Allegiant Air (G4, Las Vegas Harry Reid) will likely retire its B757-200 fleet before 2021 following news the carrier took a USD43.2 million write-down on the six aircraft during the last quarter.
The chairman and CEO of Allegiant Travel Co., Maurice Gallagher Jr., said a recent review of the value of its B757 assets had shown the aircraft's residual values will be reduced from USD6 million to USD3 million due largely to a permanent decline in the used 757 market.
"Based on our review the Company concluded that the estimated future cash flows for its six 757-200 series aircraft, spare engine and parts pool did not support the net book values on our balance sheet," he said. "This decision reflects the Company's view that our 757 fleet will be held for a period less than their current expected useful lives, which is currently seven years or through 2021."
Allegiant acquired the aircraft in 2010 for the express purpose of serving Hawaii, a major leisure destination that it could not serve with its existing MD-80 fleet. However, a lack of anticipated demand has resulted in Hawaii-bound flights from Bellingham, Eugene, Spokane International, Boise, Phoenix Williams Gateway, Santa Maria, CA, and Stockton Metropolitan being dropped leaving only Las Vegas Harry Reid and Los Angeles International connected to Honolulu.
