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Allegiant Sees Decline in December Traffic, Load Factor Up

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Allegiant Travel Company (ALGT - Free Report) posted mixed traffic figures for December 2018. In spite of reporting a decline in traffic, load factor (percentage of seats filled with passengers) improved as capacity declined more than traffic. Traffic for the total system (including scheduled service and fixed fee contract), measured in revenue passenger miles (RPMs), declined 0.3% on a year-over-year basis. System capacity, calculated in available seat miles (ASMs), dropped 0.7%.

However, load factor rose 30 basis points (bps) year over year to 80.7%. Allegiant’s passenger count dropped 0.6% during the month. The company’s system-wide average fuel cost per gallon in December was approximately $2.07.

Allegiant estimates fuel cost to be $2.34 per gallon in the fourth quarter of 2018, detailed results of which will be available on Jan 30. Meanwhile, the company anticipates total passenger revenue per ASM to rise between 3.7% and 4.1% year over year.

Fuel cost per gallon for 2018 is expected at $2.33. Operating income for the full year is estimated in the range of $241-$245 million.

Price Performance
Shares of Allegiant have performed disappointingly in the past six months. The stock has declined 12.6% compared with the industry’s fall of 6%.

 

 

Zacks Rank & Other Stocks to Consider

Allegiant carries a Zacks Rank #2 (Buy).

A few better-ranked stocks in the Zacks Transportation sector are Spirit Airlines, Inc. (SAVE - Free Report) , Azul S.A. (AZUL - Free Report) and Expeditors International of Washington, Inc. (EXPD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Spirit Airlines and Azul have gained 54% and 69.9% in the past six months, respectively. Meanwhile, Expeditors boasts an impressive earnings history. Expeditors outpaced the consensus estimate in each of the trailing four quarters, the average beat being 12.2%.

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