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Allegiant Travel August Traffic Rises, Load Factor Slips

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Allegiant Travel Company (ALGT - Free Report) has reported traffic numbers for August. Traffic for the total system, including scheduled service and fixed fee contract and measured in revenue passenger miles (RPMs), increased 5.5% on a year-over-year basis to 892.45 million. System capacity, calculated in available seat miles (ASMs), improved 6.5% in the month to 1.07 billion.

With capacity growth outpacing the rise in traffic, load factor (percentage of seats filled with passengers) declined 80 basis points year over year to 83.3%. The stock declined 1.2% on Sep 7 to $115.15 primarily due to the fast approaching Hurricane Irma. The decline in load factor is a further negative.

Allegiant’s passenger count rose 9.2% in August. Its system-wide average fuel cost per gallon was approximately $1.84 per gallon in the month.

The company expects system-wide capacity growth for the third quarter of 2017 in the band of 3-5% (previous guidance: 3-7%). The metric is projected to grow further in the 9-13% range during the fourth quarter of 2017, unchanged from its past estimate.

The company anticipates departures for the third quarter to increase in the range of 6-8%. For the fourth quarter, the metric is likely to augment in the 7-11% band.

The company’s total revenue per scheduled ASM (TRASM) view for the third quarter remains unchanged at -0.5-1.5% range.

Zacks Rank & Key Picks

Allegiant currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in airline space are Deutsche Lufthansa AG , SkyWest, Inc. (SKYW - Free Report) and Air France-KLM SA (AFLYY - Free Report) . While Deutsche Lufthansa and SkyWest sport a Zacks Rank #1 (Strong Buy), Air France-KLM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

Shares of Deutsche Lufthansa and Air France-KLM have surged more than 100% in a year, while SkyWest shares have rallied 25.6% over the same time frame.

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