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Allegiant's May Traffic Increases But Load Factor Decreases

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Allegiant Travel Company (ALGT - Free Report) reported traffic numbers for May. Traffic for the total system including scheduled service and fixed fee contract, measured in revenue passenger miles (RPMs), improved 10.3% on a year-over-year basis to 1.11 billion. System capacity, calculated in available seat miles (ASMs), increased 10.7% to 1.36 billion in the month.

With capacity expansion outpacing traffic growth, load factor (percentage of seats filled with passengers) dipped 20 basis points year over year to 81.8%.

We remind investors that the carrier reported a decrease in load factor for April as well. Back then, the airline justified this slip in the key metric stating that the development “was not outside of our expectations.” Allegiant said that a significant capacity expansion between March-end and the commencement of the Easter travel period negatively impacted its load factor in the month.


The carrier’s passenger count rose 12.3% in May. Its system-wide average fuel cost per gallon was approximately $2.32 in the month, higher than $2.25 in April. Fuel cost per gallon for the current year is anticipated to be $2.26. The metric was $2.33 in 2018.

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) , GATX Corporation (GATX - Free Report) and Fly Leasing Limited (FLY - Free Report) . While Fly Leasing 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 and Fly Leasing have surged more than 33% and 58%, respectively, so far this year. Meanwhile, GATX boasts a stellar earnings history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 16%.

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