Allegiant MD-80. By Rob Finlayson

Las Vegas-based Allegiant Travel Co. reported net income of $9.5 million, down 27.9% from $13.8 million in the year-ago quarter, owing mainly to higher fuel prices.

Allegiant chairman and CEO Maurice Gallagher Jr. told reporters and analysts that this year’s elevated fuel prices led the company to restrict capacity and increase fares by 21% in the third quarter.

Revenue rose 17% to $191.5 million while expenses increased 21.2% to $174.8 million, producing an operating profit of $16.7 million, down 14.1% from the prior-year quarter.

Scheduled traffic decreased 0.6% to 1.35 billion RPMs on a 3.3% fall in capacity to 1.46 billion ASMs, producing a load factor of 92.2%, down 2.6 points. Yield rose 21.2% to 9.31 cents as scheduled service PRASM rose 24.5% to 8.58 cents. CASM was 10.97 cents, up 25.4% and CASM ex-fuel was 5.69 cents, up 14.7%.

As of Sept. 30, Allegiant had an operating fleet of 52 MD-80 aircraft and one Boeing 757 aircraft. Gallagher said the company introduced the first of six 757-200s in July, the first step toward its planned launch of flights to Hawaii next summer. It currently operates two routes to/from Las Vegas. “For a nominal amount of additional fuel burn, we are generating 67 additional profit-potential seats (ATW Daily News, July 7),” he said. “We continue to push ahead with our ETOPS certification from FAA and expect more progress after the first of the year.”

Gallagher said the conversion of its MD-80 fleet to 166 seats is expected to be completed by year end. “We now have two 166-seat MD-80s in service on our Bellingham routes. We expect to have 9-10 aircraft available by year end,” he said.