Allegiant Travel Company

Hello, and welcome to the Allegiant Travel Company fourth quarter and full year 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session, and if you would like to ask a question, simply press star 1 on your telephone keypad. I will now turn the conference over to Sherry Wilson, Managing Director of Investor Relations. Please go ahead.

Thank you, Sarah. Good afternoon, everyone, and welcome to the Allegiant Travel Company's fourth quarter and full year 2023 earnings call. On the call with me today are Maury Gallagher, the company's executive chairman and CEO, Greg Anderson, president, Scott D'Angelo, our EVP and chief marketing officer, Drew Wells, our SVP and chief revenue officer, Robert Neal, SVP and chief financial officer, and a handful of others to help answer questions. We will start the call with commentary and then open it up to questions. We ask that you please limit yourself to one question and one follow-up. The company's comments today will contain forward-looking statements concerning our future performance and strategic plan. Various risk factors could cause the underlying assumptions of these statements and our actual results to differ materially from those expressed or implied by our forward-looking statements. These risk factors and others are more fully disclosed in our filings with the SEC. Any forward looking statements are based on information available to us today. We undertake no obligation to update publicly any forward looking statements, whether as a result of future events, new information or otherwise. The company cautions investors not to place undue reliance on forward looking statements, which may be based on assumptions and events that do not materialize. To view this earnings release, as well as the rebroadcast of the call, feel free to visit the company's investor relations site at ir.allegiantair.com. And with that, I'll turn it to Maury.

Thank you, Sherry, and good afternoon, ladies and gentlemen. Thank you for your time today, and welcome from Super Bowl headquarters here in Las Vegas. As you saw in our release, we continue to move ahead in our efforts to return to pre-pandemic performances. I'm happy to report on a number of areas that we're moving forward on all fronts, Sunseeker opened on December 15th. It's a terrific destination of fun and sun. Micah Richards, who's on the call with us today, and his partner in crime, Jason Scarupa, and their team have done yeoman's work completing and operating this magnificent destination resort. Stay tuned for more updates in the coming months. Our operational performance for this year, past year, our completion factor and on-time, we're at our 2019 industry-leading stats. and we were among the top three in operating margin for the year. Aircraft deliveries. While Boeing deliveries will be delayed based on recent news and comments, we are excited about our introduction of the MAX 8200 aircraft. It's one of the most reliable airplanes in the world. Its performance profile as well will provide us enhanced economic benefits in the coming years. On the labor front, we've been plagued for the past three years by a number of labor issues, particularly with our pilots. However, I'm cautiously optimistic with our recent progress. And updated labor agreements will allow us to continue to do what we do best, to grow Allegiant in our non-competitive markets in the coming months and years. As I mentioned, it's Super Bowl week here in Las Vegas. The town is on fire and amazing stuff is going on. This week will be a large payback for our investment in the naming rights for the Las Vegas Raiders Stadium. The exposure, the impressions we have already received and will continue to receive in this next week have been and will be exceptional. Allegiant Stadium has a nice ring to it. We made this investment in 2019 a big step for us, but it was part and parcel of our efforts to separate ourselves from the crowd and promote our Allegiant brand. As I mentioned, our operations this past year were industry leading. This level of performance in today's social media world is critical. Consumer products are continuously on stage. There is nowhere to hide. Seems simple, we're unreliable on time, airline with friendly people. Easy to say, but tough to do. But our focus on this approach for the past many years is paying dividends. Our net promoter scores are industry-leading. In recent surveys of our own customers, they assigned us what we believe to be the top of the field, an MPS of 51. It's coming in ahead of all other domestic carriers as far as we know. Our results compare extremely well when compared to other low-cost players, some of whose scores are meaningfully negative. In the past 12 to 24 months, as you all are aware, competition has become much more intense for a number of the low fare carriers. The majors have come down market and have a low price competing product and a better reputation. Again, the NPS scores tell the tale. Being the carrier of last choice in today's world is a stiff hill to climb. Over the past 20 years, there's been a generic low fare labeling or ULCC moniker assigned to a number of us carriers. Practically, this label is for the startups since the 2000s, specifically us, Frontier Spirit, and more recently, carriers such as Sun Country, Breeze, and Avello. While we all have this timeline in common, what we don't have in common is the same model and how the companies have been managed. Unlike the other carriers in this grouping, our model has allowed us to build a robust moat around our business. Over the years, we have focused on building that non-competitive, non-stop network Today, 75% of our routes do not have any direct competition. This approach is paying substantial dividends in today's more confrontational environment. With most of our routes operating just two to three times per week, we can support a much larger network of cities and routes. 124 cities today with 555 routes, 450 of which are noncompetitive. In contrast, Spirit and the Frontier have on average just 300 routes, each each rather, but only 30 are non-competitive or a 10% factor. One might analogize the ULCC crowd by comparing them and us to the famous bank robber Willie Sutton. When asked why he robbed banks, his answer was because that's where the money is. Well, in today's airline space, the banks are the big cities and the major air carrier hubs and networks. Virtually all of the ULCC labeled airlines are focused on these big banks. Historically, they've been easy money, but not anymore. The banks have developed ferocious tools to fight off their historic robbers. We at Allegiant have stayed away from those big banks. Allegiant is focused on earning its money the old-fashioned way by creating our own customers, those that heretofore have gone unnoticed. Said another way, we've created our own private swim lane and are proud to be in it. In the coming months and years, we will continue to grow our model. It is strong, it works, and it has a great deal of room to run. Lastly, I want to thank our team members. This has been a difficult three to four years, as we all know. You have been supporting our passengers' safe, reliable, and friendly service, and you have run the best airline this year, an industry-leading 99.8% controllable completion factor. Well done. In today's airport service and canceled flights, you have put us back where we belong, at the top of the pack. Thank you. Greg?