Orlando Flights Help Allegiant Boost Revenue

The Sunshine State has been very good for Las Vegas-based Allegiant Travel Co., according to its latest earnings statement.

Revenue for the airline was up 41 percent in the first quarter to $84.3 million and operating income rose nearly 93 percent to $14.3 million, due in large part to better-than-expected results from new and existing routes in Florida, company officials said Wednesday.

They said increases from flights to Orlando outpaced growth in traffic to Las Vegas and new service to Tampa/St. Petersburg helped to propel the airline's earnings

"What was really impressive was the year-over-year improvement in Orlando," said Ponder Harrison, managing director of marketing and sales for Allegiant, which trades on the Nasdaq National Market under the symbol ALGT.

Allegiant specializes in routes from small cities to major resort destinations, such as Las Vegas and Orlando. It sticks to markets with little competition and adds value by packaging low-price tickets with hotel deals in the vacation destination.

Since March 31, 2006 Allegiant added 19 routes to Florida and seven to Las Vegas. Allegiant also plans to increase its fleet of MD-80 jets to from 26 to 30 by the end of the year at a cost of between $5 million and $6 million per plane, said Andrew Levy, Allegiant's managing director of planning.

Company officials indicated the strong demand for routes to Florida gives Allegiant the power to increase passenger fares.

Allegiant posted a 52 percent increase in per-passenger ancillary revenue to $18.98.

To that end the airline will begin offering travel insurance and use special software to make more precise decisions about pricing for things like seats with more legroom.

"We may be pricing some products today too high and possibly too low," Harrison said.

Diluted earnings per share were up 17 percent to 48 cents for the quarter and the company's market capitalization was up 3 percent to $232 million.

Allegiant shares closed at $34.70 on Wednesday, down 19 cents, or 0.54 percent.



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