We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allegiant's September Traffic Slumps 36.6% on Coronavirus Woes
Read MoreHide Full Article
Like other carriers, Allegiant Travel Company (ALGT - Free Report) has been suffering due to coronavirus-induced tepid air-travel demand. Due to this weakness, shares of the company have declined 8.2% since the beginning of March.
Continuing with this disappointing trend, the company’s September traffic report, unveiled late last week, was lackluster.
Lets delve deeper.
Traffic for scheduled service, measured in revenue passenger miles (RPMs), plunged 36.6% on a year-over-year basis to 405.59 million. Scheduled capacity, calculated in available seat miles (ASMs), also declined 9% to 706.14 million in the month.
With traffic declining more than the contraction in capacity, scheduled load factor (or percentage of seats filled by passengers) deteriorated 25 percentage points year over year to 57.4%. The number of departures for scheduled service decreased 13.4%. The average stage length (average distance flown per aircraft departure) increased 3.8% at 839 miles in the same month. For the total system (including scheduled service and fixed fee contract), the number of departures declined 17.8% while the average stage length increased 3.5%.
The estimated average fuel price per gallon for September was $1.28. The company expects the metric for the third quarter to be $1.32 per gallon. Average daily cash burn for the quarter was “roughly $1.3 million” per Gregory Anderson, executive vice president and chief financial officer at Allegiant. Detailed results will be available on Oct 22.
With air-travel demand improving particularly on the leisure front leading to better bookings in September, Anderson further stated that “Gross bookings for the quarter averaged more than $2.0 million per day, which is better than our previous booking levels of less than $2 million per day”. Despite bookings being far below the year-ago levels, its improving scenario prompts the company, currently carrying a Zacks Rank #4 (Sell), to issue an encouraging view for daily cash burn for the final quarter of 2020. The company expects the metric to be well below $1 million for the December quarter.
Shares of J.B. Hunt, FedEx and Werner have gained more than 15%, 79% and 19%, respectively, on a year-to-date basis.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Image: Bigstock
Allegiant's September Traffic Slumps 36.6% on Coronavirus Woes
Like other carriers, Allegiant Travel Company (ALGT - Free Report) has been suffering due to coronavirus-induced tepid air-travel demand. Due to this weakness, shares of the company have declined 8.2% since the beginning of March.
Continuing with this disappointing trend, the company’s September traffic report, unveiled late last week, was lackluster.
Lets delve deeper.
Traffic for scheduled service, measured in revenue passenger miles (RPMs), plunged 36.6% on a year-over-year basis to 405.59 million. Scheduled capacity, calculated in available seat miles (ASMs), also declined 9% to 706.14 million in the month.
With traffic declining more than the contraction in capacity, scheduled load factor (or percentage of seats filled by passengers) deteriorated 25 percentage points year over year to 57.4%. The number of departures for scheduled service decreased 13.4%. The average stage length (average distance flown per aircraft departure) increased 3.8% at 839 miles in the same month. For the total system (including scheduled service and fixed fee contract), the number of departures declined 17.8% while the average stage length increased 3.5%.
The estimated average fuel price per gallon for September was $1.28. The company expects the metric for the third quarter to be $1.32 per gallon. Average daily cash burn for the quarter was “roughly $1.3 million” per Gregory Anderson, executive vice president and chief financial officer at Allegiant. Detailed results will be available on Oct 22.
With air-travel demand improving particularly on the leisure front leading to better bookings in September, Anderson further stated that “Gross bookings for the quarter averaged more than $2.0 million per day, which is better than our previous booking levels of less than $2 million per day”. Despite bookings being far below the year-ago levels, its improving scenario prompts the company, currently carrying a Zacks Rank #4 (Sell), to issue an encouraging view for daily cash burn for the final quarter of 2020. The company expects the metric to be well below $1 million for the December quarter.
Stocks to Consider
Investors interested in the broader Transportation sector may consider a few better-ranked stocks like J.B. Hunt Transport Services (JBHT - Free Report) , FedEx Corporation (FDX - Free Report) and Werner Enterprises (WERN - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of J.B. Hunt, FedEx and Werner have gained more than 15%, 79% and 19%, respectively, on a year-to-date basis.
Zacks’ 2020 Election Stock Report:
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Check out the 2020 Election Stock Report >>