UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedMarch 31, 20212022
ORor
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to            _______ to_______

Commission File Number 001-33166
algt-20220331_g1.jpg
Allegiant Travel Company
(Exact Name of Registrant as Specified in Its Charter)
Nevada20-4745737
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification No.)
1201 North Town Center Drive
Las Vegas,Nevada89144
(Address of Principal Executive Offices)(Zip Code)
Registrant’s Telephone Number, Including Area Code: (702) 851-7300

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $.001$0.001ALGTNASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

As of April 26, 2021,25, 2022, the registrant had 16,416,01918,117,231 shares of common stock, $.001$0.001 par value per share, outstanding.


ALLEGIANT TRAVEL COMPANY
FORM 10-Q
TABLE OF CONTENTS
PART I.FINANCIAL INFORMATION 
  
ITEM 1.
43
  
ITEM 2.
1620
  
ITEM 3.
2232
  
ITEM 4.
2233
  
PART II.OTHER INFORMATION
  
ITEM 1.
2234
  
ITEM 1A.
2334
  
ITEM 2.
2334
ITEM 3.
2334
ITEM 4.
2334
ITEM 5.
2334
  
ITEM 6.
2435
2536
2

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements
ALLEGIANT TRAVEL COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2021December 31, 2020March 31, 2022December 31, 2021
(unaudited)(unaudited)
CURRENT ASSETSCURRENT ASSETS CURRENT ASSETS 
Cash and cash equivalentsCash and cash equivalents$301,615 $152,764 Cash and cash equivalents$403,085 $363,378 
Restricted cashRestricted cash25,212 17,555 Restricted cash26,220 37,323 
Short-term investmentsShort-term investments426,381 532,477 Short-term investments808,949 819,478 
Accounts receivableAccounts receivable188,116 192,215 Accounts receivable91,070 62,659 
Expendable parts, supplies and fuel, netExpendable parts, supplies and fuel, net26,276 24,006 Expendable parts, supplies and fuel, net36,098 27,500 
Prepaid expenses and other current assetsPrepaid expenses and other current assets32,088 24,616 Prepaid expenses and other current assets45,070 28,073 
TOTAL CURRENT ASSETSTOTAL CURRENT ASSETS999,688 943,633 TOTAL CURRENT ASSETS1,410,492 1,338,411 
Property and equipment, netProperty and equipment, net2,072,211 2,050,311 Property and equipment, net2,427,180 2,259,507 
Long-term investmentsLong-term investments— 2,231 
Deferred major maintenance, netDeferred major maintenance, net131,910 127,463 Deferred major maintenance, net145,529 146,850 
Operating lease right-of-use assets, netOperating lease right-of-use assets, net116,998 115,911 Operating lease right-of-use assets, net125,616 130,087 
Deposits and other assetsDeposits and other assets24,393 21,607 Deposits and other assets122,450 113,987 
TOTAL ASSETS:TOTAL ASSETS:$3,345,200 $3,258,925 TOTAL ASSETS:$4,231,267 $3,991,073 
CURRENT LIABILITIESCURRENT LIABILITIESCURRENT LIABILITIES
Accounts payableAccounts payable$37,767 $34,197 Accounts payable$59,140 $43,566 
Accrued liabilitiesAccrued liabilities129,795 116,093 Accrued liabilities216,690 162,892 
Current operating lease liabilitiesCurrent operating lease liabilities15,247 14,313 Current operating lease liabilities19,314 19,081 
Air traffic liabilityAir traffic liability403,049 307,508 Air traffic liability452,622 307,453 
Current maturities of long-term debt and finance lease obligations, net of related costsCurrent maturities of long-term debt and finance lease obligations, net of related costs156,482 217,234 Current maturities of long-term debt and finance lease obligations, net of related costs140,450 130,053 
TOTAL CURRENT LIABILITIESTOTAL CURRENT LIABILITIES742,340 689,345 TOTAL CURRENT LIABILITIES888,216 663,045 
Long-term debt and finance lease obligations, net of current maturities and related costsLong-term debt and finance lease obligations, net of current maturities and related costs1,459,570 1,441,777 Long-term debt and finance lease obligations, net of current maturities and related costs1,634,539 1,612,486 
Deferred income taxesDeferred income taxes303,390 301,763 Deferred income taxes344,454 346,137 
Noncurrent operating lease liabilitiesNoncurrent operating lease liabilities103,103 102,289 Noncurrent operating lease liabilities110,210 115,067 
Other noncurrent liabilitiesOther noncurrent liabilities27,143 24,388 Other noncurrent liabilities31,552 30,786 
TOTAL LIABILITIES:TOTAL LIABILITIES:2,635,546 2,559,562 TOTAL LIABILITIES:3,008,971 2,767,521 
SHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITYSHAREHOLDERS' EQUITY
Common stock, par value $.00123 23 
Common stock, par value $0.001Common stock, par value $0.00125 25 
Treasury sharesTreasury shares(646,008)(646,008)Treasury shares(638,057)(638,057)
Additional paid in capitalAdditional paid in capital333,147 329,753 Additional paid in capital695,323 692,053 
Accumulated other comprehensive income (loss), net1 (27)
Accumulated other comprehensive income, netAccumulated other comprehensive income, net5,411 2,056 
Retained earningsRetained earnings1,022,491 1,015,622 Retained earnings1,159,594 1,167,475 
TOTAL EQUITY:TOTAL EQUITY:709,654 699,363 TOTAL EQUITY:1,222,296 1,223,552 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:$3,345,200 $3,258,925 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY:$4,231,267 $3,991,073 
 
The accompanying notes are an integral part of these consolidated financial statements.
3

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 (unaudited)
Three Months Ended March 31, Three Months Ended March 31,
20212020 20222021
OPERATING REVENUES:OPERATING REVENUES:OPERATING REVENUES:
PassengerPassenger$256,695 $378,911 Passenger$463,961 $256,695 
Third party productsThird party products13,622 15,976 Third party products22,480 13,622 
Fixed fee contractsFixed fee contracts7,692 8,919 Fixed fee contracts13,386 7,692 
OtherOther1,115 5,375 Other282 1,115 
Total operating revenues Total operating revenues279,124 409,181  Total operating revenues500,109 279,124 
OPERATING EXPENSES:OPERATING EXPENSES:OPERATING EXPENSES:
Salary and benefits117,950 112,646 
Aircraft fuelAircraft fuel82,848 88,813 Aircraft fuel164,137 82,848 
Salaries and benefitsSalaries and benefits134,010 117,950 
Station operationsStation operations65,744 43,094 
Depreciation and amortizationDepreciation and amortization43,174 43,699 Depreciation and amortization46,343 43,174 
Station operations43,094 40,999 
Maintenance and repairsMaintenance and repairs23,371 21,795 Maintenance and repairs27,820 23,371 
Sales and marketingSales and marketing11,609 18,455 Sales and marketing22,350 11,609 
Aircraft lease rentalAircraft lease rental4,720 962 Aircraft lease rental6,132 4,720 
OtherOther17,776 26,717 Other26,202 17,776 
Payroll Support Programs grant recognitionPayroll Support Programs grant recognition(91,758)0 Payroll Support Programs grant recognition— (91,758)
Special chargesSpecial charges1,738 172,900 Special charges142 1,738 
Total operating expenses Total operating expenses254,522 526,986  Total operating expenses492,880 254,522 
OPERATING INCOME (LOSS)24,602 (117,805)
OPERATING INCOMEOPERATING INCOME7,229 24,602 
OTHER (INCOME) EXPENSES:OTHER (INCOME) EXPENSES:OTHER (INCOME) EXPENSES:
Interest expenseInterest expense16,788 18,153 Interest expense19,791 16,788 
Capitalized interestCapitalized interest0 (4,067)Capitalized interest(1,216)— 
Interest incomeInterest income(463)(2,311)Interest income(773)(463)
Loss on debt extinguishment0 1,222 
Other, netOther, net(393)(76)Other, net(6)(393)
Total other expenses Total other expenses15,932 12,921  Total other expenses17,796 15,932 
INCOME (LOSS) BEFORE INCOME TAXESINCOME (LOSS) BEFORE INCOME TAXES8,670 (130,726)INCOME (LOSS) BEFORE INCOME TAXES(10,567)8,670 
INCOME TAX PROVISION (BENEFIT)INCOME TAX PROVISION (BENEFIT)1,801 (97,717)INCOME TAX PROVISION (BENEFIT)(2,686)1,801 
NET INCOME (LOSS)NET INCOME (LOSS)$6,869 $(33,009)NET INCOME (LOSS)$(7,881)$6,869 
Earnings (loss) per share to common shareholders:Earnings (loss) per share to common shareholders:Earnings (loss) per share to common shareholders:
BasicBasic$0.42 $(2.08)Basic$(0.44)$0.42 
DilutedDiluted$0.42 $(2.08)Diluted$(0.44)$0.42 
Shares used for computation:Shares used for computation:Shares used for computation:
BasicBasic16,167 15,952 Basic17,954 16,167 
DilutedDiluted16,167 15,952 Diluted17,954 16,167 
Cash dividends declared per share:Cash dividends declared per share:$0 $0.70 Cash dividends declared per share:$— $— 

The accompanying notes are an integral part of these consolidated financial statements.
4

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended March 31, Three Months Ended March 31,
20212020 20222021
NET INCOME (LOSS)NET INCOME (LOSS)$6,869 $(33,009)NET INCOME (LOSS)$(7,881)$6,869 
Other comprehensive income (loss):  
Other comprehensive income:Other comprehensive income:  
Change in available for sale securities, net of taxChange in available for sale securities, net of tax28 (733)Change in available for sale securities, net of tax3,355 28 
Foreign currency translation adjustments0 11 
Total other comprehensive income (loss)28 (722)
Total other comprehensive incomeTotal other comprehensive income3,355 28 
TOTAL COMPREHENSIVE INCOME (LOSS)TOTAL COMPREHENSIVE INCOME (LOSS)$6,897 $(33,731)TOTAL COMPREHENSIVE INCOME (LOSS)$(4,526)$6,897 

The accompanying notes are an integral part of these consolidated financial statements.
5

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended March 31, 2021
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202016,405 $23 $329,753 $(27)$1,015,622 $(646,008)$699,363 
Share-based compensation11 — $3,394 — — — 3,394 
Other comprehensive income— — — $28 $— — 28 
Net income— — — — $6,869 — 6,869 
Balance at March 31, 202116,416 $23 $333,147 $1 $1,022,491 $(646,008)$709,654 
Three Months Ended March 31, 2022
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202118,111 $25 $692,053 $2,056 $1,167,475 $(638,057)$1,223,552 
Share-based compensation8 — 3,270 — — — 3,270 
Other comprehensive income— — — 3,355 — — 3,355 
Net (loss)— — — — (7,881)— (7,881)
Balance at March 31, 202218,119 $25 $695,323 $5,411 $1,159,594 $(638,057)$1,222,296 

Three Months Ended March 31, 2020
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 201916,303 $23 $289,933 $98 $1,211,076 $(617,579)$883,551 
Share-based compensation113 — 5,334 — — — 5,334 
Shares repurchased by the Company and held as treasury shares(217)— — — — (33,773)(33,773)
Cash dividends declared, $0.70 per share— — — — (11,478)— (11,478)
Other comprehensive income (loss)— — — (722)— — (722)
Net loss— — — — (33,009)— (33,009)
Balance at March 31, 202016,199 $23 $295,267 $(624)$1,166,589 $(651,352)$809,903 
Three Months Ended March 31, 2021
Common stock outstandingPar valueAdditional paid-in capitalAccumulated other comprehensive income (loss)Retained earningsTreasury sharesTotal shareholders' equity
Balance at December 31, 202016,405 $23 $329,753 $(27)$1,015,622 $(646,008)$699,363 
Share-based compensation11 — 3,394 — — — 3,394 
Other comprehensive income— — — 28 — — 28 
Net income— — — — 6,869 — $6,869 
Balance at March 31, 202116,416 $23 $333,147 $1 $1,022,491 $(646,008)$709,654 

6

ALLEGIANT TRAVEL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31, Three Months Ended March 31,
20212020 20222021
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net income (loss)Net income (loss)$6,869 $(33,009)Net income (loss)$(7,881)$6,869 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization43,174 43,699 Depreciation and amortization46,343 43,174 
Special chargesSpecial charges1,738 163,360 Special charges142 1,738 
Other adjustmentsOther adjustments8,318 67,890 Other adjustments6,155 8,318 
Changes in certain assets and liabilities:Changes in certain assets and liabilities:Changes in certain assets and liabilities:
Air traffic liabilityAir traffic liability95,541 53,885 Air traffic liability145,169 95,541 
Other - netOther - net12,353 (189,508)Other - net(13,927)12,353 
Net cash provided by operating activitiesNet cash provided by operating activities167,993 106,317 Net cash provided by operating activities176,001 167,993 
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Purchase of investment securitiesPurchase of investment securities(89,338)(105,382)Purchase of investment securities(302,161)(89,338)
Proceeds from maturities of investment securitiesProceeds from maturities of investment securities194,534 130,720 Proceeds from maturities of investment securities311,332 194,534 
Aircraft pre-delivery depositsAircraft pre-delivery deposits(46,694)(3,300)
Purchase of property and equipmentPurchase of property and equipment(69,499)(134,483)Purchase of property and equipment(71,659)(66,199)
Other investing activitiesOther investing activities(16)2,283 Other investing activities(572)(16)
Net cash provided by (used in) investing activitiesNet cash provided by (used in) investing activities35,681 (106,862)Net cash provided by (used in) investing activities(109,754)35,681 
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Cash dividends paid to shareholders0 (11,478)
Proceeds from the issuance of debt and finance lease obligationsProceeds from the issuance of debt and finance lease obligations105,000 128,296 Proceeds from the issuance of debt and finance lease obligations— 105,000 
Repurchase of common stock0 (33,773)
Principal payments on debt and finance lease obligationsPrincipal payments on debt and finance lease obligations(151,517)(62,723)Principal payments on debt and finance lease obligations(37,335)(151,517)
Debt issuance costsDebt issuance costs(649)(2,530)Debt issuance costs(308)(649)
Net cash provided by (used in) financing activities(47,166)17,792 
Net cash (used in) financing activitiesNet cash (used in) financing activities(37,643)(47,166)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASHNET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH156,508 17,247 NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH28,604 156,508 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIODCASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD170,319 136,785 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD400,701 170,319 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIODCASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$326,827 $154,032 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD$429,305 $326,827 
CASH PAYMENTS (RECEIPTS) FOR:CASH PAYMENTS (RECEIPTS) FOR:CASH PAYMENTS (RECEIPTS) FOR:
Interest paid, net of amount capitalizedInterest paid, net of amount capitalized$15,059 $12,031 Interest paid, net of amount capitalized$18,007 $15,059 
Income tax payments (refunds)Income tax payments (refunds)(138)22 Income tax payments (refunds)17 (138)
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Right-of-use (ROU) assets acquiredRight-of-use (ROU) assets acquired$4,733 $50,218 Right-of-use (ROU) assets acquired$— $4,733 
Flight equipment acquired under finance leasesFlight equipment acquired under finance leases68,211 — 
Purchases of property and equipment in accrued liabilitiesPurchases of property and equipment in accrued liabilities4,064 46,452 Purchases of property and equipment in accrued liabilities37,083 4,064 

The accompanying notes are an integral part of these consolidated financial statements.
7

ALLEGIANT TRAVEL COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Allegiant Travel Company (the “Company”) and its majority-owned operating subsidiaries. The Company's investments in unconsolidated affiliates, which are 50 percent or less owned, are accounted for under the equity or cost method, and are insignificant to the consolidated financial statements. All intercompany balances and transactions have been eliminated.

These unaudited consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the financial position, results of operations, and cash flows of the Company for the respective periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto included in the annual report of the Company on Form 10-K for the year ended December 31, 20202021 and filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates.

8
Recent Accounting Pronouncements

On December 18, 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. The standard simplifies the accounting and disclosure requirements for income taxes by clarifying existing guidance to improve consistency in application of Accounting Standards Codification ("ASC") 740. The standard also removes the requirement to calculate income tax expense for the stand-alone financial statements of wholly-owned subsidiaries. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted in any interim period within that year. The Company adopted this accounting standard prospectively as of January 1, 2021, and it did not have a significant impact on the Company's consolidated financial statements.

Note 2 — Impact of the COVID-19 Pandemic

The rapid spread of COVID-19 and the related government restrictions, social distancing measures, and consumer fears have impacted flight loads, resulted in unprecedented cancellations of bookings and substantially reduced demand for new bookings throughout the airline industry. Starting in Marchindustry during 2020 the Company experienced a severe reduction in air travel, which continued through the first quarter ofand 2021. Demand in the foreseeable future willmay continue to be affected by fluctuations in COVID-19 cases, variants, hospitalizations, deaths, treatment efficacy and the availability of vaccines. The Company is continuously reevaluating flight schedules and adjusting capacity based on demand trends.

On December 27,During 2020 and 2021, Congress enacted various legislation which provided support for the airline industry. This included The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") enacted in March 2020, the Consolidated Appropriations Act, 2021 enacted in December 2020 (the "Payroll“Payroll Support Program Extension"Extension”) was signed into law. This Payroll Support Program Extension provides an additional $15.0 billionand the American Rescue Plan Act enacted in support to the airline industry.March 2021 (the “ARPA”). On January 15, 2021, the Company through its airline operating subsidiary Allegiant Air, LLC entered into a Payroll Support Program Extension Agreement (the “PSP2”) with the Treasury under the Payroll Support Program Extension. The Companyand received 2 installments of $45.9 million each in January and March 2021 for a total of $91.8 million under the Payroll Support Program Extension.

In April 2021, the Company received $13.8 million in additional funds related to the PSP2 which included a loan of $1.7 million. In consideration for these additional funds, the Company issued warrants ( the "PSP2 Warrants") to the Treasury to acquire 924 shares of common stock at a price of $179.23 per share (based on the price of the Company's common stock on the Nasdaq Stock Market on December 24, 2020).

In April 2021, the Company through its airline operating subsidiary Allegiant Air, LLC entered into a Payroll Support Program 3 Agreement (the "PSP3") with the Treasury under section 7301 of the American Rescue Plan Act of 2021 and received a total of $98.4 million.

The funds received under PSP2 and PSP3 were used exclusively for wages, salaries and benefits.

During 2020, the Company made significant progress on strengthening its liquidity by suspendingPrior to January 1, 2022, all stock buybacks and dividends; executives temporarily reducing their salaries by 50 percent and temporarily foregoing cash compensation of Board members; enacting a hiring freeze and offering voluntary leave; eliminating cash bonuses; suspending all non-essential capital expenditures including, but not limited to, Sunseeker Resorts, Teesnap and Allegiant Nonstop family entertainment centers; and extending payment terms and renegotiating contracts with vendors.

Given the Company's efforts to conserve and raise liquidity and the Company's assumptions about the future impact of COVID-19 on travel demand, which could be materially different due to the inherent uncertainties of the current operating environment, the Company expects to meet its cash obligations as well as remain in compliance with the debt covenants in its existing financing agreements for the next 12 months based on its current level of unrestricted cash and short-term investments, its anticipated access to liquidity and tax refunds, and projected cash flows from operations.

Payroll Support Program funds had been fully utilized.
89

Special Charges

The table below summarizes special charges recorded during the three months ended March 31, 2021.
Three Months Ended March 31,
(in thousands)20212020
Operating$1,738 $166,098 
Non-operating0 6,802 
Total special charges$1,738 $172,900 

Additional detail for the $1.7 million of total special charges for the three months ended March 31, 2021 appears below:

•$1.2 million resulting from the accelerated retirements of 2 airframes and 3 engines
•$0.5 million related to an impairment loss on a building in Chesterfield, Missouri associated with the Allegiant Nonstop family entertainment line of business.

In the first quarter 2020, the onset of COVID-19 triggered an impairment review of long lived assets and a non-cash impairment charge of $163.4 million was recognized. The Company also identified $9.5 million of expenses, primarily comprised of salary and benefits, that were unique and specific to COVID-19.


Note 3 — Revenue Recognition

Passenger Revenue

Passenger revenue is the most significant category in ourthe Company's reported operating revenues, as outlined below:
Three Months Ended March 31,Three Months Ended March 31,
(in thousands)(in thousands)20212020(in thousands)20222021
Scheduled serviceScheduled service$131,929 $197,261 Scheduled service$223,854 $131,929 
Ancillary air-related chargesAncillary air-related charges121,072 176,964 Ancillary air-related charges229,464 121,072 
Co-brand redemptions3,694 4,686 
Allways® Allegiant World Mastercard® redemptionsAllways® Allegiant World Mastercard® redemptions10,643 3,694 
Total passenger revenueTotal passenger revenue$256,695 $378,911 Total passenger revenue$463,961 $256,695 

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when transportation is provided or when ticket voucher breakage occurs, to the extent different from estimated breakage.provided. As of March 31, 2021, approximately 55.5 percent of2022, the air traffic liability balance was $452.6 million, of which approximately $394.1 million was related to forward bookings, with the remaining 44.5 percent$58.5 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. $70.2 million ofOf the $307.5 million that was recorded in the air traffic liability balance as of December 31, 20202021, approximately 56.0 percent was recognized into passenger revenue during the three months ended March 31, 2021.2022.

In 2020, the Company announced that creditscredit vouchers issued for canceled travel beginning in January 2020 would have an extended
expiration date of two years from the original booking date. This policy continues in effect at the current time. This change
has been considered in estimating the future breakage rate, which represents the valuecontinued for vouchers issued through June 30, 2021. Estimates of credit vouchers that are not
expectedpassenger revenue to be redeemed priorrecognized from air traffic liability for credit voucher breakage may be subject to their contractualvariability and differ from historical experience due to the change in contract duration and uncertainty regarding demand for future air travel. Effective July 1, 2021, vouchers issued have an expiration date of one year from the original booking date.

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete.

Co-brandLoyalty redemptions

In relation to the travel component of the co-branded credit cardAllways® Allegiant World Mastercard® contract with Bank of America, the Company has a performance obligation to provide cardholders with points to be used for future travel award redemptions. Therefore, consideration received from Bank of America related to the travel component is deferred based on its relative selling price and is recognized into passenger revenue when the points are redeemed and the transportation is provided. Similarly, in relation to the Allways Rewards program, points earned through the program are deferred based on the stand-alone selling price and recognized into revenue when the points are redeemed and the underlying service has been provided.

The following table presents the activity of the co-brand point liability for the periods indicated:
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Three Months Ended March 31,Three Months Ended March 31,
(in thousands)(in thousands)20212020(in thousands)20222021
Balance at January 1$21,841 $15,613 
Points balance at January 1Points balance at January 1$40,490 $21,841 
Points awarded (deferral of revenue)Points awarded (deferral of revenue)4,571 6,354 Points awarded (deferral of revenue)16,957 4,571 
Points redeemed (recognition of revenue)Points redeemed (recognition of revenue)(3,694)(4,686)Points redeemed (recognition of revenue)(10,643)(3,694)
Balance at March 31$22,718 $17,281 
Points balance at March 31Points balance at March 31$46,804 $22,718 

As of March 31, 2022 and 2021, and 2020, $10.3$23.2 million and $12.5$10.3 million, respectively, of the current points liability is reflected in accrued liabilities and represents the current estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in other noncurrent liabilities expected to be recognized into revenue in periods thereafter.
10

Note 4 — Property and Equipment

The following table summarizes the Company's property and equipment as of the dates indicated:
(in thousands)March 31, 2021December 31, 2020
Flight equipment, including pre-delivery deposits$2,370,269 $2,331,499 
Computer hardware and software151,755 149,727 
Land and buildings/leasehold improvements (1)
87,030 87,030 
Other property and equipment80,672 80,601 
Total property and equipment2,689,726 2,648,857 
Less accumulated depreciation and amortization(617,515)(598,546)
Property and equipment, net$2,072,211 $2,050,311 
(1) Balance includes a building currently held for sale in Chesterfield, Missouri with a carrying value of $4.3 million
(in thousands)March 31, 2022December 31, 2021
Flight equipment, including pre-delivery deposits$2,685,856 $2,573,657 
Computer hardware and software166,209 160,237 
Land and buildings/leasehold improvements59,853 59,735 
Other property and equipment83,326 78,192 
Sunseeker Resort147,645 83,864 
Total property and equipment3,142,889 2,955,685 
Less accumulated depreciation and amortization(715,709)(696,178)
Property and equipment, net$2,427,180 $2,259,507 

Accrued capital expenditures as of March 31, 20212022 and December 31, 20202021 were $4.1$37.1 million and $16.9$17.7 million, respectively.
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Note 5 — Long-Term Debt

The following table summarizes the Company's Long-termlong-term debt and finance lease obligations as of the dates indicated:
(in thousands)(in thousands)March 31, 2021December 31, 2020(in thousands)March 31, 2022December 31, 2021
Fixed-rate debt and finance lease obligations due through 2029$619,874 $525,240 
Fixed-rate debt and finance lease obligations due through 2032Fixed-rate debt and finance lease obligations due through 2032$885,302 $827,382 
Variable-rate debt due through 2029Variable-rate debt due through 2029996,178 1,133,771 Variable-rate debt due through 2029889,687 915,157 
Total long-term debt and finance lease obligations, net of related costs1,616,052 1,659,011 
Total debt and finance lease obligations, net of related costsTotal debt and finance lease obligations, net of related costs1,774,989 1,742,539 
Less current maturities, net of related costsLess current maturities, net of related costs156,482 217,234 Less current maturities, net of related costs140,450 130,053 
Long-term debt and finance lease obligations, net of current maturities and related costsLong-term debt and finance lease obligations, net of current maturities and related costs$1,459,570 $1,441,777 Long-term debt and finance lease obligations, net of current maturities and related costs$1,634,539 $1,612,486 
Weighted average fixed-interest rate on debtWeighted average fixed-interest rate on debt5.8 %5.7 %Weighted average fixed-interest rate on debt5.8%5.8%
Weighted average variable-interest rate on debtWeighted average variable-interest rate on debt2.5 %2.4 %Weighted average variable-interest rate on debt2.9%2.5%

Maturities of long-term debt and finance lease obligations for the remainder of 20212022 and for the next four years and thereafter, in the aggregate, are: remaining in 2021 - $120.4 million; 2022 - $131.9$95.4 million; 2023 - $131.7$133.9 million; 2024 - $801.6$804.3 million; 2025 - $84.6$111.1 million; 2026 - $104.7 million; and $345.8$525.5 million thereafter.

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Senior Secured Revolving Credit Facility

The senior secured revolving credit facility under which the Company was able to borrow up to $81.0 million matured on March 31, 2021. Principal payments were made during the quarter totaling $7.4 million and the final outstanding balance of $46.5 million was paid at maturity.

In March 2021, the Company entered into a new revolving credit facility under which it is entitled to borrow up to $50.0 million. The facility has a term of 24 months and the borrowing ability is based on the value of the Airbus A320 series aircraft placed into the collateral pool. The notes for amounts borrowed under the facility bear interest at a floating rate based on LIBOR and are due in March 2023. As of March 31, 2021, 0 aircraft collateral had been added to the collateral pool and the facility was undrawn.
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Note 6 — Income Taxes

The Company recorded an effective tax rate of 20.825.4 percent and 74.720.8 percent for the three months ended March 31, 20212022 and 2020,2021, respectively. The effective tax rate for the three months ended March 31, 20212022 differed from the statutory Federal income tax rate of 21.0 percent primarily due to state income taxes;taxes and the impact of ASU 2016-09 related to share-based payments; and reserve for uncertainpermanent tax positions. The effective tax rate for the three months ended March 31, 2020 was primarily due to the tax accounting impactdifferences of the CARES Act which includes a $39.6 million discrete federal income tax benefit related to the full utilization of 2018 and 2019 net operating losses against taxable income in earlier years in which 35.0 percent was the enacted tax rate; the ability to carryback the 2020 net operating loss at a 35.0 percent rate applicable in earlier years; a deferred tax remeasurement related to the 2020 tax year; and state taxes.none are individually significant. While the Company expects its effective tax rate to be fairly consistent in the near term, it will vary depending on recurring items such as the amount of income earned in each state and the state tax rate applicable to such income. Discrete items during interim periods may also affect the Company's tax rates.
1113

Note 7 — Leases

The Company evaluates all operating leases and they are measured on the balance sheet with a lease liability and right-of-use asset (“ROU”) at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make scheduled lease payments. Airport terminal leases mostly include variable lease payments outside of those based on a fixed index, and are therefore not recorded as ROU assets.

The following table summarizes the Company's total assets and liabilities related to leases as of the dates indicated:
(in thousands)Classification on the Balance SheetMarch 31, 2021December 31, 2020
Assets
Operating lease assets(1)
Operating lease right-of-use assets$116,998 $115,911 
Finance lease assets(2)
Property and equipment, net242,280 133,175 
Total lease assets$359,278 $249,086 
Liabilities
Current
Operating(1)
Current operating lease liabilities$15,247 $14,313 
Finance(2)
Current maturities of long-term debt and finance lease obligations13,358 9,767 
Noncurrent
Operating(1)
Noncurrent operating lease liabilities103,103 102,289 
Finance(2)
Long-term debt and finance lease obligations215,354 117,060 
Total lease liabilities$347,062 $243,429 
(1) Represents assets and liabilities of 13 aircraft, office equipment, certain airport and terminal facilities, and other assets under operating leases
(2) March 31, 2021, number represents assets and liabilities of 9 aircraft under finance leases

Sale-Leaseback Transaction

In March 2021, the Company entered into a sale-leaseback transaction involving 3 aircraft and generating $105.0 million of proceeds. The lease was classified as a finance lease and as a result, the transaction did not qualify as a sale. The aircraft were not removed from property and equipment in the Company's balance sheet and the Company recorded a financial liability in the amount of $105.0 million. The proceeds from this transaction are treated as cash inflows from finance lease obligations and reported in financing activities on the statement of cash flows.

Note 8 — Fair Value Measurements

The Company utilizes the market approach to measure the fair value of its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The assets classified as Level 2 primarily utilize quoted market prices or alternative pricing sources including transactions involving identical or comparable assets and models utilizing market observable inputs for valuation of these securities. No changes in valuation techniques or inputs occurred during the three months ended March 31, 2021.2022.

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Financial instruments measured at fair value on a recurring basis:
March 31, 2021December 31, 2020March 31, 2022December 31, 2021
(in thousands)(in thousands)TotalLevel 1Level 2TotalLevel 1Level 2(in thousands)TotalLevel 1Level 2TotalLevel 1Level 2
Cash equivalentsCash equivalents   Cash equivalents   
Money market fundsMoney market funds$160,730 $160,730 $0 $5,340 $5,340 $0 Money market funds$4,295 $4,295 $— $25,019 $25,019 $— 
Commercial PaperCommercial Paper144,882 — 144,882 179,455 — 179,455 
Municipal debt securitiesMunicipal debt securities59,417 0 59,417 34,338 0 34,338 Municipal debt securities48,066 — 48,066 63,875 — 63,875 
Commercial Paper21,889 0 21,889 48,908 0 48,908 
Corporate debt securitiesCorporate debt securities7,407 0 7,407 0 0 0 Corporate debt securities7,849 — 7,849 — — — 
Federal agency debt securities0 0 0 51,400 0 51,400 
Total cash equivalentsTotal cash equivalents249,443 160,730 88,713 139,986 5,340 134,646 Total cash equivalents205,092 4,295 200,797 268,349 25,019 243,330 
Short-termShort-term     Short-term     
Commercial paperCommercial paper188,937 0 188,937 229,821 0 229,821 Commercial paper377,695 — 377,695 419,469 — 419,469 
Corporate debt securitiesCorporate debt securities115,812 0 115,812 166,768 0 166,768 Corporate debt securities255,848 — 255,848 234,436 — 234,436 
Municipal debt securitiesMunicipal debt securities84,294 0 84,294 87,290 0 87,290 Municipal debt securities173,561 — 173,561 165,573 — 165,573 
Federal agency debt securitiesFederal agency debt securities37,338 0 37,338 48,598 0 48,598 Federal agency debt securities1,845 — 1,845 — — — 
Total short-termTotal short-term426,381 0 426,381 532,477 0 532,477 Total short-term808,949 — 808,949 819,478 — 819,478 
Long-termLong-term      
Municipal debt securitiesMunicipal debt securities— — — 2,231 — 2,231 
Total long-termTotal long-term— — — 2,231 — 2,231 
Total financial instrumentsTotal financial instruments$675,824 $160,730 $515,094 $672,463 $5,340 $667,123 Total financial instruments$1,014,041 $4,295 $1,009,746 $1,090,058 $25,019 $1,065,039 

None of the Company's debt is publicly held and as a result, the Company has determined the estimated fair value of these notes to be Level 3. Certain inputs used to determine fair value are unobservable and, therefore, could be sensitive to changes in inputs. The Company utilizes the discounted cash flow method to estimate the fair value of Level 3 debt.

Carrying value and estimated fair value of long-term debt, including current maturities and without reduction for related costs, are as follows:
March 31, 2021December 31, 2020March 31, 2022December 31, 2021
(in thousands)(in thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair ValueHierarchy Level(in thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair ValueHierarchy Level
Non-publicly held debtNon-publicly held debt$1,408,823 $1,197,427 $1,555,637 $1,191,008 3Non-publicly held debt$1,413,414 $1,198,418 $1,447,462 $1,261,170 3

Due to their short-term nature, the carrying amounts of cash, cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair value.
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Note 98 — Earnings (Loss) per Share

Basic and diluted earnings (loss) per share are computed pursuant to the two-class method. Under this method, the Company attributes net income (loss) to two classes: common stock and unvested restricted stock. Unvested restricted stock awards granted to employees under the Company’s Long-Term Incentive Plan are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock.

Diluted net income per share is calculated using the more dilutive of the two methods. Under both methods, the exercise of employee stock options is assumed using the treasury stock method. The assumption of vesting of restricted stock, however, differs:

1.Assume vesting of restricted stock using the treasury stock method.

2.Assume unvested restricted stock awards are not vested, and allocate earnings to common shares and unvested restricted stock awards using the two-class method.

For the three months ended March 31, 2022 basic and diluted (loss) per share are the same because of the (loss) position. For the three months ended March 31, 2021, the second method was used because it was more dilutive than the first method.

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The following table sets forth the computation of net income (loss) per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in the table are in thousands):
Three Months Ended March 31,Three Months Ended March 31,
2021202020222021
Basic:Basic:  Basic:
Net income (loss)Net income (loss)$6,869 $(33,009)Net income (loss)$(7,881)$6,869 
Less income allocated to participating securitiesLess income allocated to participating securities(103)(236)Less income allocated to participating securities— (103)
Net income (loss) attributable to common stockNet income (loss) attributable to common stock$6,766 $(33,245)Net income (loss) attributable to common stock$(7,881)$6,766 
Earnings (loss) per share, basicEarnings (loss) per share, basic$0.42 $(2.08)Earnings (loss) per share, basic$(0.44)$0.42 
Weighted-average shares outstandingWeighted-average shares outstanding16,167 15,952 Weighted-average shares outstanding17,954 16,167 
Diluted:Diluted:  Diluted:  
Net income (loss)Net income (loss)$6,869 $(33,009)Net income (loss)$(7,881)$6,869 
Less income allocated to participating securitiesLess income allocated to participating securities(103)(236)Less income allocated to participating securities— (103)
Net income (loss) attributable to common stockNet income (loss) attributable to common stock$6,766 $(33,245)Net income (loss) attributable to common stock$(7,881)$6,766 
Earnings (loss) per share, dilutedEarnings (loss) per share, diluted$0.42 $(2.08)Earnings (loss) per share, diluted$(0.44)$0.42 
Weighted-average shares outstanding(1)
16,167 15,952 
Weighted-average shares outstandingWeighted-average shares outstanding17,954 16,167 
(1) Dilutive effect of common stock equivalents excluded from the diluted per share calculation is not material.
15


Note 109 — Contingencies

The Company is subject to certain legal and administrative actions it considers routine to its business activities. The Company believes the ultimate outcome of any potential and pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity or results of operations.
16

Note 10 — Segments

Operating segments are components of a company for which separate financial and operating information is regularly evaluated and reported to the Chief Operating Decision Maker ("CODM"), and is used to allocate resources and analyze performance. The Company's CODM is the executive leadership team, which reviews information about the Company's 2 operating segments: Airline and Sunseeker Resort.

Airline Segment

The Airline segment operates as a single business unit and includes all scheduled service air transportation, ancillary air-related products and services, third party products and services, fixed fee contract air transportation and other airline-related revenue. The CODM evaluation includes, but is not limited to, route and flight profitability data, ancillary and third party product and service offering statistics, and fixed fee contract information when making resource allocation decisions with the goal of optimizing consolidated financial results.

Sunseeker Resort Segment

The Sunseeker Resort segment represents activity related to the development and construction of Sunseeker Resort in Southwest Florida, as well as the renovation of Aileron Golf Course (formerly known as Kingsway Golf Course). Plans for the resort include a 500-room hotel and 2 towers offering more than 180 one, two and three-bedroom suites, bar and restaurant options, and other amenities. The golf course is a short drive from the resort site and is considered, from a planning and strategic perspective, to be an additional resort amenity. The construction of Sunseeker Resort is an extension of the Company's leisure travel focus and it is expected that many customers flying to Southwest Florida on Allegiant will elect to stay at this resort and enjoy its amenities.


Selected information for the Company's segments and the reconciliation to the consolidated financial statement amounts are as follows:
(in thousands)AirlineSunseeker ResortConsolidated
Quarter Ended March 31, 2022
Operating revenue:
    Passenger$463,961 $— $463,961 
    Third party products22,480 — 22,480 
    Fixed fee contract13,386 — 13,386 
    Other281 1 282 
Operating income (loss)10,176 (2,947)7,229 
Interest expense, net15,828 1,974 17,802 
Depreciation and amortization46,341 2 46,343 
Capital expenditures142,178 63,781 205,959 
Quarter Ended March 31, 2021
Operating revenue:
Passenger$256,695 $— $256,695 
Third party products13,622 — 13,622 
Fixed fee contract7,692 — 7,692 
Other1,124 (9)1,115 
Operating income (loss)25,463 (861)24,602 
Interest expense, net16,325 — 16,325 
Depreciation and amortization43,136 38 43,174 
Capital expenditures57,674 — 57,674 

Total assets were as follows as of the dates indicated:
14
17

(in thousands)As of March 31, 2022As of December 31, 2021
Airline$4,046,505 $3,872,041 
Sunseeker Resort184,762 119,032 
Consolidated$4,231,267 $3,991,073 
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Note 11 — Subsequent Events

In April 2021, the Company received $13.82022, we borrowed $108.3 million in funds related to the PSP2. In consideration for these additional funds, the Company issued additional warrants ( the "PSP2 Warrants") to the Treasury to acquire 924 shares of common stock at a price of $179.23 per share (based on the price of the Company's common stock on the Nasdaq Global Select Market.on December 24, 2020). Also, in consideration for these additional funds received, the PSP2 note was increased to $1.7 million.under senior bank debt facilities secured by aircraft.

In April 2021,2022, the Company through its airline operating subsidiary Allegiant Air, LLC enteredlender funded $87.5 million into a Payroll Support Program 3 Agreement (the "PSP3") with the Treasury under section 7301 ofconstruction disbursement account for the American Rescue Plan Act of 2021. The total amount expected to be allocated to Allegiant Air under the PSP3 is approximately $98.4 million, which must be used exclusively for wages, salaries and benefits. The Company received an initial installment of $49.2 million in April 2021 and the remainder of the funds are expected to be received during the second quarter 2021.Sunseeker project.
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If additional funds are allocated by the Treasury under the PSP3 such that the amount received by the Company exceeds $100.0 million, then Allegiant Air will issue a note for 30 percent for the funds received under the PSP3 in excess of $100.0 million and the Company will be required to issue warrants based on the amount of the notes.

On April 30, 2021, the Company closed on a transaction to sell 85 percent of Teesnap, its golf course management software subsidiary. The Company will retain 15 percent ownership in the business.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis presents factors that had a material effect on our results of operations during the three months ended March 31, 20212022 and 2020.2021. Also discussed is our financial position as of March 31, 20212022 and December 31, 2020.2021. You should read this discussion in conjunction with our unaudited consolidated financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q and our consolidated financial statements appearing in our annual report on Form 10-K for the year ended December 31, 2020.2021. This discussion and analysis contains forward-looking statements. Please refer to the section below entitled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.
20

First Quarter 20212022 Review

Highlights:

–EarningsLoss per share of $0.42$(0.44) as a result of significantly higher fuel costs as fuel prices surged during the PSP funds contributed to our first net profit since the onset of the pandemicquarter and higher irregular operations costs.
–Restored capacity to pre-pandemic levelsTotal operating revenue was $500.1 million, up 10.7 percent when compared with scheduled service capacity up 3.1 percent versusthe first quarter of 20192019.
–Continued sequential quarterly improvement in total revenue with first quarter 2021 total revenueload factor, which came in at 78.9 percent, up 13.2 percentnearly 2 percentage points from the fourth quarter 2020
–Fixed fee revenue of $7.7 million, the strongest quarter since the onset of the pandemic2021.
–Total cash and investments at March 31, 20212022 were $728 million, up from $685 million at December 31, 2020$1.21 billion.
–Included on Forbes' listAverage total fare per passenger increased by 2.7 percent year over three-year to $131.15 despite scheduled service capacity increases of America's Best Employers for Diversity in 202118.7 percent.
–PartneredWe began work with The Smith Centerour ESG partner Schneider Electric in preparation for the Performing Arts aspublishing of our initial sustainability report later in the year.
–45 thousand new Allways® Allegiant World Mastercard® cardholders in first quarter 2022, the highest number of additions in a sponsor of the annual Heart of Education Awards honoring outstanding teachersquarter in Southern Nevada by awarding travel vouchers to 700 teachersCompany history.
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AIRCRAFT

The following table sets forth the aircraft in service and operated by us as of the dates indicated:
March 31, 2021December 31, 2020March 31, 2022December 31, 2021
A319A31935 34 A31935 35 
A320(1)
A320(1)
65 61 
A320(1)
77 73 
TotalTotal100 95 Total112 108 
(1) Does not include foureight aircraft of which we have taken delivery as of March 31, 2022, but were not yet in service as of March 31, 2021.that date.

As of March 31, 2021,2022, we had firm commitmentsare party to forward purchase four aircraft. We expectagreements for 51 aircraft with one Airbus A320 delivery of three of theseexpected in 2022, ten Boeing 737MAX aircraft in 20212023 and the remainingremainder of the Boeing aircraft under contract thereafter. Additionally, we are party to finance leases for six Airbus A320 aircraft expected to deliver in 2022.
22

NETWORK

As of March 31, 2021,2022, we were selling 580617 routes versus 520580 as of the same date last year,in 2021 and 450 as of March 31, 2019, which represents an 11.5a 6.4 and 37.1 percent increase.increase, respectively. Our total active number of origination cities and leisure destinations (for operating routes) were 9799 and 32,33, respectively, as of March 31, 2021. During the first quarter, we announced the addition of a new base in Austin, Texas, beginning base operations in November 2021, which is expected to house three A320 aircraft.2022.

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Our unique model is predicated around expanding and contracting capacity to meet seasonal travel demands. We are maintainingmaintained a broad network and selling presence. We consistently monitor flights to assess for cash profitability.presence during the pandemic and have grown our network as air travel is recovering.
23

TRENDS

COVID-19
The COVID-19 pandemic has significantly impacted our operating results for the three months ending March 31,in 2020 and 2021 and willwe suffered numerous cancellations due to the effect of the Omicron variant on flight crews into first quarter 2022. COVID-19 may continue to do soimpact our operations into the future. Air traffic demand is down substantially and base air fares are down as well. We cannot predict when air travel will return to customary levels or at what pace. In the meantime, our revenues will be adversely affected. We believe that demand in the foreseeable future will continue tocould fluctuate in response to fluctuations in COVID-19 cases, new variationsvariants of the virus, hospitalizations, deaths, treatment efficacy, and the availability of vaccines.vaccines, CDC recommendations, and government restrictions.

Strong Demand Momentum

As concerns over COVID-19 have declined, we saw significant increases in load factors and average total fare per passenger in March which are continuing into second quarter.

Aircraft Fuel
The cost of fuel is volatile, as it is subject to many economic and geopolitical factors we can neither control nor predict. Significant increases in fuel costs could materially affect our operating results and profitability. We have not sought to use financial derivative products to hedge our exposure to fuel price volatility, nor do we have any plans to do so in the future.

The cost per gallon of fuel began to increase significantly in 2021 and the increases were exacerbated by the geopolitical impact of the war in Ukraine. As a result, the average fuel cost per gallon increased by 65.1 percent in first quarter 2022 over first quarter 2021 and 43.5 percent over first quarter 2019. We expect high fuel costs will continue to impact our total costs and operating results.

Network Growth
Despite the pandemicpandemic and airline industry challenges, since the beginning of 2021 and through March 31, 2021,2022, we have announced service on 50on 123 new routes, 17 hyper seasonal routes, and to threeeight new cities, includingincluding seasonal and temporary routes. We will continue to manage capacity to meet demand, which we believe is a core strength of our business model. However, we have pulled back some of our growth in 2022 due to staffing challenges as mentioned below.

Boeing Agreement

In December 2021, we signed an agreement with The Boeing Company to purchase 50 newly manufactured 737MAX aircraft scheduled to be delivered in 2023 to 2025 with options to purchase an additional 50 737’s. We believe this new aircraft purchase is complimentary with our low cost strategy based on of our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, expected fuel savings and operational reliability from the use of these new aircraft.

Operations

Staffing challenges and employee call-outs continue to impact our operations and costs and we have pulled back some of our planned growth for 2022 as a result. We believe these issues are not unique to Allegiant nor do we believe they are systemic. Our primary focus duringirregular operations costs are also impacted by our policy to compensate passengers for their inconvenience in addition to the ticket price, not generally done in the airline industry.

We are investing incrementally in our employee hiring and retention and our operations in an attempt to improve performance and this may put pressure on unit costs in the near term. However, if these problems persist, we may suffer reputational damage and incur higher costs for irregular operations.

Union Negotiations

The collective bargaining agreement with our pilots is currently amendable and the parties have begun to discuss the terms of a new labor agreement for this work group. The terms of any new collective bargaining agreement will impact our costs over the term of the contract.

Pilot Scarcity

The supply of pilots necessary for airline industry growth may be a limiting factor. The pandemic has beenresulted in more than 3,000 early pilot retirements across U.S. mainline and cargo carriers and the pipeline for new pilots does not appear at the present time to conserve cash. be sufficiently robust to replace retired pilots and to allow for projected industry growth. The ability to hire and retain pilots will be critical to our and the industry’s growth.

Engagement of Schneider Electric as ESG Consultant

We have suspended paymententered into a three-year partnership with Schneider Electric to help us develop an Environmental, Social and Governance (ESG) program including:

–Identifying and prioritizing relevant ESG topics through a materiality assessment
24

–Establishing ESG goals and environmental goal achievement plans
–Developing an inaugural ESG report referencing the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) frameworks
–Providing ongoing carbon emissions reporting of cash dividendsScope 1, 2 and stock buybacks.3 greenhouse gas (GHG) emissions
–Supporting the communications efforts around our ESG program

VivaAerobus Alliance

In December 2021, we announced plans for a fully-integrated commercial alliance agreement with VivaAerobus, designed to expand options for nonstop leisure air travel between our markets in the United States and Mexico. We and VivaAerobus have suspendedsubmitted a joint application to the DOT requesting approval of and antitrust immunity for the alliance. The transactions are also subject to clearance by the Mexican Federal Economic Competition Commission.

We and VivaAerobus currently expect to offer new routes under the alliance beginning in the first quarter of 2023, pending governmental approval of the applications.

Sunseeker Resort

We recommenced the construction of theour Sunseeker Resort in Southwest Florida in August 2021 and closed and disposed of our family entertainment centers. We have eliminated other nonessential expenditures and have renegotiated arrangementsconstruction is ongoing with outside vendors, allthe expectation to open the Resort in an effort to conserve cash until revenues more fully recover.second quarter 2023.
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Health and Safety

Amid various uncertainties and public concern during the COVID-19 pandemic, we have implemented the below measures to ensure health and safety for all traveling on our flights. Due to our focus on these health and safety measures, we were ranked by Safe Travel Barometer in August 2020 as the #1 airline among North American carriers and among the top five worldwide for best COVID-19 Traveler Safety Measures, with results based on an independent audit of more than 150 airlines.

–Maintain a comprehensive cleaning program for all aircraft that includes a regular schedule of standard and deep-clean procedures that exceed both CDC and Airbus guidance
–Aircraft receive regular treatment with an advanced antimicrobial protectant that kills viruses, germs and bacteria on contact for 14 days
–Utilize VOC (volatile organic compound) filters on board every aircraft, which remove additional organic compounds and ensure that cabin air is changed, on average, every three minutes, exceeding HEPA standards
–Require customers to wear face coverings through all phases of travel, including at the ticket counter, in the gate area and during flight
–Complimentary health and safety kits,which include a single-use face mask and cleaning wipes, available to all of our customers
–Crew members required to wear face masks on board and during any interaction with customers
–Social distancing principles at check-in, boarding and on-board to the extent practicable
–Treat hard surfaces in all office areas, including airport station offices, maintenance facilities, headquarters/administrative offices, withantimicrobial disinfectant/protectant, and utilize wall-mounted and handheld thermometers for employee and crew member temperature checks
–Partner with Quest Diagnostics to provide at home COVID-19 test kits to employees in the event local testing is not immediately available

RESULTS OF OPERATIONS

Comparison of three months ended March 31, 20212022 to three months ended March 31, 20202021

OperationsAs comparisons of our 2022 results to periods during 2021 reflect disproportionate changes due to the first quartercontinued impact of 2020 consisted of two months of pre-pandemic activitythe pandemic on air travel, and March 2020, which was substantially impacted by the pandemic. The entirety ofparticularly during first quarter 2021, was impacted by continuing reduced demand for air travel.we have also provided analysis of certain revenue and expense line items to 2019 results where helpful to understand trends in our performance.

Operating Revenue

Passenger revenue. For the first quarter 2021,2022, passenger revenue decreased 32.3increased 80.7 percent compared to first quarter 2020.the same period in 2021. This declineincrease was largely due to a significant decline inlower passenger demand related to COVID-19 as scheduledduring the first quarter 2021. Scheduled service passengers were down 26.4up 59.6 percent and scheduled service average base fare was down 8.8up 8.3 percent.

Passenger revenue for the first quarter 2022, as compared to first quarter 2019, increased by 10.5 percent, as passengers increased by 8.4 percent on an 18.7 percent increase in capacity resulting in a 5.0 percentage point decrease in load factor. Average scheduled service revenue per passenger increased by 1.9 percent over the same period in 2019 as a result of a 16.5 percent increase in air ancillary revenue per passenger.

The increase in air ancillary revenue per passenger was primarily driven by increased revenue from the sale of bundled products.

Third party products revenue. Third party products revenue for the first quarter 2021 decreased 14.72022 increased 65.0 percent compared to the first quarter 2020. This2021 and 31.1 percent compared to the first quarter 2019. The increase from 2021 is primarily due to decreased net revenue from boththe result of greater travel demand for rental cars and hotels asand increased Allways® Allegiant World Mastercard® revenues. Increased rental car and hotel rates combined with a result of fewer passengers33.2 percent increase in rental car days sold and with respect29.1 percent increase in room nights sold to hotel room revenue, particularly reductions in those traveling to Las Vegas. On a per passenger basis, third party products revenue was up 15.9 percent yeargenerate the substantial increase over year and 17.0 percent year over first quarter 2019.2021.

16The increase from 2019 is attributable to increased rental car rates (which more than offset the impact of fewer rental car days) and growth in our Allways® Allegiant World Mastercard® revenues.

Fixed fee contract revenue. Despite increased fixed fee flying for March Madness in the first quarter 2021, fixedFixed fee contract revenue for the first quarter 2021 decreased 13.82022 increased 74.0 percent compared to the same period in 20202021 as a result of a 16.0 percent increase in related departures due to decreaseslower charter activity during the pandemic. In addition, charter rates were lower in demand. The decreases in fixed fee revenue are related to COVID-19.2021.

Other revenue. OtherFixed fee contract revenue decreased 79.3 percent for the first quarter 2021 from the same period2022, as compared to 2019, increased by 26.6 percent as a result of a 4.9 percent increase in 2020. The decrease was due to decreasedrelated departures driven primarily by March Madness activity, in the non-airline subsidiaries including the closure of the family entertainment centers.higher charter rates and higher fuel cost passthroughs.

Operating Expenses

We primarily evaluate our expense management by comparing our costs per available seat mile (ASM) across different periods, which enables us to assess trends in each expense category. The following table presents unit costs on a per ASM basis, or CASM, for the indicated periods.periods, 2019 being included as a more representative pre-pandemic first quarter comparison. Excluding fuel on a per ASM basis provides management and investors the ability to measure and monitor our cost performance absent fuel price volatility. Both the cost and availability of fuel are subject to many economic and political factors beyond our control.
 Three Months Ended March 31,Percent
Unitized costs (in cents)20212020Change
Salary and benefits2.94 2.77 6.1 %
Aircraft fuel2.06 2.18 (5.5)
Depreciation and amortization1.08 1.07 0.9 
Station operations1.07 1.01 5.9 
Maintenance and repairs0.58 0.54 7.4 
Sales and marketing0.29 0.45 (35.6)
Aircraft lease rentals0.12 0.02 500.0
Other0.44 0.66 (33.3)
Payroll Support Programs grant recognition(2.28)— NM
Operating Special charges0.04 4.25 (99.1)
CASM6.34 12.95 (51.0)
Operating CASM, excluding fuel4.28 10.77 (60.3)
26

 Three Months Ended March 31,Percent Change
Unitized costs (in cents)202220212019YoYYo3Y
Aircraft fuel3.55 2.06 2.55 72.3 %39.2 %
Salaries and benefits2.90 2.94 3.05 (1.4)(4.9)
Station operations1.42 1.07 1.00 32.7 42.0 
Depreciation and amortization1.00 1.08 0.93 (7.4)7.5 
Maintenance and repairs0.60 0.58 0.58 3.4 3.4 
Sales and marketing0.48 0.29 0.54 65.5 (11.1)
Aircraft lease rentals0.13 0.12 — 8.3 NM
Other0.59 0.44 0.57 34.1 3.5 
Payroll Support Programs grant recognition— (2.28)— NMNM
Special charges0.000.04 — NMNM
CASM10.67 6.34 9.22 68.3 15.7 
Operating CASM, excluding fuel7.12 4.28 6.67 66.4 6.7 
Sunseeker Resort CASM0.06 0.02 0.05 200.0 20.0 
Operating CASM, excluding fuel and Sunseeker Resort activity7.06 4.26 6.62 65.7 6.6 
NM - Not meaningful


SalarySalaries and benefits expense. SalarySalaries and benefits expense increased $5.3$16.1 million, or 4.713.6 percent, for the first quarter 20212022 when compared to the same period in 2020.2021. The increase is primarily due to the classification of $9.5 million as COVID-19 related special chargesan 18.3 percent increase in the first quarter 2020 (consisting almost entirelynumber of salary and benefit expense) offset by a decline in full time equivalent employees of 9.9 percent whenfrom the first quarter 2021 and higher wages offset by the employee retention tax credit recognized in 2022.

When compared to March 31, 2020.the same period in 2019, salaries and benefits expense increased by $14.6 million or 12.2 percent on a 16.3 percent increase in the number of full time equivalent employees year over three-year.

Aircraft fuel expense. Aircraft fuel expense decreased $6.0increased $81.3 million, or 6.798.1 percent, for the first quarter 20212022 compared to first quarter 2020 as2021. This is primarily due to a 65.1 percent increase in average fuel cost per gallon was relatively flat year over year. Systemand a 20.3 percent increase in fuel gallons consumed decreased by 6.4 percent on a 1.315.1 percent decreaseincrease in ASMs. Fuel efficiency (measuredcapacity.

When compared to the same period in 2019, aircraft fuel expense increased by 64.7 percent as ASMsaverage fuel cost per gallon)gallon increased 5.543.5 percent, year over yearASM's increased 18.2 percent, and fuel gallons consumed increased 15.0 percent.

Station operations expense. Station operations expense for the first quarter 2022 increased $22.7 million, or 52.6 percent compared to the same period in 2021 due to fuel saving initiatives, as well as less weight on manyincreased departures of our flights,10.9 percent and increased costs associated with irregular operations.

As compared to the same period in 2019, station operations expense increased by $26.8 million or 68.7 percent due to a 18.5 percentage point decrease13.1 percent increase in load factor as compareddepartures, increased costs associated with irregular operations and airport fees.

Irregular operations costs in 2022 were significantly attributable to COVID absences due to the first quarter 2020.Omicron variant in January and February. These absences resulted in numerous flight cancellations. The amount of irregular operations costs is significantly impacted by our decision to compensate impacted passengers for their inconvenience in addition to the ticket price.

Depreciation and amortization expense. Depreciation and amortization expense for the first quarter 2021 was relatively flat2022 increased by 7.3 percent as compared to the first quarter 2020 with a 1.2 percent decrease due to2021 as the retirement and sale lease-back transactionsaverage number of aircraft during 2020.owned and in service increased 8.6 percent year over year.

Station operations expense. Station operations expense for the first quarter 2021 increased $2.1 million, or 5.1 percent comparedCompared to the same period in 2020 primarily due to a 12.72019, depreciation and amortization expense increased $10.2 million or 28.1 percent increaseas the average number of aircraft owned and in airport and landing fees.service increased 28.8 percent year over three-year.

Maintenance and repairs expense. Maintenance and repairs expense for the first quarter 20212022 increased $1.6$4.4 million, or 7.219.0 percent, compared to the same period in 2020.2021. Routine maintenance costs increased as the average number of aircraft utilizationin service increased 12.5 percent year over year and there was up 1.4a 15.1 percent during the quarter and we incurred incremental costs preparing our fleet to operate at full capacity again.increase in ASMs.

Compared to the same period in 2019, maintenance and repairs expense increased by $5.0 million or 21.9 percent primarily due to a 37.6 percent increase in the average number of aircraft in service and an 18.2 percent increase in ASM's year over three-year.

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Sales and marketing expense. Sales and marketing expense for the first quarter 2021 decreased2022 increased by 37.192.5 percent compared to the same period in 2020,2021, due to an increase in net credit card fees as a decreaseresult of an 80.7 percent increase in passenger revenue year-over-year as well as reduced advertising spend in early 2021 during the pandemic.

Compared to the same period in 2019, sales and marketing expense increased by 6.8 percent due to an increase in net credit card fees as a result of a 32.310.5 percent decreaseincrease in passenger revenue year-over-year as well as effortscompared to more adeptly deploy advertising spend during the pandemic.same period in 2019.

Other operating expense. Other expense decreased $8.9increased $8.4 million for the first quarter 20212022 compared to the first quarter 2020, mostly due2021 attributable to decreased activityincreased service and incremental increases in our non-airline subsidiaries.employee training activity.

17

Payroll Support ProgramPrograms grant recognition.recognition We. During 2021, we received a total of $91.8$203.9 million in direct grants during the first quarter 2021funds through the Payroll Support Extension Program. The direct grants werepayroll support programs and recognized as a credit to operating expense on our statement of income, over the periods for which the funds were intended to compensate. We recognized the entire $91.8 million as an offset to operating expense on our statement of income during the first quarter of 2021.

Special charges. Special charges of $1.7 million The funds were recorded within operating expenses for the first quarter 2021 compared to $172.9 million for the same periodfully utilized in 2020. The special charges relate to expenses that2021. There were unique and specific to COVID-19. These chargesno such funds received in 2021 include accelerated depreciation on airframes and engines resulting from an accelerated retirement plan, and losses within our non-airline subsidiaries. Special charges recorded in the first quarter 2020 primarily consisted of impairments related to our non-airline subsidiaries. See Note 2 of Notes to Consolidated Financial Statements (unaudited) for further information.2022.

Interest Expense

Interest expense for the quarter ended March 31, 2021 declined2022 increased by $1.4$3.0 million, or 7.517.9 percent as a result of declines in LIBOR impacting our variableover first quarter 2021, due to new fixed rate debt.debt and finance lease transactions entered into since first quarter 2021.

Income Tax Expense

Our effective tax rate was 20.825.4 percent and 74.720.8 percent for the three months ended March 31, 20212022 and 2020,2021, respectively. The effective tax rate for the three months ended March 31, 20212022 differed from the statutory federalFederal income tax rate of 21.0 percent primarily due to state income taxes;taxes and the impact of ASU 2016-09 related to share-based payments; and reserve for uncertainpermanent tax positions. The effective tax rate for the three months ended March 31, 2020 was primarily due to the tax accounting impactdifferences of the CARES Act which includes a $39.6 million discrete federal income tax benefit related to the full utilization of 2018 and 2019 net operating losses against taxable income in earlier years in which 35.0 percent was the enacted tax rate; the ability to carryback the 2020 net operating loss at a 35.0 percent rate applicable in earlier years; a deferred tax remeasurement related to the 2020 tax year; and state taxes. While we expect our effective tax rate to be fairly consistent in the near term, it will vary depending on recurring items such as the amount of income we earn in each state and the state tax rate applicable to such income. Discrete items during interim periods may also affect our tax rates.none are individually significant.
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Comparative Consolidated Operating Statistics

The following tables set forth our operating statistics for the periods indicated:
Three Months Ended March 31,PercentThree Months Ended March 31,
Percent Change (1)
20212020
Change(1)
202220212019YoYYo3Y
Operating statistics (unaudited):Operating statistics (unaudited):   Operating statistics (unaudited):   
Total system statistics:Total system statistics:   Total system statistics:   
PassengersPassengers2,334,503 3,175,450 (26.5)Passengers3,734,262 2,334,503 3,450,278 60.0 %8.2 %
Available seat miles (ASMs) (thousands)Available seat miles (ASMs) (thousands)4,013,989 4,067,671 (1.3)Available seat miles (ASMs) (thousands)4,620,144 4,013,989 3,910,239 15.1 18.2 
Operating expense per ASM (CASM) (cents)Operating expense per ASM (CASM) (cents)6.34 12.96 (51.1)Operating expense per ASM (CASM) (cents)10.67 6.34 9.22 68.3 15.7 
Fuel expense per ASM (cents)Fuel expense per ASM (cents)2.06 2.18 (5.5)Fuel expense per ASM (cents)3.55 2.06 2.55 72.3 39.2 
Operating CASM, excluding fuel (cents)Operating CASM, excluding fuel (cents)4.28 10.77 (60.3)Operating CASM, excluding fuel (cents)7.12 4.28 6.67 66.4 6.7 
ASMs per gallon of fuelASMs per gallon of fuel90.4 85.7 5.5 ASMs per gallon of fuel86.5 90.4 84.1 (4.3)2.9 
DeparturesDepartures25,684 26,312 (2.4)Departures28,494 25,684 25,200 10.9 13.1 
Block hoursBlock hours60,373 62,123 (2.8)Block hours69,655 60,373 59,819 15.4 16.4 
Average stage length (miles)Average stage length (miles)898 895 0.3 Average stage length (miles)920 898 904 2.4 1.8 
Average number of operating aircraft during periodAverage number of operating aircraft during period97.3 93.5 4.1 Average number of operating aircraft during period109.5 97.3 79.6 12.5 37.6 
Average block hours per aircraft per dayAverage block hours per aircraft per day7.4 7.3 1.4 Average block hours per aircraft per day7.1 7.4 8.3 (4.1)(14.5)
Full-time equivalent employees at end of periodFull-time equivalent employees at end of period3,998 4,436 (9.9)Full-time equivalent employees at end of period4,728 3,998 4,067 18.3 16.3 
Fuel gallons consumed (thousands)Fuel gallons consumed (thousands)44,426 47,479 (6.4)Fuel gallons consumed (thousands)53,438 44,426 46,474 20.3 15.0 
Average fuel cost per gallonAverage fuel cost per gallon$1.86 $1.87 (0.5)Average fuel cost per gallon$3.07 $1.86 $2.14 65.1 43.5 
Scheduled service statistics:Scheduled service statistics:  Scheduled service statistics:  
PassengersPassengers2,323,302 3,154,606 (26.4)Passengers3,709,104 2,323,302 3,421,538 59.68.4
Revenue passenger miles (RPMs) (thousands)Revenue passenger miles (RPMs) (thousands)2,166,417 2,925,482 (25.9)Revenue passenger miles (RPMs) (thousands)3,558,045 2,166,417 3,191,045 64.211.5
Available seat miles (ASMs) (thousands)Available seat miles (ASMs) (thousands)3,921,090 3,964,009 (1.1)Available seat miles (ASMs) (thousands)4,512,315 3,921,090 3,802,132 15.118.7
Load factorLoad factor55.3 %73.8 %(18.5)Load factor78.9 %55.3 %83.9 %23.6(5.0)
DeparturesDepartures24,947 25,484 (2.1)Departures27,637 24,947 24,344 10.813.5
Block hoursBlock hours58,851 60,346 (2.5)Block hours67,829 58,851 57,963 15.317.0
Total passenger revenue per ASM (TRASM) (cents)(2)
6.89 9.96 (30.8)
Average fare - scheduled service(3)
$58.38 $64.02 (8.8)
Average fare - air-related charges(3)
$52.11 $56.10 (7.1)
Average seats per departureAverage seats per departure175.6 173.6 171.4 1.22.5
Yield (cents) (2)
Yield (cents) (2)
6.59 6.26 7.47 5.3(11.8)
Total passenger revenue per ASM (TRASM) (cents)(3)
Total passenger revenue per ASM (TRASM) (cents)(3)
10.78 6.89 11.50 56.5(6.3)
Average fare - scheduled service(4)
Average fare - scheduled service(4)
$63.22 $58.38 $69.64 8.3(9.2)
Average fare - air-related charges(4)
Average fare - air-related charges(4)
$61.87 $52.11 $53.10 18.716.5
Average fare - third party productsAverage fare - third party products$5.86 $5.06 15.8 Average fare - third party products$6.06 $5.86 $5.01 3.421.0
Average fare - totalAverage fare - total$116.35 $125.18 (7.1)Average fare - total$131.15 $116.35 $127.75 12.72.7
Average stage length (miles)Average stage length (miles)902 900 0.2 Average stage length (miles)926 902 908 2.72.0
Fuel gallons consumed (thousands)Fuel gallons consumed (thousands)43,306 46,105 (6.1)Fuel gallons consumed (thousands)52,110 43,306 45,068 20.315.6
Average fuel cost per gallonAverage fuel cost per gallon$1.82 $1.87 (2.7)Average fuel cost per gallon$3.01 $1.82 $2.13 65.441.3
Rental car days soldRental car days sold275,584 481,046 (42.7)Rental car days sold367,094 275,584 471,598 33.2(22.2)
Hotel room nights soldHotel room nights sold56,208 92,004 (38.9)Hotel room nights sold72,539 56,208 105,015 29.1(30.9)
Percent of sales through website during periodPercent of sales through website during period93.3 %93.6 %(0.3)Percent of sales through website during period96.0 %93.3 %93.6 %2.72.4
(1) Except load factor and percent of sales through website during period, which are presented as a percentage point change.
(2) Defined as scheduled service revenue divided by revenue passenger miles.
(3) Various components of this measure do not have a direct correlation to ASMs. This measure is provided on a per ASM basis so as to facilitate comparison with airlines reporting revenues on a per ASM basis.
(3)(4) Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.

1929

LIQUIDITY AND CAPITAL RESOURCES

Current liquidity

Cash, cash equivalents and investment securities (short-term and long-term) increased to $728.0 million$1.21 billion at March 31, 2021,2022, from $685.2 million$1.19 billion at December 31, 2020.2021. Investment securities represent highly liquid marketable securities which are available-for-sale.

Restricted cash represents escrowed funds under fixed fee contracts, escrowed project funds and cash collateral against letters of credit required by hotel properties for guaranteed room availability, airports and certain other parties. Under our fixed fee flying contracts, we require our customers to prepay for flights to be provided by us. The prepayments are escrowed until the flight is completed and are recorded as restricted cash with a corresponding amount reflected as air traffic liability.

During the first quarter 2021, we received a total of $91.8 million in assistance through the Payroll Support Extension Program.

We have suspended share repurchases and our quarterly cash dividend, as part of cash conservation efforts in response to the effects of COVID-19 on our business. In connection with our receipt of financial support under the payroll support program, we agreed not to repurchase shares or pay cash dividends through September 30, 2022.

We believe we have more than adequate liquidity resources through our cash balances, operating cash flows borrowings and expected tax refunds,borrowings, to meet our future contractual obligations. We will continue to consider raising funds through debt financing on an opportunistic basis.

Debt

Our debt and finance lease obligations balance, without reduction for related issuance costs, decreasedincreased from $1.68$1.77 billion as of December 31, 20202021 to $1.64$1.80 billion as of March 31, 2021.2022. During the first quarter of 2021,three months ended March 31, 2022, we borrowed $105.0entered into finance leases for $68.2 million and we made principal payments of $151.5 million, including $53.9 million on our senior secured revolving credit facility that matured on March 31, 2021 and a $54.8 million prepayment of debt secured by aircraft.

Despite substantially lower revenues caused by the pandemic, our total debt and finance lease obligations declined by 2.7% from December 31, 2020 until March 31, 2021.$37.3 million.

Sources and Uses of Cash

Operating Activities. Operating cash inflows are primarily derived from providing air transportation and related ancillary products and services to customers. During the three months ended March 31, 2021,2022, our operating activities provided $168.0$176.0 million of cash compared to $106.3$168.0 million during the same period of 20202021. This change is mostly attributable to a $39.9 million increase in net income and a $41.7$49.6 million larger increase in air traffic liability.liability which more than offset a $14.8 million decrease in net income.

Investing Activities. Cash provided byused in investing activities was $35.7$109.8 million during the three months ended March 31, 20212022 compared to cash used of $106.9$35.7 million provided from investing activities for the same period in 2020.2021. The change is due to a $65.0$96.0 million year-over-year decrease in cash outlays for the purchase of property and equipment and an increase of $79.9 million of proceeds from maturities of investment securities, net of purchases.purchases, and $46.7 million related to aircraft pre-delivery deposits in first quarter 2022. Purchases of property and equipment were relatively flat year over year.

Financing Activities. Cash used by financing activities for the three months ended March 31, 20212022 was $47.2$37.6 million, compared to cash provided of $17.8$47.2 million for the same period in 2020.2021. The year-over-year change is mostly due to the net effect of debt activity, asresulted from principal payments exceeded debt proceeds by $47.2of $37.3 million during the three months ended March 31, 2021,2022, compared to $63.0$46.5 million of debt proceeds (net of related costs)principal payments in excess of principal paymentsdebt proceeds during the same period in 2020. Additionally, there were no share repurchases in the first quarter of 2021 (the share repurchase program was suspended) compared to $33.8 million during the first three months of 2020. Dividends paid decreased by $11.5 million year-over-year as dividend payments were also suspended due to the pandemic.2021.
30

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding future expenses, revenues, earnings, ASM growth, fuel consumption, expected capital expenditures, number of contracted aircraft to be placed in service in the future, the developmenttiming of aircraft deliveries and financingretirements, the implementation of a joint alliance with VivaAerobus, the development of our Sunseeker Resort, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate," “project,” “hope” or similar expressions.

20


Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the impact and duration of the COVID-19 pandemic on airline travel and the economy, liquidity issues resulting from the effect of the COVID-19 pandemic on our business, restrictions imposed on us a result of accepting government grants under the Payroll Support Programs,government payroll support programs, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on third parties to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed, the effect of economic conditions on leisure travel, debt covenants and balances, the ability to finance aircraft to be acquired, the ability to obtain necessary U.S. and Mexican government approvals to implement the announced alliance with VivaAerobus and to otherwise prepare to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, the ability to successfully develop and finance a resort in Southwest Florida, governmental regulation, increases in maintenance costs and cyclical and seasonal fluctuations in our operating results.

Any forward-looking statements are based on information available to us today and we undertake no obligation to publicly update any forward-looking statements, whether as a result of future events, new information or otherwise.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting estimates during the three months ended March 31, 2021.2022. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 20202021 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited).
31

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to certain market risks, including commodity prices (specifically aircraft fuel). The adverse effects of changes in these markets could pose potential losses as discussed below. The sensitivity analysis provided does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ.

Aircraft Fuel

Our results of operations can be significantly impacted by changes in the price and availability of aircraft fuel. Aircraft fuel expense for the three months ended March 31, 20212022 represented 32.633.3 percent of our total operating expenses. Increases in fuel prices, or a shortage of supply, could have a material impact on our operations and operating results. Based on our fuel consumption for the three months ended March 31, 2021,2022, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately $8.2$16.5 million. We have not hedged fuel price risk for many years.

Interest Rates

As of March 31, 2021,2022, we had $1.01$0.90 billion of variable-rate debt, including current maturities and without reduction for $16.8$11.0 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $2.8$2.2 million for the three months ended March 31, 2021.2022.
32

Item 4. Controls and Procedures

As of March 31, 2021,2022, under the supervision and with the participation of our management, including our chief executive officer ("CEO") and chief financial officer (“CFO”), we evaluated the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”) as of the end of the period covered by this report. Based on that evaluation, management, including our CEO and CFO, has concluded that our disclosure controls and procedures are designed, and are effective, to give reasonable assurance that the information we are required to disclose is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the CEO and the CFO, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ending March 31, 2021,2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

33

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

21

We are subject to certain legal and administrative actions we consider routine to our business activities. We believe the ultimate outcome of any pending legal or administrative matters will not have a material adverse impact on our financial position, liquidity or results of operations.

Item 1A. Risk Factors

We have evaluated our risk factors and determined there are no changes to those set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 20202021 and filed with the Commission on March 1, 2021.2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Our Repurchases of Equity Securities

(a) Not applicable

(b) Not applicable

(c) We did not repurchase any common stock during the first quarter 2021.2022.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None
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Item 6. Exhibits
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Labels Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
(1) Incorporated by reference to Exhibit filed with Registration Statement #333-134145 filed by the Company with the Commission and amendments thereto.
(2) Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on May 12, 2020.
(3) Incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Commission on March 1, 2021.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALLEGIANT TRAVEL COMPANY
Date:May 4, 20215, 2022By:/s/ Gregory Anderson
Gregory Anderson, as duly authorized officer of the Company (Chief Financial Officer) and as Principal Financial Officer
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