Allegiant Airlines has repaid its $24.8 million CARES Act loan
Earlier today, Allegiant Air announced that it had repaid the $24.8 million loan it received from the United States government under the CARES (Coronavirus Aid, Relief, and Economic Security) Act. ).
In early 2020, when the COVID-19 pandemic began, the United States passed the CARES Act, which provided significant amounts of relief funding to businesses across the country. The CARES Act included the payroll support program that helped businesses affected by the pandemic. Airlines received much of the aid and $24.8 million went to Allegiant Air in April 2020. Just over two years later, Allegiant has repaid the entire loan, helping to supporting airline employee salaries and benefits.
According to Allegiant, government relief, coupled with “proactive initiatives” by the airline and its staff, has positioned it to navigate the chaos of the pandemic. Allegiant has a unique business model focused entirely on leisure travel. This business model has benefited the airline and helped it respond to obstacles faced when travel demand plummeted around the world due to the COVID-19 pandemic.
John Redmond, CEO of Allegiant, said:
“We are so grateful to the Federal Government and the American people for stepping up and helping the entire industry when the outlook for the future was so uncertain. This loan helped us save jobs at a time when it It was unclear how the United States would emerge from the pandemic.We are delighted that demand has increased so much in recent months that we have been able to fulfill our obligation much sooner than originally planned.
Allegiant Air is owned by a parent company, Allegiant Travel Company, which generated more revenue in the second quarter of 2022 than in the second quarter of 2019. Comparing the second quarter of 2022 to the second quarter of 2019, Allegiant increased its revenue by 28%, registering revenue of $629.8 million in the second quarter of this year. Despite an increase in turnover of 28%, its net profit fell by more than 93%. In the second quarter of 2019, Allegiant posted a net profit of $70.5 million, compared to just $4.4 million in the second quarter of this year.
Allegiant has struggled to grow profits in 2022. Photo: Vincenzo Pace | Single flight.
On an earnings call in early August, John Redmond said:
“The second quarter was not our best, but we are responding quickly to this ever-changing environment.”
Redmond added that the numbers shown above did not directly reflect the airline’s financial situation, but that the decline in productivity levels was the result of rising fuel prices and a difficult operating environment.
Proposed joint venture between Allegiant and Viva Aerobus
In December 2021, Allegiant and Viva Aerobus announced a joint venture plan which was the first between two ultra-low-cost carriers in the world. The two carriers have since submitted a joint application to the U.S. Department of Transportation (USDOT), but the DOT has requested additional information, leading the two carriers to revise the proposal. Now the airlines are awaiting approval from the Department of Transport in hopes the partnership can begin in the first half of next year.
Simple Flying covered the joint venture proposal a few days ago, and the full story can be viewed here.