USA: Allegiant Acquires First Airbus A320ceo

American ultra-low-cost carrier Allegiant has taken delivery of its first Alabama-made Airbus A320ceo, joining a fleet of 31 A319s, 40 A320s, and 29 McDonnell-Douglas MD-80s.

The airline is on its way to becoming an all-Airbus carrier, progressively replacing its older MD-80s with brand-new planes.

We are proud to deliver Allegiant their first Airbus aircraft manufactured in Mobile, said Bob Lekites, Executive Vice President of Customers for Airbus Americas.

According to Airbus, this is the 69th aircraft that the Mobile assembly line has delivered since it opened in 2015.

Back in 2016, Allegiant placed an order for 12 Airbus A320ceo planes. The airline took delivery of its first A320 in May 2016, unveiling it at an event at Orlando Sanford International Airport (SFB).

This delivery is also an important step in our transition to an all-Airbus fleet, increasing efficiencies across our entire operation, remarked Maury Gallagher, CEO, and chairman, Allegiant.

According to the CEO, these planes will bring economic advantages in fuel savings and higher seat capacity.

Allegiant’s overall fleet age averages at 17.0 years.

The airline’s A319/A320 fleet averages 12.9 years, as most of these planes come from airlines like easyJet, Vueling, Aer Lingus, and CEBU Pacific Air.

Commercial aircraft company officials gathered in Alabama to celebrate the delivery of the first U.S.-produced Allegiant aircraft.

The Airbus Final Assembly was the 69th jet delivered but the first one built in the country, Al.com reported. The low-fare carrier is based in Las Vegas that has routes connecting to cities including New Orleans, Jacksonville, Savannah, San Diego, Orlando, New York, Washington, D.C., Las Vegas, Los Angeles and Austin.


The company described its newest jet as “the 11th of 13 new A320 aircraft scheduled for purchase directly from Airbus, to be inducted into Allegiant’s fleet this year.”

The new jets had previously been built in Toulouse, France and Hamburg, Germany.

Allegiant has 99 Airbus jets in service or on order and plans to be flying an all-Airbus fleet by the end of the year.

“Today’s delivery is an exciting milestone for Allegiant and our ongoing commitment to providing access to affordable, safe and reliable air travel for many people who wouldn’t otherwise be able to fly,” said Maury Gallagher, CEO and chairman of Allegiant. “This delivery is also an important step in our transition to an all-Airbus fleet, increasing efficiencies across our entire operation, and bringing economic advantages in fuel savings, higher seat capacity and more.”

More than 380 Airbus representatives, executives from Airbus and Allegiant Air, a team of Allegiant employees gathered at the Airbus production facility in Mobile.

Bob Lekites, Executive Vice President of Customers for Airbus Americas, said the relationship between the two companies “has allowed Allegiant to expand their ultra-low cost consumer flight options. “

Lekites added: “We are proud to deliver Allegiant their first Airbus aircraft manufactured in Mobile, and we look forward to providing them more aircraft that exceed customer expectations.”

It has been about a month since the last earnings report for Allegiant Travel Company ALGT . Shares have added about 5% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is ALGT due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

First-quarter results

Allegiant's first-quarter earnings of $3.42 per share surpassed the Zacks Consensus Estimate of $3.00. Also, the bottom line improved significantly on a year-over-year basis. Results were aided by the strong demand for air travel.

Quarterly revenues increased in double-digits year over year to $425.4 million, marginally above the Zacks Consensus Estimate of $425.1 million. Moreover, the top line was boosted primarily by a significant increase (14.1%) in passenger revenues.

Systemwide air traffic (measured in revenue passenger miles) in the reported quarter rose 14.3% and capacity (measured in available seat miles) expanded 10.4% year over year. Load factor (percentage of seats filled by passengers) was 83%, up 280 basis points as capacity expansion was outweighed by traffic growth.

Cost per available seat miles (CASM) excluding fuel, decreased 2%. Total scheduled service revenue per available seat miles (TRASM) also inched up 1.4% to 11.30 cents.

TRASM in the quarter is expected to decrease by two percentage points driven by Easter, falling partly in the first quarter this time. High demand for air travel during Easter generates more passenger revenues and in turn, boosts unit revenues. Additionally, scheduled and system ASMs are anticipated to increase between 10% and 14%.

The company expects fuel cost per gallon of $$2.20 for the full year. The previous forecast for the metric was $2.17 per gallon. Additionally, effective tax rate is now anticipated between 21% and 22%. Earlier, the metric was estimated at 24-25%. This upside is owing to dissolution of foreign subsidiaries leading to adjustment of deferred tax balance. Capital expenditures are now projected at $300 million, higher than the earlier predicted $290 million.

The company continues to expect earnings per share in the band of $10-$12 for the current year. System capacity is likely to increase between 11% and 15%, unchanged from its past guidance.

It turns out, fresh estimates have trended downward during the past month. There have been five revisions lower for the current quarter. Last month, the consensus estimate has shifted downward by 12.2% due to these changes.

At this time, ALGT has a nice Growth Score of B, however its Momentum is doing a bit better with an A. Following the exact same course, the stock was also allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is equally suitable for value and momentum investors than growth investors.

Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, ALGT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


Tourism Observer

Worst Airlines For Customer Service

The subscribers of Travel + Leisure were asked in the annual World’s Best survey to rate airlines’ customer experience, from website design to loyalty programs to face-to-face customer service.

Many respondents took the opportunity to showcase some of the World’s Worst behaviors in travel, such as the impression of increased rudeness and disinterest among airport staff tending to travelers’ problems.

Here’s a breakdown of the airlines that readers rated least favorably.

10. Iberia
Survey respondents called out Iberia flight crew for being inattentive and unfriendly. The Spanish carrier doesn't quite engender a lot of love on review sites such as Yelp, either. Reviewers consistently point to poor/destructive baggage handling and problematic customer service.

9. Alitalia
Respondents gave Italy's flag carrier poor marks for bad service and disorganization, leading to confused boarding processes. American consumers reviewing the airline on Consumer Affairs rated the airline 1 star out of 5 from 178 reviews.

8. Air China
The JFK-Beijing route is especially reviled, with travelers taking to Air China's perceived lack of disruption support in the form of knowledgeable and attentive customer service. Yelp user Grace L shared this tidbit on Yelp:

"Without incident, Air China is probably just fine. But if there is an incident, cue customer rage. Horrendous customer support."

The airline has 2 stars on Yelp, 4 out of 10 on AirlineRatings.com and 5 out of 10 on Skytrax.

7. United Airlines
United is the only operating U.S. legacy carrier to make this list. United is also the least loved airline on Yelp, garnering only 1.5 stars for a litany of poor customer service experiences and operational delays. One review was especially memorable, with traveler Jennifer K likening the experience to a bad dream:

"Now I am having recurring nightmare that I am stuck in a long haul UA flight."

T+L respondents complained about seat comfort and unclear procedures during overbooked flights, with one saying:

"The United Board and the executives should be forced to ride in coach class for a week, including cancelled connections and lost luggage. Hell isn't as bad as this airline."

6. US Airways
US Airways actually tied with United for the lowest rated airline on Yelp. Now the airline has been fully merged into American Airlines, making this the airline's last appearance on any customer satisfaction survey. Reviewers on Consumer Affairs left 255 ratings during the airline's tenure — and left only an average of 1 star for inconsistent operations and customer experience.

5. Frontier Airlines
The reviews across various platforms, from Yelp to ConsumerAffairs to Skytrax, are all overwhelmingly negative. Reviewers point to cramped seats, angry staff and lengthy delays as reasons for the poor reviews. And according to the Forbes and the Walter Cronkite School of Journalism and Mass Communication at Arizona State University, Frontier was late on a record 40% of holiday flights over the course of the last few years.

One Skytrax reviewer, and longtime Frontier flier, called the airline "disgraceful" for its "unsafe" seats:

"These seats represent what happens when an airline crosses the line in an effort to cut costs. I will never book another ticket on Frontier Airlines.​"

4. American Eagle
Flying small commuter jets are always a trying travel experience: cramped seats, low headroom and noisy engines. Thankfully, new planes are making the rounds on the commuter routes, as airlines focus on increasing connections beyond the hub-and-spoke model. American Eagle has some work to do to shift perceptions, with reviewers across the Web offering mixed reviews.

3. Allegiant
The low-cost carriers continue to post poor customer reviews. Allegiant is particularly vulnerable, even triggering the Twitter handle @AllegiantSucks that sporadically tracks and retweets customer complaints. The handle mentions frustrating experiences, usually related to lengthy delays in travel times — and baggage handling.

2. easyJet
easyJet has long been known as a no-frills airline that charges customers for virtually everything —even for proof their flight was canceled. This means a lower investment in overhead, which indicates that low fares do come with a cost: less investment in customer service and tight schedules that leave little breathing room for disruptions.

1. Spirit Airlines
Spirit often offers lower prices than any other U.S. carrier, but apparently the cheap prices aren't enough to satisfy the T+L crowd, as Spirit ranked last.

One reader said:

"Worst airline in the world. If they could figure out a way to charge for oxygen, they would do it. Used to fly them regularly but now I would pay more to avoid them."

The disdain permeates across other traveler review platforms. The airline has one of the highest rating and review counts on Consumer Affairs with 590 ratings and 1,550 reviews pegging the airline at a solid one star.

USA: US Department of Justice sues Delta and United Airlines over Newark slot sale

Business Travel Coalition (BTC) today welcomed the news that the US Department of Justice (DOJ) is suing Delta Air Lines and United Airlines to block a slot sale at Newark Liberty International Airport, a sale which DOT contends is in violation of Section 1 and Section 2 of the Sherman Act. United is seeking to build on its 73 percent of takeoff and landing slots at Newark by purchasing 24 slots from Delta.

“This is an important day for business travelers who have been on the losing end of the Big Three U.S. carriers’ stranglehold at Newark where they control 91 percent of the slots and charge some of the highest fares in the country. DOJ no doubt has viewed with alarm the behavior of the Big Three in a radically consolidated industry,” stated BTC founder Kevin Mitchell. “The highest and best use of those slots would be if they were in the hands of low fare airlines like Frontier, Allegiant, JetBlue or Spirit,” added Mitchell.

“As Hillary Clinton’s recent criticism of the airline industry underscored, the Big Three, through their hyper-aggressive efforts to reduce price transparency, undermine consumer protections and frustrate airline new entry, have raised serious concerns in the U.S. Congress, at DOJ, and yes, among U.S. presidential candidates. There are remedies available to policy makers to fix airline behavioral problems caused, in part, by industry consolidation,” continued Mitchell.