Allegiant (ALGT) Trims Summer Schedule Amid Coronavirus Crisis
With multiple countries on lockdown due to the coronavirus pandemic, air-travel demand has been dealt a body blow. To combat this unprecedented low-demand scenario, airlines across the globe are cutting capacity.
Akin to other carriers across the globe, namely United Airlines UAL, Gol Linhas GOL and Ryanair Holdings RYAAY, Allegiant Travel Company ALGT) also reduced its schedule for the usually busy summer season. Notably, the companyoperates a low-cost passenger airlinethrough its subsidiary Allegiant Air.With cancellations exceeding booking by some distance, the company’s top line gets stressed. In fact, March revenues are likely to have been affected year over year by 40-45%.
Due to dwindling demand, the company trimmed its March capacity as well, down 12.2% on a year-over-year basis. With demand continuing to disappear as the pandemic shows little signs of subsiding, the companies even plan deeper capacity cuts for April and May. Allegiant expects capacity for April and May to plummet in the 80-90% range year over year.
Thanks to this unparalleled crisis, Allegiant’s daily cash burn is estimated between $2 and $2.5 million. As a result, this Zacks Rank # 5 (Strong Sell) is seeking government assistance and trying out other financing alternatives to shore up its balancesheet.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beleaguered by this pandemic, majority ofthe stocks have been displaying a downtrend on the bourse. Shares of Allegiant have lost 54.3% compared with the industry’s 56.2% decline since the beginning of March.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
