LAS VEGAS, March 18, 2020 /PRNewswire/ -- In light of
continuing operational impacts of the Coronavirus Disease /
COVID-19 pandemic, Allegiant Travel Company (NASDAQ: ALGT)
today announced a slate of strategic measures aimed at
strengthening the company's balance sheet, consolidating demand
while continuing to provide service to customers, protecting health
and safety, and enabling a solid foundation for the
future.
"This is an unprecedented situation and our team has come
together in extraordinary ways to ensure our customers can continue
to fly with confidence, while taking steps to ensure the ongoing
financial health of the company," said Maurice J. Gallagher, Jr., Allegiant chairman
and CEO. "As a domestic airline with a unique business model
serving primarily leisure travelers, we were better positioned than
most to withstand the early impact of COVID-19 on travel. But this
is a situation which is changing daily, and we are focused on
taking proactive steps to protect the health and safety of our
customers and team members, and to ensure our resilient company can
continue to provide access to convenient, affordable nonstop
travel."
In an effort to address reduced demand in leisure travel,
Allegiant has already cut airline capacity by approximately 15
percent during April and May, a figure expected to grow to 30-35
percent with additional reductions to come. Flexible scheduling for
seasonal peaks which is adjusted regularly to demand has been a
core principal of Allegiant's business model, and allows the
airline to decrease capacity quickly and inexpensively.
In an effort to limit prospective expenditures, the travel
company will immediately cease activity on non-airline projects,
including suspending construction of Sunseeker Resort Charlotte
Harbor – its planned resort in southwest Florida – and the related renovation of
Kingsway Country Club. Family entertainment centers operating in
Warren, Michigan and Clearfield, Utah will also close until further
notice. In addition to the preservation of liquidity, suspending
these projects is necessary for social distancing to prevent
community spread of COVID-19.
Allegiant has also placed an immediate moratorium on all
non-essential capital expenditures and discretionary spending
across the company, and instituted an immediate hiring freeze on
all non-essential positions. Stock buyback and dividend activity
will also be suspended, and avenues for additional borrowing will
be explored. Allegiant Chairman and CEO Maurice J. Gallagher, Jr. and President
John Redmond do not draw salary.
Other officers of the company will take a 50 percent salary
reduction.
"This set of initiatives could defer as much as $300
million in planned cash outlay for 2020," said Greg Anderson, chief financial officer. "In
addition, meaningful capacity cuts will help to preserve additional
liquidity. The flexibility of our business model – particularly our
low fixed cost structure – will go a long way to help
navigate these uncertain times and put us in a strong position
moving forward," he continued. "With these initiatives we
believe we are well positioned to mitigate the impact to our sector
of COVID-19, but we will continue to be proactive in our approach
to mitigate both current and long-term effects, and to bring
forward additional measures as needed."
Allegiant Travel Company
Las
Vegas-based Allegiant (NASDAQ: ALGT) is an integrated travel
company with an airline at its heart, focused on connecting
customers with premier leisure experiences - from vacations to
hometown family entertainment. Since 1999, Allegiant Air has linked
travelers in small-to-medium cities to world-class vacation
destinations with all-nonstop flights and industry-low average
fares. Today, Allegiant serves more than 450 routes across the
country, with base airfares less than half the cost of the average
domestic roundtrip ticket. Allegiant's Sunseeker
Resorts subsidiary is currently under construction with
its inaugural resort property, Sunseeker Resort Charlotte Harbor in
Southwest Florida - a unique
waterside integrated resort like no other. And a growing group of
Allegiant Nonstop family entertainment centers offer state-of-the
art indoor games and attractions to thrill seekers of all
ages. For more information, visit us at Allegiant.com.
Media information, including photos, is available
at http://gofly.us/iiFa303wrtF
Media Contact
Phone: 702-800-2020
Email: mediarelations@allegiantair.com
Investor Inquiries
Email: ir@allegiantair.com
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SOURCE Allegiant Travel Company