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ALGT Shares Rise 12.8% Since Third-Quarter 2026 Earnings Release
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Key Takeaways
Allegiant's Q3 adjusted loss narrowed to 3 cents per share, while revenues surged 71.1% to $961.6M.
Strong pricing and Sun Country contributions drove TRASM up 28.3%, despite a 5.7% capacity reduction.
Allegiant reaffirmed its 2026 EPS outlook above $6 & targets over $140M in annual synergies by 2029.
AllegiantTravelCompany (ALGT - Free Report) reported a third-quarter 2026 adjusted loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 47 cents. The result represented a 93.6% earnings surprise. The company had reported an adjusted loss of $2.09 per share in the year-ago quarter.
The company’s stock had a positive impact on the market, gaining 12.8% since its earnings release on Nov. 4, 2026.
Image Source: Zacks Investment Research
Revenues surged 71.1% year over year to $961.6 million, surpassing the Zacks Consensus Estimate of $941 million by 2.2%. Strong leisure travel demand, improved pricing and contributions from Sun Country supported performance. Total revenue per available seat mile (TRASM) increased 28.3% on a pro forma basis.
Allegiant Travel Company Price, Consensus and EPS Surprise
Passenger revenues increased 57.3% year over year to $777.4 million. Third-party product revenues rose 13.2% to $44.6 million. Fixed-fee contract revenues surged to $83.6 million from $18.9 million, while cargo operations contributed $52.4 million.
On a pro forma basis, consolidated revenues increased 19% despite a 5.7% reduction in capacity. This comparison treats the Sun Country acquisition and Sunseeker Resort sale as completed at the beginning of 2025.
TRASM reached a third-quarter record of 14.18 cents. Load factor improved 2 percentage points, while air revenue per passenger increased 50% year over year on a pro forma basis, reflecting stronger pricing and disciplined capacity deployment.
Allegiant's Ancillary Revenues and Bookings Strengthen
Ancillary revenue per passenger increased 5.8% year over year to $76.64 on a pro forma basis. The improvement reflected enhanced merchandising capabilities, pricing initiatives and growing demand for premium seating products.
Allegiant Extra, available on approximately 75% of the legacy fleet, continued to gain traction. The company also reported encouraging advance bookings for Allegiant First, which is scheduled to launch in March 2027.
The Expedia partnership contributed approximately 4% of bookings, with more than half originating from customers new to Allegiant. Meanwhile, co-branded credit card remuneration increased 23.6% to $42.1 million, supported by higher card spending and customer acquisition.
ALGT's Operating Costs Face Fuel Price Pressure
Total operating expenses increased 61.4% year over year to $950.8 million. Aircraft fuel expenses surged 94.1% to $293.6 million, while salaries and benefits increased 46.3% to $287.4 million. Station operating expenses rose 59.7% to $114 million.
The average fuel cost reached $3.98 per gallon, up 55.5% from the comparable pro forma quarter and exceeding management's initial expectation of $3.80.
Adjusted operating cost per available seat mile, excluding fuel, special charges and cargo expenses, increased 9.1% to 9.23 cents on a pro forma basis. Management expects the third quarter to represent the peak of year-over-year non-fuel unit cost pressure.
Adjusted operating income totaled $29.8 million, translating into a 3.1% margin. This represented a 340-basis-point improvement from the year-ago pro forma adjusted operating margin of negative 0.3%.
Adjusted EBITDA reached $110.9 million, with an adjusted EBITDA margin of 11.5%, improving 160 basis points year over year on a pro forma basis.
On a GAAP basis, Allegiant reported a net loss of $15.2 million, narrower than the $43.6 million loss recorded a year earlier. GAAP loss per share narrowed to 56 cents from $2.41.
ALGT Advances Sun Country Integration and Fleet Plans
Allegiant continued integrating Sun Country Airlines following the acquisition completed in May 2026. The company realized initial benefits from airport operations consolidation, shared insurance arrangements, reduced duplicate corporate costs and purchasing efficiencies.
Management reaffirmed its target of more than $140 million in annual run-rate synergies by 2029. The combined operating fleet totaled 192 aircraft at quarter-end, including 22 freighters operated for a cargo customer.
Boeing 737 MAX aircraft accounted for more than 22% of legacy Allegiant's scheduled-service capacity during the third quarter compared with 12% a year earlier. Approximately 20 additional aircraft deliveries are expected in 2027.
Allegiant's Liquidity and Cash Position
Allegiant ended September with approximately $1.1 billion in available liquidity, comprising $864.7 million in cash and investments and $250 million in undrawn revolving credit facilities.
Total debt stood at $2.9 billion, while net debt was $2.1 billion. Operating activities used $211 million in cash during the quarter, including a $267 million pilot retention bonus payment.
Capital expenditures totaled $135.7 million, alongside $19.6 million in deferred heavy maintenance expenditures.
ALGT Reaffirms 2026 Earnings Outlook
For the fourth quarter, Allegiant expects adjusted earnings between $1 and $1.50 per share, with an adjusted operating margin of 6-7%. System capacity is projected to remain approximately flat year over year, while scheduled-service capacity is expected to increase 1.7%.
Management anticipates fuel costs of $4.75 per gallon. Despite this headwind, fourth-quarter TRASM is expected to increase more than 20% year over year on a pro forma basis.
For full-year 2026, Allegiant reaffirmed its adjusted earnings guidance of more than $6 per share. Capital expenditures are expected to remain approximately $850 million, excluding Sun Country spending before the acquisition.
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.
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ALGT Shares Rise 12.8% Since Third-Quarter 2026 Earnings Release
Key Takeaways
Allegiant Travel Company (ALGT - Free Report) reported a third-quarter 2026 adjusted loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 47 cents. The result represented a 93.6% earnings surprise. The company had reported an adjusted loss of $2.09 per share in the year-ago quarter.
The company’s stock had a positive impact on the market, gaining 12.8% since its earnings release on Nov. 4, 2026.
Image Source: Zacks Investment Research
Revenues surged 71.1% year over year to $961.6 million, surpassing the Zacks Consensus Estimate of $941 million by 2.2%. Strong leisure travel demand, improved pricing and contributions from Sun Country supported performance. Total revenue per available seat mile (TRASM) increased 28.3% on a pro forma basis.
Allegiant Travel Company Price, Consensus and EPS Surprise
Allegiant Travel Company price-consensus-eps-surprise-chart | Allegiant Travel Company Quote
ALGT's Passenger Revenues and Unit Revenues Rise
Passenger revenues increased 57.3% year over year to $777.4 million. Third-party product revenues rose 13.2% to $44.6 million. Fixed-fee contract revenues surged to $83.6 million from $18.9 million, while cargo operations contributed $52.4 million.
On a pro forma basis, consolidated revenues increased 19% despite a 5.7% reduction in capacity. This comparison treats the Sun Country acquisition and Sunseeker Resort sale as completed at the beginning of 2025.
TRASM reached a third-quarter record of 14.18 cents. Load factor improved 2 percentage points, while air revenue per passenger increased 50% year over year on a pro forma basis, reflecting stronger pricing and disciplined capacity deployment.
Allegiant's Ancillary Revenues and Bookings Strengthen
Ancillary revenue per passenger increased 5.8% year over year to $76.64 on a pro forma basis. The improvement reflected enhanced merchandising capabilities, pricing initiatives and growing demand for premium seating products.
Allegiant Extra, available on approximately 75% of the legacy fleet, continued to gain traction. The company also reported encouraging advance bookings for Allegiant First, which is scheduled to launch in March 2027.
The Expedia partnership contributed approximately 4% of bookings, with more than half originating from customers new to Allegiant. Meanwhile, co-branded credit card remuneration increased 23.6% to $42.1 million, supported by higher card spending and customer acquisition.
ALGT's Operating Costs Face Fuel Price Pressure
Total operating expenses increased 61.4% year over year to $950.8 million. Aircraft fuel expenses surged 94.1% to $293.6 million, while salaries and benefits increased 46.3% to $287.4 million. Station operating expenses rose 59.7% to $114 million.
The average fuel cost reached $3.98 per gallon, up 55.5% from the comparable pro forma quarter and exceeding management's initial expectation of $3.80.
Adjusted operating cost per available seat mile, excluding fuel, special charges and cargo expenses, increased 9.1% to 9.23 cents on a pro forma basis. Management expects the third quarter to represent the peak of year-over-year non-fuel unit cost pressure.
Allegiant's Operating Margins Expand Despite Costs
Adjusted operating income totaled $29.8 million, translating into a 3.1% margin. This represented a 340-basis-point improvement from the year-ago pro forma adjusted operating margin of negative 0.3%.
Adjusted EBITDA reached $110.9 million, with an adjusted EBITDA margin of 11.5%, improving 160 basis points year over year on a pro forma basis.
On a GAAP basis, Allegiant reported a net loss of $15.2 million, narrower than the $43.6 million loss recorded a year earlier. GAAP loss per share narrowed to 56 cents from $2.41.
ALGT Advances Sun Country Integration and Fleet Plans
Allegiant continued integrating Sun Country Airlines following the acquisition completed in May 2026. The company realized initial benefits from airport operations consolidation, shared insurance arrangements, reduced duplicate corporate costs and purchasing efficiencies.
Management reaffirmed its target of more than $140 million in annual run-rate synergies by 2029. The combined operating fleet totaled 192 aircraft at quarter-end, including 22 freighters operated for a cargo customer.
Boeing 737 MAX aircraft accounted for more than 22% of legacy Allegiant's scheduled-service capacity during the third quarter compared with 12% a year earlier. Approximately 20 additional aircraft deliveries are expected in 2027.
Allegiant's Liquidity and Cash Position
Allegiant ended September with approximately $1.1 billion in available liquidity, comprising $864.7 million in cash and investments and $250 million in undrawn revolving credit facilities.
Total debt stood at $2.9 billion, while net debt was $2.1 billion. Operating activities used $211 million in cash during the quarter, including a $267 million pilot retention bonus payment.
Capital expenditures totaled $135.7 million, alongside $19.6 million in deferred heavy maintenance expenditures.
ALGT Reaffirms 2026 Earnings Outlook
For the fourth quarter, Allegiant expects adjusted earnings between $1 and $1.50 per share, with an adjusted operating margin of 6-7%. System capacity is projected to remain approximately flat year over year, while scheduled-service capacity is expected to increase 1.7%.
Management anticipates fuel costs of $4.75 per gallon. Despite this headwind, fourth-quarter TRASM is expected to increase more than 20% year over year on a pro forma basis.
For full-year 2026, Allegiant reaffirmed its adjusted earnings guidance of more than $6 per share. Capital expenditures are expected to remain approximately $850 million, excluding Sun Country spending before the acquisition.
Currently, ALGT carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.