Rising fuel prices affect Allegiant earnings

Increasing jet fuel prices were a drag on fourth-quarter earnings at Allegiant Travel, corporate parent of Allegiant Air, which serves The Esstern Iowa Airport.

The Las Vegas-based airline and travel service company posted fourth-quarter net income of $12.4 million, up 17.5 percent from $10.5 million in the final quarter of 2009. Allegiant recorded fourth-quarter operating revenue of $162 million, a 20.3 percent increase from $134.7 million in the final quarter of 2009.

Allegiant's scheduled service cost per gallon increased almost 11 percent or 25 cents to $2.61 in the last three weeks of 2010.  If the airline had maintained its third-quarter unit fuel cost, the company's operating margin would have approached 17 percent instead of 12.9 percent.

For all of 2010, Allegiant recorded net income of $65.7 million, down 13.9 percent from $76.3 million in 2009. Full year operating revenue was $663.6 million, up 18.9 percent from $557.9 million in 2009.

Maurice Gallagher, chairman and chief executive officer of Allegiant Travel, said the company has further reduced its projected growth rate for 2011 .

”While we are pleased with our revenue performance, we are wary of the accelerating climb in jet fuel prices we have seen in the last six weeks (three weeks of 2010 and three weeks of 2011),” Gallagher said. ”Our capacity plan for the first half of 2011 had already reflected a slowing growth rate, but we have reduced our growth even further, particularly for the second quarter.  We now expect second-quarter scheduled capacity to range from flat to up 4 percent year over year.”

Allegiant Air provides non-stop flights between Cedar Rapids and Las Vegas, Orlando Sanford, Phoenix-Mesa and St. Petersburg/Tampa.