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Allegiant a Step Closer to Maintaining All-Airbus Fleet

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Allegiant Travel Company (ALGT - Free Report) , the parent company of Allegiant Air, has taken a significant step toward fulfilling its objective of transitioning to an all-Airbus fleet by year-end. To this end, the low-cost carrier recently took delivery of its first US-produced Airbus A320 plane. The aircraft was delivered from the Airbus' U.S. production facility located in Mobile, AL.

We note that Allegiant is scheduled to purchase 13 new A320 aircraft directly from Airbus. This newest addition to Allegiant’s fleet marks the 11th such aircraft to be added to Allegiant's fleet this year. Currently, the company has 99 Airbus aircraft (in service or committed for future delivery).

Allegiant’s efforts to transition into a single-fleet type are commendable. This is because the company aims to increase efficiencies and improve the flying experience of passengers. The new planes are equipped with all-modern facilities, have additional seating capacity and are fuel-efficient. In line with its fleet-modernization efforts, this Las Vegas-based carrier is not only adding new and more efficient planes but retiring old ones.

Allegiant also hit the headlines when it reached a tentative agreement with the International Brotherhood of Teamsters (IBT), which represents its flight dispatchers. The tentative agreement follows extensive negotiations, which commenced in 2017.

Notably, this provisional agreement with IBT pertains to the wages and other benefits of 34 flight dispatchers of the carrier, who fall under the umbrella of the union. However, the tentative deal will have to be ratified (via votes) by the dispatchers before the first collective bargaining agreement between the partiesbecomes operational. Results of the voting procedure should be available by Jul 31, 2018. After becoming operational, the deal will run for five years.

Zacks Rank & Key Picks

Allegiant carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and GATX Corporation (GATX - Free Report) . While Expeditors sports a Zacks Rank #1 (Strong Buy), SkyWest and GATX carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here. 

Shares of SkyWest, Expeditors and GATX have rallied more than 58%, 37% and 19%, respectively, in a year.

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