Allegiant Air saw a continued trend in air travel demand in June. The airline notched an average of over $4 million in gross bookings per day. This was double what the airline averaged in May. Also, during June, the airline nearly doubled the number of departures it had and nearly tripled the number of passengers it flew in comparison to May.
Strong domestic bookings
Allegiant announced in a press release viewed by Simple Flying that June’s $4 million per day gross bookings number exceeded expectations and was twice what it was in May. Thus, the carrier was able to reduce average daily cash burn for the second quarter down to $900,000– compared to the previously forecast $1.75 million.
For the second quarter entirely, the average daily gross bookings were over $2.5 million. This includes the sharp drop in demand that occurred during the month of April with a rebound starting in May.
Allegiant’s schedule and statistics
During June, the airline operated 70% of its schedule. It was about 50% back in May. With this increase, the airline also saw a rise in load factor by nearly 10 points taking June to 57.3%– below the 85.9% it recorded in June 2019, but much higher than the last few months.
Compared to May, Allegiant continued to see massive growth in scheduled passenger numbers:
- Passengers: 362,528 in May vs. 867,207 in June
- Load Factor: 47.3% in May vs. 57.3% in June
- Departures: 4,654 in May vs. 8.940 in June
Compared to 2019, passenger numbers were down 45.6%, and departures were down 20%. This gives the airline plenty of room to grow and build up its operations.
About 6% of all travelers going through TSA checkpoints in June were flying Allegiant. The airline also noted that there was good traffic through the busy Fourth of July holiday period.
Looking ahead to the third quarter
The first quarter was rough for Allegiant. And, with the second quarter complete, the airline is looking ahead to the third quarter. For now, the airline is anticipating a daily cash burn of $750,000 in the third quarter and plans to fly about 75% of its schedule. There are, however, plenty of variables.
For one, Allegiant has noted that the health crisis has started to worsen in several states– especially ones with strong tourist demand across the Southeastern United States, where the airline has a strong presence. This has, according to the airline, “negatively impacted bookings and tempered expectations into the third quarter.”
The fluid nature of the situation means Allegiant’s trend in seeing more passengers fly with them per month could see a reversal if the situation continues to worsen. The airline noted additional shutdowns and required quarantines as some potential hits to the airline’s operations. This has kept the carrier focused on reducing costs and bolstering its liquidity position. Gregory Anderson, executive vice president, chief financial officer, and principal accounting officer of Allegiant, stated the following:
“We continue to keep our finger on the pulse and will leverage the flexibility of our model to pull back capacity to match demand levels in the coming months.”
Allegiant focuses on leisure travelers. This helped the carrier bolster its positions in May and June. However, leisure travel demand is also incredibly sensitive and could change rapidly depending on the situation at popular vacation destinations. For now, these results are good for the airline as it navigates the current crisis.
What do you make of Allegiant’s June numbers? How do you think leisure travel demand will look in the fall? Let us know in the comments!
