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Allegiant (ALGT) Posts Encouraging March Traffic Results

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With air-travel demand improving in the United States, particularly on the leisure front, Allegiant Travel Company’s (ALGT - Free Report) March traffic results were better than the February report. Traffic, measured in revenue passenger miles, increased 60.7% month over month in March. Also, load factor (% of seats filled by passengers) improved to 55.8% from 52.8% reported in February.

The picture was rosy on the year-over-year front as well with traffic rising 21.8% in March for scheduled service. Scheduled capacity for March 2021 increased 29.6% from March 2020 levels as demand for air travel moderately increased, prompting the carrier to expand supply to meet modest rise demand. With traffic increasing less than the extent of capacity expansion, load factor fell 3.6 points year over year to 55.8%.

The number of departures for scheduled services rose 31.2%. However, the average stage length (average distance flown per aircraft departure) fell 1.6% to 899 miles in the same month.

For the total system (including scheduled service and fixed fee contract), number of departures rose 32.4% and the average stage length dropped 1.8%. Capacity for the total system rose 30.7% on a year-over-year basis.

Besides, Allegiant expects average fuel costs per gallon (total system) for the March quarter to be at $1.86 per share. Total revenues for the March quarter is expected to decline 35-40% from the first-quarter 2019 levels.  For the first quarter, operating cost per available seat miles (CASM) excluding fuel is expected to have dipped by 3-4% from first-quarter 2019’s levels.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Transportation sector are Triton International Limited (TRTN - Free Report) , Landstar System, Inc. (LSTR - Free Report) and Herc Holdings (HRI - Free Report) . While Landstar carries a Zacks Rank #2 (Buy), Triton and Herc Holdings sport a Zacks Rank #1 (Strong Buy) at present. 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 Triton, Landstar and Herc Holdings is pegged at 10%, 12% and 31.2%, respectively.

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