Allegiant Travel Company Announces a $43.2 Million Non-Cash Impairment Charge on Its 757 Fleet

LAS VEGAS, NV--(Marketwired - December 22, 2014) - Allegiant Travel Company (NASDAQ: ALGT) today reported that it is taking a $43.2 million write-down on the value of its Boeing 757 aircraft fleet. The charge will occur in the fourth quarter of 2014.

"This non-cash impairment charge resulted from a recent review of the value of the Company's Boeing 757 assets," stated Maurice J. Gallagher Jr., Chairman and CEO of Allegiant Travel Company. "We evaluate factors such as our ability or intent to operate fleet types through their estimated useful lives, potential changes to fleet residual values based on changes in market conditions for used aircraft, spare engines and parts and potential changes to our scheduled revenue network based on competition trends and operational performance. 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. 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. In addition, residual values for 757 aircraft will be reduced from $6 million to $3 million based what we believe is a permanent decline in the used 757 market. The Company will continue to operate 757 aircraft on longer-haul routes, including Hawaii, in the near term." 

With this write down, the Company expects fourth quarter CASM ex fuel to increase between 40 and 41 percent versus last year. Prior to the charge, the fourth quarter was trending towards the lower end of the range provided on October 22, 2014. 

At this time, Allegiant Travel Company provides the following guidance to investors, subject to revision.

Capacity guidance, subject to revision			Year over Year Growth
			Departures		ASMs
1st Quarter 2015
	System		+6 to 10%		+2 to 6%
	Scheduled		+6 to 10%		+2 to 6%
ASMs - Available seat miles

Cost guidance, subject to revision
		4th quarter 2014
Cost per available seat mile excluding fuel (CASM-ex fuel) - year over year change		40 to 41%
CASM-ex fuel (excluding non-cash aircraft impairment charge) - year over year change		9 to 10%
		Full year 2015
CASM-ex fuel - year over year change		(10) to (6)%
CASM-ex fuel (excluding non-cash aircraft impairment charge) - year over year change		(4) to 0%

Allegiant, Travel is our deal. ^®