Allegiant Travel CO
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
ALGT$91.97+5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001362468-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001362468-26-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 156 current paragraphs.
29 unchanged; 36 reworded; 84 added; 33 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 5 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (84)
Current report
Second Quarter 2026 Highlights
Current report
Second quarter 2026 highlights include the following. Note that second quarter consolidated results include Sun Country operations only from and after the May 13, 2026 closing date of the transaction until the period end on June 30, 2026 (the "stub period").
Current report
•On May 13, 2026, we completed the acquisition of Sun Country just four months after announcing the transaction.
Current report
•Record Allegiant Air revenue of $776.2 million, up 16.1 percent year over year on 6.8 percent less capacity compared to the prior year quarter
Current report
•Allegiant Air quarterly TRASM record of 14.42 ¢, up 24.6 percent year over year
Current report
•Consolidated third-party products revenue of $45.8 million
Current report
◦Allegiant Air third-party products revenue of $44.5 million, up 32.2 percent year over year driven by cobrand remuneration
Current report
•Received proceeds of $874.7 million from debt financings during the quarter
Current report
◦Issued $650.0 million Senior Secured Notes due 2031 and used the proceeds to refinance $377.5 million of our Senior Secured Notes due 2027.
Current report
◦Received proceeds of $224.7 million from debt secured by aircraft and aircraft related assets
Current report
Subsequent Events
Current report
•In July, entered a 12-month exclusive distribution agreement with Expedia Group, Allegiant's first-ever authorized online travel agency ("OTA") partner, bringing the company's nonstop network to all of Expedia Group's U.S. brands and expanding reach to new leisure customers
Current report
•In July, announced enhancements to the onboard experience, including complimentary inflight beverage service on all Allegiant flights beginning August 1, 2026, and Allegiant First, a new premium seating tier scheduled to debut on select aircraft in spring 2027
Current report
•On July 31, a new collective bargaining agreement with the International Brotherhood of Teamsters representing the Allegiant pilots was ratified with nearly 80 percent of votes in favor
Current report
(3)Includes 12 aircraft under finance lease as of June 30, 2026.
Current report
(4)Includes one aircraft under finance lease as of June 30, 2026.
Current report
Sun Country's largest and primary base is Minneapolis-Saint Paul International Airport ("MSP"), where it is the largest low-cost carrier and the second largest airline overall. Our MSP network served approximately 96 markets as of June 30, 2026. As of that date, Sun Country also served approximately 17 non-MSP markets and was selling a total of 109 routes.
Current report
Acquisition of Sun Country Airlines
Current report
Both companies continue to operate as separate airlines under FAA rules. We have applied with the FAA for a single operating certificate which we currently expect will be obtained in 2028. Our ability to combine operations will be limited until we receive a single operating certificate and there are joint collective bargaining agreements in place with the various unionized work groups.
Current report
Commercial Initiatives
Current report
In July 2026, we entered into a 12-month exclusive distribution agreement with Expedia Group to be Allegiant Air's first-ever authorized online travel agency ("OTA") partner, bringing our nonstop network to all of Expedia Group's U.S. brands and expanding reach to new leisure customers. Early results are promising, comprising of approximately 3% of bookings since the launch, with meaningfully more than half of those bookings from net new customers.
Current report
We have also announced enhancements to our onboard experience. Beginning August 1, 2026, all Allegiant Air flights will include a complimentary inflight beverage service. We have also announced Allegiant First, a new premium seating tier scheduled to debut on future MAX deliveries, with service expected to begin in spring 2027. The introduction of Allegiant First will feature a redesigned and enhanced cabin with eight new Allegiant First seats with minimal impact to seating capacity. The new seating to be included on these future deliveries will feature improved seat cushions and in-seat power in all cabins.
Current report
The Allegiant Air pilots, who are represented by the International Brotherhood of Teamsters (“IBT”), ratified a new collective bargaining agreement on July 31, 2026. Among other new and modified terms, that new agreement provides for increased compensation and enhanced benefits to the Allegiant Air pilot group and contains improvements to the scheduling process for the Company. In addition, pursuant to the terms of that agreement, the pilot retention bonuses we have accrued will be payable no later than fourth quarter 2026.
Current report
In 2026, the collective bargaining agreement between Allegiant Air and its air dispatchers represented by the IBT became amendable under the Railway Labor Act (“RLA”). The parties are engaged in negotiations over new and modified rates of pay, rules, and working conditions pursuant to the procedures set forth in Section 6 of the RLA.
Current report
In 2025, the collective bargaining agreement covering the Sun Country pilots, who are represented by the Air Line Pilots Association (“ALPA”), became amendable. The parties continue to engage in negotiations under Section 6 of the RLA for a new agreement addressing rates of pay, rules, and working conditions for those employees.
Current report
In order to fully integrate the pre-merger union represented employee groups of Allegiant Air and Sun Country, we may be required to negotiate joint collective bargaining agreements covering the respective combined crafts or classes of employees. Where necessary, these negotiations will likely begin after a single post-merger representative has been certified by the National Mediation Board.
Current report
Items affecting comparability
Current report
As the acquisition of Sun Country was completed on May 13, 2026, the three and six months ended June 30, 2026 include the results of Sun Country for the period May 13, 2026 through June 30, 2026, while the comparative periods in 2025 do not. Consolidated revenue and expenses all increased compared to the prior period due to the incorporation of Sun Country's operations into the Company. As a result, the below discussion of changes to our revenue and expenses compared to the prior year largely focuses on material factors independent of the acquisition.
Current report
Passenger revenue. Passenger revenue for second quarter 2026 increased $204.6 million or 33.1 percent, of which Sun Country contributed $105.5 million during the stub period.
Current report
The remaining change is attributable to strength in demand, which drove a 17.9 percent increase in average total fare for Allegiant Air, including a 39.9 percent increase in average scheduled service base fare. Allegiant Air scheduled service passengers decreased by 0.8 percent on a capacity reduction of 6.2 percent, resulting in a 4.0 percentage point increase in the Allegiant Air load factor.
Current report
Third party products revenue. Third party products revenue increased $12.1 million or 36.0 percent, of which Sun Country contributed $1.3 million during the stub period.
Current report
The remaining increase is attributable to a $9.3 million increase in the marketing component of Allegiant Air's co-brand remuneration and smaller increases in Allegiant Air's third party rental car and travel insurance revenue. These increases were slightly offset by a decrease in hotel room revenue.
Current report
Fixed fee contract revenue. Fixed fee contract revenue increased $28.7 million, all of which was attributable to Sun Country during the stub period.
Current report
Allegiant Air fixed fee revenue decreased $2.5 million driven by fewer charter flights flown during the quarter.
Current report
Cargo revenue. Cargo revenue was $27.6 million, which was wholly attributable to the acquisition of Sun Country, and which was generated during the stub period.
Current report
Sun Country CASM, excluding fuel, special charges, and cargo expenses, was 8.33 ¢ in second quarter 2026 (after May 13, 2026) and drove a 0.02 ¢ spread between Allegiant Air and Consolidated adjusted CASM.
Current report
Aircraft fuel expense. Aircraft fuel expense increased by $141.9 million or 85.6 percent, of which Sun Country contributed $42.5 million during the stub period.
Current report
The remaining increase of $99.4 million was driven by an increase in Allegiant Air fuel cost per gallon to $4.19 from $2.42 in the prior year quarter as a result of the geopolitical unrest in the Middle East. Increased fuel costs were partially offset by a decrease in Allegiant Air consumption consistent with a 6.8 percent decrease in total system ASMs and a 0.7 percent improvement in fuel efficiency as the percentage of ASMs flown by MAX aircraft continues to increase.
Current report
Salaries and benefits expense. Salaries and benefits expense increased by $36.2 million or 16.9 percent, of which Sun Country contributed an increase of $49.0 million during the stub period, offset by a decrease of $10.6 million resulting from the sale of Sunseeker Resort.
Current report
The remaining decrease of $2.1 million was driven by organizational restructuring initiatives implemented by Allegiant Air during 2025, which resulted in a 4.9 percent reduction in full-time equivalent Allegiant Air employees, offset by increased wages for certain employee workgroups due to contractual and annual merit raises.
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Removed paragraphs (33)
Previous report
First Quarter 2026 Review
Previous report
First quarter 2026 highlights include:
Previous report
•Signed the Merger Agreement to acquire Sun Country and received the necessary regulatory approvals to close the Merger
Previous report
•Fixed fee revenue of $18.1 million, up 11.5 percent year-over-year
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•Total revenue per available seat mile (TRASM) up 16.4 percent year-over-year
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•Airline-only operating cost per available seat mile (CASM), excluding fuel and special charges of 8.64 ¢, up 7.1 percent year-over-year
Previous report
•System capacity down 5.9 percent year-over-year
Previous report
Proposed Acquisition of Sun Country Airlines
Previous report
In January 2026, we entered into an agreement to acquire Sun Country Airlines, subject to satisfaction of customary closing conditions, including each company's receipt of shareholder approval and regulatory reviews and approvals (please see Note 11 to the consolidated financial statements included in this report).
Previous report
The collective bargaining agreement with our pilots has been amendable since 2021. We and the International Brotherhood of Teamsters ("IBT") jointly requested the mediation services of the National Mediation Board in January 2023 to assist with the negotiations. The mediation process with the NMB is continuing. At this time, the announced acquisition of Sun Country has not changed the mediation process.
Previous report
Separately from the ongoing collective bargaining agreement negotiations, to address retention and pilot pay issues and increase pilot staffing levels, effective in May 2023, we began accruing a retention bonus, with IBT's agreement, for pilots who continue employment with us until a new labor agreement is approved. The amount being accrued is 35 percent of current hourly pay rates, except for our first year first officers for whom the percentage is 82 percent, in each case, calculated at a minimum of 85 pay credit hours per month. Our implementation of the retention bonus has allowed us to effectively increase pay rates for our pilot team members (by way of the accrual of the retention bonus), add pilots through hiring and significantly slow attrition.
Previous report
For the three months ended March 31, 2026, we recorded estimated pilot retention bonus accruals of $20.1 million, bringing the total accrual to $256.0 million as of March 31, 2026, including the related payroll taxes. The bonus will be paid to all pilots remaining employed with us after ratification of a new collective bargaining agreement.
Previous report
NMNot meaningful
Previous report
Passenger revenue. Passenger revenue increased $55.0 million or 8.9 percent compared to first quarter 2025. The increase was primarily driven by strong leisure demand, which resulted in a 19.8 percent increase in average scheduled service base fare and a 3.9 percentage point improvement in scheduled service load factor, on a 5.9 percent decrease in scheduled service capacity.
Previous report
Third party products revenue. Third party products revenue for first quarter 2026 increased $7.1 million or 20.3 percent compared to first quarter 2025. The increase was primarily attributable to a $5.1 million increase in the marketing component of co-brand revenue, a $1.7 million increase in rental car revenue, and a $1.3 million increase in revenue from the sales of a third party travel insurance product. These increases were offset by a $0.6 million decrease in third party hotel revenue as the result of a decrease in the number of room nights sold.
Previous report
Fixed fee contract revenue. Fixed fee contract revenue increased $1.9 million or 11.5 percent in first quarter 2026. The increase was driven by a 5.5 percent increase in fixed fee departures and a 5.7 percent increase in revenue per departure, reflecting continued strength in sports flying during March Madness.
Previous report
Salaries and benefits expense. Airline salaries and benefits expense decreased by $2.3 million or 1.0 percent compared to first quarter 2025. Our 2025 organizational restructuring initiatives resulted in a decrease of 6.5 percent in the number of full-time equivalent employees, the savings from which were offset by increases in flight crew wages resulting from increases in average tenure. As noted above, this expense on a per ASM basis increased as a result of the reduction in capacity from the prior year quarter.
Previous report
Salaries and benefits expense in first quarter 2025 included $11.1 million from Sunseeker Resort, which was sold on September 4, 2025.
Previous report
Aircraft fuel expense. Aircraft fuel expense increased $13.9 million or 8.4 percent, during first quarter 2026 compared to the same period in 2025, driven by a 16.5 percent increase in average fuel cost per gallon resulting from the ongoing hostilities in the Middle East. This increase was partially offset by a 7.0 percent decrease in fuel gallons consumed on a 5.9 percent reduction in capacity. So long as these market disruptions continue, we expect even greater cost impact from higher fuel costs in the future as the significant fuel cost increase in first quarter 2026 only affected the last month of the quarter.
Previous report
Station operations expense. Station operations expense increased $3.0 million or 4.1 percent, compared to first quarter 2025. The increase was primarily driven by increases in building rent, airport and landing fees, and other station-related services reflecting higher rates and costs across multiple stations and the net addition of four new stations over the course of 2025.
Previous report
Depreciation and amortization expense. Airline depreciation and amortization expense decreased $1.8 million or 3.0 percent compared to first quarter 2025. The decrease was driven by lower depreciation and amortization costs associated with the retirement of seven Airbus airframes and the sale of certain engines associated with the Airbus fleet since the beginning of 2025. These decreases were partially offset by aircraft depreciation from nine additional 737 MAX aircraft placed into service since the prior year period.
Previous report
Depreciation and amortization expense in first quarter 2025 included $3.6 million from Sunseeker Resort, which was sold on September 4, 2025.
Previous report
Maintenance and repairs expense. Maintenance and repairs expense remained flat compared to the prior year quarter and increased 7.8 percent on a per ASM basis primarily as a result of the lower number of ASMs flown. Costs incurred to prepare aircraft for return from operating leases and a higher volume of rotable repairs were offset by fewer other maintenance events resulting from a 5.0 percent reduction in departures.
Previous report
Sales and marketing expense in first quarter 2025 included $1.7 million from Sunseeker Resort, which was sold on September 4, 2025.
Previous report
Aircraft lease rentals. Aircraft lease rental expense increased $1.5 million compared to first quarter 2025. The increase is attributable to estimated lease return costs we accrued for certain aircraft on operating leases related to redeliveries in 2026 and future years, offset by lower lease expense from leased aircraft that were redelivered during fourth quarter 2025 and first quarter 2026.
Previous report
Other operating expense. Airline other operating expenses decreased by $2.1 million or 9.7 percent during first quarter 2026 compared to the prior year quarter. The decrease was driven primarily by gains on the sale of assets, which resulted in a $2.4 million greater offset to expense in first quarter 2026 compared to first quarter 2025.
Previous report
Other operating expense in first quarter 2025 included $13.1 million from Sunseeker Resort, which was sold on September 4, 2025.
Previous report
Special charges. The Airline recorded special charges of $27.8 million in first quarter 2026, compared to $1.4 million in first quarter 2025. Special charges in 2026 consisted of $10.0 million of accelerated amortization related to software identified for redevelopment, $9.6 million of costs related to the proposed acquisition of Sun Country Airlines, and a $7.0 million allowance for credit losses on a third party note receivable.
Previous report
Special charges in first quarter 2025 (a negative amount in the quarter) reflected insurance recoveries from damages related to weather events that occurred at Sunseeker Resort between 2022 and 2024.
Previous report
Interest Expense and Income
Previous report
Interest expense, net of interest income and capitalized interest, decreased $6.1 million or 27.5 percent, compared to first quarter 2025. The decrease was primarily driven by an $8.1 million reduction in interest expense, reflecting lower average outstanding debt balances and lower variable interest rates year over year. In addition, first quarter 2025 included a $3.4 million loss on debt extinguishment related to the early repayment of the Sunseeker construction loan. This decrease was partially offset by a $2.2 million decrease in capitalized interest attributable to lower average pre-delivery deposit balances, and a $3.2 million decrease in interest income due to lower yields on invested cash balances.
Previous report
Comparative Airline-Only Operating Statistics
Previous report
During the three months ended March 31, 2026, we borrowed $20.5 million secured by aircraft related assets.
Reworded paragraphs (36)
Previous wording
The following discussion and analysis presents factors that had a material effect on our results of operations during the three months ended March 31, 2026 and 2025. Also discussed is our financial position as of March 31, 2026 and December 31, 2025. You should read this discussion in conjunction with our unaudited consolidated financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q and our consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.
Current wording
The following discussion and analysis presents factors that had a material effect on our results of operations during the three and six months ended June 30, 2026 and 2025. Also discussed is our financial position as of June 30, 2026 and December 31, 2025. You should read this discussion in conjunction with our unaudited consolidated financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q and our consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, 2025. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.
Previous wording
•Record first quarter total operating revenue of $732.4 million, up 9.6 percent year-over-year when excluding prior year Sunseeker results
Current wording
•Consolidated total operating revenue of $943.5 million
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•Available seat miles per gallon of fuel of 86.7, up 1.2 percent year-over-year
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•Allegiant Air available seat miles per gallon of fuel of 85.4, up 0.8 percent year over year
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•$39.3 million in total cobrand credit card remuneration received, up 8.9 percent year-over-year
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•$41.2 million in total Allegiant Air cobrand credit card remuneration received, up 23.6 percent year over year
Previous wording
(1)Includes 23 aircraft under finance lease and 9 aircraft under operating lease as of March 31, 2026 and December 31, 2025. Excludes two aircraft under operating lease as of March 31, 2026 and three aircraft under operating lease as of December 31, 2025, which were removed from service pending redelivery.
Current wording
(1)Includes 23 aircraft under finance lease and 9 aircraft under operating lease as of June 30, 2026 and December 31, 2025. Excludes one aircraft under operating lease as of June 30, 2026 and three aircraft under operating lease as of December 31, 2025, which were removed from service pending redelivery.
Previous wording
As of March 31, 2026, we are party to forward purchase agreements for 33 aircraft with deliveries expected between 2026 and 2028.
Current wording
As of June 30, 2026, we are party to forward purchase agreements for 30 aircraft with deliveries expected between 2026 and 2028.
Previous wording
Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors, we identified aging airframes for early retirement to coincide with the delivery schedule for our 737 MAX aircraft provided in an amendment to our Boeing purchase agreement signed in September 2023. As of March 31, 2026, 16 airframes have been retired, with eight additional retirements scheduled between May 2026 and January 2027. The accelerated depreciation resulting from the revised estimated useful life of these aircraft is recorded as a special charge in the consolidated financial statements, including $1.3 million recognized in first quarter 2026. The engines from these aircraft will be retained for future overhaul cost mitigation and may be sold on an opportunistic basis if we determine the engine has no better economic use in our operating fleet.
Current wording
Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors, we identified aging airframes for early retirement to coincide with the delivery schedule for our 737 MAX aircraft provided in an amendment to our Boeing purchase agreement signed in September 2023. As of June 30, 2026, 17 airframes have been retired, with seven additional retirements scheduled between July 2026 and January 2027. The accelerated depreciation resulting from the revised estimated useful life of these aircraft is recorded as a special charge in the consolidated financial statements, including $1.3 million recognized in second quarter 2026. The engines from these aircraft will be retained for future overhaul cost mitigation and may be sold on an opportunistic basis if we determine the engine has no better economic use in our operating fleet.
Previous wording
As of March 31, 2026, we were selling 576 routes versus 577 as of the same date in 2025. Network growth in the future will continue to be affected by high fuel prices, the timing of aircraft deliveries, aircraft in heavy maintenance, airport construction and disruption, trends in domestic, leisure air travel demand and other factors such as macroeconomic conditions and geopolitical unrest. We have identified over 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 75 percent currently have no non-stop service. Our total active number of origination cities and leisure destinations were 91 and 35, respectively, as of March 31, 2026.
Current wording
As of June 30, 2026, and with the Sun Country acquisition, we were selling 675 routes versus 579 as of the same date in 2025. Network growth in the future will continue to be affected by high fuel prices, the timing of aircraft deliveries, aircraft in heavy maintenance, crew availability, airport construction and disruption, trends in domestic, leisure air travel demand and other factors such as macroeconomic conditions and geopolitical unrest. We have identified over 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 75 percent currently have no non-stop service. The Allegiant Air network included 90 origination cities and 34 leisure destinations, as of June 30, 2026.
Previous wording
We believe the proposed transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting scheduled service, charter and cargo operations of both airlines. Integration planning activities are underway, while both companies continue to operate independently and maintain normal business operations. We now expect the closing of the transaction to occur as early as May 13, 2026, following shareholder approval at special meetings scheduled to be held by both companies on May 8, 2026. There are several risks associated with the completion of the proposed transaction, as well as risks related to future operations if the transaction is completed, and future results of operations may be affected by regulatory outcomes, integration considerations, transaction-related costs, and other factors.
Current wording
In May 2026, we closed on our agreement to acquire Sun Country. We believe the transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting the passenger and cargo operations of both airlines. The acquisition of Sun Country involves the integration of Sun Country’s business with our existing business, which is a complex, costly, and time-consuming process. Integration of the two companies is underway.
Previous wording
The cost of fuel, including refining costs and applicable crack spreads, remains volatile, and are influenced by numerous economic and geopolitical factors beyond our control or prediction, including geopolitical conflict and war. The recent escalation of hostilities in the Middle East has significantly impacted the market prices of products that are derived from crude oil. Our first quarter fuel expense was $180.2 million, or $3.04 per gallon, which is 16.5 percent higher than the $2.61 we paid in first quarter 2025. As the geopolitical unrest in the Middle East began in late February, the volatility only impacted our results for approximately one month of the quarter. However, as this situation persists, we may continue to see significant increases in fuel costs that will materially impact our overall cost structure, operating results and profitability. We have not used financial derivative products to hedge against fuel price volatility, nor do we have any plans to do so in the future.
Current wording
The cost of fuel, including refining costs and applicable crack spreads, remains volatile, and is influenced by numerous economic and geopolitical factors beyond our control or prediction, including geopolitical conflict and war. The recent escalation of hostilities in the Middle East has significantly impacted the market prices of products that are derived from crude oil. Our second quarter fuel expense was $307.7 million or $4.14 per gallon, which is 71.1 percent higher than the $2.42 per gallon we paid in second quarter 2025. As hostilities and uncertainty continue in the Middle East, we may continue to see significant increases in fuel costs that will materially impact our overall cost structure, operating results and profitability. We have not used financial derivative products to hedge against fuel price volatility, nor do we have any plans to do so in the future.
Previous wording
Although air travel demand in the first part of 2026 has been strong, demand could be impacted in the future by macroeconomic, geopolitical, and airline industry events as it has in the past. In first quarter 2026, we strategically reduced off-peak day of week capacity and, in turn, increased peak day ASMs on fewer total aircraft year-over year. This contributed to a 3.9 percentage point increase in load factor on a 5.9 percentage decrease in capacity. We expect to continue to manage our peak period utilization as the demand environment allows.
Current wording
Although air travel demand in the first half of 2026 has been strong, demand could be impacted in the future by macroeconomic, geopolitical, and airline industry events as it has in the past. During 2026, we strategically reduced off-peak day of week capacity and, in turn, increased peak day ASMs on fewer total aircraft year-over year. For Allegiant Air, this contributed to a 4.0 percentage point increase in load factor on a 6.2 percent decrease in scheduled service capacity in second quarter 2026. Our unique model is predicated around expanding and contracting capacity to meet seasonal leisure travel demands. We expect to continue to manage our peak period utilization as the demand environment allows.
Previous wording
We have signed an agreement and amendments with Boeing to purchase 50 newly manufactured 737 MAX aircraft with options to purchase up to an additional 80 737 MAX aircraft. We have taken delivery of 17 MAX aircraft from this order and all of these aircraft are currently in revenue service. We believe this new aircraft purchase is complementary with our low-cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, and expected fuel savings and operational reliability from the use of these new aircraft.
Current wording
We have signed an agreement and amendments with Boeing to purchase 50 newly manufactured 737 MAX aircraft with options to purchase up to an additional 80 737 MAX aircraft. We have taken delivery of 20 737 MAX aircraft from this order through June 30, 2026, and all of these aircraft are currently in revenue service. We believe this new aircraft purchase is complementary with our low-cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, and expected fuel savings and operational reliability from the use of these new aircraft. Our 737 MAX aircraft represented approximately 21% of our ASMs in second quarter 2026 as compared to 11% during the same period 2025.
Previous wording
There continues to be regulatory focus on increasing quality control standards at Boeing and its suppliers with the aim of stabilizing aircraft production. These factors and the requirements for Boeing to obtain routine and necessary regulatory approvals could delay deliveries to us beyond management's current expectations. We currently expect ten more aircraft to be delivered to us in the last nine months of 2026. Delays in aircraft deliveries could impact our ability to schedule additional growth when the demand environment allows.
Current wording
We currently expect seven aircraft to be delivered to us in the last six months of 2026 with the remaining aircraft under contract to be delivered in 2027 and 2028. Delays in aircraft deliveries could impact our ability to schedule additional growth when the demand environment allows.
Previous wording
Resort and other revenue. Resort and other revenues decreased compared to the prior-year period as we sold Sunseeker Resort on September 4, 2025.
Current wording
Resort and other revenue. Resort and other revenues decreased by $18.9 million due to the sale of Sunseeker Resort in September 2025.
Previous wording
The following table presents airline only operating unit costs on a per available seat mile (ASM) basis, defined as Operating CASM, for the indicated periods. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control. We also show Operating CASM excluding fuel costs and special charges. Excluding fuel costs and special charges allows management and investors to better compare our airline unit costs with those of other airlines.
Current wording
The following table presents airline only operating unit costs on a per available seat mile (ASM) basis, defined as Operating CASM, for the indicated periods. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control. We also show Operating CASM excluding fuel costs, special charges, and cargo expenses. Excluding fuel costs, special charges, and cargo expenses allows management and investors to better compare our airline unit costs with those of other airlines. Sun Country cargo expenses (which are included in salaries and benefits, station operations, depreciation and amortization, maintenance and repairs, and other expenses in our consolidated statements of income) are excluded as those expenses do not drive ASMs.
Previous wording
Airline operating CASM, excluding fuel and special charges. Airline operating CASM, excluding fuel and special charges, increased 7.1 percent to 8.64 ¢ in first quarter 2026 from 8.07 ¢ in first quarter 2025. The CASM-ex increase was primarily driven by a 5.9 percent decrease in capacity compared to the prior year quarter, which resulted in higher unit costs across nearly all expense categories. CASM-ex increases were also driven by year-over-year expense increases in the expense categories described below.
Current wording
Airline operating CASM, excluding fuel, special charges and cargo expenses. Allegiant Air operating CASM, excluding fuel and special charges, increased 6.4 percent to 8.17 ¢ in second quarter 2026 from 7.68 ¢ in second quarter 2025. The increase was primarily driven by a 6.8 percent decrease in Allegiant Air capacity compared to the prior year quarter, which resulted in higher unit costs across most expense categories. CASM-ex was also impacted by the year-over-year expense increases discussed below.
Previous wording
Sales and marketing expense. Airline sales and marketing expense increased $4.8 million or 20.7 percent compared to first quarter 2025 due to a non-recurring item related to our credit card agreement that offset expenses in first quarter 2025 and higher credit card processing fees associated with a $55.0 million year-over-year increase in passenger revenue.
Current wording
The remaining increase of $9.6 million was driven by higher Allegiant Air credit card processing fees consistent with the increase in passenger revenue and a non-recurring item related to our credit card agreement that offset expenses in the prior year period.
Previous wording
The following tables set forth ourairline operating statistics for the three-month periods indicated:
Current wording
The following tables set forth our operating statistics for the three-month periods indicated:
Previous wording
(1)Except load factor and percent of sales through website and mobile app during period, which are presented as a percentage point change.
Current wording
(1)Except load factor during period, which is presented as a percentage point change.
Previous wording
Cash, cash equivalents and investment securities (short-term and long-term) increased to $933.6 million as of March 31, 2026, from $838.5 million at December 31, 2025. Investment securities represent highly liquid marketable securities which are available-for-sale.
Current wording
Cash, cash equivalents and investment securities (short-term and long-term) increased to $1.1 billion as of June 30, 2026, from $0.8 billion at December 31, 2025. Investment securities represent highly liquid marketable securities which are available-for-sale.
Previous wording
As of March 31, 2026, we had $250.0 million of undrawn capacity under revolving credit facilities and $25.1 million in undrawn borrowing capacity under aircraft financing facilities. The latter facility has now been fully drawn.
Current wording
As of June 30, 2026, we had $250.0 million of undrawn capacity under revolving credit facilities and $177.0 million under prearranged aircraft financing facilities.
Previous wording
Our operating cash flows and long-term debt borrowings have allowed us to invest in our fleet renewal. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments, and for the proposed acquisition of Sun Country and related expenditures.
Current wording
Our operating cash flows and long-term debt borrowings have allowed us to invest in our fleet renewal. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments, as well as investments related to the integration and ongoing operations of Sun Country following the acquisition.
Previous wording
Our share repurchase authority at March 31, 2026 is $64.7 million. We did not repurchase any shares on the open market during first quarter 2026. We have indefinitely suspended our quarterly cash dividend in anticipation of upcoming capital needs related to our fleet investments.
Current wording
Our share repurchase authority at June 30, 2026 is $64.7 million. We did not repurchase any shares on the open market during the first six months of 2026. We have indefinitely suspended our quarterly cash dividend in anticipation of upcoming capital needs related to our fleet investments.
Previous wording
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short-term investment balances, existing aircraft financing facilities, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months. We will continue to consider raising funds through debt financing as needed to fund capital expenditures and refinance our corporate debt in advance of its maturity.
Current wording
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short-term investment balances, existing aircraft financing facilities, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months. We will continue to consider raising funds through debt financing as needed to fund capital expenditures.
Previous wording
Our debt and finance lease obligations balance, without reduction for related issuance costs, was $1.8 billion as of March 31, 2026 and December 31, 2025. Net debt (total debt less unrestricted cash, cash equivalents, and investments) totaled $0.9 billion as of March 31, 2026, representing a reduction of $102.9 million compared to December 31, 2025.
Current wording
Our debt and finance lease obligations balance, before reduction for related issuance costs, was $2.8 billion as of June 30, 2026, compared to $1.8 billion as of December 31, 2025. Net debt (total debt less unrestricted cash, cash equivalents, and investments) totaled $1.7 billion as of June 30, 2026, representing an increase of $749.4 million from December 31, 2025. The increase in debt was attributable to the acquisition of Sun Country, which contributed $546.8 million of the increase in balance sheet debt, and to $895.2 million of new borrowings which were offset by principal repayments of $451.8 million and debt issuance costs. Sun Country's debt structure assumed in the acquisition consisted primarily of finance lease obligations, enhanced equipment trust certificates, and term loan borrowings.
Previous wording
As of March 31, 2026, approximately 59.4 percent of our debt and finance lease obligations is fixed-rate.
Current wording
As of June 30, 2026, approximately 66.9 percent of our debt and finance lease obligations are fixed-rate.
Previous wording
During the three months ended March 31, 2026, and 2025, we generated cash flows from operations of $268.1 million and $191.4 million respectively.
Current wording
During the six months ended June 30, 2026, and 2025, we generated cash flows from operations of $314.1 million and $283.6 million respectively.
Previous wording
Fuel. Fuel is our second largest expense. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. During the three months ended March 31, 2026, we decreased our year over year flying capacity by 5.9 percent, which led to an 7.0 percent decrease in fuel gallons consumed when compared to the same period in 2025. However, this decrease was offset by a 16.5% increase in average fuel cost per gallon over the same period, stemming from the Iranian conflict beginning on February 28, 2026. We expect to continue to see material increases in fuel costs while these circumstances persist.
Current wording
Fuel. With the recent fuel price increases, fuel is our largest expense. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. During the six months ended June 30, 2026, Allegiant Air decreased our year over year flying capacity by 6.3 percent, which led to a 7.2 percent decrease in fuel gallons consumed when compared to the same period in 2025. However, this decrease was offset by a 44.6 percent increase in average fuel cost per gallon for Allegiant Air over the same period in 2025, stemming from the Iranian conflict beginning on February 28, 2026. We expect to continue to see material increases in fuel costs while these circumstances persist.
Previous wording
Salaries and Benefits. Salaries and benefits expense represents our single largest expense and has increased considerably in recent years. Cash payments for our salaries and benefits expense are typically made in the period that they are incurred with the exception of our pilot retention bonus, which will be paid to all pilots after ratification of a new collective bargaining agreement. For the quarters ended March 31, 2026 and 2025, we recognized, within the accrued liabilities line item in our balance sheet, approximately $20.1 million and $22.7 million, respectively, of expense related to the pilot retention bonus, including related payroll taxes.
Current wording
Salaries and Benefits. Salaries and benefits expense represents our second largest expense and has increased considerably in recent years. Cash payments for our salaries and benefits expense are typically made in the period that they are incurred with the exception of our pilot retention bonus, which we expect will be paid to all pilots no later than fourth quarter 2026 as a new collective bargaining agreement was ratified in July 2026. For the quarters ended June 30, 2026 and 2025, we recognized, within the accrued liabilities line item in our balance sheet, approximately $17.0 million and $23.8 million, respectively, of expense related to the pilot retention bonus, including related payroll taxes.
Previous wording
Investments. We hold various financial assets and will strategically purchase and sell these assets based on operational cash needs. During the three months ended March 31, 2026, we had $17.4 million of net investment maturities (net cash inflows) compared to $73.3 million of net investment purchases (net cash outflows) during the same period in 2025.
Current wording
Investments. We hold various financial assets and will strategically purchase and sell these assets based on operational cash needs. During the six months ended June 30, 2026, we had $161.1 million of net investment maturities (net cash inflows) compared to $90.0 million of net investment purchases (net cash outflows) during the same period in 2025.
Previous wording
Capital Expenditures. Capital expenditures for the three months ended March 31, 2026 and 2025 were $177.8 million and $74.5 million, respectively. In December 2021, we committed to purchase 50 Boeing 737 MAX aircraft, of which we began to receive delivery in September 2024. During the three months ended March 31, 2026, we took delivery of one aircraft and made pre-delivery payments on certain of the remaining 33 aircraft under firm commitment.
Current wording
Capital Expenditures. Capital expenditures for the six months ended June 30, 2026 and 2025 were $386.0 million and $186.9 million, respectively. In December 2021, we committed to purchase 50 Boeing 737 MAX aircraft, of which we began to receive delivery in September 2024. During the six months ended June 30, 2026, we took delivery of four aircraft and made pre-delivery payments on certain of the remaining 30 aircraft under firm commitment.
Previous wording
Long-Term Debt and Finance Leases. Cash used in financing activities for the three months ended March 31, 2026 was $9.0 million, compared to $69.0 million during the same period in 2025. During first quarter 2026, we made regularly scheduled principal payments of $29.4 million on our debt and finance lease obligations and received $20.5 million of proceeds from a draw on our PDP facility. During the three months ended March 31, 2025, we made $280.6 million of principal repayments on our debt and finance leases, largely related to prepayments of the Sunseeker construction loan and a PDP financing facility and received proceeds from the issuance of aircraft financing debt totalling $224.5 million.
Current wording
Long-Term Debt and Finance Leases. Cash provided by financing activities for the six months ended June 30, 2026 was $411.1 million, which was net of $22.8 million used by Sun Country during the stub period, compared to $116.2 million used for financing activities of legacy Allegiant only during the same period in 2025. During the six months ended June 30, 2026, we received proceeds of $895.2 million from our Senior Secured Notes due 2031 and other borrowings secured by aircraft and made principal payments of $474.4 million on our debt and finance lease obligations. During the six months ended June 30, 2025, we made $432.6 million of principal repayments on our debt and finance leases, largely related to prepayments of the Sunseeker construction loan and a PDP financing facility, and received proceeds from the issuance of aircraft financing debt totalling $323.8 million.
Previous wording
We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding the acquisition of Sun Country, the number of contracted aircraft to be placed in service in the future, the timing of aircraft deliveries and retirements, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate," “project,” “hope” or similar expressions.
Current wording
We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding future airline operations, revenue, expenses and earnings, available seat mile growth, expected capital expenditures, the cost of fuel, the timing of aircraft acquisitions and retirements, the number of contracted aircraft to be placed in service in the future, our ability to consummate announced aircraft transactions, estimated tax rate, as well as other information concerning future results of operations, business strategies, financing plans, industry environment and potential growth opportunities. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," “guidance,” "anticipate," "intend," "plan," "estimate", “project”, “hope” or similar expressions.
Previous wording
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the impact of regulatory reviews of, and production limits on, The Boeing Company on our aircraft delivery schedule, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on Boeing to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed in connection with our fleet and network, the effect of economic conditions on leisure travel, debt covenants and balances, the impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to prepare to offer international service from our markets, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the impact of the possible loss of key personnel, economic and other conditions in markets in which we operate, increases in maintenance costs and availability of outside maintenance contractors to perform needed work on our aircraft on a timely basis and at acceptable rates, cyclical and seasonal fluctuations in our operating results and the perceived acceptability of our environmental, social and governance efforts, the occurrence of any event, change or other circumstance that could give rise to the right of one or both of us or Sun Country to terminate the definitive merger agreement for the Sun Country acquisition; the risk that potential legal proceedings may be instituted against us or Sun Country and result in significant costs of defense, indemnification or liability; the possibility that the Sun Country acquisition does not close when expected or at all because required stockholder approvals or other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Sun Country acquisition or that any of the foregoing may take longer to realize or be more costly to achieve than expected; disruption to the parties' businesses as a result of the announcement and pendency of the Sun Country acquisition; the costs associ…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, regulatory reviews of, and production limits on, Boeing impacting our aircraft delivery schedule, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on Boeing to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed in connection with our fleet and network, the effect of economic conditions on leisure travel, debt covenants and balances, the impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the impact of the possible loss of key personnel, economic and other conditions in markets in which we operate, increases in maintenance costs and availability of outside maintenance contractors to perform needed work on our aircraft on a timely basis and at acceptable rates, cyclical and seasonal fluctuations in our operating results, the perceived acceptability of our environmental, social and governance efforts, the risk that the combined company after the Sun Country acquisition will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Sun Country acquisition or that any of the foregoing may take longer to realize or be more costly to achieve than expected, the diversion of management's attention and time from ongoing business operations and opportunities to integration matters, the risk that the integration of Sun Country's operations will be materially delayed or will be more costly or difficult than expected or that Allegiant is otherwise unable to successfully integrate Sun Country's businesses into its businesses, and reputational risk and potential adverse reactions of Allegiant's or Sun Country's customers, suppliers, employees, labor unions or other business partners, including those resulting from the completion of the Sun Country acquisition and the integration of the companies.
Previous wording
Any forward-looking statements are based on information available to us today and we undertake no obligation to publicly update any forward-looking statements, whether as a result of future events, new information or otherwise.
Current wording
Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.
Previous wording
There were no material changes to our critical accounting estimates during the three months ended March 31, 2026. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 2025 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited) in this Form 10-Q.
Current wording
Except as set forth below, there were no material changes to our critical accounting estimates during the six months ended June 30, 2026. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 2025 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited) in this Form 10-Q.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
•Available seat miles per gallon of fuel of 86.2
Current report — wording carried from elsewhere
The following table presents airline only operating unit costs on a per available seat mile (ASM) basis, defined as Operating CASM, for the indicated periods. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control. Excluding fuel costs, special charges, and cargo expenses allows management and investors to better compare our airline unit costs with those of other airlines. Sun Country cargo expenses (which are included in salaries and benefits, station operations, depreciation and amortization, maintenance and repairs, and other expenses in the Company's consolidated statements of income) are excluded as those expenses do not drive ASMs.
Current report — wording carried from elsewhere
The following tables set forth our operating statistics for the six-month periods indicated:
Current report — wording carried from elsewhere
(1)Except load factor during period, which is presented as a percentage point change.
Current report — wording carried from elsewhere
(2)Defined as scheduled service revenue divided by revenue passenger miles.
Current report — wording carried from elsewhere
(3)Various components of this measure do not have a direct correlation to ASMs. This measure is provided on a per ASM basis so as to facilitate comparison with airlines reporting revenues on a per ASM basis.
Current report — wording carried from elsewhere
(4)Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our unique model is predicated around expanding and contracting capacity to meet seasonal leisure travel demands.