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Allegiant (ALGT) Posts Bland August Traffic, Load Factor Tanks

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Allegiant Travel Company (ALGT - Free Report) reported dull traffic numbers for August, primarily due to weak air travel demand stemming from the COVID-19 pandemic. Traffic for scheduled service, measured in revenue passenger miles (RPMs), plunged 48.4% on a year-over-year basis to 540.3 million. Scheduled capacity, calculated in available seat miles (ASMs), fell 0.3% to 1226.4 million in the month.

Since the decline in traffic exceeded capacity reduction, load factor (percentage of seats filled with passengers) plunged 4110 basis points year over year to 44.1%. Moreover, number of passengers carried declined 49% year over year to 633.2 million.

Number of departures for scheduled service declined 3.6% on a year-over-year basis. However, average stage length (average distance flown per aircraft departure) moved up 1.6% to 835 miles in the same month. For the total system (including scheduled service and fixed fee contract), number of departures fell 6.7%, while the average stage length inched up 1.1% to 833 miles. The average fuel cost per gallon (estimated) for August was $1.34.

Average daily bookings for August were approximately $2 million per day. The company expects average daily cash burn to exceed $1 million for the September quarter. The same is expected to be lower than $1 million for the final quarter of the year, in the event of current booking trends remaining stable.

Zacks Rank & Stocks to Consider

Allegiant currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , Canadian Pacific Railway Limited (CP - Free Report) and Werner Enterprises, Inc. (WERN - Free Report) . Knight-Swift sports a Zacks Rank #1(Strong Buy), while Canadian Pacific and Werner carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Canadian Pacific and Werner is pegged at 15%, 8% and 8.5%, respectively.

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