Allegiant President Says Company Expects About 12 Aircraft Deliveries From Boeing In 2024 Versus Previous Estimate Of 24; Co Has Reactivated A Few Used Airbus A320 Jets To Mitigate Effect Of Boeing Delivery Delays; Delivery Of First Max Jet Expected In Coming Months; Delivery Delays Should Not Have A 'Meaningful' Impact On Capacity Plans
Portfolio Pulse from Benzinga Newsdesk
Allegiant's President announced the company expects to receive around 12 aircraft from Boeing in 2024, down from the initial estimate of 24. To mitigate the impact of Boeing's delivery delays, Allegiant has reactivated some used Airbus A320 jets. The first Max jet delivery is anticipated in the coming months. Despite these delays, the President assures that Allegiant's capacity plans will not be significantly affected.
February 28, 2024 | 5:53 pm
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NEGATIVE IMPACT
Boeing faces delivery delays, impacting its 2024 aircraft delivery schedule to Allegiant, which now expects half the initially estimated aircraft.
Boeing's inability to meet its initial delivery schedule for Allegiant in 2024 could be viewed negatively by investors, as it reflects challenges in meeting contractual obligations and could impact Boeing's revenue projections from these sales. The delivery delays may raise concerns about Boeing's operational efficiency and reliability, potentially leading to a negative short-term impact on BA's stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
NEUTRAL IMPACT
Allegiant expects fewer Boeing aircraft in 2024 and has reactivated Airbus A320s to mitigate delivery delays. Capacity plans remain unaffected.
The reduction in expected Boeing aircraft deliveries for 2024 could be seen as a negative development for Allegiant. However, the proactive measures taken by reactivating Airbus A320 jets and the assurance that capacity plans will not be meaningfully impacted help mitigate potential negative perceptions. The overall impact on ALGT's stock price in the short term is likely neutral, as the market may view the company's adaptability positively, balancing out the initial negative news of delivery delays.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 80