process to find optimal winds aloft while inflight In addition to the initiatives above, we are currently assessing sustainable aviation fuels as part of our sustainability strategy for reaching our emissions intensity reduction goal by the end of 2030 and offsetting requirements under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
These practices include the following: • Single engine taxi in and out, as time permits • Constant descent angle approach, as permitted by air traffic • Flaps 3 for landing, an Airbus green procedure creating less drag during the landing process, conditions permitting • Idle thrust reverse for landing, conditions permitting • Auxiliary power unit fuel optimization • Route optimization • Data collection by aircraft to identify performance deterioration and rectify where necessary • Optimization of the amount of contingency and dispatch fuel • Deployment of process to find optimal winds aloft while inflight In addition to the initiatives above, we are currently assessing sustainable aviation fuels as part of our sustainability strategy for reaching our emissions intensity reduction goal by the end of 2030 and offsetting requirements under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
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.
For seven years in a row, Allegiant's co-brand credit card has been voted as the No. 1 Best Airline Credit Card, and for the second year in a row, our non-card loyalty program Allways Rewards® was rated as the number one Best Frequent Flyer Program in USA Today's 10 Best Loyalty/Rewards Readers' Choice Awards.
Indirectly, we compete with various carriers that provide nonstop service to our leisure destinations from airports near our cities. We also face indirect competition from legacy carriers offering hub-and-spoke connecting flights to our markets, although these fares tend to be substantially higher, with much longer elapsed travel times. Several airlines also offer competitive one-stop service from the cities we serve.
We indirectly compete with various carriers that provide nonstop service to our leisure destinations from airports near our cities. We also face indirect competition from legacy carriers offering hub-and-spoke connecting flights to our markets, although these fares tend to be substantially higher, with much longer elapsed travel times.
Our intent to retain ownership of the aircraft, coupled with the longer useful life for depreciation purposes should result in similar ownership expense when compared with a used aircraft in our fleet.
Our intent to retain ownership of the aircraft, coupled with the longer useful life for depreciation purposes is resulting in similar ownership expense when compared with used aircraft in our fleet.
The FAA monitors our compliance with maintenance, flight operations and safety regulations on an ongoing basis, maintains a continuous working relationship with our operations and maintenance management personnel, and performs pre-scheduled inspections as well as frequent spot inspections of our aircraft, employees and records.
Emergency suspensions or revocations have been upheld with few exceptions. The FAA monitors our compliance with maintenance, flight operations and safety regulations on an ongoing basis, maintains a continuous working relationship with our operations and maintenance management personnel, and performs pre-scheduled inspections as well as frequent spot inspections of our aircraft, employees and records.
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.
By way of illustration, in 2025, during our peak demand period in July, we averaged 8.6 system block hours per aircraft per day while in September, our lowest month for demand, we averaged only 4.6 system block hours per aircraft per day, which is approximately 47 percent less than the average system block hours in July.
In most of these cities, we provide service to more than one of our leisure destinations which are offered either on a year-round or seasonal basis. Our vast network footprint, coupled with our low frequency scheduling, provides us with a diversified, resilient network.
As of that date, we have announced 39 new routes scheduled to begin service in 2026. In most of these cities, we provide service to more than one of our leisure destinations which are offered either on a year-round or seasonal basis. Our vast network footprint, coupled with our low frequency scheduling, provides us with a diversified, resilient network.
However, most U.S. airlines serve the major airports for Orlando, Phoenix, Fort Myers, and Tampa. Allegiant and Breeze Airways are the only carriers at Plattsburgh International Airport (PBG), Portsmouth International Airport (PSM), and Stewart International Airport (SWF). Allegiant and Avelo Airlines are the only carriers at Concord-Padgett Regional Airport (USA). In addition, many U.S. airlines serve our other leisure destinations.
However, most U.S. airlines serve the nearby major airports for Orlando, Phoenix, Fort Myers, and Tampa. Allegiant and Breeze Airways are the only carriers at Portsmouth International Airport (PSM) and Stewart International Airport (SWF). Allegiant and Avelo Airlines are the only carriers at Concord-Padgett Regional Airport (USA).
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.
The scheduled service routes as of February 1, 2026 are summarized below (includes 539 active routes, and 39 newly announced routes as of February 1, 2026, which will begin service in 2026): Routes to Orlando (MCO & SFB) 83 Routes to Tampa/St.
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.
Our customers predominantly 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 92.3 percent of our scheduled service revenue during 2025.
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 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 Winglet Snack Pack (previously called Wingz Kids Snack Pack) to the organization.
As an organization, we strive to always use data to make informed, fact-based decisions. We are continuing to focus on capturing data to identify trends and patterns in an effort to gain efficiencies and decrease costs.
We regularly revisit and review various distribution methods and opportunities from time to time. Data driven. As an organization, we strive to always use data to make informed, fact-based decisions. We are continuing to focus on capturing data to identify trends and patterns in an effort to gain efficiencies and decrease costs.
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.
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 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.
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.
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.
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.
Town Center Drive, Las Vegas, Nevada 89144. Our telephone number is (702) 851-7300. Our website address is http://www.allegiant.com. We have not incorporated by reference into this annual report the information on our website and investors should not consider it to be a part of this document. Our website address is included in this document for reference only.
Our principal executive offices are located at 1201 N. Town Center Drive, Las Vegas, Nevada 89144. Our telephone number is (702) 851-7300. Our website address is allegiantair.com. We have not incorporated by reference into this annual report the information on our website and investors should not consider it to be a part of this document.
Unlike other carriers which typically provide a consistent number of flights every day of the week, we manage our capacity with a goal of being profitable on each route. We do this by flying only on days with sufficient market demand.
Unlike other carriers which typically provide a consistent number of flights every day of the week, we manage our capacity with a goal of being profitable on each route. We do this by flying only on days with sufficient market demand. In 2025, we flew a disproportionately low 12 percent of our scheduled ASMs on off-peak days (Tuesdays and Wednesdays).
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”).
Our website address is included in this document for reference only. 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 SEC.
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.
Petersburg 64 Routes to Las Vegas 54 Routes to Punta Gorda 52 Routes to Phoenix (AZA & PHX) 47 Routes to Sarasota 36 Routes to Destin 34 Other routes 208 Total routes 578 The number of routes served varies from time to time as some routes are offered seasonally or on a temporary basis.
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.
Several airlines also offer competitive one-stop service from the cities we serve. 11 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.
Under the RLA, if direct negotiations do not result in an agreement, either party may request the National Mediation Board ("NMB") to appoint a federal mediator to assist the parties with their negotiations. If no agreement is reached in these mediated discussions, the NMB must proffer binding arbitration to the parties.
Under the RLA, if direct negotiations do not result in an agreement, either party may request the NMB to appoint a federal mediator to assist the parties with their negotiations. If no agreement is reached in these mediated discussions, one of the parties may declare an impasse and ask for relief.
The FAA can suspend or revoke our authority to provide air transportation on an emergency basis, without notice and hearing, if, in the FAA’s judgment, safety requires such action. A legal right to an independent, expedited review of such FAA action exists. Emergency suspensions or revocations have been upheld with few exceptions.
The FAA can suspend or revoke our authority to provide air transportation on an emergency basis, without notice and hearing, if, in the FAA’s judgment, safety requires such action. A legal right to an independent, expedited review of such FAA action exists before a National Transportation Safety Board (NTSB) Administrative Law Judge with further appeal rights to the full NTSB.
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.
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 Practices, Employee Training and Development, Labor Management, Local Job Creation • Governance - Business Ethics and Integrity, Anti-Corruption, Competitive Behavior, Data Security, Customer Privacy 17 Environment The aviation industry accounts for roughly two percent of global greenhouse gas emissions, almost all of which is attributable to aircraft fuel.
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.
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. Aviation Taxes and Fees .
The quality of water used for drinking and hand-washing aboard aircraft is subject to regulation by the EPA. To the extent we are subject to EPA requirements, we intend to continue to comply with those requirements.
The quality of water used for drinking and hand-washing aboard aircraft is subject to regulation by the EPA.
Customs and Border Protection, Immigration and Agriculture requirements and the requirements of equivalent foreign governmental agencies. Future Laws and Regulations .
International flights are also subject to U.S. Customs and Border Protection, Immigration and Agriculture requirements and the requirements of equivalent foreign governmental agencies. Future Laws and Regulations .
At any time, Congress may consider legislation that could increase the amount of FET and/or one or more of the other federally imposed or approved fees identified above. The CBP fee is inflation adjusted every October 1, and the APHIS fees are set to increase each of the next three years on October 1.
At any time, Congress may consider legislation that could increase the amount of FET and/or one or more of the other federally imposed or approved fees identified above. The domestic segment fee, a component of FET, is inflation adjusted every January 1.
During 2025, we expect to increase peak period utilization closer to 2019 levels. Our management of seat capacity also includes changes in weekly frequency of certain markets based on identified peak and off-peak travel demand throughout the year.
In 2026, we expect to continue leveraging higher aircraft utilization during peak demand periods to align capacity with seasonal leisure demand. Our management of seat capacity also includes changes in weekly frequency of certain markets based on identified peak and off-peak travel demand throughout the year.
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.
We achieve low aircraft ownership costs by opportunistically acquiring aircraft and by primarily owning our aircraft. As of February 1, 2026, we own or finance lease all but nine of the aircraft in our operating fleet. In addition, we believe that we properly balance lower aircraft acquisition costs and operating costs to seek to minimize our total costs.
Sustainability We believe that solidifying our commitment to sustainability efforts is a natural integration into our long-term corporate strategy and will enable us to better serve our stakeholders. We've developed a comprehensive sustainability program which focuses on: • Identify and prioritize relevant topics through a materiality assessment.
Sustainability We believe that solidifying our commitment to sustainability efforts is a natural integration into our long-term corporate strategy and will enable us to better serve our stakeholders.
The NMB has appointed a mediator and the parties continue to participate and make progress in mediated negotiations. To date, we have not experienced any work interruptions or stoppages from our non-unionized or unionized employee groups. Human Capital As part of our human capital resource objectives, we seek to recruit, retain, and develop our existing and future workforce.
To date, we have not experienced any work interruptions or stoppages from our non-unionized or unionized employee groups. Human Capital As part of our human capital resource objectives, we seek to recruit, retain, and develop our existing and future workforce. We have always hired and will continue to hire based on merit.
All of the aviation fees also may be increased by their implementing federal agency via a rulemaking. Increasing the overall price charged to passengers could lessen demand for air travel.
The CBP fee is inflation adjusted every October 1, and the APHIS fees are set to increase each year on October 1 through 2028. All of the aviation fees also may be increased by their implementing federal agency via a rulemaking. Increasing the overall price charged to passengers could lessen demand for 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.
Our third party product offerings give our customers the opportunity to purchase hotel rooms, rental cars and travel insurance from third parties. 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.
We provide unbundled air-related services and products in conjunction with air transportation for an additional cost to customers.
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.
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.
Many U.S. airlines serve our other leisure destinations, so there is potential for increased competition on our routes. As of December 31, 2025, we face mainline nonstop competition on approximately 25 percent of our operating and announced routes.
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.
As of December 31, 2025, the composition of our fleet included a mix of A319, A320 and B737 aircraft with seat configurations ranging from 156 to 190 seats, some of which are fitted with fuel-efficient Sharklets.
This strategy allows us to generate additional passenger revenues from our customers' decisions to purchase these ancillary products. We have established a broad route network with a national footprint.
This strategy allows us to generate additional passenger revenues from our customers' decisions to purchase these ancillary products. We have established a broad route network with a national footprint. As of February 1, 2026, we serve 539 active routes between 88 origination cities and 33 leisure destinations in 42 states.
Our co-brand credit card incentivizes customers who fly more often to maximize their benefits with members-only promotions and travel perks like complimentary priority boarding. Cardholders are among our most engaged customers and book air ancillary and third-party products at a higher rate than other customers. As of December 31, 2024, we had more than 545 thousand co-brand credit cardholders.
Cardholders are among our most engaged customers and book air ancillary and third-party products at a higher rate than other customers. As of December 31, 2025, we had more than 590 thousand co-brand credit cardholders.
We believe DOT Secretary Duffy’s recent statement that he plans to involve the Department of Government Efficiency (DOGE) team to review and overhaul technological systems and procedures at the FAA is a positive sign that critical aspects of the aging National Air System, including AWOS/ASOS weather observing systems, could soon receive modernization, replacement or repair. 14 Security .
We believe DOT Secretary Duffy’s recent announcement to overhaul the FAA's organizational structure, which includes the launch of a new Airspace Modernization office, is a positive sign that critical aspects of the aging National Airspace System, including air traffic control and AWOS/ASOS weather observing systems, could soon receive modernization, replacement or repair. Security .
We then engaged with more than 400 stakeholders including customers, employees, suppliers, shareholders and community partners.
This assessment included engagement of more than 400 stakeholders including customers, employees, suppliers, shareholders and community partners.
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).
We seek to sell our product directly to our customers as opposed to through outside sales channels, thus largely avoiding the fees charged by travel websites (Expedia, Orbitz or Travelocity) and traditional global distribution systems (“GDS”) (Sabre or Worldspan).
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.
We overlap with Southwest Airlines on 73 routes, Breeze Airways on 35 routes, Spirit Airlines on 26 routes, Frontier Airlines on 26 routes, American Airlines on 16 routes, United Airlines on 12 routes, JetBlue Airways on 11 routes, Delta Air Lines on nine routes, Alaska Airlines on two routes, and Sun Country Airlines on one route.
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.
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 January 2026, we and Sun Country entered into an agreement for us to acquire Sun Country.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOtherwise, 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.
Biggest changeAt 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. By increasing the overall price charged to passengers, any additional taxes or fees could lessen the demand for air travel or force carriers to lower fares to maintain demand.
These loan agreements contain various events of default (including failure to comply with the covenants under the loan agreements), and upon an event of default the lenders may, subject to various cure rights, require the immediate payment of all amounts outstanding under the these loans.
These loan agreements contain various events of default (including failure to comply with the covenants under these loan agreements), and upon an event of default the lenders may, subject to various cure rights, require the immediate payment of all amounts outstanding under the these loans.
Additionally, meeting our environmental goal will require the adoption of sustainable aviation fuels (SAF), the supply of which currently falls short of the aviation industry requirements and would likely be commercially viable only with the support and incentives from governmental initiatives. Risks Associated with the Airline and Travel Industry Our operating results could be affected by outbreaks of communicable diseases.
Additionally, meeting our environmental goal will require the adoption of sustainable aviation fuels (SAF), the supply of which currently falls short of the aviation industry requirements and would likely be commercially viable only with support and incentives from governmental initiatives. Risks Associated with the Airline and Travel Industry Our operating results could be affected by outbreaks of communicable diseases.
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.
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 30 • 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.
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.
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. 26 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.
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.
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.
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.
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.
Our bylaws further provide no shares of our capital stock will be registered on the foreign stock record if the amount so registered would exceed the foreign ownership restrictions imposed by federal law. Registration on the foreign stock record is made in chronological order based on the date we receive a written request for registration.
Our bylaws further provide that no shares of our capital stock will be registered on the foreign stock record if the amount so registered would exceed the foreign ownership restrictions imposed by federal law. Registration on the foreign stock record is made in chronological order based on the date we receive a written request for registration.
See also Risk Factors - Regulatory review of Boeing’s operations could delay its production schedule, which could impact us as any delivery delays may result in lower profitability than expected and delayed growth as well as bad publicity and other consequences.
See also Risk Factors 27 - Regulatory review of Boeing’s operations could delay its production schedule, which could impact us as any delivery delays may result in lower profitability than expected and delayed growth as well as bad publicity and other consequences.
Due to the high percentage of our operating costs represented by fuel, a relatively small increase in the price of fuel could have a significantly negative impact on our operating costs. A fuel supply shortage or higher fuel prices could result in reduction of our service during the period affected.
Due to the high percentage of our operating costs represented by fuel, a relatively small increase in the price of fuel could have a 23 significantly negative impact on our operating costs. A fuel supply shortage or higher fuel prices could result in reduction of our service during the period affected.
Our bylaws provide no shares of our capital stock may be voted by or at the direction of non-U.S. citizens unless such shares are registered on a separate stock record, which we refer to as the foreign stock record.
Our bylaws provide that no shares of our capital stock may be voted by or at the direction of non-U.S. citizens unless such shares are registered on a separate stock record, which we refer to as the foreign stock record.
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.
While we believe debt financing will be available for the aircraft we intend to acquire, we cannot provide assurance that we will be able to secure such financing on terms attractive to us or at all.
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.
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. 31 Item 1B. Unresolved Staff Comments None.
This indebtedness, the Boeing purchase agreement and other commitments with debt service and fixed charge obligations could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under agreements governing our indebtedness; • make it more difficult to satisfy our other future obligations, including our obligations to pay the purchase price in respect of current and future aircraft purchase contracts; • require us to dedicate a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available to fund internal growth through working capital, capital expenditures, and for other purposes; • limit our flexibility in planning for, or reacting to, changes in our business, the competitive environment, legislation and our industry; • make us more vulnerable to adverse changes in our business, economic, industry, market or competitive conditions and adverse changes in government regulation; • expose us to interest rate and pricing increases on indebtedness and financing arrangements as general interest rates rise; • restrict us from pursuing strategic acquisitions or exploiting certain business opportunities; • subject us to a greater risk of non-compliance with financial and other restrictive covenants in financing arrangements; • limit, among other things, our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, execution of our business strategy and other purposes or raise equity capital in the future and increasing the costs of such additional financings; and • place us at a competitive disadvantage compared to our competitors who may not be as highly leveraged or who have less debt in relation to cash flow.
This indebtedness, the Boeing purchase agreement, the proposed acquisition of Sun Country and related expenditures, the payment of the accrued pilot retention bonus, and other commitments with debt service and fixed charge obligations could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under agreements governing our indebtedness; • make it more difficult to satisfy our other future obligations, including our obligations to pay the purchase price in respect of current and future aircraft purchase contracts; • require us to dedicate a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available to fund internal growth through working capital, capital expenditures, and for other purposes; • limit our flexibility in planning for, or reacting to, changes in our business, the competitive environment, legislation and our industry; • make us more vulnerable to adverse changes in our business, economic, industry, market or competitive conditions and adverse changes in government regulation; • expose us to interest rate and pricing increases on indebtedness and financing arrangements as general interest rates rise; • restrict us from pursuing strategic acquisitions or exploiting certain business opportunities; • subject us to a greater risk of non-compliance with financial and other restrictive covenants in financing arrangements; • limit, among other things, our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, execution of our business strategy and other purposes or raise equity capital in the future and increasing the costs of such additional financings; and • place us at a competitive disadvantage compared to our competitors who may not be as highly leveraged or who have less debt in relation to cash flow.
We receive, retain, and transmit certain personal information about our customers. Additionally, our online operations rely on the secure transmission of customer data. We use third party systems, integrated software, and advanced cyber security tools in order to protect the customer data we obtain through the course of our business.
We receive, retain, and transmit certain personal information about our customers. Additionally, our online operations rely on the secure transmission of customer data. We use third party systems, integrated software, and advanced cybersecurity tools in order to protect the customer data we obtain through the course of our business.
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.
FAA requirements cover, among other things, cockpit voice recorder durations, 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.
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.
We have pledged our assets to secure the Senior Secured Notes and revolving credit facility with the exception of aircraft, aircraft engines, and certain other exceptions. This will limit our ability to obtain debt secured by these pledged assets while these loans are outstanding.
The airline industry is particularly sensitive to changes in economic conditions. Unfavorable U.S. economic conditions have historically driven changes in travel patterns and have resulted in reduced discretionary spending for leisure travel. Unfavorable economic conditions could impact demand for airline travel in our under-served cities to our leisure destinations.
The airline industry is particularly sensitive to changes in economic conditions. Unfavorable U.S. economic conditions have historically driven changes in travel patterns and have resulted in reduced discretionary spending for leisure travel. Unfavorable economic conditions could impact demand for airline travel in our underserved cities to our leisure destinations.
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.
Further, we have four employee groups (pilots, flight attendants, flight dispatchers and maintenance technicians) which have elected union representation. These groups represent approximately 71.2 percent of our employees (full-time equivalent). In 2016, we reached a collective bargaining agreement with the International Brotherhood of Teamsters, representing our pilots.
Actual or perceived risk of infection could have a material adverse effect on the public's comfort with air travel, in general or on our flights, which could harm our reputation and business. The airline industry is highly competitive and future competition in our under-served markets could harm our business. The airline industry is highly competitive.
Actual or perceived risk of infection could have a 28 material adverse effect on the public's comfort with air travel, in general or on our flights, which could harm our reputation and business. The airline industry is highly competitive and future competition in our underserved markets could harm our business. The airline industry is highly competitive.
Our automated systems cannot be completely protected against events that are beyond our control, such as natural disasters, telecommunications failures, malware, ransom ware, security breaches or cyber-security attacks. Although we have implemented security measures and have information systems disaster recovery plans in place, we cannot assure investors that these measures are adequate to prevent disruptions or losses.
Our automated systems cannot be completely protected against events that are beyond our control, such as natural disasters, telecommunications failures, malware, ransomware, security breaches or cybersecurity attacks. Although we have implemented security measures and have information systems disaster recovery plans in place, we cannot assure 25 investors that these measures are adequate to prevent disruptions or losses.
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.
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. Increases in taxes could impact demand for our services.
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.
Increased labor costs could result from industry conditions and could be impacted by labor-related disruptions. Labor costs constituted approximately 32.4 percent of our total operating costs in 2025, our largest expense line item. Labor costs are generally rising and there is much competition for qualified candidates.
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.
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 24.9 percent of our total operating expenses in 2025.
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.
Our business depends upon the efforts of our chief executive officer, 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.
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.
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, subject to the labor group's compliance with law, work slowdowns or stoppages could have an adverse effect on our operations and future results.
As of December 31, 2024, the principal balance of our Senior Secured Notes due 2027 (the "Senior Secured Notes") was $550.0 million.
As of December 31, 2025, the principal balance of our Senior Secured Notes due 2027 (the "Senior Secured Notes") was $403.0 million.
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.
While we do not currently anticipate significant new consumer protection rules or legislation during the current Presidential administration and Congress, and indeed DOT has stated it will not enforce, and plans to rescind, some existing consumer protection rules, 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.
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.
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. While we do not anticipate such legislation from the current U.S.
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.
Delivery schedules for newly built aircraft frequently slip which could delay deliveries to us. 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.
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.
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, such as the State of California adopting rules that mandate GHG emissions reporting and climate risk assessment disclosures.
The trading price of our common stock could decline due to any of these risks, and investors may lose all or part of their investment.
The trading price of our common stock could decline due to any of these risks, and investors may lose all or part of their investment. Risks Related to our Proposed Acquisition of Sun Country Airlines Holdings, Inc.
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.
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. We continue to believe that the addition of the 737 MAX aircraft will be safe, reliable and accretive to our profitability.
We 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.
When necessary, we finance our aircraft through debt financing. As of February 1, 2026, we have secured revolving lines of credit for up to $250.0 million to offset the risk that financing may not be available on acceptable terms when needed.
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.
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.
In the meantime and in recognition of these higher prevailing pilot pay rates, in May 2023, we began to accrue a retention bonus which will become payable to our pilots who remain with us until a new collective bargaining agreement is ratified .
In the meantime and in recognition of these higher prevailing pilot pay rates, in May 2023, we began to accrue a retention bonus which will become payable to our pilots who remain employed with us when a new collective bargaining agreement is ratified . 24 We also have collective bargaining agreements with the Transport Workers Union for our flight attendants and with the International Brotherhood of Teamsters for our flight dispatchers and for our maintenance technicians.
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.
Our debt and finance lease obligations as of December 31, 2025 totaled $1.80 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 16 have been delivered as of December 31, 2025 and the remaining 34 are expected to be delivered through 2028.
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.
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.
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.
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.
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.
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.
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.
Although we introduced new Boeing 737 MAX aircraft to our fleet in late 2024, the average age of the Airbus aircraft in our fleet as of February 1, 2026 was 17.2 years, which is older than the fleets of many other carriers.
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.
Congress, a mandatory five-year validity of airline vouchers and credits issued for flight cancellations and significantly delayed flights, and substantially increased civil penalties for noncompliance by airlines with consumer-protection and other regulatory requirements became law in 2024.
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.
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. We and our third party vendors compete with the entire airline industry for aircraft maintenance technicians, ground handling and customer service agents, and flight attendants.
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.
We rely on third parties to provide us with aircraft, facilities and services that are integral to our business. 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.
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.
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.
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.
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. There continues to be regulatory focus on increasing quality control standards at Boeing and its suppliers with the aim of stabilizing aircraft production.
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.
We may not be able to maintain or grow our ancillary revenues . Our business strategy includes expanding our ancillary products and services. 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.
Failure to maintain our ancillary revenues could have a material adverse effect on our results of operations, financial condition and stock price. If we are unable to maintain and grow these revenues, we may be unable to execute our strategy to continue to offer low base fares in order to stimulate demand.
If we are unable to maintain and grow these revenues, we may be unable to execute our strategy to continue to offer low base fares in order to stimulate demand. Our business could be harmed if we lose the services of key personnel.
Although deliveries under the contract have begun and we have accepted delivery of seven aircraft as of February 21, 2025, these factors could delay future deliveries to us. As a result, our expectation of the number of deliveries in each year differs from the contractual provisions.
Although deliveries under the contract have begun and we have accepted delivery of 16 aircraft as of February 13, 2026, these factors could delay future deliveries to us.
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.
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. 29 In addition, the EPA concluded in 2016 that current and projected concentrations of GHG emitted by various aircraft, including all of the aircraft we and other carriers operate, threaten public health and welfare.
Consequences could include litigation, other legal actions against us, and/or the imposition of penalties, fines, fees or liabilities. We currently are self-insured against these risks.
Consequences could include litigation, other legal actions against us, and/or the imposition of penalties, fines, fees or liabilities. We maintain a combination of risk mitigation strategies, including self-insurance for certain cyber-related risks, which may not be sufficient to cover all potential losses.
As with all scheduled airlines, the FAA must approve each aircraft we utilize and each airport we serve.
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.
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.
FAA regulations, including aging aircraft airworthiness directives, can require enhanced inspection programs and other maintenance actions that may increase both the scope and frequency of work performed, and these requirements may vary by aircraft and engine type.
Future union contracts with these, or other, work groups could put additional pressure on our labor costs.
These agreements become amendable in 2029 (flight attendants), 2026 (flight dispatchers) and 2028 (maintenance technicians). The CBA covering our flight dispatchers becomes amendable in May 2026 and we have commenced those negotiations. Future union contracts with these, or other, work groups could put additional pressure on our labor costs.
Our ability to meet our environmental goal depends on various actions from third parties outside of our control.
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 goals depends on various actions from third parties outside of our control.
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.
We cannot assure investors that our maintenance costs will not increase or exceed our expectations. As our aircraft age and maintenance events become more extensive, we expect to rely more heavily on third-party MRO (maintenance, repair and overhaul) facilities to perform certain work.
Removed
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.
Added
The proposed acquisition of Sun Country will involve substantial costs and the pendency of the proposed acquisition of Sun Country may cause disruption in our business.
Removed
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.
Added
The Merger Agreement requires us to operate in the ordinary course of business and restricts us from taking specified actions without Sun Country’s consent until the proposed acquisition of Sun Country occurs or the Merger Agreement terminates. Matters relating to the proposed acquisition of Sun Country are expected to occupy a significant amount of management’s time.
Removed
As more than 1,100 737 MAX aircraft remain in service throughout the world and FAA oversight and Boeing process improvements should further assure the public regarding safety issues, we continue to believe that the addition of the 737 MAX aircraft will be safe, reliable and accretive to our profitability.
Added
The diversion of management’s attention away from day-to-day business concerns and any difficulties encountered in the transition and integration process could adversely affect our business, results of operations and financial condition. In addition, we have incurred and will continue to incur significant costs, expenses and fees in connection with the proposed acquisition of Sun Country.
Removed
An agreement with the Transport Workers Union for the flight attendant group was approved in 2017 and became amendable in 2022. A new agreement with this union was ratified in April 2024 under which the flight attendants received a ratification bonus and will receive pay increases during the term of the agreement. This contract will become amendable in 2029.
Added
The substantial majority of these costs will be non-recurring expenses relating to the proposed acquisition of Sun Country, some of which are payable regardless of whether or not the proposed acquisition of Sun Country is consummated. Litigation may be filed in connection with the proposed acquisition of Sun Country and defending any such litigation could prove costly and time consuming.
Removed
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.
Added
Shareholder litigation could prevent or delay the consummation of the proposed acquisition of Sun Country or otherwise negatively impact our business, operating results and financial condition. Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger, or other business combination agreements.
Removed
This industry-wide growth slowed significantly in the second half of 2024, driven by aircraft availability (e.g., production delays), failed mergers, and the inability of certain carriers to execute on their plans to grow to profitability.
Added
Even if such a lawsuit is without merit, defending against or settlement of these claims can result in substantial additional costs and diversion of management time and resources. Any such future lawsuit or litigation may adversely affect our ability to complete the proposed acquisition of Sun Country.
Removed
The successful operation of our Sunseeker Resort and ability to enter into a suitable arrangement with a capital partner are dependent on commercial and economic factors, some of which are beyond our control. We opened Sunseeker Resort in Southwest Florida in December 2023 and incurred significant operating losses in 2024.
Added
We could incur significant costs in connection with any such litigation, including costs associated with an adverse judgment resulting in monetary damages and the indemnification of our directors and officers, which could have a negative impact on our liquidity and financial position.
Removed
Although we are seeing improvement in recent months, we expect losses to continue in 2025.
Added
Furthermore, one of the conditions to the consummation of the proposed acquisition of Sun Country is the absence of any governmental order or law preventing the consummation of the proposed acquisition of Sun Country or making the consummation of the proposed acquisition of Sun Country illegal.
Removed
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.
Added
Consequently, if a plaintiff were to secure injunctive or other relief prohibiting, delaying or otherwise adversely affecting our ability to complete the consummation of the proposed acquisition of Sun Country, then such injunctive or other relief may prevent the proposed acquisition of Sun Country from becoming effective within the expected time frame or at all.
Removed
We cannot assure investors whether or when we will be able to consummate such a transaction on acceptable terms or at all. The success of our proposed alliance with VivaAerobus will depend on our ability to obtain necessary government approvals and other factors.
Added
Failure to complete the proposed acquisition of Sun Country in a timely manner or at all could negatively impact the market price of our common stock, as well as our future business and our results of operations and financial condition.
Removed
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.
Added
Consummation of the proposed acquisition of Sun Country is subject to various customary conditions set forth in the Merger Agreement beyond our control. The failure to satisfy the required conditions could delay the completion of the proposed acquisition of Sun Country for a significant period of time or prevent it from occurring.
Removed
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.
Added
Further, there can be no assurance that the conditions to the closing of the proposed acquisition of Sun Country will be satisfied or waived or that the proposed acquisition of Sun Country will be completed. We cannot predict whether and when the conditions to the proposed acquisition of Sun Country will be satisfied.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−1 removed12 unchanged
Biggest changeOur process includes assessing, mitigating, and managing risk in three categories: cybersecurity or technical risk, vendor risk, and compliance and regulatory risk. To support those risk management categories, we partner with third parties in the implementation of tooling to help us decrease cyber risks and ensure compliance within Allegiant and with third parties.
Biggest changeTo support those risk management categories, we partner with third parties in the implementation of tooling to help us decrease cyber risks and ensure compliance within Allegiant and with third parties. We verify third-party compliance, such as suppliers and business partners, by aligning with several standards.
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.
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 – 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.
Our program evaluates potential risks consistent with industry best practices, customer requirements and applicable law, including privacy and other considerations. • Information Sharing and Collaboration – We work with government, customer, industry and supplier partners including government-industry partnerships and critical infrastructure threat intelligence sharing platforms.
Our program seeks to evaluate potential risks consistent with industry best practices, customer requirements and applicable law, including privacy and other considerations. • Information Sharing and Collaboration – We work with government, customer, industry and supplier partners including government-industry partnerships and critical infrastructure threat intelligence sharing platforms.
We have implemented processes and procedures for the assessment, identification, and management of material risks from cybersecurity threats. These processes implement both qualitative and quantitative measurements that have been agreed upon with our third-party consultants, our auditors, and integrated into our overall risk management process.
We have implemented processes and procedures for the assessment, identification, and management of material risks from cybersecurity threats. These processes implement both qualitative and quantitative measurements that have been integrated into our overall risk management process.
The 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
The CISO, who has more than 20 years of experience, reports regularly to our President & CFO (chief financial officer), monthly to the risk and compliance committee (consisting of executive leadership), and quarterly to our board.
Our chief information security officer (CISO) presents a quarterly update to the full board, including an update on our risk management process and risk trends related to cybersecurity.
The appropriate committees assist the board in the role of risk oversight. Our chief information security officer (CISO) presents a quarterly update to the full board, including an update on our risk management process and risk trends related to cybersecurity.
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.
As a publicly traded company and given the industry in which we operate, we have established a risk-based strategy informed by recognized cybersecurity and risk management frameworks and applicable regulatory requirements, including, where relevant, NIST CSF, PCI, and other industry standards.
Disclosure of Identified Risks: As of the date of this report, we have not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the organization.
This framework includes defined escalation protocols involving senior management, legal, finance, and our disclosure controls and procedures to assess potential reporting obligations and communications, including notification to the board. 32 Disclosure of Identified Risks As of the date of this report, we have not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the organization.
Removed
We verify third-party compliance, such as suppliers and business partners, by aligning with several standards. For example, we subject our IT suppliers to the Sarbanes-Oxley ("SOX") and payment card industry ("PCI") compliance standards where applicable.
Added
In evaluating cybersecurity incidents and risks, management assesses materiality by considering both quantitative and qualitative factors, including the potential impact on our operations, results of operations, customer relationships, regulatory obligations, reputation, and the sensitivity of the data involved. Our process includes assessing, mitigating, and managing risk in three categories: cybersecurity or technical risk, vendor risk, and compliance and regulatory risk.
Added
We maintain an incident response and escalation framework designed to enable timely identification, containment, investigation, and remediation of cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−3 removed1 unchanged
Biggest changeThe 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.
Biggest changeLanding fees under these agreements are based on the number of landings and weight of the aircraft. 33 The following details the airport locations we utilize as operational bases as of February 1, 2026: 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 Fort Lauderdale-Hollywood International Airport Fort Lauderdale, Florida Gerald R.
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.
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. 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.
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 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 9 acres of property containing approximately 211,000 square feet of office space.
Our leases for terminal passenger service facilities (which include ticket counter and gate space, and operations support areas) generally have a term ranging from month-to-month to several years, and may typically be terminated with a 30 to 90 day notice.
Our leases for terminal passenger service facilities (which include ticket counter and gate space, and operations support areas) generally have a term ranging from month-to-month to several years, and may typically be terminated with 30 to 90 days' notice.
Ford 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.
Ford International Airport Grand Rapids, Michigan Harry Reid International Airport Las Vegas, Nevada Indianapolis International Airport Indianapolis, Indiana Lehigh Valley International Airport Allentown, Pennsylvania 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 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 also lease and/or own other facilities in Nevada and Florida, with approximately 370,000 square feet of space used for training and other corporate purposes. These leases expire between 2036 and 2043. 34
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.
Properties Aircraft The following table summarizes our total in-service aircraft as of December 31, 2025: Aircraft Type Number of In-Service Aircraft Seating Capacity (per aircraft) Age Range (years) Average Age in Years Airbus A319 28 156 18-21 20.3 Airbus A320 79 177 / 180 7-28 14.8 Boeing 737-8200 16 190 0-1 Total aircraft 123 Ground Facilities We lease facilities at the majority of our leisure destinations and several other airports we serve.
We have also entered into use agreements at each of the airports we serve which provide for non-exclusive use of runways, taxiways, and other facilities. Landing fees under these agreements are based on the number of landings and weight of the aircraft.
We have also entered into use agreements at each of the airports we serve which provide for non-exclusive use of runways, taxiways, and other facilities.
Removed
Lauderdale-Hollywood International Airport Ft. Lauderdale, Florida Gerald R.
Removed
Sunseeker Resort We own approximately 28 acres on the harbor in Port Charlotte, Florida where Sunseeker Resort - Charlotte Harbor is located which includes additional property available for related purposes and for possible future expansion. We also own an office building in Lake Suzy, Florida for Sunseeker administration.
Removed
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+1 added−4 removed6 unchanged
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.
Biggest changeAbsent an event of default, this restriction would not constrain the continued payment of a quarterly dividend at the levels paid in 2023 and 2024. 36 Our Repurchases of Equity Securities The following table reflects repurchases of our common stock during the fourth quarter of 2025: 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 9,147 $ 62.46 None November — — None December 753 82.24 None Total 9,900 $ 63.96 None $ 64,694 (1) Represents shares repurchased from employees who vested a portion of their restricted stock grants.
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.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2020 and that all dividends are reinvested. Stock price performance for the historical periods presented is not necessarily indicative of future results.
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 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. 37 Item 6.
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.
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, 2020.
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.
As a result, a maximum of 695,281 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, 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.
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, 2025: Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (2)(3) Equity compensation plans approved by security holders (1) — N/A 1,390,562 (1) There are no securities to be issued under any equity compensation plans not approved by our security holders.
(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.
(2) The shares shown as available for future issuance under equity compensation plans exclude 171,256 shares of unvested restricted stock awards as all restricted stock awards are deemed to have been issued.
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.
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 13, 2026, the last sale price of our common stock was $111.30 per share.
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.
Period High Low 2025 1st Quarter $ 107.57 $ 49.62 2nd Quarter 60.89 39.80 3rd Quarter 67.34 42.56 4th Quarter 93.00 57.11 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 As of February 13, 2026, there were approximately 160 holders of record of our common stock.
Removed
In addition, in connection with the Payroll Support Program Agreements we entered into with the U.S. Department of Treasury, repurchases of common stock and the payment of cash dividends were prohibited through September 30, 2022. In 2023, we recommenced the payment of cash dividends.
Added
We recommenced the payment of quarterly cash dividends in third quarter 2023 until it was suspended in July 2024 in anticipation of capital needs related to our fleet investments. As of December 31, 2025, we have not resumed dividend payments. Certain of our credit agreements limit the amount of dividends we may pay.
Removed
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.
Removed
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.
Removed
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

42 edited+62 added−46 removed20 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 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.
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. 39 2025 Highlights • In January 2026, announced a definitive merger agreement under which Allegiant plans to acquire Sun Country Airlines • Record total airline-only operating revenue of $2.5 billion, up 4.3 percent year-over-year • Achieved controllable completion of 99.9% for the year • Airline-only operating CASM, excluding fuel and special charges of 8.04 cents, down 6.1 percent as compared with full-year 2024, on capacity growth of 12.6 percent • During the year, expanded the network by announcing 54 new routes, including service to eight new cities: Atlantic City (NJ), Burbank (CA), Columbia (MO), Fort Myers (FL), Huntsville (AL), La Crosse (WI), Philadelphia (PA), and Trenton (NJ) • Ranked 2nd best airline among major US carriers in the Wall Street Journal's "The Best and Worst Airlines of 2025" • The only US Airline named by Newsweek as one of America's Most Loved Brands 2025 • Named Best Airline Credit Card by USA TODAY's Readers' Choice Awards for the seventh consecutive year and Best Frequent Flyer Program by USA TODAY's Readers' Choice Awards for the second consecutive year • $139.6 million in total co-brand credit card remuneration received from Bank of America, up 3.6 percent from the prior year • Ended the year with 21 million total active Allways Rewards members • Completed the sale of Sunseeker Resort on September 4, 2025 • Published the company's fourth annual sustainability report 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.
“ 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.
“ 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. 47 “ Average stage length ” represents the average number of miles flown per flight.
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.
We believe we have more than adequate liquidity resources through our cash, cash equivalents 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.
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.
Unless otherwise expressly stated, for discussion and analysis of 2024 and a comparison of our 2024 results to 2023 results, please refer to our Annual Report on Form 10-K for the year ended December 31, 2024, under Part II Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations.
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. 51 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.
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.
Also discussed is our financial position as of December 31, 2025 and 2024. 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.
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.
Other expense includes travel and training expenses for crews and ground personnel, facility lease expenses, professional fees, personal property taxes, information technology consulting, the cost of passenger liability insurance, aircraft hull insurance and all other insurance policies, excluding employee welfare insurance.
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.
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, 2025 and 2024.
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.
Network Expansion We have identified more than 1,400 incremental routes as opportunities for future network growth, with approximately 75 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 aircraft availability, flight crew staffing, high fuel costs, economic conditions and other factors.
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.
Aircraft fuel expense includes the cost of aircraft fuel, fuel taxes, into plane fees and airport fuel flowage, storage or throughput 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.
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.
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.
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.
Additionally, this expense includes gains and losses on disposals of aircraft and other equipment, and all other administrative and operational overhead expenses not included in other line items above.
“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.
“Total passenger revenue per ASM” or “TRASM” represents total passenger revenue divided by scheduled service available seat miles. 48 LIQUIDITY AND CAPITAL RESOURCES Current liquidity Cash, cash equivalents and investment securities (short-term and long-term) increased to $838.5 million at December 31, 2025, from $832.9 million at December 31, 2024. Investment securities represent highly liquid marketable securities which are available-for-sale.
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 .
As of December 31, 2025, we are party to forward purchase agreements for 34 aircraft with 11 deliveries expected in 2026, 15 in 2027, and the remainder in 2028. 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.
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.
For the year ended December 31, 2025, we recorded estimated pilot retention bonus accruals of $89.8 million bringing the total accrual to $235.9 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.
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.
For the Year Ended December 31, Airline operating statistics (unaudited): 2025 2024 2023 Total system statistics: Passengers 18,737,151 16,982,836 17,342,236 Available seat miles (ASMs) (thousands) 21,369,532 18,984,711 18,772,110 Airline operating expense per ASM (CASM) (cents) 11.24 ¢ 12.11 ¢ 12.02 ¢ Fuel expense per ASM (cents) 2.99 ¢ 3.31 ¢ 3.71 ¢ Airline special charges per ASM (cents) 0.21 ¢ 0.24 ¢ 0.19 ¢ Airline operating CASM, excluding fuel and special charges (cents) 8.04 ¢ 8.56 ¢ 8.12 ¢ Departures 137,039 121,580 120,525 Block hours 327,440 288,407 285,453 Average stage length (miles) 887 887 882 Average number of operating aircraft during period 124.8 124.7 125.2 Average block hours per aircraft per day 7.2 6.3 6.2 Full-time equivalent employees at end of period 5,616 5,991 5,643 Fuel gallons consumed (thousands) 251,049 227,345 224,996 ASMs per gallon of fuel 85.1 83.5 83.4 Average fuel cost per gallon $ 2.55 $ 2.76 $ 3.09 Scheduled service statistics: Passengers 18,518,653 16,765,283 17,143,870 Revenue passenger miles (RPMs) (thousands) 16,947,654 15,303,737 15,639,329 Available seat miles (ASMs) (thousands) 20,679,905 18,314,867 18,208,820 Load factor 82.0 % 83.6 % 85.9 % Departures 131,668 116,441 116,044 Block hours 316,137 277,626 276,313 Average seats per departure 175.4 176.0 176.3 Yield (cents) (1) 6.22 ¢ 7.11 ¢ 7.59 ¢ Total passenger revenue per ASM (TRASM) (cents) (2) 11.93 ¢ 12.88 ¢ 13.38 ¢ Average fare - scheduled service (3) $ 56.89 $ 64.89 $ 69.25 Average fare - air-related charges (3) $ 68.62 $ 67.35 $ 66.33 Average fare - third party products $ 7.73 $ 8.48 $ 6.57 Average fare - total $ 133.25 $ 140.72 $ 142.15 Average stage length (miles) 893 893 888 Fuel gallons consumed (thousands) 242,673 219,061 218,129 Average fuel cost per gallon $ 2.54 $ 2.76 $ 3.09 Percent of sales through website during period 92.3 % 93.6 % 95.8 % Other Data: Rental car days sold 1,347,975 1,306,775 1,377,710 Hotel room nights sold 122,780 196,605 249,933 (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.
Station operations expense also includes most of our irregular operations costs. Depreciation and amortization expense includes the depreciation of all owned fixed assets, including aircraft and engines, Sunseeker Resort assets, and assets recorded in connection with finance leases.
Station operations expense also includes most of our irregular operations costs. Depreciation and amortization expense includes the depreciation of all owned fixed assets, including aircraft and engines, Sunseeker Resort assets (until determined to be an asset held for sale in June 2025), and assets recorded in connection with finance leases.
The effective tax rates for 2024 and 2023 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes, executive compensation, and the impact of ASU 2016-09 related to share-based compensation. 2023 compared to 2022 The comparison of our 2023 results to 2022 results is included in 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.
The effective tax rates for 2025 and 2024 differed from the statutory federal income tax rate of 21.0 percent primarily due to state income taxes and the impact of permanent tax differences. 2024 compared to 2023 The comparison of our 2024 results to 2023 results is included in our Annual Report on Form 10-K for the year ended December 31, 2024, under Part II Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 46 Airline Operating Statistics The following table shows the airline operating statistics for the last three years.
Significant increases in fuel costs could materially affect our operating results and profitability. We have not sought to use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future.
We have not sought to use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future. Elevated fuel costs in the future may impact our overall cost structure and operating results.
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.
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. 41 There continues to be regulatory focus on increasing quality control standards at Boeing and its suppliers with the aim of stabilizing aircraft production.
(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.
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.
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.
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 have taken delivery of 16 MAX aircraft from this order and all 16 aircraft are currently in revenue service.
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 allows management and investors to better compare our airline unit costs with those of other airlines. 44 Year Ended December 31, Percent Change Airline Unitized Costs (in cents) 2025 2024 YoY Salaries and benefits 3.77 ¢ 4.06 ¢ (7.1) % Aircraft fuel 2.99 3.31 (9.7) Station operations 1.39 1.44 (3.5) Depreciation and amortization 1.13 1.22 (7.4) Maintenance and repairs 0.70 0.66 6.1 Sales and marketing 0.44 0.52 (15.4) Aircraft lease rentals 0.17 0.12 41.7 Other 0.44 0.54 (18.5) Special charges 0.21 0.24 (12.5) Airline operating CASM 11.24 ¢ 12.11 ¢ (7.2) Airline operating CASM, excluding fuel 8.25 ¢ 8.80 ¢ (6.3) Airline operating CASM, excluding fuel and special charges 8.04 ¢ 8.56 ¢ (6.1) Airline operating CASM, excluding fuel and airline special charges.
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.
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. Salaries and benefits expense also includes such costs for Sunseeker Resort personnel through the sale of the Resort in September 2025.
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.
Additional special charges in 2025, 2024, and 2023 include costs associated with the accelerated retirement of 24 airframes to align with planned 737 MAX aircraft deliveries, a ratification bonus for our flight attendants in 2024, an impairment charge in 2024 for Sunseeker Resort, as well as losses incurred at the Resort from hurricanes and other severe weather events, net of insurance recoveries. 43 RESULTS OF OPERATIONS 2025 compared to 2024 Operating Revenue Year Ended December 31, Percent Change Operating Revenues (in thousands) 2025 2024 YoY Passenger $ 2,324,348 $ 2,217,059 4.8 % Third party products 143,188 142,128 0.7 Fixed fee contracts 77,647 80,660 (3.7) Resort and other 61,396 72,742 (15.6) Total operating revenues $ 2,606,579 $ 2,512,589 3.7 Passenger revenue.
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.
We will continue to consider raising funds through debt financing as needed to fund capital expenditures. Debt Our debt and finance lease obligations balance, without reduction for related issuance costs, decreased from $2.08 billion as of December 31, 2024 to $1.82 billion as of December 31, 2025.
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.
All of the aircraft in our fleet as of December 31, 2025 are owned by us except as indicated in the footnotes to the table: As of December 31, 2025 2024 2023 A320 (1) 79 87 92 A319 (2) 28 34 34 737-8200 16 4 — Total 123 125 126 (1) Includes 23 aircraft under finance lease and 9 aircraft under operating lease as of December 31, 2025, and 23 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2024 and December 31, 2023.
These figures are provided on a per ASM basis so as to facilitate comparisons with airlines reporting revenues on a per ASM basis.
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.
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.
The increase was primarily driven by a 10.4 percent increase in fuel gallons consumed, attributable to a 12.6 percent increase in total system ASMs. This increase was partially offset by a 7.6 percent decrease in average fuel cost per gallon. Fuel efficiency improved by 1.9 percent year over year. Station operations expense.
Restricted cash represents escrowed funds under fixed fee contracts, escrowed project funds and cash collateral against letters of credit required by hotel properties for guaranteed room availability, airports and certain other parties. Under our fixed fee flying contracts, we require our customers to prepay for flights to be provided by us.
As of December 31, 2025, we had $250.0 million of undrawn capacity under revolving credit facilities, plus another $25.1 million of undrawn capacity under a PDP financing facility. Restricted cash represents escrowed funds under fixed fee contracts and cash collateral against letters of credit required by hotel properties for guaranteed room availability, airports and certain other parties.
Subsequent revisions to these estimates could be caused by changing market prices of our aircraft, changes in utilization of the aircraft, and other fleet events. 50 RECENT ACCOUNTING PRONOUNCEMENTS See related disclosure in Note 2 to our Consolidated Financial Statements. 51
Subsequent revisions to these estimates could be caused by changing market prices of our aircraft, changes in utilization of the aircraft, and other fleet events. We classify assets as held for sale when the asset or asset group meets all of the accounting requirements to be classified as held for sale.
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.
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.
(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.
As of December 31, 2025, excludes three aircraft under operating lease which have been removed from service pending redelivery. (2) As of December 31, 2025, excludes three aircraft under operating lease which have been removed from service pending redelivery. Includes four aircraft under operating lease as of December 31, 2024, and December 31, 2023.
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.
Properties for further detail regarding our aircraft fleet. 40 NETWORK As of February 1, 2026, and including service announcements through that date, we were selling travel on 578 routes to 126 cities in 42 states. These include 39 routes scheduled to begin service in 2026.
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.
Further delays in aircraft deliveries will impact our ability to schedule additional growth in late 2026 and beyond. Union Negotiations The collective bargaining agreement with our pilots has been amendable since 2021. We and the International Brotherhood of Teamsters ("IBT") jointly requested the mediation services of the National Mediation Board in January 2023 to assist with the negotiations.
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 following table shows the number of leisure destinations and cities served as of the dates indicated (includes cities served seasonally): As of December 31, 2025 2024 2023 Leisure destinations 34 34 33 Origination cities 88 87 91 Total cities 122 121 124 Total routes 540 541 544 TRENDS Proposed Acquisition of Sun Country Airlines In January 2026, we entered into an agreement to acquire Sun Country subject to satisfaction of customary closing conditions, including each company's receipt of certain shareholder approvals and regulatory reviews and approvals.
Airline operating CASM, excluding fuel and airline special charges, increased by 5.4 percent to 8.56 ¢ for 2024 compared to 8.12 ¢ in 2023. The CASM-ex increase is primarily attributable to a 13.4 percent increase in airline salaries and benefits expense on a per ASM basis (for the reasons described in the expense line item discussion below).
A majority of expense line items were lower on a per ASM basis due in part to the increase in capacity. With limited ASM growth currently expected in 2026, CASM-ex is expected to increase to some extent during the year. Salaries and benefits expense. Airline salaries and benefits expense increased $34.8 million or 4.5 percent in 2025 compared to 2024.
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.
Income taxes We recorded a $10.2 million tax benefit in 2025 compared to a $68.2 million tax benefit in 2024.
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.
We had heightened debt repayment activity in 2025 due to the prepayment of the Sunseeker construction loan, refinancing of our pre-delivery deposit loans upon aircraft delivery, redemptions and repurchases (prepayments) of a portion of our 2027 Senior Secured Notes, and prepayments of other aircraft secured debt. 50 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, 2025 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) $ 182,976 $ 767,736 $ 284,421 $ 588,923 $ 1,824,056 Finance lease obligations 51,108 117,016 209,629 126,539 504,292 Operating lease obligations 14,143 22,430 20,399 25,176 82,148 Aircraft acquisition obligations (2) 632,159 671,167 — — 1,303,326 Total future payments under contractual obligations $ 880,386 $ 1,578,349 $ 514,449 $ 740,638 $ 3,713,822 (1) Long-term debt obligations (including variable interest entities) include scheduled interest payments, using applicable reference rates as of December 31, 2025, and excluding debt issuance costs.
Airline depreciation and amortization expense increased $10.9 million, or 4.9 percent, in 2024 compared to 2023 as the result of increases in deferred heavy maintenance amortization as well as increases in capitalized software amortization resulting from the airline's implementation of new enterprise resource planning ("ERP") systems including SAP, Navitaire, and Trax during 2023 and 2024.
Additionally, there was an increase in software amortization resulting from the airline's implementation of new enterprise resource planning systems throughout 2024 and 2025. These increases were partially offset by decreases in depreciation and heavy maintenance amortization associated with the retirement of six Airbus airframes during 2025. Sunseeker Resort depreciation and amortization decreased by $19.3 million in 2025 compared to 2024.
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.
These factors and the requirements for Boeing to obtain routine and necessary regulatory approvals could delay deliveries to us beyond management's current expectations. Although the contract provides for more deliveries, at this time, we currently expect eleven aircraft to be delivered to us in 2026.
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.
During 2026, we expect to continue focusing on the strategic utilization of our fleet, particularly during peak demand periods with only minimal scheduled service growth expected at this time. We anticipate that projected fleet growth after 2026 will provide additional flexibility to pursue network expansion opportunities. Sunseeker Resort In September 2025, we completed the sale of Sunseeker Resort.
Removed
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.
Added
Network growth in the future will continue to be affected by timing of aircraft deliveries, aircraft in heavy maintenance, airport construction and disruptions, trends in domestic, leisure air travel demand and other factors. We have identified over 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 75 percent currently have no nonstop service.
Removed
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.
Added
Our total number of origination cities and leisure destinations were 91 and 35, respectively, as of February 1, 2026, including announced routes. Our unique model is predicated on expanding and contracting capacity to meet seasonal leisure travel demands.
Removed
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.
Added
See Item 1. Business - "Announced Acquisition of Sun Country Airlines." We believe the proposed transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting scheduled service, charter and cargo operations of both airlines.
Removed
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.
Added
We believe the combination of our two financially strong leisure carriers in the U.S. will create benefits for customers, communities, employees, and partners by enhancing stability, expanding opportunities, and enabling continued investment and innovation. There are several risks associated with whether or not the transaction will close and also with respect to future operations if the transaction does close.
Removed
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.
Added
See Item 1A. Risk Factors - " Risks Related to our Proposed Acquisition of Sun Country Airlines Holdings, Inc. ” Future results of operations will be affected by the timing of regulatory approvals, integration considerations, transaction costs and other factors.
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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.
Added
Business and Macroeconomic Conditions Consumer confidence vacillated during 2025, which along with other macroeconomic and airline industry events, initially contributed to a general decline in consumer spending and, in particular, softened demand for domestic, leisure air travel. Although demand fluctuates, macroeconomic uncertainty persists, driven by factors such as trade policies and tariffs.
Removed
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.
Added
These factors have impacted our fares, load factors, and profitability. Our results of operations may continue to be impacted while these conditions persist. We continue to monitor how these factors could impact our business and take steps to mitigate their effect on our business.
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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.
Added
Aircraft Fuel The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict. Significant increases in fuel costs could materially affect our operating results and profitability.
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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.
Added
The mediation process with the NMB is continuing. At this time, the announced acquisition of Sun Country has not changed the mediation process.
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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.
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The sale aligns with our strategic focus on our core Airline operations. 42 Our Operating Expenses A brief description of the items included in our operating expense line items follows.
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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.
Added
Prior to the sale of Sunseeker Resort on September 4, 2025, sales and marketing expense also included costs related to advertising and marketing for the Resort, and credit card processing fees for Resort bookings.
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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.
Added
Special charges for 2025 include expenses related to organizational restructuring driven by reduced air travel demand amid heightened macroeconomic uncertainty, accelerated amortization and disposal of software identified for redevelopment, costs related to the proposed acquisition of Sun Country Airlines, and charges related to the sale of Sunseeker Resort.
Removed
We and VivaAerobus submitted a joint application to the DOT requesting approval of, and antitrust immunity for, the alliance.
Added
Passenger revenue increased $107.3 million or 4.8 percent in 2025 compared to 2024, driven by a 10.5 percent increase in scheduled service passengers on a 13.1 percent increase in scheduled service departures.
Removed
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.
Added
The increase in scheduled service passengers was offset by a 5.3 percent decrease in scheduled service total fare, which largely resulted from a 12.3 percent decline in average base fare due to demand softness in the industry. This decrease was partially offset by a 1.9 percent increase in average fare for air-related charges.
Removed
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.
Added
Over the last year, revenues for air-related charges have been bolstered by sales of our Allegiant Extra product. Since December 31, 2024, we have configured an additional 31 aircraft with the extra legroom seating for our Allegiant Extra offering, bringing the total number to 87 aircraft as of December 31, 2025.
Removed
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.
Added
The restoration of functionality around our third party bundled product offering, which began in late 2024, has also contributed to ancillary revenue increases over the last year. Third party products revenue. Third party products revenue increased $1.1 million or 0.7 percent in 2025 compared to 2024.
Removed
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.
Added
The increase was driven by a $3.8 million increase in revenue from sales of a third party travel insurance product, as well as a $1.4 million increase from sales of rental cars.
Removed
Fixed fee contract revenue. Fixed fee contract revenue increased 17.7 percent in 2024 compared to 2023 as the result of an 18.3 percent increase in fixed fee departures. Increased fixed fee flying was primarily driven by military charters, which increased by 34.4 percent compared to the prior year. Resort and other revenue.
Added
These increases were partially offset by a $3.7 million decrease in the marketing component of co-brand revenue as certain bonus compensation was phased out in late 2024 and a decline in revenue from sales of hotel rooms. Fixed fee contract revenue. Fixed fee contract revenue decreased $3.0 million or 3.7 percent in 2025 compared to 2024.
Removed
Resort and other revenue increased $68.4 million in 2024 compared to 2023, primarily as the result of the opening of Sunseeker Resort in December 2023. Resort revenue was $71.8 million in 2024 compared to $2.9 million in 2023.
Added
While fixed fee departures were consistent year over year, revenue per departure declined due to operating a higher proportion of ad-hoc charter flights, which generated lower fuel pass through contributions (the fuel pass throughs being accounted for as revenue) driven by the decrease in average fuel prices year over year. Resort and other revenue.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest 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
Biggest changeInterest Rates As of December 31, 2025, we had $747.5 million of variable-rate debt, including current maturities and without reduction for $10.8 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $7.4 million during 2025. 54
Based 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.
Based on our fuel consumption during 2025, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately $63.2 million. We do not hedge fuel price risk.
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.
Aircraft fuel expense during 2025 represented 24.9 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.

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