With nose-bleed oil prices, we've seen a string of airline bankruptcies. But as for Allegiant Air (NASDAQ: ALGT) things are much different. In Q1, operating revenues increased 58% to $133.1 million and there was a $9.7 million profit, or $0.47 per share.
So what's going on here? Basically, the company has a strong management team and an innovative business model. That is, the airline markets primarily to smaller cities for leisure travel, to places like Las Vegas and Orlando. The fares are cheap and the flights are non-stop.
What's more, Allegiant has its own reservation system. This not only cuts out the middleman but allows for ancillary revenues. This means charging for baggage, beverages, snacks, as well as hotels, car rentals and so on. It also helps that Allegiant has been aggressive with enhancing its load factors.
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