Allegiant Travel Company

Thank you, and it is now my pleasure to turn the call over to Sherry Wilson, Managing Director of Investor Relations. Please go ahead.

Thank you, Amy. Good afternoon, everyone, and welcome to the Allegiant Travel Company's second quarter 2024 earnings call. On the call with me today are Maury Gallagher, the company's Executive Chairman and CEO, Greg Anderson, President and incoming CEO, Scott D'Angelo, our EVP and Chief Marketing Officer, Drew Wells, our SVP and Chief Revenue Officer, Robert Neal, SVP and Chief Financial Officer, Micah Richens, President of Sunseeker Resort, 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 over to Maury.

Thank you, Sherry, and good afternoon, everyone. Thank you for joining our call today. Good news is we are working our way back to the Allegiant of old. We're well positioned for 2025, and you will hear that from our different speakers today. And I'm happy, on a personal note, to go out on top. We mentioned in our release four major efforts, including increasing our utilization, addition of our new Boeing aircraft, continuing development work on our Navitair reservations platform, and the recently announced partnering with Prospect Hotel Advisors. A note on Prospect, they've both operated and bought and sold numerous properties, particularly on the west coast of Florida where Sunseeker is located. After a recent review of the property, they've been impressed. They've complimented its quality of construction, its people, products, and services, and its management team. So stay tuned as we dig into that aspect. Turning to the airline, the number one asset we have available to us in the coming year is our ability to increase our flying with the existing fleet and personnel. Moreover, this increased flying will be concentrated on peak periods, which are very revenue accretive. Additionally, this increased flying will also drive down our unit cost, our CASMX. As I move to the sidelines, I would be remiss in not applauding this world-class management team. They are as good, if not better, than any team I have had the privilege to work with in this past 20-some years. The people you, the analysts, represent, the investors in this industry, will be well served by these excellent leaders in the coming years. Just as important also, though, is we've been fortunate to have one of the best workforces, if not the best in the industry. Their excellence can be seen in every aspect of what we do from our 99% plus completion factor to our industry leading NPS scores and to our top three ranking among the industry's carriers. And at this point, everyone understands brand and reputation matter, particularly in this social media world. Allegiant and its world-class team members continually rank near the top in these categories. This reputational quality is critical to profitability. Our unique business model over the years has served us well and continues to do so. However, the recent undoing of this low fare industry that we all are part of does not portend well for a number of the incumbent low fare carriers. The combination of weakening revenues, substantial cost increases, Poor reputation and brand has condemned a number of the industry's low fare players to a loss situation that will be hard to turn around. This environment has driven certain players to make massive schedule changes in search of a viable business plan. The magnitude of these changes almost certainly suggest losses will increase near term. On the regulatory front, I worry about the efforts that the federal government is working to fix something that is not broken. By any measure, this Airline Deregulation Act of 1978 has been the best outcome for the U.S. traveling public. However, since Allegiant began in the early 2000s, there's been a constant drumbeat by the government on a path to re-regulate the industry. The current administration has made it known that they do not want any additional mergers, that mergers, they believe, have been bad for the industry. But when a current carrier's business does not work, there's only one of two options. You go out of business or you merge. The DOT recently introduced a number of new regulations, which will only add to the cost the consumer must pay for air travel. As you are aware, the industry trade groups A4A and NACA filed suit in the Fifth Circuit to block one of these proposed regulations, the Ancillary Fee Rule. This new regulation would have required a complete rewrite of the industry's websites, with DOT dictating how we must present our products to our customers. This rewrite, as you can imagine, would have cost and will cost every carrier millions to develop a website to comply with the proposed presentation format. I'm happy to report that yesterday, the Fifth Circuit issued a motion to stay the implementation of the DOT's ancillary fee rule, a small victory. Looking forward, as I said, I'm bullish on Allegiant's ability with its unique model, with 75% of its routes non-competitive, to grow profitably and strengthen its position in the coming years. I think my ownership position says as much. Unfortunately, low fares, which politicians all pay lip service to, will be more difficult to find in the coming months and years with the unwinding of a number of low fare carriers. Accordingly, the majors market share should be increasing and will be increasing. However, the one I care the most about, Allegiant, will do well in the coming years. It is a model that works. It has proven its resilience over 20 years. It has the team members to execute the plan and the leadership to oversee this effort. Thank you very much, Greg.