US ultra-low-cost carrier Allegiant Air has posted a net profit for 2021 despite the negative impact of COVID-19 on the airline’s operations.
According to its financial results, Allegiant Air has reported a slight net profit of $152 million in 2021. This compares to a $184 million net loss in 2020.
“Despite impacts from multiple variants throughout the year, we grew scheduled capacity more than eight percent when compared to 2019,” stated Maurice J. Gallagher, Jr., chairman and CEO of Allegiant (ALGT).
The airline’s load factors improved gradually throughout the year with Q4 loads of 77%, a more than 20-point increase from the first quarter of 2021. In addition, Allegiant (ALGT) grew its fourth quarter revenue by 7.8% when compared with 2019, finishing the year with a total operating revenue of $1.7 billion, just seven percent below 2019.
“As we exited 2021, the operation was challenged by impacts from the Omicron variant. We saw unprecedented crew shortages due to COVID, resulting in cancelled flights during the peak holiday travel season and persisting throughout January,” Gallagher added.
The airline expects strong leisure demand this spring and summer.
“Over the past several months, the booking curve has normalized to its pre-COVID state, and although early, we are beginning to see positive demand trends into early summer,” Gallagher explained.
In late 2021, Allegiant Air announced that it would expand its fleet by ordering 50 Boeing 737 MAX aircraft with options for 50 additional jets. Allegiant (ALGT) has picked two models: the Boeing 737 MAX 7 and the Boeing 737 MAX 8200. Allegiant (ALGT) will take delivery of an initial group of planes in 2023, with the remaining deliveries scheduled throughout 2024 and 2025.
The hefty order sees Allegiant (ALGT) switching suppliers and potentially replacing its older Airbus fleet of A319 and A320 jets. However, the carrier has not yet outlined aircraft retirement plans.
“The recently announced Boeing transaction will increase incremental route opportunities to 1,400, which represents more than ten years of growth,” according to Gallagher.
Currently, the airline has a total of 113 aircraft in its fleet, including 35 Airbus A319s and 78 Airbus A320s. In a statement, the carrier has pledged to end 2022 with 127 aircraft.