Allegiant Travel Company LLC.ALGT

Morningstar Rating

Stock Research and Analysis

by Jeremy Cohen

As an airline, Allegiant Travel offers a commodified product. Although the low-cost carrier faces little competition on its routes, there are no barriers to keep another airline from encroaching on its territory, which is why we believe Allegiant has Read more

Bulls Say

Rapid revenue growth will be possible, as long as Allegiant can find new routes that fit its business model.

Incremental passengers cost very little for an airline, so economic expansion leads to greatly improved margins.

Allegiant's relative flexibility compared with most airlines gives it the freedom to save costs by eliminating capacity in times of economic downturn. Read more

Bears Say

Allegiant's strategy is vulnerable to economic downturns, which decreases discretionary spending.

Any new entrant into Allegiant's markets could hurt profitability.

Allegiant's margins could suffer greatly in time of rising jet fuel prices.

Eventually Allegiant will have to replace its aging fleet of planes, which could prove costly. Read more

Strategy

Allegiant is expanding by adding service to more small cities and vacation destinations. The company attempts to keep nonfuel costs as low as possible by operating only older, less expensive MD-80 aircraft Read more

Management

Maurice Gallagher was named CEO of Allegiant in 2003, and was designated its chairman in late 2006. As of May 2009, Gallagher held over 21% of the firm's outstanding shares. He and his management team have ample experience in the airline industry to Read more

Profile

Allegiant is a niche travel airline providing nonstop flights from nearly 60 cities to large vacation destinations such as Las Vegas and Orlando. The firm generates ancillary Read more

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