Allegiant Air Execs Angrily Defend Airline’s Hotel Strategy
Photo Credit: Allegiant Air is building a resort hotel complex called Sunseeker. Allegiant Air
Skift Take
Allegiant CEO Maury Gallagher has always done things his way. By doing so, he has built one of the most profitable airlines in the world. But is it a good idea to get into the hotel business?
Allegiant Air executives could have spent Wednesday’s earnings call bragging about their remarkable 22 percent profit margin. Instead, they took considerable time to criticize and mock investment analysts who have questioned their model as the company’s focus moves away from aviation and into hotels.
It was, at times, a bizarre call. After analyst Duane Pfennigwerth of Evercore asked a simple question about non-aircraft spending and the future of the company’s dividend, Allegiant President John Redmond nearly didn’t answer.
“I wasn’t going to take the question from you just because of how unprofessional and disrespectful you’ve been in the past,” Redmond said. “But I'll go ahead and rise up to the occasion.”
Redmond didn’t say what had made him so angry, but an airline spokeswoman said he was referring to an exchange with Pfennigwerth on January’s fourth quarter earnings call. On that call, Pfennigwerth asked several pointed questions about Redmond’
