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LAS VEGAS and LOVELAND — Allegiant Travel Co. (Nasdaq: AGLT) is cutting almost every category of spending outside of a few key routes, all but confirming further delays in potentially restarting commercial service from Northern Colorado Regional Airport.
In a statement to investors, the Las Vegas-based airline said it would cut flight capacity by 15 percent through May and potentially up to 35 percent in later months if the public health crisis persists.
It suspended giving dividends to shareholders, froze new hiring and halted all non-essential capital and discretionary spending, which combined would save about $300 million in spending through 2020.
“This is a situation that is changing daily, and we are focused on taking proactive steps to protect the health and safety of our customers and team members, and to ensure our resilient company can continue to provide access to convenient, affordable nonstop travel,” CEO Maurice Gallagher said in a prepared statement.
However, that all but guarantees further delays in restarting commercial service at Northern Colorado Regional Airport after cancelling its planned routes to Las Vegas and Phoenix last October. At the time, the routes were expected to generate up to $9 million in revenue per year for the airport.
Allegiant announced last August it would return to the airport after a multi-year hiatus, but troubles in securing air traffic controllers for both traditional service and the U.S. Federal Aviation Administration’s virtual tower testing caused months of delays.
The airport began air traffic control this week. BizWest previously reported Allegiant had told the airport last fall that it would consider re-announcing the start of flights this spring depending on if air traffic controllers were in place.
Allegiant is one of several airlines shaken by the social distancing measures put in place to slow the spread of the COVID-19 virus in the U.S. and abroad. Industry trade group Airlines For America has asked Congress to provide a bailout of more than $60 billion in grants, loans and tax deferments to prevent a collapse in the industry and cuts to the 750,000 jobs the industry provides.
“The current economic environment is simply not sustainable, and it is compounded by the fact that the crisis does not appear to have an end in sight,” the group said.
Airport director Jason Licon said Allegiant’s announcement likely does place the return of flights to Northern Colorado in a holding pattern.
He said the airport is following public health recommendations on social distancing and expects to see a decrease in flight training sessions, but the airport is required to remain open under current FAA guidance.
Licon also said the temporary ban on non-essential travel between the U.S. and Canada announced Wednesday morning has no impact on discussions of opening an international customs office as it’s in the early planning stages.