Increased fuel and labor costs mean budget airline Allegiant is likely to mean a shart drop in, despite increased demand from passengers.

After-hours trading on Monday, July 25, saw the low-cost carrier provide a dismal preview of its second-quarter results, which it said were largely caused by increasing costs, particularly fuel.

After the market closed, Allegiant Travel Company announced it anticipates reporting 62 cents per share earnings.

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According to a FactSet survey, analysts had been even more positive than the firm, predicting a profit of $1.36 per share.

The company had previously predicted a profit of 92 cents per share.

Its shares traded down more than 18 percent in extended trading on Monday.

The difficulties Allegiant faced mirrored those other airlines experienced over the previous two weeks: ticket demand is still high.

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This is because of the public’s desire to fly after more than two years of the pandemic, but costs for fuel, labor and other costs are also massively rising.

The airline located in Las Vegas reported revenue for the April through June quarter was over $629 million, up 28 percent from the same time in 2019.

Strong sales have continued in July, with flights often being slightly more than 90 percent full.

Allegiant is scheduled to report quarterly results on August 3.

Source: Washington Post

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