Allegiant Travel Charts Ambitious Course Following Strong Operational Finish

Buoyed by a robust final quarter, Allegiant Travel is projecting significant earnings growth for the coming year. The company's latest financial results reveal a core airline business performing with strength, even as one-time items impacted the full-year bottom line. The focus now shifts to whether strategic fleet upgrades and a major acquisition can power the firm toward its ambitious 2026 targets.

The fourth quarter of 2025 provided a clear picture of Allegiant's operational health. Revenue climbed 4.5% year-over-year to $656.2 million, driven by a substantial 10.5% increase in scheduled service capacity. On a GAAP basis, earnings per share (EPS) for the quarter were $1.73. However, the adjusted EPS figure, which isolates the performance of the ongoing airline operations, came in at a much stronger $2.72.

For the full 2025 fiscal year, the GAAP result shows a loss of $2.48 per share. The adjusted annual earnings tell a different story, underscoring the company's underlying profitability in a competitive landscape. Allegiant reported an adjusted EPS of $5.07 for the year.

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Efficiency Gains and Margin Expansion

A key driver behind these results has been a relentless focus on cost control and reliability. In 2025, Allegiant achieved a reduction in unit costs exceeding 6%. The airline also reported a 99.9% completion factor for controllable flights, a rate that positions it among the industry leaders. This operational discipline culminated in a fourth-quarter adjusted operating margin of 12.9%, surpassing the company's own initial forecasts.

The Roadmap to an $8+ EPS in 2026

Looking ahead, management has set forth confident guidance. For the first quarter, Allegiant is targeting an adjusted operating margin of 13.5%. The full-year 2026 outlook is even more striking, with the company projecting an adjusted EPS exceeding $8.00.

Two primary initiatives are central to achieving this growth. The first is the ongoing integration of more fuel-efficient MAX aircraft into its fleet. The second is the expansion of its "Allegiant Extra" service offerings. However, the most significant strategic move is the planned acquisition of Sun Country Airlines. This transaction, pending regulatory approvals, is anticipated to close in the second half of 2026. The deal is designed to substantially bolster Allegiant's position in the leisure travel market.