The business climate for airlines still isn’t great, but conditions are improving for one Las Vegas-based company.
Allegiant Travel Co., parent company of Allegiant Air, reported in a regulatory filing this week that it continues to see “material improvement” in air travel demand.
Just over two months ago, the company reported it was burning through up to $2.5 million a day as it struggled to cope with the economic downturn caused by the coronavirus pandemic.
The company earlier this week said it expects its second-quarter cash burn figure to be closer to $1.75 million.
During May, Allegiant serviced just over 365,500 passengers, down nearly 72% from May 2019. Allegiant and other airlines have been hit hard during the pandemic as many have shied away from travel to keep from exposing themselves to the virus.
“We are continuing to see material improvement in demand from the April lows,” said Gregory Anderson, chief financial and principal accounting officer for the company, in a statement. “For the entire month, we averaged over $2 million in gross bookings per day. Even with this improvement in demand, we are continuing to focus on finding ways to reduce costs. The flexibility that is central to our business model allows us to take advantage of these periods of extremely low demand, which is clearly unique in our industry.”
The May results were stronger than the company had anticipated, said Drew Wells, Allegiant’s vice president of revenue.
“During Memorial Day weekend, Allegiant accounted for approximately 8% of all travelers going through a TSA checkpoint,” Wells said in a statement.
That was compared to just 2% for May 2019, he said. During the first week in June, the airline operated about 70% of its schedule, Wells said, which was a jump of roughly 20% from May’s numbers.
With many Las Vegas casinos reopening earlier this month after more than a two-month hiatus, Wells said he expects “modest” improvements to the operation figures through June.
In April, the airline announced it was set to receive more than $170 million in emergency federal aid through the federal CARES Act to help pay its employees. Allegiant has about 1,500 employees in Southern Nevada.
Despite the favorable news for May, Allegiant Travel Co. stock took a plunge during trading on the Nasdaq Stock Exchange on Thursday. The airline’s stock finished the day down more than 12%, trading at $106.97 per share. For comparison, the stock closed the trading day at $164.02 on Feb. 11, before COVID-19 took its grip on the U.S. economy.