Allegiant Travel Company is burning $2.5 million per day

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Allegiant Travel Company (NASDAQ: ALGT) waited all day to submit 8-K report and the price of their share went up 9%. But we are sure that this wont be the case tomorrow when the market opens. as we just received an announcement.

Allegiant provided the following information regarding the business disruptions caused by the Covid-19 pandemic.

The capacity for March 2020 was down 12.2 percent from March 2019. but the revenue for March 2020 will be approximately 40 to 45% lower than March 2019.

ALGT expects that capacity for April – May 2020 will be down 80 to 90 percent from the same period last year. If this is not enough ALGT also reports unprecedented cancellations, and bookings for future periods are well off prior periods.

All in all, profitability will be impacted by the duration of the national emergency and the pace of the recovery for the entire airline industry.

Last week, Allegiant appplied for the payroll support funds to the Treasury departmen and are pursuing government and other financing alternatives.

They also disclosed that their “current cash burn is estimated to be $2.0 to $2.5 million per day.”

Executives have reduced salaries by 50 percent and Board members are foregoing cash compensation