Allegiant Air (G4, Las Vegas Harry Reid) has again reduced the number of B737-8-200 deliveries it expects for 2024 to four, down from six as announced last quarter.
This is a further reduction in the expected deliveries for the year. Allegiant initially expected to receive twelve B737-8-200s in 2024, but the ongoing Boeing quality issues and reduced output have forced the ULCC to adjust its fleet growth plans accordingly.
As a result of these altered plans, Allegiant Air is absorbing USD30 million of annual expenses not associated with productive assets, such as pilots hired and trained to operate the B737 MAX aircraft.
During an investors call for the second quarter of 2024, Gregory Anderson, current president and the next chief executive of the ULCC, said the team is currently focused on getting to a realistic delivery schedule and a deal on compensation from Boeing for the extended delays.
The carrier expects to receive its first B737-8-200 in September. However, it is planning for an elongated delivery cycle and expects a slower delivery cadence in 2025 and 2026, easing Allegiant’s near- and medium-term capital needs.
Robert Neal, chief financial officer, said that the US Federal Aviation Administration (FAA) had opted to retain the certification of the carrier’s first aircraft (instead of delegating these certifications to Boeing), which means a longer timeline but also that “the clock starts clicking” and there is a more straightforward path for its arrival. “So we are marching to what we hope is around another 30 days or so before an airplane is delivered,” he added.
The ch-aviation fleets module shows that Allegiant Air has twenty-six B737-8-200s and twenty-four B737-7s on order. The first four B737-8-200s have their US registrations already assigned - N810MG (msn 68001), N811NV (msn 68002), N812NV (msn 68003), and N813NV (msn 68004).
Allegiant currently operates a fleet of 131 aircraft composed of thirty-five A319-100s and ninety-six A320-200s, averaging 19.0 and 15.2 years of age for each type, respectively. It expects to retire two A320s for the remainder of the year.
Moving forward, Allegiant will continue retiring the aircraft with the heaviest checks, those that need the most man hours and most days at the MRO, said Neal, adding that it will be a challenge to maintain an equilibrium between the Boeing deliveries and holding constant retirements, but it expects to close 2025 with a total fleet growth of one or two aircraft.
Allegiant Air posted a net profit of USD42.9 million for the first half of the year.
