Allegiant Travel CO
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
ALGT$91.97+5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001362468-25-000054
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001362468-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 99 current paragraphs.
32 unchanged; 28 reworded; 39 added; 59 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
First Quarter 2026 Review
Current report
First quarter 2026 highlights include:
Current report
•Signed the Merger Agreement to acquire Sun Country and received the necessary regulatory approvals to close the Merger
Current report
•Record first quarter total operating revenue of $732.4 million, up 9.6 percent year-over-year when excluding prior year Sunseeker results
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•Fixed fee revenue of $18.1 million, up 11.5 percent year-over-year
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•Total revenue per available seat mile (TRASM) up 16.4 percent year-over-year
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•Airline-only operating cost per available seat mile (CASM), excluding fuel and special charges of 8.64 ¢, up 7.1 percent year-over-year
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•System capacity down 5.9 percent year-over-year
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•Available seat miles per gallon of fuel of 86.7, up 1.2 percent year-over-year
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(2)Excludes three aircraft under operating lease that were removed from service pending redelivery as of December 31, 2025.
Current report
Proposed Acquisition of Sun Country Airlines
Current report
In January 2026, we entered into an agreement to acquire Sun Country Airlines, subject to satisfaction of customary closing conditions, including each company's receipt of shareholder approval and regulatory reviews and approvals (please see Note 11 to the consolidated financial statements included in this report).
Current report
We believe the proposed transaction aligns with our long-term strategic objectives and is expected to enhance our network breadth, operational flexibility, and ability to respond to demand shifts, while supporting scheduled service, charter and cargo operations of both airlines. Integration planning activities are underway, while both companies continue to operate independently and maintain normal business operations. We now expect the closing of the transaction to occur as early as May 13, 2026, following shareholder approval at special meetings scheduled to be held by both companies on May 8, 2026. There are several risks associated with the completion of the proposed transaction, as well as risks related to future operations if the transaction is completed, and future results of operations may be affected by regulatory outcomes, integration considerations, transaction-related costs, and other factors.
Current report
Demand Environment
Current report
Although air travel demand in the first part of 2026 has been strong, demand could be impacted in the future by macroeconomic, geopolitical, and airline industry events as it has in the past. In first quarter 2026, we strategically reduced off-peak day of week capacity and, in turn, increased peak day ASMs on fewer total aircraft year-over year. This contributed to a 3.9 percentage point increase in load factor on a 5.9 percentage decrease in capacity. We expect to continue to manage our peak period utilization as the demand environment allows.
Current report
Boeing Agreement
Current report
We have signed an agreement and amendments with Boeing to purchase 50 newly manufactured 737 MAX aircraft with options to purchase up to an additional 80 737 MAX aircraft. We have taken delivery of 17 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.
Current report
There continues to be regulatory focus on increasing quality control standards at Boeing and its suppliers with the aim of stabilizing aircraft production. These factors and the requirements for Boeing to obtain routine and necessary regulatory approvals could delay deliveries to us beyond management's current expectations. We currently expect ten more aircraft to be delivered to us in the last nine months of 2026. Delays in aircraft deliveries could impact our ability to schedule additional growth when the demand environment allows.
Current report
NMNot meaningful
Current report
Passenger revenue. Passenger revenue increased $55.0 million or 8.9 percent compared to first quarter 2025. The increase was primarily driven by strong leisure demand, which resulted in a 19.8 percent increase in average scheduled service base fare and a 3.9 percentage point improvement in scheduled service load factor, on a 5.9 percent decrease in scheduled service capacity.
Current report
Third party products revenue. Third party products revenue for first quarter 2026 increased $7.1 million or 20.3 percent compared to first quarter 2025. The increase was primarily attributable to a $5.1 million increase in the marketing component of co-brand revenue, a $1.7 million increase in rental car revenue, and a $1.3 million increase in revenue from the sales of a third party travel insurance product. These increases were offset by a $0.6 million decrease in third party hotel revenue as the result of a decrease in the number of room nights sold.
Current report
Fixed fee contract revenue. Fixed fee contract revenue increased $1.9 million or 11.5 percent in first quarter 2026. The increase was driven by a 5.5 percent increase in fixed fee departures and a 5.7 percent increase in revenue per departure, reflecting continued strength in sports flying during March Madness.
Current report
Airline operating CASM, excluding fuel and special charges. Airline operating CASM, excluding fuel and special charges, increased 7.1 percent to 8.64 ¢ in first quarter 2026 from 8.07 ¢ in first quarter 2025. The CASM-ex increase was primarily driven by a 5.9 percent decrease in capacity compared to the prior year quarter, which resulted in higher unit costs across nearly all expense categories. CASM-ex increases were also driven by year-over-year expense increases in the expense categories described below.
Current report
Salaries and benefits expense. Airline salaries and benefits expense decreased by $2.3 million or 1.0 percent compared to first quarter 2025. Our 2025 organizational restructuring initiatives resulted in a decrease of 6.5 percent in the number of full-time equivalent employees, the savings from which were offset by increases in flight crew wages resulting from increases in average tenure. As noted above, this expense on a per ASM basis increased as a result of the reduction in capacity from the prior year quarter.
Current report
Salaries and benefits expense in first quarter 2025 included $11.1 million from Sunseeker Resort, which was sold on September 4, 2025.
Current report
Aircraft fuel expense. Aircraft fuel expense increased $13.9 million or 8.4 percent, during first quarter 2026 compared to the same period in 2025, driven by a 16.5 percent increase in average fuel cost per gallon resulting from the ongoing hostilities in the Middle East. This increase was partially offset by a 7.0 percent decrease in fuel gallons consumed on a 5.9 percent reduction in capacity. So long as these market disruptions continue, we expect even greater cost impact from higher fuel costs in the future as the significant fuel cost increase in first quarter 2026 only affected the last month of the quarter.
Current report
Station operations expense. Station operations expense increased $3.0 million or 4.1 percent, compared to first quarter 2025. The increase was primarily driven by increases in building rent, airport and landing fees, and other station-related services reflecting higher rates and costs across multiple stations and the net addition of four new stations over the course of 2025.
Current report
Depreciation and amortization expense. Airline depreciation and amortization expense decreased $1.8 million or 3.0 percent compared to first quarter 2025. The decrease was driven by lower depreciation and amortization costs associated with the retirement of seven Airbus airframes and the sale of certain engines associated with the Airbus fleet since the beginning of 2025. These decreases were partially offset by aircraft depreciation from nine additional 737 MAX aircraft placed into service since the prior year period.
Current report
Depreciation and amortization expense in first quarter 2025 included $3.6 million from Sunseeker Resort, which was sold on September 4, 2025.
Current report
Maintenance and repairs expense. Maintenance and repairs expense remained flat compared to the prior year quarter and increased 7.8 percent on a per ASM basis primarily as a result of the lower number of ASMs flown. Costs incurred to prepare aircraft for return from operating leases and a higher volume of rotable repairs were offset by fewer other maintenance events resulting from a 5.0 percent reduction in departures.
Current report
Sales and marketing expense. Airline sales and marketing expense increased $4.8 million or 20.7 percent compared to first quarter 2025 due to a non-recurring item related to our credit card agreement that offset expenses in first quarter 2025 and higher credit card processing fees associated with a $55.0 million year-over-year increase in passenger revenue.
Current report
Sales and marketing expense in first quarter 2025 included $1.7 million from Sunseeker Resort, which was sold on September 4, 2025.
Current report
Other operating expense. Airline other operating expenses decreased by $2.1 million or 9.7 percent during first quarter 2026 compared to the prior year quarter. The decrease was driven primarily by gains on the sale of assets, which resulted in a $2.4 million greater offset to expense in first quarter 2026 compared to first quarter 2025.
Current report
Other operating expense in first quarter 2025 included $13.1 million from Sunseeker Resort, which was sold on September 4, 2025.
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Special charges. The Airline recorded special charges of $27.8 million in first quarter 2026, compared to $1.4 million in first quarter 2025. Special charges in 2026 consisted of $10.0 million of accelerated amortization related to software identified for redevelopment, $9.6 million of costs related to the proposed acquisition of Sun Country Airlines, and a $7.0 million allowance for credit losses on a third party note receivable.
Current report
Special charges in first quarter 2025 (a negative amount in the quarter) reflected insurance recoveries from damages related to weather events that occurred at Sunseeker Resort between 2022 and 2024.
Current report
Interest expense, net of interest income and capitalized interest, decreased $6.1 million or 27.5 percent, compared to first quarter 2025. The decrease was primarily driven by an $8.1 million reduction in interest expense, reflecting lower average outstanding debt balances and lower variable interest rates year over year. In addition, first quarter 2025 included a $3.4 million loss on debt extinguishment related to the early repayment of the Sunseeker construction loan. This decrease was partially offset by a $2.2 million decrease in capitalized interest attributable to lower average pre-delivery deposit balances, and a $3.2 million decrease in interest income due to lower yields on invested cash balances.
Current report
During the three months ended March 31, 2026, we borrowed $20.5 million secured by aircraft related assets.
Current report
Long-Term Debt and Finance Leases. Cash used in financing activities for the three months ended March 31, 2026 was $9.0 million, compared to $69.0 million during the same period in 2025. During first quarter 2026, we made regularly scheduled principal payments of $29.4 million on our debt and finance lease obligations and received $20.5 million of proceeds from a draw on our PDP facility. During the three months ended March 31, 2025, we made $280.6 million of principal repayments on our debt and finance leases, largely related to prepayments of the Sunseeker construction loan and a PDP financing facility and received proceeds from the issuance of aircraft financing debt totalling $224.5 million.
Removed paragraphs (59)
Previous report
Third Quarter 2025 Review
Previous report
Third quarter 2025 highlights include:
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•Total consolidated operating revenue of $561.9 million, flat over the prior year
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•Airline-only operating CASM, excluding fuel and special charges of 8.47 ¢, down 4.7 percent year-over-year
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•Ended the quarter with 21 million total active Allways Rewards members
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•Named Best Airline Credit Card for the seventh consecutive year and Best Frequent Flyer Program for the second consecutive year by USA TODAY's Readers' Choice Awards
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•During the third quarter, expanded the network by announcing 12 new nonstop routes and three new cities, Atlantic City, Burbank, and Huntsville
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(2)Includes one aircraft under operating lease as of September 30, 2025 and four aircraft under operating lease as of December 31, 2024. Excludes three leased aircraft as of September 30, 2025, which have been removed from service as of that date, but have yet to be returned to the lessor.
Previous report
(3)These numbers exclude six Boeing 737-8200 aircraft of which we have taken delivery but which have not been placed in service as of September 30, 2025.
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Business and Macroeconomic Conditions
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Consumer confidence has vacillated during the current year, which along with other macroeconomic and airline industry events, initially contributed to a general decline in consumer spending and, in particular, softened demand for domestic, leisure air travel. Although demand fluctuates, macroeconomic uncertainty persists, driven by factors such as trade policies, tariffs, and the U.S. Government shutdown. These factors have impacted our fares, load factors, and profitability. Our results of operations may continue to be impacted while these conditions persist. We continue to monitor how these factors could impact our business and take steps to mitigate their effect on our business.
Previous report
Elevated fuel costs may continue to impact our overall cost structure and operating results.
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Sunseeker Resort
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In September 2025, we completed the sale of Sunseeker Resort and received cash proceeds of approximately $189.9 million after various closing adjustments. The sale aligns with our strategic focus on our Airline operations.
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Passenger revenue. Passenger revenue increased $5.2 million or 1.1 percent compared to third quarter 2024 driven by a 9.0 percent increase in scheduled service passengers on an 11.0 percent increase in scheduled service departures. The increase in scheduled service passengers was offset by a 7.3 percent decrease in scheduled service total fare. While average base fare declined by 16.3 percent compared to third quarter 2024 due to demand softness in the industry, average ancillary fare remained flat quarter over quarter.
Previous report
Third party products revenue. Third party products revenue was flat compared to the prior year quarter despite the 9.0 percent increase in scheduled service passengers. An increase in revenue from our travel insurance product was offset by decreases in revenues from hotel room sales on our website and in the marketing component of our co-brand credit card revenue.
Previous report
Fixed fee contract revenue. Fixed fee contract revenue decreased $1.7 million or 8.3 percent compared to third quarter 2024. This is primarily due to a 4.3 percent decrease in fixed fee departures driven by lower availability of aircraft for fixed fee service due to higher utilization in scheduled service and also by decreases in international vacation and Department of Defense charters.
Previous report
Airline operating CASM, excluding fuel and special charges. Airline operating CASM, excluding fuel and special charges, decreased 4.7 percent to 8.47 ¢ from 8.89 ¢ in third quarter 2025. The primary driver of the CASM-ex decrease was a 9.7 percent increase in ASMs, as we grew into our existing infrastructure. In particular, we achieved the increased capacity with no increase to the average number of aircraft in service and with only a small increase in the number of full-time equivalent employees. A majority of expense line items were lower on a per ASM basis due in part to the increase in capacity.
Previous report
Salaries and benefits expense. Airline salaries and benefits expense increased $6.6 million or 3.6 percent compared to third quarter 2024. The increase was primarily attributable to increased flight crew wages due to a 10.2 percent increase in total block hours flown compared to third quarter 2024. Additionally, flight crew wages were higher year over year due to an increase in average tenure.
Previous report
Salaries and benefits expense at Sunseeker Resort decreased $5.6 million or 48.6 percent primarily due to the sale of Sunseeker Resort on September 4, 2025, resulting in approximately one less month of expense included in third quarter 2025 compared to third quarter 2024.
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Aircraft fuel expense. Aircraft fuel expense increased $3.0 million or 2.0 percent compared to third quarter 2024. The increase was primarily driven by a 6.9 percent increase in fuel gallons consumed on a 9.7 percent increase in available seat miles, which was partially offset by a 4.8 percent decrease in average fuel cost per gallon. Fuel efficiency improved by 2.6 percent compared to the prior year quarter.
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Station operations expense. Station operations expense increased 1.1 percent or $0.8 million compared to third quarter 2024. The increase was primarily driven by a 10.4 percent year-over-year increase in total system departures that resulted in a corresponding increase in airport and landing fees, ground handling, and certain other stations-related expenses. These increases were largely offset by a reduction in passenger compensation resulting from fewer irregular operations events compared to the prior year quarter, which included disruptions related to the CrowdStrike outage in July 2024.
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Depreciation and amortization expense. Airline depreciation and amortization expense increased $2.9 million or 5.2 percent compared to third quarter 2024. This increase was primarily attributable to the addition of 10 new aircraft from our 737 MAX order, which were placed into service over the past year. This increase was partially offset by decreases in depreciation and heavy maintenance amortization resulting from the retirement of seven Airbus airframes since third quarter 2024.
Previous report
Maintenance and repairs expense. Maintenance and repairs expense increased $9.6 million or 31.8 percent compared to third quarter 2024, primarily due to a higher volume of certain rotable part repairs during third quarter 2025. Maintenance and repairs expense was also impacted by tariffs and repairs to aircraft to be returned from operating lease. The remaining increases in maintenance and repairs expense were consistent with the 9.7 percent increase in capacity.
Previous report
Sales and marketing expense. Airline sales and marketing expense decreased $1.3 million or 5.5 percent compared to third quarter 2024 primarily due to a decrease in sponsorship related expenses.
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Sunseeker Resort sales and marketing expense decreased $0.6 million or 36.8 percent primarily due to the sale of Sunseeker Resort on September 4, 2025, resulting in approximately one less month of expense in third quarter 2025 compared to third quarter 2024.
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Other operating expense. Airline other operating expenses decreased by $5.5 million or 18.2 percent partially due to gains on the sale of land and flight equipment during third quarter 2025, which resulted in a larger offset to other operating expenses compared to the prior year quarter. Additionally, there were decreases in various other operating expense items, such as corporate and crew travel, administrative services, insurance costs, rent and property taxes as we continue to focus on managing costs.
Previous report
Sunseeker Resort other operating expenses decreased $1.4 million or 13.9 percent primarily due to the sale of Sunseeker Resort on September 4, 2025, resulting in approximately one less month of expense in third quarter 2025 compared to third quarter 2024.
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Special charges. In third quarter 2025, the Airline recorded $2.9 million in special charges related to accelerated depreciation on airframes identified for early retirement.
Previous report
Sunseeker Resort recorded $0.6 million in special charges during third quarter 2025. These charges primarily reflect $2.9 million in asset write-downs and transaction-related adjustments associated with the sale of the Resort. The impact of these charges was largely offset by final insurance recoveries related to previous weather and associated events.
Previous report
Interest expense, net of interest income and capitalized interest, increased $7.8 million or 45.5 percent, compared to third quarter 2024. The increase was primarily driven by an $8.8 million decrease in capitalized interest as 15 aircraft from our 737 MAX order have been delivered since September 30, 2024, and the interest expense on debt to acquire those aircraft is no longer capitalized.
Previous report
Comparison of nine months ended September 30, 2025 to nine months ended September 30, 2024
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Operating Revenue
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Passenger revenue. Passenger revenue increased $65.4 million or 3.9 percent compared to the nine months ended September 30, 2024, driven by a 9.6 percent increase in scheduled service passengers on a 13.7 percent increase in scheduled service departures. The increase in scheduled service passengers was offset by a 5.5 percent decrease in scheduled service total fare, which largely resulted from a 13.8 percent decline in average base fare due to demand softness in the industry. This decrease was partially offset by a 3.0 percent increase in average fare for air-related charges. Over the last year, revenues for air-related charges have been bolstered by sales of our Allegiant Extra product. Since September 30, 2024, we have configured an additional 44 aircraft with the extra legroom seating for our Allegiant Extra offering, bringing the total number to 83 aircraft as of September 30, 2025. The restoration of functionality around our third bundled product offering, which began in late 2024, has also contributed to ancillary revenue gains over the last year.
Previous report
Third party products revenue. Third party products revenue decreased $1.7 million or 1.5 percent compared to the nine months ended September 30, 2024 despite the 9.6 percent increase in scheduled service passengers. The decrease is primarily driven by a $6.0 million decrease in the marketing component of co-brand revenue as certain bonus compensation was phased out in late 2024. The decrease was partially offset by a $2.9 million increase in revenue from our travel insurance product, which was implemented during first quarter 2024.
Previous report
Fixed fee contract revenue. Fixed fee contract revenue decreased $5.0 million or 8.7 percent compared to the nine months ended September 30, 2024. This was primarily due to a 5.7 percent decrease in fixed fee departures driven by lower availability of aircraft for fixed fee service due to higher utilization in scheduled service and also by decreases in international vacation, Department of Defense and sports charters.
Previous report
Resort and other revenue. Resort revenues increased $6.9 million or 12.9 percent compared to the nine months ended September 30, 2024, despite having one less month of revenue in 2025 due to the sale of the Resort on September 4, 2025. The increased revenue was primarily driven by increased occupancy which was partially offset by a reduction in the average daily rate.
Previous report
Operating Expenses
Previous report
Airline operating CASM, excluding fuel and special charges. Airline operating CASM, excluding fuel and special charges decreased by 6.9 percent to 8.05 ¢ for the nine months ended September 30, 2025 compared to 8.65 ¢ for the same period in 2024. The primary driver of the CASM-ex decrease was a 13.3 percent increase in ASMs as we grew into our existing infrastructure. In particular, we achieved the increased capacity with the same average number of aircraft in service and only a small increase in the number of full-time equivalent employees. A majority of expense line items were lower on a per ASM basis due in part to the increase in capacity.
Previous report
Salaries and benefits expense. Airline salaries and benefits expense increased $33.6 million or 5.8 percent year over year. The increase was primarily attributable to an increase in flight crew wages due to a 14.4 percent increase in total block hours flown. Additionally, average flight crew wages increased due to an increase in average tenure, and there were further increases for our flight attendant group due to a pay band increase associated with the collective bargaining agreement that took effect in April 2024.
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Reworded paragraphs (28)
Previous wording
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, 2025 and 2024. Also discussed is our financial position as of September 30, 2025 and December 31, 2024. 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, 2024. 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.
Current wording
The following discussion and analysis presents factors that had a material effect on our results of operations during the three months ended March 31, 2026 and 2025. Also discussed is our financial position as of March 31, 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.
Previous wording
•$34.0 million in total cobrand credit card remuneration received
Current wording
•$39.3 million in total cobrand credit card remuneration received, up 8.9 percent year-over-year
Previous wording
(1)Includes 23 aircraft under finance lease and 12 aircraft under operating lease as of September 30, 2025. Includes 23 aircraft under finance lease and 13 aircraft under operating lease as of December 31, 2024. Excludes one leased aircraft as of September 30, 2025, which has been removed from service as of that date, but has yet to be returned to the lessor.
Current wording
(1)Includes 23 aircraft under finance lease and 9 aircraft under operating lease as of March 31, 2026 and December 31, 2025. Excludes two aircraft under operating lease as of March 31, 2026 and three aircraft under operating lease as of December 31, 2025, which were removed from service pending redelivery.
Previous wording
As of September 30, 2025, we are party to forward purchase agreements for 34 aircraft with deliveries expected between 2026 and 2028. The timing of these deliveries is based on management's best estimates.
Current wording
As of March 31, 2026, we are party to forward purchase agreements for 33 aircraft with deliveries expected between 2026 and 2028.
Previous wording
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, 2025, 15 airframes had been retired, with nine additional retirements scheduled between February 2026 and December 2026. The accelerated depreciation resulting from the revised estimated useful life of these aircraft is being recorded as a special charge, including $2.9 million recognized in the third quarter of 2025. 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 the fleet.
Current wording
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 March 31, 2026, 16 airframes have been retired, with eight additional retirements scheduled between May 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 $1.3 million recognized in first 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.
Previous wording
As of September 30, 2025, we were selling 551 routes versus 542 as of the same date in 2024. Network growth in the future will continue to be affected by timing of aircraft deliveries, aircraft in heavy maintenance, airport construction and disruption, trends in domestic, leisure air travel demand and other factors. 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. Our total active number of origination cities and leisure destinations were 88 and 35, respectively, as of September 30, 2025.
Current wording
As of March 31, 2026, we were selling 576 routes versus 577 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, 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. Our total active number of origination cities and leisure destinations were 91 and 35, respectively, as of March 31, 2026.
Previous wording
The cost of fuel, including refining costs and applicable crack spreads, remains volatile, influenced by numerous economic and geopolitical factors beyond our control or prediction. Significant increases in fuel costs could materially impact our 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.
Current wording
The cost of fuel, including refining costs and applicable crack spreads, remains volatile, and are influenced by numerous economic and geopolitical factors beyond our control or prediction, including geopolitical conflict and war. The recent escalation of hostilities in the Middle East has significantly impacted the market prices of products that are derived from crude oil. Our first quarter fuel expense was $180.2 million, or $3.04 per gallon, which is 16.5 percent higher than the $2.61 we paid in first quarter 2025. As the geopolitical unrest in the Middle East began in late February, the volatility only impacted our results for approximately one month of the quarter. However, as this situation persists, we may continue to see significant increases in 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.
Previous wording
The collective bargaining agreement with our pilots has been amendable since 2021. We and the International Brotherhood of Teamsters ("IBT”) jointly requested the mediation services of the National Mediation Board ("NMB") in January 2023 to assist with the negotiations. The mediation process with the NMB is continuing.
Current wording
The collective bargaining agreement with our pilots has been amendable since 2021. We and the International Brotherhood of Teamsters ("IBT") jointly requested the mediation services of the National Mediation Board in January 2023 to assist with the negotiations. The mediation process with the NMB is continuing. At this time, the announced acquisition of Sun Country has not changed the mediation process.
Previous wording
For the three months ended September 30, 2025, we recorded estimated pilot retention bonus accruals of $22.4 million, bringing the total accrual, which is shown in the balance sheet within the accrued liabilities line item, to $215.0 million at September 30, 2025, including the related payroll taxes. The bonus will be paid to all pilots remaining employed with us after ratification of a new collective bargaining agreement.
Current wording
For the three months ended March 31, 2026, we recorded estimated pilot retention bonus accruals of $20.1 million, bringing the total accrual to $256.0 million as of March 31, 2026, including the related payroll taxes. The bonus will be paid to all pilots remaining employed with us after ratification of a new collective bargaining agreement.
Previous wording
Resort and other revenue. Resort and other revenues decreased $3.7 million or 27.9 percent, primarily due to the sale of Sunseeker Resort on September 4, 2025, resulting in approximately one less month of resort revenue included in third quarter 2025 compared to third quarter 2024.
Current wording
Resort and other revenue. Resort and other revenues decreased compared to the prior-year period as we sold Sunseeker Resort on September 4, 2025.
Previous wording
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 and special charges allows management and investors to better compare our airline unit costs with those of other airlines.
Current wording
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 and special charges. Excluding fuel costs and special charges allows management and investors to better compare our airline unit costs with those of other airlines.
Previous wording
Aircraft lease rentals. Aircraft lease rental expense increased $5.2 million compared to third quarter 2024. The increase is attributable to estimated lease return costs we began to accrue in second quarter 2025 for certain aircraft on operating leases related to redeliveries in 2025 and future years.
Current wording
Aircraft lease rentals. Aircraft lease rental expense increased $1.5 million compared to first quarter 2025. The increase is attributable to estimated lease return costs we accrued for certain aircraft on operating leases related to redeliveries in 2026 and future years, offset by lower lease expense from leased aircraft that were redelivered during fourth quarter 2025 and first quarter 2026.
Previous wording
(1)Except load factor and percent of sales through website during period, which are presented as a percentage point change.
Current wording
(1)Except load factor and percent of sales through website and mobile app during period, which are presented as a percentage point change.
Previous wording
Cash, cash equivalents and investment securities (short-term and long-term) increased to $991.3 million as of September 30, 2025, from $832.9 million at December 31, 2024. Investment securities represent highly liquid marketable securities which are available-for-sale.
Current wording
Cash, cash equivalents and investment securities (short-term and long-term) increased to $933.6 million as of March 31, 2026, from $838.5 million at December 31, 2025. Investment securities represent highly liquid marketable securities which are available-for-sale.
Previous wording
As of September 30, 2025, we had $175.0 million of undrawn capacity under revolving credit facilities and $25.1 million in undrawn borrowing capacity under aircraft financing facilities.
Current wording
As of March 31, 2026, we had $250.0 million of undrawn capacity under revolving credit facilities and $25.1 million in undrawn borrowing capacity under aircraft financing facilities. The latter facility has now been fully drawn.
Previous wording
Our operating cash flows and long-term debt borrowings have allowed us to invest in our fleet renewal. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments.
Current wording
Our operating cash flows and long-term debt borrowings have allowed us to invest in our fleet renewal. Future capital needs are primarily for the acquisition of additional aircraft, including our existing aircraft commitments, and for the proposed acquisition of Sun Country and related expenditures.
Previous wording
Our share repurchase authority at September 30, 2025 is $64.7 million. During the first quarter of 2025, we made $11.0 million of open market share repurchases. We did not repurchase any shares on the open market during the second and third quarters of 2025. We have indefinitely suspended our quarterly cash dividend in anticipation of upcoming capital needs related to our fleet investments.
Current wording
Our share repurchase authority at March 31, 2026 is $64.7 million. We did not repurchase any shares on the open market during first quarter 2026. We have indefinitely suspended our quarterly cash dividend in anticipation of upcoming capital needs related to our fleet investments.
Previous wording
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short-term investment balances, existing aircraft financing facilities, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months. We will continue to consider raising funds through debt financing as needed to fund capital expenditures.
Current wording
We believe we have more than adequate liquidity resources through our cash, cash equivalent and short-term investment balances, existing aircraft financing facilities, our undrawn capacity under existing credit facilities, operating cash flows and anticipated access to liquidity, to meet our current contractual obligations and remain in compliance with the debt covenants in our existing financing agreements for the next 12 months. We will continue to consider raising funds through debt financing as needed to fund capital expenditures and refinance our corporate debt in advance of its maturity.
Previous wording
Our debt and finance lease obligations balance, without reduction for related issuance costs, remained stable at $2.08 billion as of December 31, 2024 and September 30, 2025. Net debt (total debt less unrestricted cash, cash equivalents, and investments) totaled $1.07 billion as of September 30, 2025, representing a reduction of $168.5 million compared to December 31, 2024.
Current wording
Our debt and finance lease obligations balance, without reduction for related issuance costs, was $1.8 billion as of March 31, 2026 and December 31, 2025. Net debt (total debt less unrestricted cash, cash equivalents, and investments) totaled $0.9 billion as of March 31, 2026, representing a reduction of $102.9 million compared to December 31, 2025.
Previous wording
As of September 30, 2025, approximately 59.4 percent of our debt and finance lease obligations are fixed-rate.
Current wording
As of March 31, 2026, approximately 59.4 percent of our debt and finance lease obligations is fixed-rate.
Previous wording
During the nine months ended September 30, 2025, and 2024, we generated cash flows from operations of $277.6 million and $254.1 million respectively.
Current wording
During the three months ended March 31, 2026, and 2025, we generated cash flows from operations of $268.1 million and $191.4 million respectively.
Previous wording
Salaries and Benefits. Salaries and benefits expense represents our single largest expense and has increased considerably in recent years. Cash payments for our salaries and benefits expense are typically made in the period that they are incurred with the exception of our pilot retention bonus, which will be paid to all pilots after ratification of a new collective bargaining agreement. At September 30, 2025 and December 31, 2024, we have recorded, within the accrued liabilities line item in our balance sheet, approximately $215.0 million and $146.1 million, respectively, in relation to the pilot retention bonus, including related payroll taxes.
Current wording
Salaries and Benefits. Salaries and benefits expense represents our single largest expense and has increased considerably in recent years. Cash payments for our salaries and benefits expense are typically made in the period that they are incurred with the exception of our pilot retention bonus, which will be paid to all pilots after ratification of a new collective bargaining agreement. For the quarters ended March 31, 2026 and 2025, we recognized, within the accrued liabilities line item in our balance sheet, approximately $20.1 million and $22.7 million, respectively, of expense related to the pilot retention bonus, including related payroll taxes.
Previous wording
Fuel. Fuel expense is our second largest expense. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. During the nine months ended September 30, 2025, we increased our year over year flying capacity by 13.3 percent, which led to an 11.4 percent increase in fuel gallons consumed but a $5.0 million decrease in fuel expense due to lower per gallon fuel cost.
Current wording
Fuel. Fuel is our second largest expense. The market price for jet fuel is volatile, which can impact the comparability of our periodic cash flows from operations. During the three months ended March 31, 2026, we decreased our year over year flying capacity by 5.9 percent, which led to an 7.0 percent decrease in fuel gallons consumed when compared to the same period in 2025. However, this decrease was offset by a 16.5% increase in average fuel cost per gallon over the same period, stemming from the Iranian conflict beginning on February 28, 2026. We expect to continue to see material increases in fuel costs while these circumstances persist.
Previous wording
Investments. We hold various financial assets and will strategically purchase and sell these assets based on operational cash needs. During the nine months ended September 30, 2025, we had $117.8 million of net investment purchases (net cash outflows) compared to $202.7 million of net investment maturities (net cash inflows) during the same period in 2024.
Current wording
Investments. We hold various financial assets and will strategically purchase and sell these assets based on operational cash needs. During the three months ended March 31, 2026, we had $17.4 million of net investment maturities (net cash inflows) compared to $73.3 million of net investment purchases (net cash outflows) during the same period in 2025.
Previous wording
Capital Expenditures. Capital expenditures for the nine months ended September 30, 2025 and 2024 were $334.1 million and $274.9 million, respectively. In December 2021, we committed to purchase 50 Boeing 737 MAX aircraft, of which we began to receive delivery in September 2024. During the nine months ended September 30, 2025, we took delivery of 12 aircraft, and as of September 30, 2025, we have firm commitments to purchase 34 more aircraft.
Current wording
Capital Expenditures. Capital expenditures for the three months ended March 31, 2026 and 2025 were $177.8 million and $74.5 million, respectively. In December 2021, we committed to purchase 50 Boeing 737 MAX aircraft, of which we began to receive delivery in September 2024. During the three months ended March 31, 2026, we took delivery of one aircraft and made pre-delivery payments on certain of the remaining 33 aircraft under firm commitment.
Previous wording
We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding the number of contracted aircraft to be placed in service in the future, the timing of aircraft deliveries and retirements, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate," “project,” “hope” or similar expressions.
Current wording
We have made forward-looking statements in this quarterly report on Form 10-Q, and in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” that are based on our management’s beliefs and assumptions, and on information currently available to our management. Forward-looking statements include our statements regarding the acquisition of Sun Country, the number of contracted aircraft to be placed in service in the future, the timing of aircraft deliveries and retirements, as well as other information concerning future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "anticipate," "intend," "plan," "estimate," “project,” “hope” or similar expressions.
Previous wording
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements may be found in our periodic reports filed with the Securities and Exchange Commission atwww.sec.gov. These risk factors include, without limitation, the impact of regulatory reviews of, and production limits on, Boeing on our aircraft delivery schedule, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on Boeing to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed, the effect of economic conditions on leisure travel, debt covenants and balances, the impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to implement an alliance with VivaAerobus and to otherwise prepare to offer international service, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the possible loss of key personnel, economic and other conditions in markets in which we operate, increases in maintenance costs and the availability of outside maintenance contractors to perform needed work on our aircraft on a timely basis and at acceptable rates, cyclical and seasonal fluctuations in our operating results and the perceived acceptability of our environmental, social, and governance efforts.
Current wording
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in the forward-looking statements. Important risk factors that could cause our results to differ materially from those expressed in the forward-looking statements generally may be found in our periodic reports filed with the Securities and Exchange Commission at www.sec.gov. These risk factors include, without limitation, the impact of regulatory reviews of, and production limits on, The Boeing Company on our aircraft delivery schedule, an accident involving, or problems with, our aircraft, public perception of our safety, our reliance on our automated systems, our reliance on Boeing to deliver aircraft under contract to us on a timely basis, risk of breach of security of personal data, volatility of fuel costs, labor issues and costs, the ability to obtain regulatory approvals as needed in connection with our fleet and network, the effect of economic conditions on leisure travel, debt covenants and balances, the impact of government regulations on the airline industry, the ability to finance aircraft to be acquired, the ability to obtain necessary government approvals to prepare to offer international service from our markets, terrorist attacks, risks inherent to airlines, our competitive environment, our reliance on third parties who provide facilities or services to us, the impact of the possible loss of key personnel, economic and other conditions in markets in which we operate, increases in maintenance costs and availability of outside maintenance contractors to perform needed work on our aircraft on a timely basis and at acceptable rates, cyclical and seasonal fluctuations in our operating results and the perceived acceptability of our environmental, social and governance efforts, the occurrence of any event, change or other circumstance that could give rise to the right of one or both of us or Sun Country to terminate the definitive merger agreement for the Sun Country acquisition; the risk that potential legal proceedings may be instituted against us or Sun Country and result in significant costs of defense, indemnification or liability; the possibility that the Sun Country acquisition does not close when expected or at all because required stockholder approvals or other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction); the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Sun Country acquisition or that any of the foregoing may take longer to realize or be more costly to achieve than expected; disruption to the parties' businesses as a result of the announcement and pendency of the Sun Country acquisition; the costs associ…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
There were no other material changes to our critical accounting estimates during the nine months ended September 30, 2025. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 2024 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited) in this Form 10-Q.
Current wording
There were no material changes to our critical accounting estimates during the three months ended March 31, 2026. For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 2025 Form 10-K, and in Note 1 of Notes to Consolidated Financial Statements (unaudited) in this Form 10-Q.
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Previous report — wording carried elsewhere
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 and special charges allows management and investors to better compare our airline unit costs with those of other airlines.
Previous report — wording carried elsewhere
Aircraft lease rentals. Aircraft lease rental expense increased $10.4 million compared to the nine months ended September 30, 2024. The increase is attributable to estimated lease return costs we began to accrue in second quarter 2025 for certain aircraft on operating leases related to redeliveries in 2025 and future years.
Previous report — wording carried elsewhere
The following tables set forth ourairline operating statistics for the nine-month periods indicated:
Previous report — wording carried elsewhere
(1)Except load factor and percent of sales through website during period, which are presented as a percentage point change.
Previous report — wording carried elsewhere
(2)Defined as scheduled service revenue divided by revenue passenger miles.
Previous report — wording carried elsewhere
(3)Various components of this measure do not have a direct correlation to ASMs. This measure is provided on a per ASM basis so as to facilitate comparison with airlines reporting revenues on a per ASM basis.
Previous report — wording carried elsewhere
(4)Reflects division of passenger revenue between scheduled service (base fare) and air-related charges in our booking path.