Allegiant maintains faith in MD-80 with Finnair purchase
Monday April 14, 2008
Allegiant Air parent Allegiant Travel Co. announced the purchase from Finnair of six MD-80s and three spare engines that currently are on lease to FlyNordic, which was sold by Finnair to Norwegian last year.
"Our strong financial condition permits us to purchase aircraft for cash," Allegiant Chairman and CEO Maurice Gallagher Jr. said. The airline claimed to be one of only two in the US to carry more cash than debt as of Dec. 31.
Four of the aircraft will enter service for Allegiant in the first half of 2009 and the remaining two in the first quarter of 2010. It expects to receive around $5.5 million in lease revenue from the planes while they continue to operate for FlyNordic but expects to incur a similar amount in maintenance obligations (ATWOnline, March 17). Finnair said the transaction would not have any significant impact on its financial performance.
Allegiant currently flies 36 MD-80s. It flew 393.3 million scheduled RPMs in March, up 46.7% from the year-ago month, against a 41.1% rise in capacity to 433 million ASMs. Load factor increased 3.5 points to 90.8%.
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