Allegiant Travel Company
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Item 1. Business
Overview
We are a leisure travel company focused on providing travel and leisure services and products to residents of under-served cities in the United States. Our vision is to be the leading airline in the communities we serve, offering reliable, nonstop travel at unbeatable value. We were founded in 1997 and, in conjunction with our initial public offering in 2006, we incorporated in the state of Nevada. Our unique business model provides diversified revenue streams from various travel services and product offerings which distinguish us from other travel companies. We operate a low-cost, low utilization passenger airline marketed primarily to leisure travelers in under-served cities, allowing us to sell air transportation both on a stand-alone basis and bundled with the sale of air-related and third party services and products. In addition, we provide air transportation under fixed fee flight arrangements. Our developed nation-wide route network, pricing philosophy, direct distribution, award-winning loyalty programs, advertising, and product offerings built around relationships with premier leisure companies, are all intended to appeal to leisure travelers and make it attractive for them to purchase air travel and related services and products from us.
Below is a brief description of the travel services and products we provide to our airline customers:
Scheduled service air transportation. We provide scheduled air transportation on limited-frequency, nonstop flights predominantly between under-served cities and popular leisure destinations. As of February 1, 2026, we were selling travel on 578 routes to 126 cities. Of these routes, 433 of them are unique city pairs which do not have any current nonstop competition with other airlines. As of February 1, 2026, our operating fleet consisted of 16 Boeing 737 series aircraft and 106 Airbus A320 series aircraft. In this document, references to "Airbus A320 series aircraft" are intended to describe both Airbus A319 and A320 aircraft.
Ancillary air-related products and services. We provide unbundled air-related services and products in conjunction with air transportation for an additional cost to customers. These optional air-related services and products include larger seats, baggage fees, advance seat assignments, our own travel protection product, change fees, use of our call center for purchases, priority boarding, a customer convenience fee, food and beverage purchases on board, and other air-related services. We also offer certain bundles of air-ancillary products where customers can choose popular combinations of these products at a discounted price to the combined individual prices. The revenue from ancillary air-related products and services is reflected in the passenger revenue income statement line item, along with scheduled service air transportation revenue and travel point redemptions from our co-brand Allegiant credit card and our non-card loyalty program.
Third party products and services. We offer third party travel products such as hotel rooms, rental cars, and travel insurance from a third party insurer for sale to our passengers. The marketing component of revenue related to our co-brand Allegiant credit card is also included in this category.
Fixed fee contract air transportation. We provide air transportation through fixed fee agreements and charter service on a year-round and ad hoc basis.
Proposed Acquisition of Sun Country Airlines
On January 11, 2026, we announced that we plan to acquire Sun Country Airlines Holdings, Inc. (“Sun Country”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, each existing share of Sun Country common stock will be converted into the right to receive (i) $4.10 in cash, without interest and (ii) 0.1557 shares of our common stock.
The Merger Agreement provides that, immediately following the effective date of the proposed acquisition of Sun Country, we will increase the size of our board of directors by three members, which will be comprised of three directors designated by Sun Country, one of whom will be Jude Bricker, the president and chief executive officer of Sun Country, and two of whom will be current members of Sun Country’s board of directors who are reasonably acceptable to our nominating and governance committee.
Completion of the proposed acquisition of Sun Country is subject to the satisfaction or waiver of certain closing conditions, including, among other things that (1) our stockholders approve the issuance of shares of our common stock pursuant to the Merger Agreement, and the Sun Country stockholders approve the Merger Agreement, (2) the waiting period applicable to the closing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (and any customary timing agreement with any governmental entity to toll, stay or extend such waiting period, or to delay or not to consummate the mergers) will have expired or been terminated, (3) all consents, registrations, notices, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders and authorizations required to be obtained from, or delivered to, as applicable, the U.S. Federal Aviation Administration (“FAA”), the U.S. Department of Transportation (“DOT”) and the U.S. Department of Homeland Security (“DHS”), including the Transportation Security Administration ("TSA"), in connection with the closing will have been obtained or delivered, as applicable, (4) there will be no law in effect, whether preliminary, temporary or permanent, which makes the proposed transaction illegal or prohibits or otherwise prevents the closing, (5) the registration statement to be filed by us with the Securities and Exchange Commission (the “SEC”) pursuant to the Merger Agreement, will have become effective in accordance with the provisions of the Securities Act of 1933, as amended, and no stop order
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suspending the effectiveness of the registration statement will have been issued by the SEC and remain in effect and no proceeding to that effect will have been commenced or threatened unless subsequently withdrawn; and (6) the shares of our common stock to be issued in the proposed acquisition of Sun Country will have been authorized and approved for listing on Nasdaq.
We and Sun Country each make certain customary representations, warranties and covenants, as applicable, in the Merger Agreement, including, among others, covenants regarding the conduct of our respective businesses during the pendency of the transactions contemplated by the Merger Agreement.
In addition, we and Sun Country have agreed, among other things, that we will not (1) solicit alternative transactions, (2) participate in or facilitate any discussions or negotiations relating to alternative transactions, (3) furnish any non-public information in connection with alternative transactions or (4) enter into any agreement relating to alternative transactions, except under limited circumstances described in the Merger Agreement. However, in certain circumstances, we or Sun Country may terminate the Merger Agreement to enter into a definitive agreement for a superior proposal as specified in the Merger Agreement.
The Merger Agreement contains certain customary termination rights for us and Sun Country, including, without limitation, a right for either party to terminate if the proposed acquisition of Sun Country is not consummated on or before January 11, 2027, subject to certain extensions if needed to obtain required regulatory approvals, or if a required stockholder approval is not obtained. If the Merger Agreement is terminated under certain circumstances relating to a change of recommendation by our board or by our entry into a definitive agreement for a superior proposal, we will be required to pay Sun Country a termination fee of $52,230,000. Conversely, if the Merger Agreement is terminated under certain circumstances relating to a change of recommendation by the Sun Country board or by Sun Country’s entry into a definitive agreement for a superior proposal, Sun Country will be required to pay us a termination fee of $33,020,000. In addition, we will be required to pay Sun Country a termination fee of $30,000,000 if the Merger Agreement is terminated under certain circumstances relating to the failure of the parties to obtain the expiration or termination of the waiting period under the HSR Act (“HSR Clearance”), or if there is a final, non-appealable law or order prohibiting the consummation of the transactions relating to HSR Clearance.
If the Merger Agreement is terminated under certain circumstances in which a required stockholder approval is not obtained, either party may be required to reimburse the other party’s expenses up to $11,000,000. The Merger Agreement also provides the methodology by which certain expenses will be borne.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to full text of the Merger Agreement, which has previously been filed with the SEC.
Allegiant ONE
We continue to sharpen our focus on our strength - our unique airline and seeking to return to historical margins. We fly so the one person who couldn't travel, could. Our vision is to be the leading airline in the communities we serve, offering reliable, nonstop travel at an unbeatable value. We have coined our Company strategy as "Allegiant ONE" which currently includes the following Company goals:
•maintaining our foundation of providing affordably accessible all-nonstop air travel while refining and strengthening our air travel product
•expanding our already broad domestic network as we have identified more than 1,400 incremental routes of which more than 75 percent currently have no nonstop service
•earning the right to grow by seeking to restore historical margins and strengthening our balance sheet
•taking advantage of the foundational technology we now have in place to leverage and embrace advancing technology (such as AI) to offer increased value to our customers and be able to scale more productively
•increasing peak period service to 1,000 daily departures over time as we earn the right to grow
•achieving at least 15 percent of new revenue from sources other than capacity growth
•seeking to offer (subject to government approval) transborder international scheduled service
•utilizing our customer data to offer personalized and more attractive product offerings
•transforming our eCommerce strategy to create a frictionless experience for our customers and drive increased air ancillary and third party products revenue generation
•expanding our award-winning co-brand credit card program and our non-card loyalty program
•revisiting our marketing strategy to be more surgical and measured
In our pursuit of Allegiant ONE, on January 11, 2026, we entered into an agreement to acquire Sun Country Airlines Holdings, Inc. ("Sun Country"), subject to shareholder approval and required regulatory review. The proposed transaction is anticipated to close in the second half of 2026. We expect this combination to support our Allegiant ONE objectives by broadening our network and improving our ability to flex capacity in response to market and demand conditions. We believe Sun Country's route network and operations are complementary to ours and will support our ability to expand year-round scheduled service, charter, and cargo capabilities while offering customers more destinations and more frequent service. We believe the combined organization will support long-term strategy growth and investment, consistent with our commitment to providing affordable leisure travel and creating long-term value for our shareholders.
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Also in pursuit of Allegiant ONE, and consistent with our strategy to focus on the airline as our core business, we completed the sale of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") on September 4, 2025.
Our principal executive offices are located at 1201 N. Town Center Drive, Las Vegas, Nevada 89144. Our telephone number is (702) 851-7300. Our website address is allegiantair.com. We have not incorporated by reference into this annual report the information on our website and investors should not consider it to be a part of this document. Our website address is included in this document for reference only. Our annual report, quarterly reports, current reports and amendments to those reports are made available free of charge through the investor relations section on our website as soon as reasonably practicable after electronically filed with or furnished to the SEC.
Unique Business Model
We have developed a unique business model that primarily focuses on leisure travelers in under-served cities. The business model has evolved as our experienced management team has looked differently at the traditional way business has been conducted in the airline and travel industries. Our focus on the leisure customer allows us to eliminate the significant costs associated with serving a wide variety of customers and to concentrate our product appeal on a customer base which is under-served by traditional airlines. We have consciously developed a business model which distinguishes us from the traditional airline approach:
| Traditional Airline Approach | Allegiant Approach | |||||||||||
| Customer Base: | Business and leisure | Leisure | ||||||||||
| Network: | Primarily large and mid-sized markets | Almost all routes serve small/medium-sized under-served markets | ||||||||||
| Flight Connections: | Nonstop or connect through hubs | All nonstop | ||||||||||
| Competition: | High | Low | ||||||||||
| Schedule: | Uniform throughout the week | Low frequency/variable capacity | ||||||||||
| Distribution: | Sell through various intermediaries | Sell directly to travelers | ||||||||||
| Fare Strategy: | High base fares/low ancillary revenue | Low base fares/high ancillary revenue | ||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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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 and nine months ended September 30, 2026 and 2025. Also discussed is our financial position as of September 30, 2026 and December 31, 2025. 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, 2025. 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.
Third Quarter 2026 Highlights
•Consolidated total operating revenue of $961.6 million
•Record third-quarter total passenger revenue per ASM ("TRASM") of 14.18 cents, up 26.7 percent over the prior year Allegiant Air results
•Total fixed fee revenue of $83.6 million
◦Allegiant standalone fixed fee revenue of $20.6 million, up 9.4 percent year over year
•Total ancillary revenue per passenger of $76.64, up 4.6 percent from the prior year Allegiant Air results
•$42.1 million in total Allegiant Air co-brand credit card remuneration received, up 23.6 percent year over year (excluding Sun Country)
•Named 2026's Best Low-Cost Airline in North America by Skytrax, the international air transport rating organization, marking the third consecutive year Allegiant has won the award
•Earned the top spot in USA TODAY's 10Best 2026 Readers' Choice Awards, being recognized as Number 1 for Best Airline Credit Card and Best Frequent Flyer Program
•In October, exercised six Boeing 737-8 aircraft purchase options for delivery in 2028, bringing total firm aircraft orders under the Boeing purchase agreement to 56, of which 22 have been delivered to date, with 74 options remaining
AIRCRAFT
The following table sets forth the aircraft in service and operated by us as of the dates indicated:
| September 30, 2026 | December 31, 2025 | |||||||||
| Passenger service | ||||||||||
Airbus A320(1) | 76 | 79 | ||||||||
Airbus A319(2) | 27 | 28 | ||||||||
| Boeing 737 MAX 8200 | 21 | 16 | ||||||||
Boeing 737-800 (Sun Country)(3) | 43 | — | ||||||||
| Boeing 737-900ER (Sun Country) | 3 | — | ||||||||
| Total aircraft in passenger service | 170 | 123 | ||||||||
| Boeing 737-800 in cargo service | 22 | — | ||||||||
| Aircraft held for operating lease | ||||||||||
Boeing 737-800(4) | 1 | — | ||||||||
| Boeing 737-900ER | 2 | — | ||||||||
| Total | 195 | 123 | ||||||||
(1)Includes 23 aircraft under finance lease and nine aircraft under operating lease as of September 30, 2026 and December 31, 2025. Excludes three aircraft under operating lease as of December 31, 2025, which were removed from service pending redelivery.
(2)Excludes three aircraft under operating lease that were removed from service pending redelivery as of December 31, 2025.
(3)Includes 12 aircraft under finance lease as of September 30, 2026.
(4)Includes one aircraft under finance lease as of September 30, 2026.
As of October 30, 2026, we are party to forward purchase agreements for 34 aircraft with deliveries expected between November 2026 and 2028.
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Due to the heavy maintenance needs on certain aging Airbus airframes and capacity constraints at the maintenance, repair, and overhaul contractors, we identified aging airframes for early retirement to coincide with the delivery schedule for our 737 MAX aircraft provided in an amendment to our Boeing purchase agreement signed in September 2023. As of September 30, 2026, 19 airframes have been retired, with five additional retirements scheduled between November 2026 and January 2027. The accelerated depreciation resulting from the revised estimated useful life of these aircraft is recorded as a special charge in the consolidated financial statements, including $0.8 million recognized in third quarter 2026. The engines from these aircraft will be retained for future overhaul cost mitigation and may be sold on an opportunistic basis if we determine the engine has no better economic use in our operating fleet.
NETWORK
As of September 30, 2026, and with the Sun Country acquisition, we were selling 664 routes versus 551 being sold by Allegiant Air as of the same date in 2025. Network growth in the future will continue to be affected by high fuel prices, the timing of aircraft deliveries, aircraft in heavy maintenance, crew availability, airport construction and disruption, trends in domestic, leisure air travel demand and other factors such as macroeconomic conditions and geopolitical unrest. We have identified over 1,400 incremental domestic nonstop routes as opportunities for future network growth, of which over 75 percent currently have no non-stop service. The Allegiant Air network included 90 origination cities and 33 leisure destinations, as of September 30, 2026.
Minneapolis-Saint Paul International Airport ("MSP") is the largest and primary base for our Sun Country operation. At MSP, we are the largest low-cost carrier and the second largest airline overall. As of September 30, 2026, our MSP network served approximately 85 markets. As of that date, our overall Sun Country operation served approximately 14 non-MSP markets and was selling a total of 109 routes.
TRENDS
Acquisition of Sun Country Airlines
In May 2026, we completed our acquisition of Sun Country. Integration of Sun Country’s business with our existing business is underway and is expected to be a complex, costly, and time-consuming process. We believe the combination will enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting the passenger and charter operations of both airlines.
Both companies continue to operate as separate airlines under FAA rules. We have applied with the FAA for a single operating certificate ("SOC") which we currently expect will be obtained in 2028. Our ability to combine operations will be limited until we receive a single operating certificate and there are joint collective bargaining agreements in place with the various unionized work groups.
In addition to our application to the FAA to operate the two airlines under a SOC, we are also focused on combining the two companies' passenger platforms into a single passenger reservation system ("PSS"). Once the SOC is granted by the FAA and the combined PSS is implemented (which is currently expected in 2028), we believe we will be able to begin to capture more of the revenue and cost synergies sought from the transaction.
Aircraft Fuel
The cost of fuel, including refining costs and applicable crack spreads, remains volatile, and is influenced by numerous economic and geopolitical factors beyond our control or prediction, including geopolitical conflict and war. Our third quarter fuel expense was $293.6 million or $3.98 per gallon, which is 55.5 percent higher than the $2.56 per gallon Allegiant Air paid in third quarter 2025. As hostilities in the Middle East continue to significantly impact the market prices of products that are derived from crude oil, we may continue to experience elevated fuel costs that will materially impact our overall cost structure, operating results and profitability. We have not used financial derivative products to hedge against fuel price volatility, nor do we have any plans to do so in the future.
Demand Environment
Although air travel demand throughout 2026 has been strong, demand could be impacted in the future by macroeconomic, geopolitical, and airline industry events as it has in the past. Throughout 2026 at Allegiant Air, we strategically reduced off-peak day of week capacity and, in turn, increased peak day ASMs on fewer average total aircraft year-over year. For Allegiant Air, this contributed to a 2.7 percentage point increase in load factor on a 3.2 percent decrease in scheduled service capacity in third quarter 2026. Our unique model is predicated around expanding and contracting capacity to meet seasonal leisure travel demands. We expect to continue to manage our peak period utilization as the demand environment allows.
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Commercial Initiatives
In July 2026, we entered into a 12-month exclusive distribution agreement with Expedia Group, making Allegiant Air's nonstop network available through an authorized online travel agency ("OTA") partner for the first time. The agreement makes our flights available across Expedia Group's U.S. brands and expands our reach to new leisure customers. Since its launch in July 2026, approximately four percent of our Allegiant Air bookings have come from this distribution channel, and a significant portion of these are new customers to Allegiant.
In August 2026, we introduced complimentary inflight beverage service on all Allegiant Air flights. We have also announced Allegiant First, a new premium seating tier scheduled to debut on future MAX deliveries, with service expected to begin in spring 2027. Allegiant First will feature a redesigned and enhanced cabin with eight new Allegiant First seats with minimal impact to seating capacity. The new seating configuration on these future deliveries will feature improved seat cushions and in-seat power in all cabins.
Boeing Agreement
We have signed an agreement and amendments with Boeing to purchase 56 newly manufactured 737 MAX aircraft with options to purchase up to an additional 74 737 MAX aircraft. Through September 30, 2026, we have taken delivery of 21 737 MAX aircraft from this order, and all of these aircraft are currently in revenue service. We believe this new aircraft purchase is complementary with our low-cost strategy based on our intent to retain ownership of the aircraft, the longer useful life for depreciation purposes, and expected fuel savings and operational reliability from the use of these new aircraft. Our 737 MAX aircraft represented approximately 22.1% of the Allegiant Air ASMs in third quarter 2026 as compared to 12.7% during the same period in 2025.
We currently expect four aircraft to be delivered to us in the last three months of 2026 with the remaining aircraft under contract to be delivered in 2027 and 2028. Delays in aircraft deliveries could impact our ability to schedule additional growth when the demand environment allows.
Union Negotiations
The Allegiant Air pilots, who are represented by the International Brotherhood of Teamsters (“IBT”), ratified a new collective bargaining agreement on July 31, 2026. Among other new and modified terms, that new agreement provides for increased compensation and enhanced benefits to the Allegiant Air pilot group and contains improvements to the scheduling process which we expect will increase pilot productivity. Following ratification of the collective bargaining agreement, we paid pilot retention bonuses (which we began accruing in May 2023) totaling $267.0 million, including related taxes.
In 2026, the collective bargaining agreement between Allegiant Air and its air dispatchers represented by the IBT became amendable under the Railway Labor Act (“RLA”). The parties are engaged in negotiations over new and modified rates of pay, rules, and working conditions pursuant to the procedures set forth in Section 6 of the RLA.
In 2025, the collective bargaining agreement covering the Sun Country pilots, who are represented by the Air Line Pilots Association (“ALPA”), became amendable. The parties continue to engage in negotiations under Section 6 of the RLA for a new agreement addressing rates of pay, rules, and working conditions for those employees.
In order to fully integrate the pre-merger union represented employee groups of Allegiant Air and Sun Country, we may be required to negotiate joint collective bargaining agreements covering the respective combined crafts or classes of employees. Where necessary, these negotiations will likely begin after a single post-merger representative has been certified by the National Mediation Board.
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RESULTS OF OPERATIONS
Items affecting comparability
As the acquisition of Sun Country was completed on May 13, 2026, the three months ended September 30, 2026 include Sun Country's results for the full three month period, while the nine months ended September 30, 2026 include Sun Country's results from May 13, 2026 through September 30, 2026, which we also refer to as the "stub period." The comparative periods in 2025 do not include Sun Country's results. Consolidated revenue and expenses all increased compared to the prior year periods due to the incorporation of Sun Country's operations into the Company. As a result, the discussion below of changes to our revenue and expenses compared to the prior year largely focuses on material factors independent of the acquisition.
Comparison of three months ended September 30, 2026 to three months ended September 30, 2025
Operating Revenue
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Percent Change | |||||||||||||||||||||||||||||||||||||
| Operating Revenues (in thousands) | Allegiant Air | Sun Country | Consolidated | Allegiant Air | Sunseeker* | Consolidated | YoY | ||||||||||||||||||||||||||||||||
| Passenger | $ | 620,668 | $ | 156,780 | $ | 777,448 | $ | 494,144 | $ | — | $ | 494,144 | 57.3 | % | |||||||||||||||||||||||||
| Third party products | 42,292 | 2,324 | 44,616 | 39,397 | — | 39,397 | 13.2 | % | |||||||||||||||||||||||||||||||
| Fixed fee contracts | 20,627 | 63,019 | 83,646 | 18,852 | — | 18,852 | 343.7 | % | |||||||||||||||||||||||||||||||
| Cargo | — | 52,393 | 52,393 | — | — | — | NM | ||||||||||||||||||||||||||||||||
| Resort and other | 174 | 3,282 | 3,456 | 181 | 9,358 | 9,539 | NM | ||||||||||||||||||||||||||||||||
| Total operating revenues | $ | 683,761 | $ | 277,798 | $ | 961,559 | $ | 552,574 | $ | 9,358 | $ | 561,932 | 71.1 | % | |||||||||||||||||||||||||
NM Not meaningful
* Sunseeker numbers only through September 4, 2025 when the Resort was sold
Passenger revenue. Passenger revenue increased $283.3 million or 57.3 percent, of which Sun Country contributed $156.8 million.
The remaining increase is attributable to strength in demand, which drove a 23.6 percent increase in average total fare for Allegiant Air, including a 54.5 percent increase in average scheduled service base fare. Allegiant Air scheduled service passengers decreased by 0.5 percent on a capacity reduction of 3.2 percent, resulting in a 2.7 percentage point improvement in load factor.
Third party products revenue. Third party products revenue increased $5.2 million or 13.2 percent, of which Sun Country contributed $2.3 million.
The remaining increase is attributable to continued growth in the marketing component of Allegiant Air’s co-brand remuneration, along with moderate growth in third party travel insurance and rental car sales.
Fixed fee contract revenue. Fixed fee contract revenue increased $64.8 million, the majority of which was contributed by Sun Country.
Allegiant Air fixed fee revenue increased $1.8 million or 9.4 percent, primarily driven by a 16.1 percent increase in revenue per departure, partially offset by a modest decrease in charter departures during the quarter.
Cargo revenue. Cargo revenue was $52.4 million, which was wholly attributable to Sun Country.
Resort and other revenue. Resort and other revenues decreased by $6.1 million, primarily due to a $9.4 million decrease in resort revenue as a result of the sale of Sunseeker Resort in September 2025, offset by $3.3 million of other revenue contributed by Sun Country (mostly aircraft lease revenue).
Sun Country standalone operating revenue comparison. In comparison with Sun Country standalone (pre-acquisition) performance in third quarter 2025, Sun Country scheduled service passenger revenue was up 25.3 percent on a 14.1 percent decrease in scheduled service ASMs as TRASM increased by 27.2 percent and load factor increased by 50 basis points. Fixed fee revenue was up 7.4 percent on a 13.8 percent increase in revenue per departure and cargo revenue was up 19.0 percent due to a higher number of aircraft in cargo service.
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Operating Expenses
The following table presents airline only operating unit costs on a per available seat mile (ASM) basis, defined as Operating CASM, for the indicated periods. 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. We also show Operating CASM excluding fuel costs, special charges, and cargo expenses. Excluding fuel costs, special charges, and cargo expenses allows management and investors to better compare our airline unit costs with those of other airlines. Sun Country cargo expenses (which are included in aircraft fuel, salaries and benefits, station operations, depreciation and amortization, maintenance and repairs, and other expenses in our consolidated statements of income) are excluded from the CASM calculation as those expenses do not drive ASMs.
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Percent Change | ||||||||||||||||||||||||||||||||||||||||||
| Airline Unitized costs (in cents) | Allegiant Air | Sun Country | Consolidated | Allegiant Air | Allegiant Air | |||||||||||||||||||||||||||||||||||||||
| Aircraft fuel | 4.74 | ¢ | 4.39 | ¢ | 4.66 | ¢ | 3.06 | ¢ | 54.9 | % | ||||||||||||||||||||||||||||||||||
| Salaries and benefits | 3.96 | 6.42 | 4.56 | 3.86 | 2.6 | |||||||||||||||||||||||||||||||||||||||
| Station operations | 1.64 | 2.33 | 1.81 | 1.45 | 13.1 | |||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1.21 | 1.54 | 1.29 | 1.19 | 1.7 | |||||||||||||||||||||||||||||||||||||||
| Maintenance and repairs | 0.82 | 1.34 | 0.95 | 0.81 | 1.2 | |||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 0.58 | 0.53 | 0.57 | 0.45 | 28.9 | |||||||||||||||||||||||||||||||||||||||
| Aircraft rent | 0.16 | — | 0.12 | 0.22 | (27.3) | |||||||||||||||||||||||||||||||||||||||
| Other | 0.66 | 1.36 | 0.82 | 0.49 | 34.7 | |||||||||||||||||||||||||||||||||||||||
| Special charges | 0.25 | 0.48 | 0.30 | 0.06 | NM | |||||||||||||||||||||||||||||||||||||||
| Airline operating CASM | 14.02 | ¢ | 18.39 | ¢ | 15.08 | ¢ | 11.59 | ¢ | 21.0 | |||||||||||||||||||||||||||||||||||
| Airline operating CASM, excluding fuel | 9.28 | ¢ | 13.99 | ¢ | 10.42 | ¢ | 8.53 | ¢ | 8.8 | |||||||||||||||||||||||||||||||||||
| Cargo expenses | — | ¢ | 3.66 | ¢ | 0.89 | ¢ | — | ¢ | N/A | |||||||||||||||||||||||||||||||||||
| Airline operating CASM, excluding fuel, special charges, and cargo expenses | 9.03 | ¢ | 9.86 | ¢ | 9.23 | ¢ | 8.47 | ¢ | 6.6 | |||||||||||||||||||||||||||||||||||
NM Not meaningful
Airline operating CASM, excluding fuel, special charges and cargo expenses. Allegiant Air operating CASM, excluding fuel, special charges and cargo expenses ("CASM-ex"), increased 6.6 percent to 9.03 ¢ in third quarter 2026 from 8.47 ¢ in third quarter 2025. The increase was primarily driven by a 3.4 percent decrease in Allegiant Air capacity compared to the prior year quarter, which resulted in higher unit costs across most expense categories. CASM-ex was also impacted by the year-over-year expense increases discussed below.
Sun Country CASM, excluding fuel, special charges, and cargo expenses, was 9.86 ¢ in third quarter 2026 and drove a 0.20 ¢ spread between Allegiant Air and Consolidated CASM. In comparison with Sun Country standalone (pre-acquisition) CASM in third quarter 2025, Sun Country CASM, excluding fuel, special charges, and cargo expenses in third quarter 2026 increased by 16.5 percent as cost per ASM in most line items increased due to a 13.4 percent decrease in capacity.
Aircraft fuel expense. Aircraft fuel expense increased by $142.3 million or 94.1 percent, of which Sun Country contributed $67.4 million.
The remaining increase of $74.9 million was primarily driven by a 55.0 percent increase in Allegiant Air's average fuel cost per gallon to $3.97 from $2.56 in the prior year quarter, primarily attributable to geopolitical unrest in the Middle East. The increase was partially offset by a 3.5 percent decrease in fuel gallons consumed, consistent with a 3.4 percent decrease in total system ASMs.
Salaries and benefits expense. Salaries and benefits expense increased by $91.0 million or 46.3 percent, of which Sun Country contributed an increase of $98.4 million, offset by a decrease of $5.9 million resulting from the sale of Sunseeker Resort.
The remaining decrease was driven by organizational restructuring initiatives implemented by Allegiant Air during 2025, which resulted in a 7.2 percent reduction in average full-time equivalent Allegiant Air employees, offset by increased wages for certain employee workgroups due to contractual and annual merit raises.
Station operations expense. Station operations expense increased $42.6 million or 59.7 percent, of which Sun Country contributed $35.7 million.
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The remaining increase of $6.9 million was primarily driven by airport fee refunds received in the prior year that were not present in the current year period, the transition of certain station positions to outsourced operations, and other stations-related costs. These increases were offset by a 3.5 percent decrease in departures and lower Allegiant Air building rent and aircraft parking costs due to the closure of certain bases.
Depreciation and amortization expense. Depreciation and amortization expense increased by $22.2 million or 37.7 percent. Sun Country contributed an increase of $23.6 million.
Allegiant Air depreciation and amortization expense decreased slightly as a result of aircraft and engine retirements, partially offset by new aircraft placed into service.
Maintenance and repairs expense. Maintenance and repairs expense increased $19.9 million, or 49.8 percent, of which Sun Country contributed $20.6 million.
Allegiant Air maintenance and repairs expense decreased slightly, consistent with a 3.3 percent decrease in scheduled service departures.
Sales and marketing expense. Sales and marketing expense increased $12.8 million or 55.4 percent, of which $8.2 million was contributed by Sun Country and a decrease of $0.9 million was attributable to the sale of Sunseeker Resort.
The remaining increase of $5.5 million or 25.1 percent for Allegiant Air was primarily driven by higher credit card processing fees consistent with the 25.6 percent increase in Allegiant Air passenger revenue compared to the prior year quarter.
Aircraft rent. Aircraft rent decreased $3.4 million as a result of lease return costs accrued during the prior year quarter that were not present in third quarter 2026 and eight leased aircraft that were returned to lessors since September 30, 2025.
Other operating expense. Other operating expenses increased $18.7 million or 55.5 percent, of which an increase of $20.7 million was contributed by Sun Country, which was partially offset by an $8.9 million decrease resulting from the sale of Sunseeker Resort.
The remaining $6.8 million increase was primarily attributable to lower net gains on the sale of flight equipment at Allegiant Air compared to the prior year quarter.
Special charges. Special charges were $19.1 million in third quarter 2026, of which $18.9 million related to the Sun Country acquisition, $1.3 million related to accelerated amortization of software identified for redevelopment, and $0.8 million related to accelerated depreciation of airframes identified for early retirement. These charges were partially offset by a benefit of $1.9 million related to final closing adjustments from the sale of Sunseeker Resort.
During third quarter 2025, special charges included $0.6 million of asset write-downs and transaction-related adjustments associated with the sale of the Resort, net of final insurance recoveries related to prior weather and associated events, and $2.9 million of accelerated depreciation associated with airframes identified for early retirement.
31
Comparison of nine months ended September 30, 2026 to nine months ended September 30, 2025
Operating Revenue
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | Percent Change | |||||||||||||||||||||||||||||||||||||
| Operating Revenues (in thousands) | Allegiant Air | Sun Country* | Consolidated | Allegiant Air | Sunseeker* | Consolidated | YoY | ||||||||||||||||||||||||||||||||
| Passenger | $ | 2,009,483 | $ | 262,256 | $ | 2,271,739 | $ | 1,728,802 | $ | — | $ | 1,728,802 | 31.4 | % | |||||||||||||||||||||||||
| Third party products | 129,110 | 3,599 | 132,709 | 108,249 | — | 108,249 | 22.6 | % | |||||||||||||||||||||||||||||||
| Fixed fee contracts | 53,273 | 94,218 | 147,491 | 52,123 | — | 52,123 | 183.0 | % | |||||||||||||||||||||||||||||||
| Cargo | — | 79,978 | 79,978 | — | — | — | NM | ||||||||||||||||||||||||||||||||
| Resort and other | 533 | 5,031 | 5,564 | 536 | 60,680 | 61,216 | NM | ||||||||||||||||||||||||||||||||
| Total operating revenues | $ | 2,192,399 | $ | 445,082 | $ | 2,637,481 | $ | 1,889,710 | $ | 60,680 | $ | 1,950,390 | 35.2 | % | |||||||||||||||||||||||||
NM Not meaningful
* Sun Country numbers only after May 13, 2026, and Sunseeker numbers only through September 4, 2025 when the Resort was sold
Passenger revenue. Passenger revenue increased $542.9 million or 31.4 percent, of which $262.3 million was contributed by Sun Country during the stub period.
The remaining increase is attributable to strength in demand, which drove a 16.8 percent increase in average total fare for Allegiant Air, including a 35.7 percent increase in scheduled service base fare. Allegiant Air passengers decreased by 0.3 percent on a scheduled service capacity reduction of 5.2 percent, resulting in a 3.6 percentage point increase in Allegiant Air load factor.
Third party products revenue. Third party products revenue increased $24.5 million or 22.6 percent, of which $3.6 million was contributed by Sun Country during the stub period.
The remaining increase is primarily attributable to a $16.5 million increase in the marketing component of Allegiant Air co-brand remuneration, along with moderate growth in third party rental car and travel insurance sales. These increases were slightly offset by a decrease in hotel room revenue.
Fixed fee contract revenue. Fixed fee contract revenue increased $95.4 million or 183.0 percent, of which $94.2 million was contributed by Sun Country during the stub period.
Allegiant Air fixed fee revenue remained relatively flat year-over-year, despite a modest decrease in fixed fee contract departures during the period.
Cargo revenue. Cargo revenue was $80.0 million, which was wholly attributable to Sun Country and was generated during the stub period.
Resort and other revenue. Resort and other revenue decreased $55.7 million, of which a decrease of $60.7 million was due to the sale of Sunseeker Resort in September 2025 and an increase of $5.0 million was contributed by Sun Country during the stub period (mostly aircraft lease revenue).
Operating Expenses
The following table presents airline only operating unit costs on a per available seat mile (ASM) basis, defined as Operating CASM, for the indicated periods. 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. Excluding fuel costs, special charges, and cargo expenses allows management and investors to better compare our airline unit costs with those of other airlines. Sun Country cargo expenses (which are included in aircraft fuel, salaries and benefits, station operations, depreciation and amortization, maintenance and repairs, and other expenses in the Company's consolidated statements of income) are excluded from the CASM calculation as those expenses do not drive ASMs.
32
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | Percent Change | |||||||||||||||||||||||||||||||||
| Airline Unitized costs (in cents) | Allegiant Air | Sun Country* | Consolidated | Allegiant Air | Allegiant Air | ||||||||||||||||||||||||||||||
| Aircraft fuel | 4.39 | ¢ | 4.34 | ¢ | 4.38 | ¢ | 2.99 | ¢ | 46.8 | % | |||||||||||||||||||||||||
| Salaries and benefits | 3.97 | 5.82 | 4.24 | 3.79 | ¢ | 4.7 | |||||||||||||||||||||||||||||
| Station operations | 1.51 | 2.18 | 1.60 | 1.36 | 11.0 | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 1.14 | 1.41 | 1.18 | 1.13 | 0.9 | ||||||||||||||||||||||||||||||
| Maintenance and repairs | 0.74 | 1.20 | 0.81 | 0.69 | 7.2 | ||||||||||||||||||||||||||||||
| Sales and marketing | 0.56 | 0.53 | 0.56 | 0.44 | 27.3 | ||||||||||||||||||||||||||||||
| Aircraft rent | 0.15 | — | 0.12 | 0.17 | (11.8) | ||||||||||||||||||||||||||||||
| Other | 0.52 | 1.28 | 0.63 | 0.47 | 10.6 | ||||||||||||||||||||||||||||||
| Special charges | 0.52 | 1.33 | 0.63 | 0.12 | NM | ||||||||||||||||||||||||||||||
| Airline operating CASM | 13.50 | ¢ | 18.09 | ¢ | 14.15 | ¢ | 11.16 | ¢ | 21.0 | ||||||||||||||||||||||||||
| Airline operating CASM, excluding fuel | 9.11 | ¢ | 13.75 | ¢ | 9.77 | ¢ | 8.17 | ¢ | 11.5 | ||||||||||||||||||||||||||
| Cargo expenses | — | ¢ | 3.16 | ¢ | 0.45 | ¢ | — | ¢ | |||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-11-12 | Anderson Gregory Clark | CEO | Sell | -2,640 | $92.92 | -$245,309 |
| 2026-11-09 | Marvin Linda A | Director | Sell | -2,000 | $97.17 | -$194,330 |
| 2026-11-06 | Pollard Charles W. | Director | Sell | -10,000 | $93.04 | -$930,400 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-02-26 10-K expected by 2027-02-28 (in 103 days)
- ~2027-05-06 10-Q expected by 2027-05-09 (in 172 days)
- ~2027-08-10 10-Q expected by 2027-08-13 (in 268 days)
- ~2027-11-06 10-Q expected by 2027-11-09 (in 356 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-11-06 10-Q Quarterly Report
- 2026-11-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-10-27 8-K Officer/Director Change
- 2026-10-23 8-K Material Agreement Entered; Officer/Director Change
- 2026-08-10 10-Q Quarterly Report
- 2026-08-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-07-30 8-K Material Agreement Entered; Material Financial Obligation
- 2026-06-30 8-K Other Events
- 2026-06-29 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
- 2026-06-10 8-K Other Events; Financial Statements and Exhibits
- 2026-06-09 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2026-05-15 DEF 14A Proxy Statement
- 2026-05-13 8-K Completion of Acquisition/Disposition; Officer/Director Change; Bylaws/Articles Amended; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-05-13 S-8 Employee Benefit Plan Registration
- 2026-05-06 10-Q Quarterly Report