Jumpstart 2017 Lukas Johnson SVP, Commercial June 2017
Forward looking statements This presentation as well as oral statements made by officers or directors of Allegiant Travel Company, its advisors and affiliates (collectively or separately, the "Company ) will contain forwardlooking statements that are only predictions and involve risks and uncertainties. Forward-looking statements may include, among others, references to future performance and any comments about our strategic plans. There are many risk factors that could prevent us from achieving our goals and cause the underlying assumptions of these forward-looking statements, and our actual results, to differ materially from those expressed in, or implied by, our forward-looking statements. These risk factors and others are more fully discussed in our filings with the Securities and Exchange Commission. Any forward-looking statements are based on information available to us today and we undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. The Company cautions users of this presentation not to place undue reliance on forward-looking statements, which may be based on assumptions and anticipated events that do not materialize. 2
Jumpstart 2017 Company overview Fleet / network changes Industry overview ULCC growth / differences Questions 3
Advantages over the typical carrier Leisure customer Will travel in all economic conditions Vacations are valued price dependent Small/medium cities Filling a large void Increasing opportunity - industry restructuring Diversity of network - minimizes competition Flexibility Adjust rapidly to changing macro (fuel/economy) Changes in capacity - immediate impact on price Minimize threat of irrational behavior from others Low cost fleet used aircraft Match capacity to demand, highly variable Relatively low capital needs, higher free cash flow Can grow and return cash to shareholders Built to be different Leisure customer Underserved markets Little competition Low cost aircraft Low frequency/variable capacity Unbundled pricing Closed distribution Bundled packages Highly profitable 4
A very large niche Stars leisure destinations Based on current published schedule through November 14, 2017 382 routes, 89 operating aircraft 98 small/medium cities, 20 leisure destinations 5
Low frequency model System block hours/ac/day 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 Leisure = seasonality Small cities = low frequency (1) Avg. block hours/ac/day Weekly market frequency % of total departures 80.0% 70.0% Peak Off peak 60.0% 50.0% 40.0% 30.0% 20.0% 4.0 10.0% 3.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0.0% 2x 3x 4x 5x or greater 2013 2014 2015 2016 2017E Weekly frequency of departures 2013 2014 2015 2016 Aircraft - 2 66 70 80 84 1 - Peak = peak is defined as 11/23 12/1, 12/21 1/3, 2/18 4/14, 6/3 8/18. Remaining is off peak 2 Aircraft are end of year 6
Low costs even with low utilization 8.5 LTM 1Q17 CASM ex fuel vs daily aircraft utilization 8.0 8.0 JBLU CASM ex fuel (cents) 7.5 7.0 6.5 6.0 6.1 ALGT 7.3 ALK 5.5 5.5 SAVE 5.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 Average daily aircraft utilization LTM (block hours per day) As of 1Q 2017, ALGT Allegiant, JBLU JetBlue, ALK Alaska mainline, SAVE Spirit 7
Revenue components $140 $137.23 Average fare - total $6.00 Average fare - ancillary third party products $130 $129.35 $4.00 $4.56 $4.29 $4.08 $4.11 $120 $117.96 $117.05 $110 2014 2015 2016 LTM 1Q17 $2.00 2014 2015 2016 LTM 1Q17 $90 $80 Average fare - scheduled service $91.30 $78.63 $50.00 Average fare - ancillary air-related charges $41.37 $46.43 $45.40 $45.59 $70 $68.47 $67.71 $40.00 $60 $50 2014 2015 2016 LTM 1Q17 $30.00 2014 2015 2016 LTM 1Q17 All revenue is revenue per scheduled passenger 8
Unique business model and results Highly resilient and profitable Profitable last 56 quarters (1) 2016 EBITDA $477mm (2) 2016 Return on Capital 22.9% (2) Strong balance sheet Rated BB and Ba3 (3) Adjusted debt/ EBITDAR 1.7x (2) $134mm returned to shareholders 2016 $89 mm in share repurchase authority as of 1/31/17 Recurring quarterly cash dividend of $0.70 per share Management owns >20% (1) Excluding non-cash mark to market hedge adjustments prior to 2008 and 4Q06 one time tax adjustment (2) See GAAP reconciliation and other calculations in Appendix (3) Corporate rating of Ba3 by Moody s and BB by Standard & Poor s 9
Fleet / Network changes June 2017
Fleet plan AC count EOY 120 100 80 60 40 Total 84 16 17 Aircraft by seat count Total 89 20 31 9 22 Total 94 Total 100 28 16 36 Total 110 5 69 20 47 38 35 36 36 0 12 4 2016 2017E 2018E 2019E 2020E 757 (215 seats) MD80 (166 seats) A319 (156 seats) A320 (186 seats) A320 (177 seats) Estimated aircraft count at end of year 186 seat density project dependent on outside supply chains and could impact the schedule 11
Airbus transition network impact Airbus aircraft allows previously marginal flying to be profitable Longer routes (~1650 stage on MD, ~1800 on AB) Off-peak day flying (Wed/Sat 2x markets 1% of ASMs in 2015, 7% in 2017) Off-peak season flying (Sept/Oct beach markets) Previously canceled markets (please don t re-pitch every canceled route) 2016 Utilization by A/C type Peak Days Off-Peak Days Total Airbus 11.1 7.3 9.5 Non-Airbus 8.5 2.0 5.7 All Aircraft 9.5 4.1 7.2 Peak days: Thursday, Friday, Sunday, Monday Off-peak days: Tuesday, Wednesday, Saturday 12
Evolving our network Seven new airports announced in last 12 months CLE DEN EWR OGS SDF SJU TTN New seasonal base Destin / Fort Walton Beach for 2017 Triangle routings (e.g. CVG-BWI-SAV and reverse) New destination types (EWR/BWI, DEN and SJU) 13
61 Route launches over last 12 months Blue: Year-round Orange: Seasonal 14
Industry update June 2017
Operating Margin: 1Q17 v 1Q16 40% 30% 1Q16 Operating Margin Fuel Labor Other Revenue offset 1Q17 Operating Margin 20% 10% - (10%) 16
2017 Allegiant pilot contract impact 17
YoY Domestic Capacity Growth 1Q 2017 Capacity Growth by Carrier Type Capacity Growth by Market Type 30% 5% 25% 4% 20% 3% 15% 10% 2% 5% 1% 0% Medium Large Small 0% Medium Large Small (5%) (1%) Ultra Low Cost Low Cost Hybrid Network Ultra Low Cost Low Cost Hybrid Network 18
CAD stabilizing 1.50 USD vs CAD History: 1 USD = x CAD 1.40 1.30 1.20 1.10 1.00 0.90 0.80 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 2013 2014 2015 2016 2017 19
ULCC growth / differences June 2017
ULCC market & segment by size & frequency % of Total Markets 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Market Distribution by Market Size (PDEW) 0% NK F9 G4 <100 100-249 250-499 500-999 1,000-1,999 >=2,000 % of Segments 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ULCC Segment Distribution by Frequency NK F9 G4 2x weekly 3x-4x weekly 5x-6x weekly 21
Projected ULCC fleet and market share 400 300 200 138 154 168 178 191 215 245 276 297 330 366 396 15% 12% 9% 6% Segments 3,500 3,000 2,500 2,000 1,500 100 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 G4 NK F9 ULCC Market Share 3% 0% 1,000 500 [CELLRANG [CELLRANG [CELLRANG [CELLRANG [CELLRANG E] [CELLRANG E] E] E] E] 0 E] 2007 2009 2011 2013 2015 2017 2019 2021 Domestic Network Carrier Segments Domestic ULCC Segments % of ULCC Segments Overlapped by Network Carriers Source: Frontier Airlines S-1, Aerotransport.org, Allegiant internal fleet plan, Spirit investor relations Source: Flightglobal schedules, ULCC segment growth based on March Spirit Investor Presentation ULCC growth outpacing network carrier growth On track for nearly 55% of ULCC segments overlapped by network carriers in 2021 Frontier estimates 650 new medium-sized markets through 2040 22
Basic economy rollout UA & AA 23
Basic economy pricing UA & AA 24
Questions? 25