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Allegiant Travel (ALGT) Posts Dismal November Traffic Data

With coronavirus cases witnessing a surge again in the United States, the slight improvement in air-travel demand has taken a beating. Due to this downside, Allegiant Travel Company’s ALGT traffic, measured in revenue passenger miles, decreased 38% year over year in November for scheduled service. This underperformed was even worse than the 29% decline registered in October.

To compensate for the year-over-year weakness in demand, this Las Vegas, NV-based carrier is trimming capacity. Consequently, in November, capacity (measured in available seat miles) contracted 13.6%. With traffic declining more than the extent of capacity reduction, load factor (% of seats filled by passengers) fell 22.8 points year over year to 57.6%. Allegiant Travel’s monthly departures for scheduled service dropped 15.3%.

Moreover, the number of passengers transported by Allegiant Travel in November for scheduled service plunged 38%. For the total system (scheduled service and fixed fee contract) passengers transported declined 38.7% year over year due to coronavirus woes. Moreover, the systemwide average fuel price per gallon in the month was estimated to be $1.39 per gallon.

Zacks Rank & Stocks to Consider

Allegiant Travel currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Landstar carries a Zacks Rank #2 (Buy) while Knight-Swift and Herc Holdings sport a Zacks Rank #1 (Strong Buy), presently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share (three to five years) growth rate for Knight-Swift, Landstar and Herc Holdings is pegged at 15%, 12% and 12.6%, respectively.

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