Allegiant Travel Company (ALGT) Q2 2026 Earnings: Revenue $944M (+36.9%)
ALGT — Q2 2026 Financial Report Analysis
Q2 · Fiscal year 2026 · Published by Pham Hop
Allegiant's standalone airline lifted unit revenue 24.6% on 6.8% less flying, beating its own loss guidance with $2.19 adjusted EPS despite 71% higher fuel, while Sun Country deal costs left a $4.9M GAAP net loss.
Revenue
$944M
+36.9% YoY
Net income
-$4.9M
Diluted EPS
$-0.21
Operating margin
2.2%
This period vs a year ago
Same period last year
This period
Revenue▲+36.9%
≈$689M
$944M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Allegiant's second quarter of 2026 is really three stories in one set of numbers: the core Allegiant airline charged much higher fares on fewer flights, jet fuel cost 71% more per gallon than a year earlier, and the company bought Sun Country Airlines, whose results count only from the May 13 closing date. Reported revenue jumped 36.9% to $943.5 million, but the GAAP result was still a small net loss of $4.9 million ($0.21 per share), because $66.0 million of one-time charges, mostly deal and integration costs, sat on top of the fuel bill. Excluding those items, adjusted earnings per share were $2.19, up 78% and far above management's own forecast of a loss.
At a glance
Standalone Allegiant revenue +16.1% on 6.8% less flying. Revenue for the original airline was a record $776.2 million while capacity (seats multiplied by miles flown) shrank. Each seat-mile brought in 24.6% more revenue, which is what kept the airline profitable through the fuel spike.
Adjusted EPS $2.19 vs. guidance of -$1.00 to $0.00. In April management expected roughly breakeven at best, assuming $4.35 fuel. Fuel came in slightly lower ($4.19 for Allegiant) and fares came in much higher.
GAAP net loss of $4.9 million vs. $65.2 million a year ago. Last year's loss was driven by a $102.2 million write-down on the Sunseeker Resort, which was sold in September 2025. This year's loss is driven by $55.2 million of Sun Country integration costs.
The numbers
Consolidated figures include Sun Country only from May 13, 2026, and the 2025 figures include the Sunseeker Resort, so the consolidated year-over-year changes mix in acquisitions and disposals. The standalone Allegiant rows are the cleaner like-for-like comparison.
Metric
Q2 2026
Q2 2025
YoY Change
Total operating revenue
$943.5M
$689.4M
+36.9%
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Operating income (loss), GAAP
$21.1M
($67.5M)
n/m
Operating margin, GAAP
2.2%
(9.8%)
+12.0 pts
Adjusted operating margin (non-GAAP)
9.2%
7.3%
+1.9 pts
Net income (loss), GAAP
($4.9M)
($65.2M)
loss narrowed by $60.3M
Diluted EPS, GAAP
($0.21)
($3.62)
n/m
Adjusted diluted EPS (non-GAAP)
$2.19
$1.23
+78.0%
Allegiant standalone revenue
$776.2M
$668.8M
+16.1%
Allegiant standalone adjusted operating margin
9.0%
8.6%
+0.4 pts
Allegiant standalone TRASM
14.42¢
—
+24.6%
Allegiant standalone CASM ex-fuel (adjusted)
8.17¢
7.68¢
+6.4%
Allegiant standalone system capacity (ASMs)
5.41B
5.80B
-6.8%
Scheduled-service load factor (consolidated)
85.7%
81.9%
+3.8 pts
Average fuel cost per gallon (consolidated)
$4.14
$2.42
+71.1%
A few terms, since airline results lean on them:
ASM (available seat mile) is one seat flown one mile. It is the standard measure of how much flying an airline sells.
TRASM (total revenue per available seat mile) is revenue divided by ASMs: how much each unit of capacity earned. Allegiant's standalone TRASM is the company's own figure; the filing gives only its percentage change, not last year's standalone level. The consolidated scheduled-service figure, which includes Sun Country's stub period, was 14.24¢, up 23.1% from 11.57¢.
CASM ex-fuel is operating cost per ASM excluding fuel and one-time charges. It shows whether the airline is running more cheaply per unit of flying, separately from the fuel price, which it does not control.
Load factor is the share of seats that had a paying passenger.
What drove the core airline: fewer flights, fuller planes, much higher fares
Allegiant deliberately cut off-peak flying (quiet days of the week) and kept its busy-day schedule, a plan it laid out in April as fuel prices rose after "the recent escalation of hostilities in the Middle East." The 10-Q quantifies the result: standalone scheduled capacity fell 6.2%, passengers fell only 0.8%, and load factor rose 4.0 points. The average base fare (the ticket price before bag and seat fees) rose 39.9%, and the average total fare per passenger, including those fees and third-party products, rose 17.9%. Air-related fees per passenger were essentially flat ($69.55 vs. $69.49 consolidated), so the growth came almost entirely from base fares.
Third-party products revenue at Allegiant rose 32.2% to $44.5 million, mainly from a $9.3 million increase in the marketing component of payments from the co-brand credit card partner; total card remuneration received was $41.2 million, up 23.6%.
On cost, standalone CASM ex-fuel rose 6.4% to 8.17¢. The 10-Q attributes this primarily to the 6.8% capacity cut: fixed costs such as aircraft ownership and overhead were spread over fewer seat-miles. Salaries were slightly lower at Allegiant ($2.1 million) after a 4.9% headcount reduction from 2025 restructuring.
Fuel is the line that matters most. Allegiant's own fuel cost was $4.19 per gallon versus $2.42, which added $99.4 million of expense at the original airline alone. Allegiant does not hedge fuel and says it has no plans to. Even so, its adjusted operating margin (the share of revenue left after operating costs, excluding one-time items) improved from 8.6% to 9.0%. Fares rose by more than fuel cost.
Sun Country: seven weeks, profitable before deal costs
Sun Country, a Minneapolis-based airline that also flies charters and cargo planes for Amazon, contributed $167.3 million of revenue in the seven weeks after closing: $105.5 million passenger, $31.2 million fixed-fee charter, $27.6 million cargo and $1.3 million third-party products. Before $26.4 million of special charges it earned $17.5 million of adjusted operating income, a 10.4% margin. After those charges it posted a $9.0 million GAAP operating loss and a $13.1 million pre-tax loss. Its CASM ex-fuel of 8.33¢ was close to Allegiant's 8.17¢, so the combination did not noticeably change the group's unit costs.
The total purchase price was $976.0 million: $223.4 million in cash, $634.8 million in Allegiant shares, plus an $80.5 million payment to end Sun Country's tax receivable agreement, $16.2 million to settle the Amazon warrants, and $21.2 million for replaced equity awards. $465.7 million of that price was booked as goodwill, the premium paid above the fair value of Sun Country's identifiable assets. Management is targeting at least $140 million of annual run-rate synergies within three years. The two airlines will keep flying under separate FAA certificates until a single certificate is obtained, which the company expects in 2028. Until then, and until joint union contracts are in place, its ability to combine operations is limited.
Sunseeker Resort: the drag is gone
Sunseeker Resort, the Florida hotel that weighed on results for years, no longer appears in the numbers. A year ago the resort segment had $20.6 million of revenue and a $110.6 million operating loss, including the $103.3 million of charges taken when the sale was agreed; even excluding those charges it lost $7.3 million. The sale closed on September 4, 2025, so there is no resort revenue or cost in 2026, apart from a $0.6 million net recovery booked in special charges this quarter. This removes a recurring loss and makes the year-over-year consolidated comparison look better than the airline's own improvement.
Takeaway: Allegiant's original airline raised revenue per seat-mile by 24.6% while flying 6.8% less, and that was enough to absorb a 73% jump in its fuel price and still widen its adjusted margin. Pricing power on peak days, rather than the Sun Country deal, produced this quarter's earnings beat. Management's guidance shows it expects much less of that pricing power in the slower third quarter.
What the headline numbers hide
The adjusted-versus-GAAP gap is large and specific. Adjusted pre-tax income of $64.5 million excludes $66.0 million of special charges ($55.2 million Sun Country integration and transaction costs, $10.0 million of accelerated write-off of software being rebuilt, $1.3 million of accelerated depreciation on aircraft retiring early, less a $0.6 million Sunseeker recovery) and a $3.7 million loss from repaying debt early. The integration costs are genuinely tied to one deal. However, the software write-off has now appeared in both 2026 quarters ($19.9 million year to date), so it is less one-off than the label suggests.
EPS grew more slowly than profit because of the share issuance. Adjusted net income rose 125% to $51.1 million, but adjusted EPS rose 78%, because the share count used for adjusted EPS rose from 18.0 million to 23.0 million after Allegiant issued stock to Sun Country holders. Full-year guidance assumes 23.9 million weighted shares, and the third quarter 27.3 million, so this dilution grows as the new shares count for a full period.
The standalone airline's GAAP profit fell. Allegiant-only GAAP operating income dropped 30.3% to $30.1 million and pre-tax income fell 73.7% to $7.8 million, mainly because of $39.5 million of special charges and higher interest expense ($35.2 million vs. $28.1 million). Adjusted Allegiant-only EBITDA margin (earnings before interest, tax, depreciation and amortization) also slipped from 18.3% to 16.5%. The 9.0% adjusted operating margin is real, but it excludes a lot.
Cash conversion was weak in the quarter but solid year to date. Second-quarter operating cash flow was $46.0 million, slightly below adjusted net income of $51.1 million. For the first half, operating cash flow was $314.1 million against GAAP net income of $37.6 million, helped by tickets sold for future travel (Allegiant's air traffic liability, cash collected for flights not yet flown, rose to $436.8 million from $363.3 million at year-end). Spending is rising, however: $219.9 million of aircraft pre-delivery deposits in the first half, versus $9.7 million a year earlier, plus $167.1 million of net cash spent on Sun Country.
Debt is up sharply. Total debt was $2.78 billion at June 30 versus $1.80 billion at year-end, and net debt (debt minus cash and investments) rose from $961 million to $1.71 billion. That includes $546.8 million of Sun Country debt and leases, plus a new $650 million of 7.125% notes due 2031, partly used to buy back $377.5 million of 7.25% notes due 2027. Liquidity remains ample at $1.3 billion.
The quarter's tax rate was unusually low, 6.9%, which the 10-Q attributes primarily to Sun Country acquisition costs, state taxes and permanent book-tax differences on a near-zero pre-tax result. This makes the small GAAP loss look smaller than the pre-tax figure ($5.2 million loss) alone would suggest, but it does not change the conclusion.
Guidance versus actual. The April guidance for standalone Allegiant called for a 0% to 2% adjusted operating margin and adjusted EPS of -$1.00 to $0.00, at $4.35 fuel. Allegiant delivered 9.0%. Fuel was $0.16 per gallon cheaper than assumed, but most of the gap came from revenue: management's April guidance did not anticipate fares rising this much.
Outlook
Guidance now covers the combined company. For the third quarter, management expects capacity down about 6.5% compared with the two airlines' combined flying a year earlier, fuel at $3.80 a gallon, an adjusted operating margin of 1% to 3%, and adjusted EPS between -$1.00 and $0.00. Management also expects third-quarter unit revenue growth roughly in line with the 24.6% standalone Allegiant achieved in the second quarter. For the full year, it introduced adjusted EPS guidance of more than $6.00 at $3.70 fuel. Full-year aircraft capital spending guidance rose to $640–660 million from $570–590 million, reflecting the larger fleet.
Our read: the third quarter includes the slower post-summer weeks for a leisure airline, but guiding to around breakeven despite 25% unit revenue growth and lower fuel than in the second quarter is cautious. The second quarter shows how much the company can beat its own numbers when peak demand holds. Simple arithmetic on the full-year figure: $6.00 on 23.9 million shares is about $143 million of adjusted net income, and the first half already produced $119.0 million attributable to common stock, so the guide implies only about $24 million from the second half. That leaves room to beat if fuel stays near $3.80.
Three things to watch:
Labor costs. Allegiant's pilots ratified a new contract on July 31 with "increased compensation and enhanced benefits," and the company says it is still evaluating the financial impact. Sun Country's pilots are still negotiating. Both will push CASM ex-fuel up from the current 8.17–8.33¢.
Whether capacity comes back. The fare gains came alongside a 6–7% capacity cut. Once fuel eases and capacity is restored, unit revenue growth will very likely slow; how much it slows will show how much of this quarter was pricing power and how much was scarcity.
Synergy evidence and new revenue channels. The $140 million synergy target, the new Expedia distribution deal (about 3% of bookings since launch, per the 10-Q) and the Allegiant First premium seats due in spring 2027 are the levers that would support margins once the fuel-driven capacity discipline fades.