0001362468-26-000022
SEC filingQ1 revenue grew 9.6% ex-Sunseeker to $732.4M, driven by strong leisure demand and higher fares despite 5.9% capacity cut.
Allegiant Travel Company reported first quarter 2026 total operating revenue of $732.4 million, a 4.8% increase year-over-year. Excluding the prior year's Sunseeker Resort results, revenue grew 9.6%, reflecting strong leisure demand. Passenger revenue rose 8.9% to $671.8 million, driven by a 19.8% increase in average scheduled service base fare and a 3.9 percentage point improvement in load factor to 84.4%, despite a 5.9% reduction in scheduled service capacity. Third party products revenue increased 20.3% to $42.3 million, led by co-brand marketing and rental car revenue. Fixed fee contract revenue grew 11.5% to $18.1 million on higher departures and revenue per departure. Resort and other revenue fell sharply to $0.2 million from $30.9 million due to the sale of Sunseeker Resort in September 2025.
Airline operating CASM, excluding fuel and special charges, rose 7.1% to 8.64¢, primarily due to lower capacity (5.9% fewer ASMs) and higher unit costs across categories. Salaries and benefits expense on a per-ASM basis increased 5.2%, though total salaries decreased 1.0% after restructing. Fuel expense per ASM surged 15.1% as average fuel cost per gallon rose 16.5% to $3.04, partially offset by a 7.0% drop in gallons consumed. Station operations, maintenance, and sales and marketing costs also increased on a per-ASM basis. Special charges totaled $27.8 million, including $10.0 million for accelerated software amortization, $9.6 million for Sun Country acquisition costs, and $7.0 million for a credit loss allowance. In the prior year quarter, special charges were negative $1.4 million due to insurance recoveries.
The passenger segment remains the core driver, with higher base fares and improved load factor offsetting capacity cuts. Third party products benefited from co-brand credit card revenue growth, with remuneration up 8.9% to $39.3 million. Fixed fee contracts posted solid gains from sports-related flying. The Resort segment essentially disappeared following the Sunseeker sale, removing a prior loss-making operation. Overall, the revenue mix shifted away from resort income toward higher-margin airline operations.
Management expects continued fuel cost pressure from the Middle East conflict, with only one month of impact in Q1. The proposed acquisition of Sun Country Airlines is expected to close as early as May 13, 2026, pending shareholder approval. Integration planning is underway, and costs may continue. Aircraft deliveries included 17 737 MAX aircraft as of March 31, 2026, with ten more expected in the remaining nine months of 2026, subject to Boeing's production stability. Pilot retention bonus accruals totaled $256.0 million as of March 31, 2026, to be paid upon ratification of a new collective bargaining agreement. The company suspended its quarterly dividend indefinitely to prioritize fleet investments and has $64.7 million remaining in share repurchase authority. Liquidity remains strong with $933.6 million in cash and investments and $250.0 million undrawn revolving credit facility.