Allegiant Air Revises Boeing 737-8 Deliveries for 2024

Allegiant Air (G4, Las Vegas Harry Reid) has further reduced its expected B737-8-200 deliveries for 2024 to four, down from six announced last quarter. Initially, the ULCC had anticipated receiving twelve of these aircraft, but ongoing Boeing quality issues and reduced production rates have necessitated this adjustment.

The revised delivery schedule has led to an additional USD30 million in annual expenses for Allegiant, related to non-productive assets such as training pilots for the B737 MAX aircraft.

During the second quarter investor call, Gregory Anderson, the current president and incoming CEO, emphasized the focus on establishing a realistic delivery timeline and securing compensation from Boeing for the delays. Allegiant expects its first B737-8-200 to arrive in September, but anticipates a slower delivery rate through 2025 and 2026, which will moderate near- and medium-term capital requirements.

Robert Neal, CFO, noted that the FAA will handle certification for the first aircraft rather than delegating it to Boeing, which could extend the timeline but simplifies the process.

Allegiant currently has twenty-six B737-8-200s and twenty-four B737-7s on order, with the first four B737-8-200s already assigned US registrations: N810MG, N811NV, N812NV, and N813NV.

The carrier operates a fleet of 131 aircraft, including thirty-five A319-100s and ninety-six A320-200s, with plans to retire two A320s by year-end. Moving forward, Allegiant will continue to balance aircraft retirements with new deliveries, aiming for modest fleet growth of one or two aircraft by the end of 2025.

Allegiant Air reported a net profit of USD42.9 million for the first half of 2024.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com