Allegiant Travel Company ALGT reported impressive traffic numbers for December as air-travel demand in the United States has not been much affected by the Omicron variant. With more Americans getting vaccinated, the scenario looks positive on a year-over-year and year-over-two-year basis.
Scheduled traffic (measured in revenue passenger miles) surged 100.5% from December 2020 levels. Capacity (measured in available seat miles) for scheduled service increased 37.9% from December 2020 reading. With the traffic surge outweighing capacity expansion, the load factor (% of seats filled by passengers) in December expanded 24.6 points to 78.8% from the year-ago period’s levels. For the total system (including scheduled service and fixed fee contract), Allegiant carried 95.4% more passengers in December 2021 from the year-ago period’s level.
Compared with December 2019 levels (pre-COVID), scheduled traffic and capacity surged 5.2% and 10.3%, respectively. The load factor tanked 3.8 points to 78.8% as the increase in traffic was lower than capacity expansion. For the total system, the airline carried 0.7% more passengers in December 2021 from December 2019 levels.
Allegiant is witnessing a fall in fuel cost per gallon on a month-over-month basis (primarily due to anxiety over the omicron variant and reductions in fuel consumption). Fuel price per gallon in December is estimated to have been $2.37 compared with $2.56 in November.
For the December-end quarter, the adjusted EBITDA margin is expected to be roughly at 19% (including approximately $23 million of irregular operations costs incurred during the quarter). Fuel price per gallon for the December quarter and full-year 2021 is estimated to be at $2.48 and $2.15, respectively.
Zacks Rank & Stocks to Consider
Allegiant currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Some better-ranked stocks in the broader Zacks Transportation sector are J.B. Hunt Transport Services JBHT, FedEx Corporation FDX and Schneider National SNDR.
The long-term expected earnings per share (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all its segments. The Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks. The Integrated Capacity Solutions (ICS) unit is gaining from a favorable customer freight mix as well as higher contractual and spot rates.
JBHT’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has increased 33.7% in the past year. J.B. Hunt currently carries a Zacks Rank #2 (Buy).
The long-term expected earnings per share (three to five years) growth rate for FedEx is pegged at 12%. FDX is benefitting from a surge in e-commerce demand amid the pandemic.
FDX exited first-quarter fiscal 2022 with cash and equivalents of $6,853 million, much higher than its current debt of $125 million. Driven by the tailwinds, the stock has moved up 3.2% in the past month. FedEx currently carries a Zacks Rank #2.
The long-term expected earnings per share (three to five years) growth rate for Schneider is pegged at 20.7%. SNDR benefits from strong performance in the Intermodal and Logistics units.
SNDR’s third-quarter cash balance is also encouraging. Driven by the tailwinds, the stock has moved up 14.9% in the past year. Schneider currently carries a Zacks Rank #2.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.3% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
Click to get this free report
J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
Allegiant Travel Company (ALGT): Free Stock Analysis Report
Schneider National, Inc. (SNDR): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com