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The budget carrier Allegiant Air (ALGT+1.60%) released earnings Wednesday, reporting a $36 million loss on $562 million in revenue. The numbers were worse than Wall Street was expecting, and it wasn’t the only bad news for the airline, which provided an update on the often-unfortunate Sunseeker Resort project in the Sunshine State.
“Estimated property damage related to Hurricane Helene is approximately $2 million, which is reported as a special charge on the third quarter income statement,” the company said about its Charlotte Harbor, Fla destination. “Hurricane Milton impact is currently being assessed and will be reported in the fourth quarter.”
Allegiant, which operates a substantial portion of its route network in Florida, “experienced substantial disruptions” due to the two storms, according to remarks from CEO Gregory Anderson in the earnings release. The airline also had to close Sunseeker.
The property has had a long run of bad luck. It dealt with COVID-19 construction delays and inflation costs, and it has been struck by a hurricane at least once a year since 2022. The aviation website Simply Flying pondered in May if the resort was the “craziest thing Allegiant Air ever did.”
Some analysts have openly wondered whether the company should sell Sunseeker rather than continue to deal with its headaches. Though Allegiant has brought in a consulting firm to initiate a strategic review that would “maximize the value” of the resort, and Anderson has said that “all options are on the table — that includes a sale or a stake sale,” the company isn’t quite ready to throw in the towel.
For now, Allegiant says that it was able to move much of its fourth-quarter reservations to early next year.
“I like what I’m seeing in terms of what the holidays look like, Thanksgiving, New Year and Christmas,” chief operating officer Micah Richins said on the company’s earnings call. “They look good. Couldn’t be more excited about Q1.”
Besides, if regular travelers are waiting out reconstruction and economic recovery efforts, there’s another group of business guests who need somewhere to stay while they attend to their work.
“In terms of FEMA, we are absolutely connected to that channel,” Richins told analysts. “We’re seeing decent production for that, and you’ll start to see that show up in November. You don’t see it in terms of a lot of ancillary spend, but it’s a decent [average daily rate] and the stays are long stays.”