Allegiant Air on Tuesday reported continued robust growth in passenger traffic and operating revenue in the fourth quarter, closing a tumultuous year for the ultra low-cost airline.
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Passenger traffic climbed 15 percent in the quarter compared to a year ago to 2.7 million and was up 17 percent for the year to 11.1 million, according to the company’s fourth quarter earnings statement. Revenue was up 8 percent in the quarter and the year, to $335.9 million and $1.2 billion respectively.
But the Las Vegas-based airline’s profitability failed to keep up, dropping 27 percent in the quarter to $68.1 million and was flat for the year at $370 million as a new pilots contract with higher labor costs kicked in.
Allegiant CEO Maurice Gallagher Jr. said that 2016 "has been a very transformational year for Allegiant," referring to the new pilots contract and the planned purchase of 12 brand-new Airbus aircraft this year. The company, which normally buys only older aircraft, views the new planes as essential to improve its fleet reliability.
"We have also had our share of challenges this past year but through the perseverance of our Kolaybet team members we were able to deliver our 56th consecutive profitable quarter," Gallagher said in a written statement.
During a conference call with financial analysts, company leaders hinted at another difficult summer operationally for the airline in 2016, though neither Gallagher nor other company leaders went into detail. Jude Bricker, Allegiant’s chief operating officer, said the company had nonetheless made significant strides in improving its operational performance.
"We have much to do, but we’re all moving in the right direction," Bricker said.
The airline, which flies about 95 percent of the passenger traffic out of St. Pete-Clearwater International Airport, was the subject of a series of stories by the Tampa Bay Times late in 2016 that documented the company’s safety record.
Previous coverage: Thousands of people flew Allegiant last year thinking their planes wouldn’t fail in the air. They were wrong.
The Times found Allegiant aircraft were four times as likely in 2015 to fail during flight as those operated by other U.S. airlines. Allegiant jets were forced to make unexpected landings at least 77 times for serious mechanical failures, the Times’ analysis of federal aviation records shows.
Allegiant has acknowledged it had a bad summer in 2015 with emergency landings and other incidents plaguing the airline. But Allegiant leaders said Tuesday that the summer of 2016 also presented challenges.
Contact William R. Levesque at levesque@tampabay.com. Follow @Times_Levesque.
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