Key Highlights:
- Allegiant Air executives warn that a prolonged government shutdown could become a “huge, huge problem” for the airline industry, especially if it extends into the Thanksgiving holiday.
- While the airline has not yet seen a significant impact on bookings, it anticipates potential disruptions within the next three weeks.
- The warning comes alongside industry-wide concerns about aviation safety, with unpaid TSA agents and air traffic controllers creating stress on the national system.
- Despite reporting a record 4.6 million passengers in its third quarter, Allegiant Travel Co. posted a net loss of $43.6 million.
Shutdown Could Ground Holiday Travel
Las Vegas-based Allegiant Air has sounded the alarm over the ongoing federal government shutdown, warning of severe consequences for the airline industry if a resolution isn’t reached soon. In a third-quarter earnings call, company President Robert “BJ” Neal stated that while the airline is currently stable, a protracted shutdown could cause significant disruptions.
“I do feel pretty confident that the longer this drags on, the more likely we are to see impact,” Neal said. “And certainly, if it does stretch all the way to Thanksgiving, that would be a huge, huge problem for the industry as a whole.”
Although Allegiant primarily operates out of smaller airports with fewer federal employees, the airline believes the effects of a shutdown could become unavoidable within three weeks.
Industry-Wide Anxiety Mounts
Allegiant’s concerns are not isolated. Neal’s comments join a growing chorus of airline executives urging Congress to end the stalemate, which has entered its 35th day.
United Airlines CEO Scott Kirby recently highlighted the increasing stress on the aviation system. He warned that with Transportation Security Administration (TSA) agents and air traffic controllers working without pay, the risk to both aviation safety and the national economy is growing. So far, operations at Allegiant’s key hub, Harry Reid International Airport in Las Vegas, have not been affected, but fears remain that cascading delays from other airports could eventually impact the city.
Record Passenger Numbers Despite Financial Loss
The shutdown warning comes as Allegiant reported mixed results for its third quarter, which ended September 30. While traditionally its weakest quarter, the airline achieved a record 33,000 departures and served 4.6 million passengers. It also boasted a controllable completion factor of 99.9 percent, an industry-leading figure.
However, these operational successes did not translate to profit. Allegiant Travel Co., the airline’s parent company, reported a net loss of $43.6 million, or $2.41 a share, on revenue of $561.9 million. This is an increased loss compared to the same period in 2024, which saw a loss of $36.8 million.
Future Outlook
Despite the current challenges, Allegiant Travel CEO Greg Anderson noted that holiday demand is “shaping up nicely,” and the company anticipates a double-digit operating margin for the fourth quarter. The airline is also continuing its fleet modernization, transitioning from Airbus jets to Boeing 737s, which will add seats with more legroom to help generate additional revenue.
Image Referance: https://www.reviewjournal.com/business/tourism/allegiant-air-concerned-about-government-shutdown-as-thanksgiving-nears-3532825/