Allegiant Turns Third-Quarter Operating Profit After Sun Country Close

The Tip Desk · November 10, 2026 · 3 min read

GAAP operating income was $10.8 million in the three months ended September 30, 2026, versus a $27.2 million loss a year earlier, as the leisure carrier posted a $15.2 million net loss, or $0.56 a share.

Allegiant Travel Company (ALGT) swung to GAAP operating income of $10.8 million in the three months ended September 30, 2026, from an operating loss of $27.2 million a year earlier, as the Las Vegas-based leisure carrier absorbed a larger Sun Country Airlines fleet after the May 13 close and still narrowed its net loss.

The net loss was $15.2 million, or $0.56 a share, compared with a $43.6 million loss, or $2.41 a share, a year earlier. Adjusted diluted loss per share was $0.03. Consolidated total operating revenue was $961.6 million, up 71.1% from $561.9 million, with Sun Country included only from the acquisition date.

Chief Executive Officer Greg Anderson said the company delivered another quarter of operating profitability and expanded its adjusted operating margin by 340 basis points year over year on a pro forma basis in its seasonally slowest quarter, despite a more than 55% surge in fuel costs per gallon. Adjusted operating income was $29.8 million, for an adjusted operating margin of 3.1%, a 3.4 percentage-point improvement on that pro forma basis. Pro forma fuel cost per gallon rose 55.5%.

The company said it reduced pro forma capacity by nearly six percent year over year to protect margins in a high-fuel environment. Record third-quarter TRASM was 14.18 cents, up 28.3% year over year on 5.7% less capacity, both on a pro forma basis. Adjusted EBITDA was $110.9 million, an 11.5% margin, 1.6 percentage points higher than the prior year on a pro forma basis. Adjusted operating CASM excluding fuel, special charges, and cargo expenses was 9.23 cents, up 9.1% on a pro forma basis.

Aircraft fuel expense was $293.6 million, up 94.1% from $151.3 million a year earlier. Special charges, net of recoveries, were $19.1 million, versus $3.5 million. Those charges related to airline activities including accelerated depreciation on airframes identified for early retirement, software amortization, Sun Country acquisition costs, organizational restructuring, and a credit loss on a note receivable.

Allegiant generated $683.8 million of operating revenue and $14.9 million of operating income. Sun Country generated $277.8 million of revenue and a $4.1 million operating loss, including $52.4 million of cargo revenue. Fixed fee revenue was $83.6 million, up 7.9% on a pro forma basis. Ancillary revenue per passenger was $76.64, up 5.8% from the prior year on a pro forma basis. Co-brand credit card remuneration was $42.1 million, up 23.6% excluding Sun Country.

Cash and investments were $864.7 million at September 30, 2026, with $250.0 million of undrawn revolving credit facilities, for $1.1 billion of total available liquidity. Consolidated debt was $2.9 billion and net debt $2.1 billion. Operations used $211.0 million of cash in the quarter, including a $267.0 million pilot retention bonus payment. Air traffic liability was $632.5 million. Capital expenditures were $135.7 million, including $114.6 million for aircraft-related items.

For the fourth quarter, the company guides to system ASMs roughly flat year over year, scheduled service ASMs up about 1.7%, fuel at $4.75 a gallon, an adjusted operating margin of 6.0% to 7.0%, and adjusted earnings of $1.00 to $1.50 a share. Full-year 2026 adjusted earnings guidance remains greater than $6.00 a share. Anderson said 72% of fourth-quarter ASMs are scheduled on high-demand peak days and that fuel-efficient MAX aircraft are expected to account for 20% of combined capacity.

In October, Allegiant exercised six Boeing 737-8 purchase options for 2028 delivery, bringing firm Boeing orders to 56, of which 22 have been delivered, with 74 options remaining. The company plans an Investor Day on December 7.