การประชุมแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ Allegiant Travel (ALGT): TRASM ทำสถิติสูงสุดเป็นประวัติการณ์ คงคาดการณ์ EPS

ประเด็นสำคัญ

• Allegiant Travel Company รายงานรายได้จากการดำเนินงานรวมในไตรมาส 3/2026 ที่ 962 ล้านดอลลาร์ เพิ่มขึ้น 19% เมื่อเทียบรายปี แม้จะมีการปรับลดกำลังการให้บริการลง 6% โดยการเปรียบเทียบเป็นไปตามผลประกอบการเสมือน (pro forma) ปี 2025 เว้นแต่จะระบุไว้เป็นอย่างอื่น
• TRASM รวมเพิ่มขึ้น 28.3% แตะที่ 0.1418 ดอลลาร์ ซึ่งทำสถิติสูงสุดสำหรับไตรมาสที่ 3 ของทั้งสองแบรนด์ อัตราการบรรทุกผู้โดยสาร (load factor) ปรับตัวดีขึ้น 2 จุดเปอร์เซ็นต์ ขณะที่รายได้จากค่าโดยสารต่อผู้โดยสารเพิ่มขึ้น 50%
• กำไรจากการดำเนินงานที่ปรับปรุงแล้วอยู่ที่ 29.8 ล้านดอลลาร์ คิดเป็นอัตรากำไรจากการดำเนินงาน 3.1% ขณะที่ EBITDA ที่ปรับปรุงแล้วแตะระดับ 111 ล้านดอลลาร์ คิดเป็นอัตรากำไร 11.5% ส่วนผลขาดทุนสุทธิที่ปรับปรุงแล้วอยู่ที่ประมาณ 1 ล้านดอลลาร์ หรือ 0.03 ดอลลาร์ต่อหุ้น
• ฝ่ายบริหารคงคาดการณ์กำไรต่อหุ้น (EPS) ที่ปรับปรุงแล้วตลอดทั้งปี 2026 ไว้สูงกว่า 6 ดอลลาร์ แม้ต้นทุนเชื้อเพลิงจะสูงขึ้น สำหรับไตรมาส 4 บริษัทคาดว่า EPS ที่ปรับปรุงแล้วจะอยู่ที่ประมาณ 1.25 ดอลลาร์ และมีอัตรากำไรจากการดำเนินงานใกล้เคียง 6.5% ภายใต้สมมติฐานราคาน้ำมันเชื้อเพลิงที่ 4.75 ดอลลาร์ต่อแกลลอน
• Allegiant ยังคงมั่นใจว่าจะบรรลุผลประโยชน์ร่วมจากการควบรวมกิจการในอัตราต่อปี (annual run-rate synergies) มากกว่า 140 ล้านดอลลาร์ จากการบูรณาการร่วมกับ Sun Country ภายในปี 2029
• ฝ่ายบริหารคาดว่า TRASM รวมในไตรมาส 4 จะเพิ่มขึ้นมากกว่า 20% เมื่อเทียบรายปี และแตะระดับสูงสุดรายไตรมาสในประวัติศาสตร์ของบริษัท

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

Allegiant ระบุว่า ผลการดำเนินงานด้านรายได้เป็นผลมาจากอุปสงค์การเดินทางเพื่อการพักผ่อนที่แข็งแกร่ง การจัดสรรกำลังการให้บริการอย่างมีวินัย และการเพิ่มความหนาแน่นของเที่ยวบินในวันที่มีผู้เดินทางสูงสุด โดยเกือบ 50% ของจำนวนที่นั่ง-ไมล์ให้บริการตามตารางบินปกติ (scheduled-service ASMs) ในไตรมาสนี้เกิดขึ้นในเดือนกรกฎาคม ขณะที่อัตราการบรรทุกผู้โดยสาร (load factor) เพิ่มขึ้นติดต่อกันเป็นไตรมาสที่ 4 บนเกณฑ์เสมือนรวม (pro forma combined basis)

รายได้เสริมต่อผู้โดยสารเพิ่มขึ้นมากกว่า 3 ดอลลาร์ ขณะที่บริษัทรองรับผู้โดยสารเพิ่มขึ้นเกือบ 5 คนต่อเที่ยวบิน ทั้งนี้ Allegiant กล่าวว่า ความร่วมมือระยะแรกระหว่างทีมงานฝ่ายรายได้ของ Allegiant และ Sun Country ช่วยเร่งการเติบโตของรายได้เสริมในช่วงปลายเดือนสิงหาคมและกันยายน

ผลตอบแทนจากบัตรร่วม (co-brand remuneration) เพิ่มขึ้นเกือบ 24% เมื่อเทียบรายปี และคิดเป็นสัดส่วนประมาณ 6% ของรายได้เฉพาะกิจการของ Allegiant โดยทั้งยอดการใช้จ่ายผ่านบัตรและการเปิดบัตรใหม่เติบโตมากกว่า 20% ติดต่อกันเป็นไตรมาสที่ 3 นอกจากนี้ Allegiant ยังได้ลงนามขยายสัญญา 5 ปีกับ Bank of America และยังคงตั้งเป้าผลตอบแทนจากบัตรร่วมให้เท่ากับ 10% ของรายได้เฉพาะกิจการของ Allegiant ในระยะยาว

เครื่องบิน Boeing 737 MAX สร้าง ASM มากกว่า 22% ของฝูงบินเดิมของ Allegiant ในไตรมาส 3 เพิ่มขึ้นจาก 12% ในปีก่อนหน้า แม้จะมีสัดส่วนเพียง 17% ของฝูงบินเดิมก็ตาม ฝ่ายบริหารระบุว่าเครื่องบินรุ่นนี้ช่วยลดต้นทุนเชื้อเพลิงและการบำรุงรักษา ทั้งนี้ บริษัทคาดว่าจะได้รับมอบเครื่องบินประมาณ 20 ลำในปี 2027 และจะมีฝูงบิน MAX ที่ให้บริการอยู่ราว 45 ลำภายในสิ้นปี 2027

ผลิตภัณฑ์ระดับพรีเมียมได้รับการตอบรับที่ดีเช่นกัน โดยมีการติดตั้ง Allegiant Extra บน 75% ของฝูงบิน ขณะที่ยอดจองเบื้องต้นสำหรับ Allegiant First ก่อนเปิดตัวในเดือนมีนาคม 2027 นั้นสูงกว่าการคาดการณ์เบื้องต้นของฝ่ายบริหาร อย่างไรก็ดี ฝ่ายบริหารเตือนว่า Allegiant First จะเริ่มต้นให้บริการด้วยเครื่องบินเพียง 1 ลำ และไม่น่าจะสร้างผลกระทบต่อผลประกอบการอย่างมีนัยสำคัญจนกว่าจะถึงช่วงปลายปี 2027 เป็นต้นไป

Expedia สร้างยอดจองประมาณ 4% โดยลูกค้ามากกว่าครึ่งหนึ่งอย่างมีนัยสำคัญเป็นลูกค้าใหม่ของ Allegiant ฝ่ายบริหารกล่าวว่าลูกค้ากลุ่มนี้มีอายุน้อยกว่าลูกค้าที่จองโดยตรง แม้ว่าปัจจุบัน Expedia จะรองรับเฉพาะการจองค่าโดยสารเครื่องบินเพียงอย่างเดียว จึงสร้างรายได้เสริมน้อยกว่าก็ตาม

การบูรณาการกับ Sun Country ได้รวมถึงการรวมประตูทางออกขึ้นเครื่องและการบริการภาคพื้นดิน การรวมความคุ้มครองประกันภัย การตัดค่าใช้จ่ายองค์กรที่ซ้ำซ้อน และการเพิ่มประสิทธิภาพการจัดซื้อ โดยฝ่ายบริหารย้ำเป้าหมายในการบรรลุผลประโยชน์ร่วมในอัตราต่อปีมากกว่า 140 ล้านดอลลาร์ภายในปี 2029

คาดการณ์ของฝ่ายบริหาร

แนวโน้ม EPS ตลอดทั้งปีรวมผลประกอบการของ Sun Country เฉพาะช่วงหลังจากที่ Allegiant เข้าครอบครองกิจการแล้วเท่านั้น ฝ่ายบริหารยังไม่ได้ข้อสรุปเกี่ยวกับแผนฝูงบินหรือกำลังการให้บริการสำหรับปี 2027 และกำลังวางแผนภายใต้สมมติฐานที่ว่าต้นทุนน้ำมันเชื้อเพลิงจะยังคงอยู่ในระดับสูง

ฝ่ายบริหารคาดว่ารายจ่ายฝ่ายทุนในปี 2027 จะสูงกว่าระดับในปี 2026 เนื่องจากการรับมอบเครื่องบินที่รวดเร็วขึ้นและการใช้สิทธิ์ซื้อเครื่องบิน 737 MAX จำนวน 6 ลำ นอกจากนี้ บริษัทยังคาดว่าประสิทธิภาพการใช้น้ำมันเชื้อเพลิงของทั้งระบบจะปรับตัวดีขึ้นจากประมาณ 86 ASM ต่อแกลลอนในปี 2026 เป็นราว 88 ASM และอาจเข้าใกล้ 90 ASM ทั้งนี้ขึ้นอยู่กับการจัดสรรกำลังการให้บริการและการใช้งานเครื่องบิน MAX

ความเสี่ยงและประเด็นที่ต้องจับตา

น้ำมันเชื้อเพลิงยังคงเป็นปัจจัยกดดันระยะสั้นที่สำคัญที่สุด โดยราคาน้ำมันเฉลี่ยในไตรมาส 3 อยู่ที่ 3.98 ดอลลาร์ต่อแกลลอน สูงกว่าที่บริษัทคาดการณ์ไว้ในตอนแรก 0.18 ดอลลาร์ ขณะที่แนวโน้มในไตรมาส 4 คาดการณ์ว่าจะปรับตัวเพิ่มขึ้นอีกเป็น 4.75 ดอลลาร์

จำนวนนักบินของ Sun Country ยังคงต่ำกว่าระดับที่ฝ่ายบริหารต้องการ แม้ว่าอัตราการลาออกจะลดลงและมีการรับสมัครนักบินใหม่เต็มชั้นเรียนแล้วก็ตาม ข้อจำกัดนี้ส่งผลให้กำลังการให้บริการในมินนิแอโพลิส-เซนต์พอล ถูกจำกัด แม้ว่าอุปสงค์จะยังคงแข็งแกร่งก็ตาม

ต้นทุนต่อหน่วยที่ไม่รวมน้ำมันเชื้อเพลิงเพิ่มขึ้น 9.1% ในไตรมาส 3 ฝ่ายบริหารคาดว่าไตรมาส 3 จะเป็นจุดสูงสุดของแรงกดดันด้านต้นทุนเมื่อเทียบรายปี แต่จำนวนนักบินและการปรับขึ้นค่าจ้างตามกำหนดในช่วงต้นปี 2027 จะยังคงส่งผลกระทบต่อต้นทุนต่อไป

การดำเนินงานด้านการบูรณาการเป็นอีกหนึ่งตัวแปรสำคัญ บริษัทกำลังจัดลำดับขั้นตอนการบูรณาการระบบพาณิชย์และระบบปฏิบัติการในระยะเวลาหลายปี ขณะที่ผลประโยชน์ร่วมตามเป้าหมายคาดว่าจะยังไม่แตะระดับอัตราต่อปี (annual run-rate) เต็มจำนวนจนกว่าจะถึงปี 2029

ความชัดเจนเกี่ยวกับอุปสงค์ในไตรมาส 1/2027 ยังคงมีอยู่อย่างจำกัด ฝ่ายบริหารระบุว่าประมาณ 90% ของยอดจองในไตรมาสแรกยังไม่ได้เข้ามา และได้ปรับลดกำลังการให้บริการบางส่วนในเดือนมกราคมและกุมภาพันธ์ลงแล้วเนื่องจากสภาวะราคาน้ำมัน

สรุปช่วงถาม-ตอบกับนักวิเคราะห์

• ความแข็งแกร่งของรายได้: ฝ่ายบริหารระบุว่า อุปสงค์ในช่วงปลายเดือนสิงหาคมและกันยายนแข็งแกร่งกว่าที่คาดการณ์ไว้ นอกจากนี้ การเติบโตของรายได้เสริมที่เร็วกว่าคาดจากความร่วมมือระหว่าง Allegiant และ Sun Country ยังช่วยสนับสนุนผลประกอบการอีกด้วย
• ความยืดหยุ่นของกำลังการให้บริการ: Allegiant วางแผนที่จะเพิ่มเที่ยวบินในช่วงเวลาที่มีผู้เดินทางสูงสุดอย่างเต็มที่ต่อไป ขณะที่ใช้แนวทางที่ระมัดระวังมากขึ้นในช่วงรอยต่อ (shoulder period) และช่วงนอกฤดูกาลท่องเที่ยว (off-peak) ทั้งนี้ หากราคาน้ำมันปรับตัวลดลง ฝ่ายบริหารเชื่อว่าจะสามารถฟื้นฟูกำลังการให้บริการกลับมาได้ โดยต้องใช้เวลาราว 90 ถึง 120 วันเพื่อให้วงจรการจองตั๋ว (booking curve) สมบูรณ์เต็มที่
• การเติบโตในปี 2027: มุมมองเบื้องต้นของฝ่ายบริหารคาดการณ์การเติบโตของกำลังการให้บริการในระดับหลักเดียวต่ำถึงปานกลาง การส่งมอบเครื่องบิน MAX ลำใหม่จะเข้ามาทดแทนเครื่องบินที่จะปลดประจำการบางส่วน และไม่ควรถือว่าเป็นกำลังการให้บริการที่เพิ่มขึ้นทั้งหมด
• มินนิแอโพลิส-เซนต์พอล: Allegiant มีความตั้งใจที่จะขยายการดำเนินงานในฐานการบินที่ใหญ่ที่สุดของบริษัทที่ควบรวมกัน เมื่อจำนวนนักบินฟื้นตัว นอกจากนี้ บริษัทยังคาดว่าเครื่องบินของ Allegiant จะเริ่มบินจากฐานการบินของ Allegiant เข้าสู่เมืองทวินซิตีส์ (Twin Cities) ในช่วงปี 2027
• กลยุทธ์ฝูงบิน MAX: ปัจจุบันฝ่ายบริหารชอบเครื่องบินรุ่น MAX 8 มากกว่า MAX 7 เนื่องจาก MAX 8 ให้ความคุ้มค่าด้านต้นทุนต่อที่นั่งที่ดีกว่า หลังจากรวมการจัดผังที่นั่งแบบ Allegiant Extra และ Allegiant First เข้าไปด้วย
• กรอบเวลาของโครงการเชิงพาณิชย์: ผลประโยชน์ร่วมจากรายได้เสริมน่าจะดำเนินต่อไปจนถึงช่วงต้นปี 2027 ขณะที่โครงการบัตรร่วมที่ปรับโฉมใหม่และ Allegiant First คาดว่าจะส่งผลกระทบทางการเงินอย่างมีนัยสำคัญมากขึ้นในครึ่งหลังของปี 2027 และต่อเนื่องไปยังปี 2028

บทถอดเสียงการประชุมแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Hello, everyone. Thank you for joining us, and welcome to the Allegiant Travel Company Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Sherry Wilson, Managing Director of Investor Relations. Sherry, please go ahead.

Sherry Wilson

Thank you, and good afternoon, everyone. Welcome to Allegiant Travel Company's Third Quarter 2026 Earnings Call. On the call with me today are Greg Anderson, Chief Executive Officer; Drew Wells, Executive Vice President and Chief Commercial Officer; and B.J. Neal, President and Chief Financial Officer. Earlier this afternoon, we issued our third quarter earnings release, which is available on the Investor Relations section of our website, along with the supplemental materials accompanying today's call.

We ask that you refer to these documents as we walk through our results. The company's comments today will contain forward-looking statements, including our fourth quarter and full year 2026 outlook, statements regarding the integration of Sun Country and expected synergies and other statements concerning our future performance and strategic plans. These statements are subject to risks and uncertainties, and actual results could differ materially from those anticipated.

For additional information, please refer to the safe harbor language in this afternoon's earnings release and our filings with the SEC. We will also be discussing non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures where available is included in the earnings release posted on our Investor Relations website. Before we begin, a brief note on comparability, speaker commentary will focus on year-over-year comparisons against 2025 pro forma results, unless otherwise noted. And with that, I'll turn the call over to Greg.

Gregory Anderson

Thank you, Sherry. The third quarter marked another quarter of operating profit. Even in what is typically our lowest margin quarter, we expanded our consolidated adjusted operating margin by 340 basis points versus last year. Leisure demand is still strong as consolidated revenue grew 19% despite a nearly 6% reduction in capacity, a lever we use to help offset a 55% increase in fuel cost per gallon. And our year-to-date performance demonstrates the strength of our flexible capacity model, as we have expanded margins even as we absorbed higher fuel costs and began the integration of our Sun Country merger.

We achieved this by focusing flights on peak days, reducing flying on routes that fall short of return expectations, introducing more MAX aircraft and growing revenue through our commercial initiatives. Matching capacity to demand with discipline is a key reason we consistently have the highest margin of all the leisure-focused airlines and are among the leaders in the industry. Our total fares are roughly 30% below the industry average, and we are the #1 or #2 carrier in more than 90% of our origination markets, underscoring our commitment to the communities that we serve. Our reliable operation gives customer service they can depend on. To that point, our teams delivered through the peak summer travel season, leading the industry in completion factor. And I'm proud that Skytrax named Allegiant the best low-cost airline in North America for the third consecutive year.

Together, this quarter's results highlight our loyal customer base and the resilient demand it generates. Our value proposition is straightforward, convenient, reliable service at an attractive price. Let me turn to several initiatives that helped drive this quarter's performance, strengthen our foundation and position us for further improvement. Starting with our credit card. Co-brand remuneration is up nearly 24% year-over-year with growth accelerating as we drove greater engagement and spending, and it now represents roughly 6% of stand-alone Allegiant revenue.

Ongoing program improvements and our recently amended Bank of America agreement strengthens our confidence in reaching our goal of 10% of stand-alone Allegiant revenue. Turning to fleet. The 737 MAX generated more than 22% of legacy Allegiant's third quarter ASMs, and that's up from 12% a year earlier, while making up only 17% of the legacy fleet. These aircraft significantly reduce fuel and maintenance costs and their share of ASMs will keep growing. The MAX fleet serves our highest lines of flying and their incremental seats per aircraft are especially valuable on peak days.

Our premium seating strategy continues to gain momentum. Allegiant Extra, now on 75% of our fleet and the equivalent Sun Country Best products sees sustained demand and meaningfully boost our unit ancillary revenue per flight. And we expect a similar financial profile for Allegiant First. Strong bookings ahead of its March 2027 launch show customer interest exceeding initial expectations and reinforcing our confidence as we prepare to expand the product with the new MAX deliveries.

And early results from our Expedia partnership are also encouraging. This additional distribution channel is attracting customers who had not considered Allegiant previously, helping boost load factors across our network and introducing new customers into our ecosystem. And last but not least, I am very pleased with the strong progress we are making on the integration of Sun Country.

Customers can search and book across both airlines, and our comprehensive bottom-up synergy plan has set the integration blueprint for the coming years. We have already realized some benefits by consolidating gates and ground handling at several airports, combining insurance coverage, eliminating duplicate corporate costs and leveraging our greater purchasing power. Building on these early wins, we are being very thoughtful to sequence the integration to maximize the long-term value, particularly with the integration of our commercial and operating systems, and we remain confident in achieving more than $140 million in annual run rate synergies by 2029.

Together, these initiatives give us multiple pathways to increase our earnings power, and we will share more details at our upcoming Investor Day. Turning to pilots. Our recruiting classes are full and new hires will enter service in the coming weeks. And since our last call, legacy Sun Country pilot attrition has come down and new hire classes will continue, and we are going to continue to keep a close eye on it.

The Twin Cities remains the combined company's largest base and growing our leisure-focused variable capacity offering in MSP is an important part of our long-term strategy. Following the ratification of our pilot agreement with legacy Allegiant last quarter, we are pleased to distribute $270 million, averaging almost $200,000 per pilot in well-earned bonuses, recognizing their dedication to our customers and the essential role they play in our airlines business.

Sharing our success with our workforce is central to how we operate. Looking ahead, given continued strength in leisure demand, we expect fourth quarter TRASM to set a record for the highest in our company's history. We are planning for fourth quarter fuel cost of about $4.75 per gallon, a sharp increase from the third quarter. Even so, with strong demand, maturing initiatives and our growing MAX fleet, we remain confident in our 2026 full year adjusted earnings per share guidance of greater than $6 despite fuel costs significantly higher than we first issued it.

Our capital allocation priorities are clear: maintain a strong balance sheet, invest in our MAX aircraft and the initiatives that unlock the combined company's earnings potential and use excess cash to reduce debt. In closing, we are building the nation's leading leisure-focused carrier with a more diversified business model and a clear path to sustainable earnings growth.

Our focus is on execution, operating safely and reliably, aligning capacity with demand, maintaining cost discipline, advancing our commercial initiatives and successfully integrating Sun Country. And we look forward to our Investor Day on December 7 in Las Vegas, where we will share more on our integration milestones and commercial initiatives and provide our long-term financial framework and a simpler reporting structure. Before I hand it over to Drew to discuss our commercial performance, I want to thank our team members across both airlines. We are well positioned because of their tireless efforts, and I am proud to serve next to them. Drew?

Drew Wells

Thank you, Greg, and thanks, everyone, for joining us this afternoon. We finished the third quarter with $962 million in total operating revenue for the combined company, up 19% year-over-year on 6% less capacity. Despite the overall reduction in scheduled service capacity, we were able to slightly increase peak day flying through the quarter. Combined TRASM was $0.1418, up 28.3% year-over-year, which for both brands would mark a third quarter record and the second best quarterly TRASM in history. This is a remarkable achievement in any light, but especially during the typically seasonally weaker third quarter.

Charter and cargo contributed another $136 million, similarly a record across both brands in the third quarter. The fuel pass-through programs give us a predictable foundation. And on top of that, we kept the scheduled service flying flexible and pointed at the best days. Load factors expanded by 2 points, marking the fourth consecutive quarter of expansion for the combined airline on a pro forma basis, increasingly important as the ancillary per passenger line expanded again in the third quarter. We added more than $3 per passenger while flying with nearly 5 additional passengers per departure.

We continue to mature into our updated merchandising and pricing capabilities. The legacy Allegiant and Sun Country teams have come together to share ancillary wins and best practices and are driving line of sight to further synergy development in early 2027. Further, the staggering yield trends continued as air revenue per passenger was up 50% versus the third quarter 2025.

The third-party line also saw high single-digit percents versus the prior year. For the Allegiant Allways Visa co-branded program, both spend on the card and acquisition of the card exceeded 20% growth in the quarter, the third consecutive quarter of achieving both, an incredible performance from the team continuing to drive focus and effort into the program. Further, I'm pleased to announce we signed a 5-year extension with Bank of America. This extension will unlock growth in our portfolio as we realize improved economics and evolve our co-brand offering. I'm excited to share more details at Investor Day.

On the network front, our summer network had 86 routes start over the past 18 months, and I expect the vast majority will return for the summer 2027 schedule. Leaning into our flexible seasonal approach to network deployment, 50 of those routes operated only during the summer peak. The third quarter is a shiny example of the flexibility in the model in other ways as well. July represented nearly 50% of the quarter's scheduled service ASMs. Charter and cargo flying constitute nearly 1/3 of September block hours, a maximum of 709 departures on a Sunday and July versus a low of 28 departures on a late August Tuesday. The fourth quarter is, of course, typically marked by the holiday peaks, where we expect our highest departure day to be approximately 10x the flying of our lowest scheduled service day in the quarter.

In total, we expect scheduled service growth will be approximately 1.7% higher versus the fourth quarter of 2025. Much of that growth is driven by our Boeing MAX deliveries. In fact, 20% of the quarter's combined scheduled service ASMs will be on the more fuel-efficient MAX aircraft. Demand remains incredibly healthy. And despite the growth and sequential year-over-year increase in ASMs, fourth quarter combined TRASM should exceed 20% on a year-over-year basis.

Most importantly, cash sales continued their strong trend with double-digit growth above our forward seat growth. Part of the sustained demand outlook is due to the shift in our distribution strategy. Our results from Expedia have been strong since our initial booking outlook just 3 months ago. Approximately 4% of bookings have come via the platform while continuing to see meaningfully more than half of customers as net new to Allegiant. As Greg mentioned, the demographic profile has skewed younger than our direct bookings on average, and the geographic profile has supported travel out of many of our traditional destination cities and newer routes to our network.

With our growth outlook, meaningful presence in Minneapolis-Saint Paul and other competitive cities, enhanced distribution strategy and increased customer centricity in our offering, we can honor the uniqueness of our commercial model while becoming an increasingly valuable option for leisure travelers. As we look into the future, Allegiant Extra and Sun Country Best have performed incredibly strong through this demand environment, and we are gaining further confidence into the very early booking curve of the new Allegiant First product.

Expedia continues to produce incremental net new customers to Allegiant, and we expect to further develop our capabilities. We are incredibly excited about the initial Allegiant First flight coming in March 2027 and the rollout of the refreshed co-brand program toward the back half of the year. The announcement of complementary in-flight beverages has resulted in the expected increase in NPS.

Further to this, we partnered with UNLV's renowned College of Hospitality to create a customer experience training program. The training will build upon the incredible work our crews already do every day to help elevate the customer experience while recognizing the strengths, professionalism and care our team members bring to each flight. Before I hand it over, thank you to the commercial teams at both airlines and to every team member who made travel possible for our more than 5 million customers this quarter. Peak flying only works when the frontline executes and they did. With that, I'd like to hand it over to BJ.

Robert Neal

Thank you, Drew, and thanks to all of our Allegiant and Sun Country team members for the continued focus and collaboration as we manage the business through a period of record high fuel prices. I'll once again comment on our results and outlook today on an adjusted basis, unless otherwise noted. This quarter was another period of solid execution for our newly combined organization. Despite a challenging fuel environment and the seasonally softer nature of the September quarter, we delivered meaningful year-over-year margin improvement while continuing to progress on the integration of our 2 airlines.

For the third quarter, the combined entity generated operating income of $29.8 million and an operating margin of 3.1%. Together, Allegiant and Sun Country produced $111 million in EBITDA, yielding an EBITDA margin of 11.5% as persistent strength in demand outpaced the increase in fuel expense. At the bottom line, we reported a net loss of approximately $1 million or a loss of just $0.03 per share. Importantly, this performance at the favorable end of our guidance range came despite fuel averaging $0.18 per gallon above our initial expectation. These results underscore the resilience of our flexible capacity operating model and the importance of our business to the communities we serve.

Third quarter nonfuel unit costs were $0.0923, an increase of 9.1% versus the pro forma third quarter of 2025 on 6% lower capacity. This CASM-ex result was better than our expectations, primarily due to a true-up of the accrual associated with our pilot retention bonus, which was paid out in the quarter. As we discussed on our last call, we expect the third quarter to mark the peak of our year-over-year nonfuel cost pressure.

We're pleased with the CASM-ex performance throughout this year, but we continue to focus on driving improvements through crew productivity and operating efficiencies as we move into 2027. Fuel expense was roughly $294 million during the quarter, $94 million higher than the pro forma prior year quarter and averaging $3.98 per gallon versus our August guidance of $3.80. While we continue to navigate the elevated fuel cost environment, our focus remains on further deployment of fuel-efficient MAX aircraft and allocating our capacity to support the highest return flying.

During the third quarter, we invested approximately $136 million in consolidated capital expenditures in addition to $20 million in deferred heavy maintenance spend across the 2 airlines. For the full year, our CapEx outlook for Allegiant Travel Company as reported, remains approximately $850 million. Looking ahead to 2027, given our increased aircraft delivery cadence and the recent exercise of 6 737 options, we are expecting capital expenditures to be elevated above 2026 levels.

We ended the quarter in a strong financial position with total available liquidity of $1.1 billion, including $865 million in cash and investments and $250 million in undrawn revolvers. With the payout of our pilot retention bonus and closing of the Sun Country transaction behind us, alongside prearranged financing for upcoming CapEx needs, we have thoughtfully relieved cash balances to approximately 21% of trailing 12-month pro forma revenue, exclusive of the $250 million in revolver capacity. This is consistent with our objective of maintaining a more efficient cash position in line with the peer group while preserving ample liquidity for the business.

Total debt at quarter end was $2.9 billion with net debt at $2.1 billion. For the remainder of 2026, we expect funding needs to be met through prearranged financing facilities disclosed earlier in the year and further financing origination would be focused around 2027 activity. Importantly, we continue to operate with approximately $2 billion in fleet equity, providing robust financial flexibility as we fund craft investments and continue integrating the 2 airlines.

During the quarter, we placed 2 737 MAX aircraft into service while retiring 3 passenger aircraft to end the quarter with 192 aircraft operating across the combined entity, which includes 22 freighter aircraft owned by our cargo customer. Looking ahead, our delivery outlook remains consistent with what we shared last quarter. We continue to expect approximately 20 aircraft deliveries in 2027, bringing our in-service MAX fleet to around 45 aircraft by year-end. As we've discussed, these deliveries provide us with significant flexibility, but they aren't necessarily an indication of incremental capacity. Given the current fuel environment, we've not yet finalized our 2027 fleet or capacity plans.

We continue to appreciate our own ability to manage retirements of owned aircraft and adjust utilization, allowing us to remain disciplined in how we deploy capacity while benefiting from the improved fuel efficiency and maintenance economics of the MAX fleet. We remain confident in the long-term value of our order book. And in October, we exercised 6 options for MAX 8 aircraft with deliveries expected in 2028. This brings our total firm order to 56 aircraft, including the 22 delivered through October with another 74 options remaining available to us.

We believe the attractive operating economics of this fleet, coupled with our combined growing network provide us with considerable opportunity to expand the business even more profitably over time. Now turning to our earnings outlook. For the fourth quarter, we expect combined capacity to be roughly flat to the fourth quarter of '25. Based on an assumed fuel price of $4.75 per gallon, we expect an operating margin of approximately 6.5% and consolidated earnings of roughly $1.25 per share. While fuel remains a headwind, the fourth quarter outlook reflects continued strength in demand and our ability to flex schedules to maximize operating income. Importantly, this outlook keeps us on track to deliver full year earnings of more than $6 per share, consistent with the guidance we provided on our last call despite a meaningful increase in forecast fuel costs.

On the integration, we've seen encouraging progress identifying opportunities and advancing initiatives that will drive value for the combined organization.

Our confidence in the synergy opportunity remains strong, and we look forward to providing additional detail around the timing and cadence of our synergy capture at upcoming Investor Day on December 7. I want to recognize the teams across both airlines for their continued hard work, integrating 2 organizations while maintaining strong operational performance and navigating record high fuel costs requires tremendous effort, and I'm appreciative of the professionalism and commitment to safe operations our team members demonstrate every day. As I wrap up, demand remains robust and our model continues to demonstrate its resilience. We have the flexibility to respond to a fluid macro environment, a strong balance sheet supporting our future investments and an increasingly efficient fleet.

Combined with the progress we're making on integration and an engaged team that's excited about what we're building, we remain confident in our ability to drive sustainable earnings growth and margin expansion in the years ahead. Operator, this concludes our prepared remarks. We can now open the line for analyst questions.

Operator

[Operator Instructions] Your first question comes from the line of Savi Syth with Raymond James.

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Savanthi Syth

Just maybe on the kind of strong revenue results and outlook here. It seems a bit stronger than maybe what you were thinking at the last earnings call. And I was curious what changed.

Drew Wells

Savi, I think part of it was as you get into the seasonally weakest part of the third quarter and really the year in late August and into September, demand has absolutely continued to rip probably beyond what we -- certainly what we had guided out and what we could have hoped for. So I think that was a big part of it. And then kind of like I alluded to in my remarks, as the revenue teams from Allegiant and Sun Country came together, finding some of those early wins on the ancillary front I think, came a little bit earlier than we had anticipated and seeing that flow through into that late August and September time frame was a nice win as well that we had not contemplated at that time.

Savanthi Syth

That's helpful. And just maybe on -- you mentioned the peak, off-peak balance there. Curious as you're building your schedule in 1Q and beyond, does that -- are you kind of maintaining that kind of pushing peaks while kind of keeping off-peaks lower? Or how are you thinking about the peak versus off-peak ASM growth?

Drew Wells

Yes. We'll absolutely still keep a bit of a spread between the 2. Demand, like we just talked about, ran crazy good through the back half of the third quarter, but fuel has also remained very high. And I think we're taking the position despite maybe what you've seen today in the oil markets that it's going to be higher fuel for longer. Really easy for us to pivot from that as we get closer to departure, but I think still taking a bit of a conservative stance relative to the fuel environment on how we're planning forward.

Operator

Your next question comes from the line of Mike Linenberg with Deutsche Bank.

Michael Linenberg

Yes. I guess 2 questions here, Drew, when we think about your distribution strategy, you said 4% Expedia. You said it skews younger. Where -- what's the right percentage? How much more is a focus to do more indirect booking? And can you give us a sense on those bookings, the quality of historically, we've seen what comes through the GDSs tend to be higher revenue, higher margin, higher yield. I realize it's early, but what you're seeing on that front? And I have a follow-up.

Drew Wells

Yes, I don't know if there's specific percentage we're targeting. I think it maybe some of that comes back to kind of where you ended that with the strength of the booking and what happens after the fact, right? If we're driving sufficient new customers to that channel and then converting them to direct, I don't mind that percentage running pretty high because it's the right long-term decision. If that starts to pivot, then back off of that stance a little bit.

So far, and I think we talked about this on the last call, it's still an airfare-only proposition. So candidly, we're lagging a little bit on the ancillary front still. We have plans to work towards correcting that here in probably the next 6 months or so, making the first foray into that. But so far, the strength of the booking, the quality of the customer, getting some of those customers come back direct such that they're booking again have all been wins so far. So very content, but I'll stop short of giving you a specific number.

Gregory Anderson

Mike, it's Greg. I just want to add to you point.

Drew Wells

Real quick.

Gregory Anderson

I think that, Mike. We've always here at Allegiant just, I think, a really great job of a direct booking basis and that's been our focus, as you know, for many years, and that will be continued -- we'll continue to focus on the direct-to-consumer booking. But as Drew mentioned, Expedia lets us reach customers we weren't reaching, and we think that complements our direct channel, and we'll do everything we can to retain such customers.

Michael Linenberg

Great. Great. Sounds great. And then just my second question, when you ordered the MAX 8200, there was also an order there for the MAX 7s, which I believe now basically have converted into options. There's nothing firm. And yet when we've seen how the industry has evolved, everybody has up gauged, and it would seem like that now that the MAX 7 is certified that that is something that may actually feature in your fleet going forward, especially given the number of markets where you're either #1 or #2. So where is your head on thinking on MAX 7 and the fact that it seems like the rest of the industry has moved to much higher seat counts. It would seem there may be an opportunity there for someone like you to strike. Your thoughts on that.

Robert Neal

Sure. Mike. Yes, when we did the order, we really liked the MAX 7 because we were looking at both the MAX 8 and MAX 7 at very high density. And so you've got a really nice trip cost seat cost mix with the MAX 7. But over time, as you've seen us roll out incremental premium offering at the moment through Allegiant Extra and eventually with Allegiant First, the seat cost just sort of loses pace with the MAX 8. And so we prefer the cost economics of the MAX 8 at this point.

Operator

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.

Duane Pfennigwerth

Just a couple of little ones for me. I just want to check, is the difference between your total system capacity in the guidance and scheduled service, is that all fixed fee? Or is there anything else in there? And then how do you think about growth of your fixed fee capacity going forward?

Drew Wells

Yes, Drew here. The vast majority is going to be fixed fee flying. There's just a small amount of company repositioning style flying, but that's going to be a very small percentage. So fixed fee is a fair way to think about that. Looking forward on the charter line, I think we're probably going to be a little bit higher in 4Q on a year-over-year basis, but probably not crazy on that front. And it's probably looking forward a small kind of low single digits kind of run rate going forward on an absolute basis, but remaining opportunistic based on fuel environment, demand environment and so on.

Duane Pfennigwerth

That's helpful. And then I know it's a much smaller percentage of your mix than the predecessor, but similar question on cargo. Are the levels we're seeing here in 3Q sort of fully scaled? Or is there more to go from here and again, understanding it's a much smaller percentage?

Drew Wells

Yes. I'd consider 3Q largely at the mature rate. There's obviously the escalators in the contract that will boost the revenue lines a little bit. And there will always be some puts and takes based on timing of maintenance. But with the aircraft we have and the level of flying, I think we're effectively at the mature rate.

Duane Pfennigwerth

Helpful. Maybe I'll just sneak one more in, apologies. The full year guide on earnings, I mean, you're giving us the fourth quarter. Clearly, it's ahead of where we were. But the full year guide for EPS, does that include Sun Country only for the period you owned it? Or is that a pro forma? And if it's not a pro forma, I assume that would be even higher.

Robert Neal

Duane, the full year guide of greater than $6 includes earnings from the Sun Country segment from the period after we took ownership.

Operator

Your next question comes from the line of James Kirby with JPMorgan.

James Kirby

I just wanted to start here on the capacity. You mentioned, I think, in the prepared remarks, Sun Country pilot attrition is starting to improve. But just wondering on a Sun Country stand-alone basis, where you see Q4 trending from schedules, it looks like still down low single digits, high single digits. And if the time line of when you can expect to normalize that network, especially into 1Q given the importance of that quarter for Sun Country.

Gregory Anderson

James, it's Greg. I'll kick it off and then Drew may want to add some more detail. But to your point, we have seen attrition rates lower since our last call with our Sun Country pilots, but staffing levels are still below where we'd like them to be. And we're working through it. The new hire classes are full. We have classes out for the foreseeable future. So I think it's just a matter of time before we get the staffing back to where we'd like to fly. The demand in the Twin Cities is really strong. We want to add capacity there. So for our Sun Country flying, I would expect we'll start adding back flying as the staffing levels rebuild. For -- we have Allegiant for -- expect sometime in 2027 to be able to fly Allegiant aircraft from Allegiant bases into the Twin Cities and add some incremental flying.

So I think that's just steps we're taking that are within our control to grow our service and MSP and leverage the strengths of the Allied Airlines. But that will take some time. I think you're hitting though on the first quarter specific to March capacity. I don't know that we're ready to give a guide yet on March capacity or first quarter '27 capacity. But what I could say is that we're just working to do everything we can to protect as much capacity in the Twin Cities as possible. But Drew, anything you want to add to the fourth quarter or anything else?

Drew Wells

No. I mean for the fourth quarter, I'd expect the Sun Country brand to be down somewhere in the 10% range on scheduled service flying. And as we see it today, I think we'd expect sequential improvement in the forward quarters. But we'll get you more detail on that either in December or our next call.

James Kirby

Got it. That's helpful. I appreciate it. And encouraging comments about Allegiant First and what you're seeing in the bookings a few months before the product launches. I was wondering on the uplift -- yield uplift you're seeing from other former single-cabin airlines, is that similar to what you're seeing with Allegiant First in terms of the bookings you have so far? Or is that better, consistent with -- basically getting at if there's any upside here to what you're seeing Allegiant First.

Drew Wells

Let me make sure I understand. You're talking how -- like how we're thinking of pricing the product relative to other narrow-body or similar cabins?

James Kirby

Yes. More so -- sorry, I worded that poorly. I guess just what you're seeing in terms of yields at other airlines that are also doing or former single cabin and now going into more of a first-class cabin product, the yields you're seeing there, are they consistent with what you're seeing with Allegiant First?

Drew Wells

I think I can maybe try to answer this. I mean I don't -- our first Allegiant or Allegiant first flight being in March of next year, it's going to be hard to compare on a time line basis, what other carriers are seeing for yields necessarily. We can see the pricing that's out there. So as you think about maybe the split of how we're thinking about pricing the product, I think you're seeing something somewhat similar in the Allegiant First price point relative to a main seat. So I'm not sure if I'm hitting exactly what you're looking for, but hopefully, between those 2, we can kind of draw the right conclusion.

James Kirby

Got it. Yes. No, maybe I'll try again at the Investor Day, we have a little more booking data there, but I appreciate the questions guys.

Operator

Your next question comes from the line of John Godyn with Citi.

Unknown Analyst

This is [ Max ] on for John. I just wanted to dialogue on how you guys plan to sort of manage capacity given potential higher for longer fuel, how this may look on a quarterly basis sort of next year with the seasonality in the combined companies? And if you can provide any insight on quarterly cadence of Max ASMs as a percentage of total company throughout next year, if possible, appreciate it.

Gregory Anderson

Max, I'll kick it off. This is Greg. I don't think we're going to provide just the 2027 guide today. As Drew mentioned earlier and rightfully so, we're still planning for fuel to be higher throughout 2027. I thought in BJ's opening comments about the MAX aircraft, you hit on that well also where we have 20 deliveries coming next year. But I wouldn't think of all those as necessarily growth aircraft. I think you'll see a lot of retirements as well. So when we think about capacity for next year, I would expect how we're thinking about it to be more modest capacity growth, maybe up low single digits to maybe mid-single digits, right? But we feel good about 2027.

We feel good about the initiatives that we've talked about in the call. We feel really good about the MAX aircraft and the integration and how it's trending. And so these are going to be some important topics and good topics to talk through on our Investor Day on December 7. But overall, I think we feel good.

Drew Wells

Yes. I mean even -- first quarter, just a little bit of it. We've already pulled down some amount of capacity in January and February. So I think the range Greg hit on was right. Now of course, we'll start to run into some lower comps from all the capacity that came down in '26. So some fun tension between those 2 as we look forward.

Robert Neal

Max, this might help you a little bit. If you just think about the prepared remarks and the prior call, we indicated that total MAX aircraft in the fleet at the end of next year would be around 45 units, and there's 20 deliveries next year. So you can just kind of think of that. And then I think ending this year with 100 A320s on the legacy Allegiant fleet should give you an idea of how we can grow MAX operations as a percent of total ASMs.

Unknown Analyst

Great. That's really helpful. And then kind of switching gears a little bit, and I'm sure you guys will speak a bit on this at the Investor Day. I recall you mentioned earlier in your script that Minneapolis is key to your long-term strategy as the combined company's largest base. I just wanted to double-click on this, hone in on what the strategy looks like there and competing versus the major carrier base there and kind of what that may look like with any insight you can provide there?

Gregory Anderson

Yes. I'll hit it at a real high level. Drew is welcome to add some color. But Max, to your point, it's -- we're investing in the Twin Cities for the long term. We believe there's a lot of opportunity. We expect to continue to serve it well just as Sun Country has served it well for more than 4 decades, and we're going to do that through our variable capacity approach. and put capacity in when demand is greater than supply and be flexible in those off-peak periods. But Drew, any other comments you want to hit on?

Drew Wells

No, I think that's right. I mean there's a really great history of demand in Minneapolis-Saint Paul. Sun Country served that incredibly well, and we think we can continue in that legacy there and continue to grow it. I mean it is a really strong market. We have some great Sun Country leaders that have joined the combined enterprise that will help us to guide the right way to serve the market. But we're really excited about the potential. It's going to be phenomenal.

Operator

Your next question comes from the line of Conor Cunningham with Melius Research.

Conor Cunningham

Just we've heard a lot of different debate around load factor and yield. You guys have obviously have the most like nimble strategy of maybe all the carriers and do the right thing and like quickly adjust supply. So I mean, your load factor was up, your yields are up a bunch, too. Just curious on how -- like what you make of some of the strategies that are out there, how you plan on positioning yourself into next year from that perspective?

Drew Wells

Yes, it's fun on our rev team to kind of pull on both these levers and see what's going to take. I mean, often, a lot of our tests show that changing the fare, either higher or lower is better than keeping it the same. And so we'll just keep kind of keep kind of pulling on that and see what spits out. I think, by and large, what you'll see through the fourth quarter is probably a bit more of a yield story than the load growth we've seen over the last 4 quarters. And I think that's going to be totally fine, especially as you get into the holidays, which is a notoriously high-yielding environment anyway. So that's probably how I see it over the fourth quarter, possibly into the first, especially if you're pulling capacity down a little bit more for the high fuel environment in Jan and Feb.

Conor Cunningham

Okay. Maybe piggybacking on that a little bit. So you just talked a little bit about 2027 capacity being up low singles to mid-singles. I know that's not firm. There's a lot of moving parts, totally get it. But like this is clearly an uncertain time. You guys have been the most nimble in the past. you're also -- again, to Greg's earlier comment that your pricing is 30% below the industry average. Like why -- like how aggressive could you actually be next year if things broke in the right direction for you? And how quickly could you restore capacity? Like maybe to ask it a different way, like what's the gating factors? I think you talked a little bit about staffing levels. But just curious on how aggressive we could be if oil were to retrace or something like that. Just any thoughts around it would be helpful.

Drew Wells

Yes. I think you'll continue to see us push pretty much as hard as we can in these peak periods. The demand levels are still sufficient to outweigh even high oil. Where you start to, I think, see some separation is in the shoulder period. So think of maybe a little bit post Easter, October, those kind of time frames, there's a pretty good amount of freed up plane space and crew availability that we can lean into that. And we don't need a significant amount of time. I think our RM team will probably at least 90 days, 120 days for a full booking curve. But I think we're spring coiled and ready to go such that oil is playing ball there.

Conor Cunningham

Maybe if I can ask it a different way. Like do you have incremental slack in the peak periods at this point? Or are you effectively full as full as you can be?

Drew Wells

Yes. Maybe just a little bit of nuance. I think for peak day in the peak period, we're probably at or very near what we can do, but that's -- there's room to add Wednesday and Saturday capacity as that hurdle rate to clear the variable cost comes down in your scenarios. So there's room in peak period, but likely not as much on the best of days.

Robert Neal

Conor, it's BJ. May ask you to look at fleet utilization to this year with fuel where it is, we do have aircraft utilization down a little bit versus 2025, if that just gives you some sort of illustration of where we could go to Drew's point on off-peak days and peak periods.

Operator

Your next question comes from the line of Ravi Shanker with Morgan Stanley.

Ravi Shanker

You guys have spoken a fair bit about 1Q capacity so far. Do you guys have much of a view of what 1Q demand looks like at all and kind of how sensitive it might be given it's more of a trough period, but how sensitive might it be to changes in fuel and such? I know it's probably a little too early for spring break, but any color would be great.

Drew Wells

Ravi, very little sight into the first quarter. It's already the shortest booking curve of the year every year. The kind of when the calendar flips, people's focus shifts into the first quarter. So there's still, I think, more than 90% -- roughly 90% left to book in the first quarter. So not a lot I can give you there.

Ravi Shanker

No worries. We can probably follow up on the next call on the 4Q call. And maybe as a follow-up here, just on -- I know you asked a question about cargo earlier, but anything to keep in mind going into peak season regarding Amazon? Obviously, kind of the plane count is where it is, but anything -- any other variables to keep in mind?

Drew Wells

Nothing immediately comes to mind. Maybe as we're looking in the first part of next year, and just a reminder that we had taken a couple of aircraft in the first part of '26, so that you'd expect just a little bit of growth due to that. Amazon has been incredible partners as we talk about our partnership. They'll do a little bit of heavy maintenance in March to free up some hours on the scheduled service side, which is a phenomenal part of the relationship with them. But I don't really -- I don't think anything else comes to mind to pass along.

Operator

Your next question comes from the line of Catherine O'Brien with Goldman Sachs.

Catherine O'Brien

So I know we're going to get a lot more details next month on this, but could you just remind us high level of the puts and takes on synergies and other initiatives into 2027? Like how impactful will the higher level of Max flying be? What are the key synergies building year-over-year? And should there be a meaningful impact to the bottom line from the start-up of Allegiant First.

Gregory Anderson

Catie, it's Greg. I'll kick it off and caveat with -- we'll probably save a lot of it for Investor Day, particularly around the synergies. We are confident that we'll be able to achieve more than $140 million in synergies by 2029. In terms of the other initiatives with the MAX aircraft, what BJ said, we'll have 45 at the end of next year. I would expect 30-plus percent of ASMs probably for the combined company, but at least stand-alone Allegiant 30-plus ASM should be produced by the MAX fleet. And we've talked about it in the past that the MAX fleet just operationally performs really well economically, I think between a 25% to 30% earnings benefit as compared to the 320 series.

So more MAX is a good thing, and it should help drive sustained earnings for the long term. And then the other initiatives, commercial initiatives, co-brand is a big one. We've talked about it. Drew mentioned the signing of the agreement or updated agreement with BofA. Our goal longer term, and this is on a stand-alone Allegiant basis, we'll have to update our numbers and give you more detail at the Investor Day, but is to go from 6% in terms of co-brand remuneration, get that up to 10%. So we think there's meaningful opportunity there.

And Drew and team, I'll leave it at this, and he can add any additional color is that an important part of our commercial strategy is how do we continue to grow non-ASM revenue. We talked about co-brand and high-margin type opportunities. There's a wave of initiatives we had a year ago that we've been talking a lot about, Allegion Extra peaking the peaks with some of the commercial systems. There's a wave now, and we'll have several waves following to continue to update with initiatives to drive better and more sustained earnings power. But anything you want to add, Drew?

Drew Wells

Yes. Maybe only a couple of things here. I mentioned some of the shared wins on the ancillary front that we experienced in the third quarter. That will continue to be win through the first part of '27. With the co-brand program with Allegiant First, I'd probably push those expectations to the back half of '27 and into '28, just given needing some lead time, right? It's one plane in March. It will take some time for that to meaningfully impact the bottom line. And looking at cold and snow real quick, but co-brand economics really starting in the back half of '27 as well. So there's a lot of great that's coming. I might just caution a little bit on the first half of the year and push some of that into the back half.

Catherine O'Brien

That's great. I'm looking forward to hearing more at Las Vegas soon. Maybe just one quick one for B.J near term. You reiterated that 3Q CASM-ex inflation is going to be the high watermark. With a decent step-up in capacity in 4Q versus 3Q, could we see CASM-ex several points better than 4Q inflation? Or is that simplifying it too much and there's some other puts and takes you'd want to flag?

Robert Neal

Yes. I guess we have quite a bit of information out there with the guide. So yes, you should see -- we'll still be up, of course, year-over-year on CASM-ex. But yes, I would say a couple of points better than what we put up in the third quarter.

Operator

Your next question comes from the line of Andrew Didora with Bank of America.

Andrew Didora

BJ, on following up on that last question. I guess from a bigger picture perspective, if we take sort of the current implied CASM-ex guide in 4Q at that sort of flattish capacity, is that the right construct to think about kind of the core CASM-ex growth rate from here? And then we can obviously layer on our own thoughts in terms of timing of synergies and the like? Or are there things in the fourth quarter kind of coming in or out? Just trying to see if that's the right kind of way to think about the core growth rate.

Robert Neal

Yes. I'm glad you asked because I just -- I don't think it is that we'll still be up a little bit higher in the fourth quarter than I would expect us to be at a run rate with that kind of a growth profile. And it might be a good opportunity to just note a couple of calls ago, we talked about full year CASM-ex. And while we had a lot of changes in capacity from '24 to '25 and '25 to '26, it's just -- it's important to note that legacy Allegiant CASM-ex is still coming in for the full year '26 right in line with where we were in 2024.

So the business has had this really strong cost performance, notwithstanding changes in capacity this year. But then just a couple of nuances to point out there. We're still carrying pilot headcount, and we have pilot wages stepping up at the beginning of next year. So there will be a little bit of pressure there as we grow into that headcount, which won't be fully realized by the end of the first quarter.

Andrew Didora

Great color. And second one for Drew, and I think I know the answer to this given your reported load factors in your outlook here. But just need to ask, just given your all leisure, have you seen any sort of demand elasticity at all? Like have you tested more off-peak flying to see if the demand holds or any markets that are kind of meaningfully underperforming? Or any color there would be helpful.

Drew Wells

Yes. I mean it's a little hard on a flight basis from that kind of experimentation, right, with things moving so quickly. What I'd say is through the month of September, typically the slowest part of the year, we were high 90% of flights that were cash positive. So even in that fuel environment, things just really ripped. Still want to be cautious into January and February and not kind of get over our ski tips. I think you saw maybe just hints of some demand elasticity through like the Halloween weekend, but that has shown signs of reversal as we get a little further into November. So it feels more like a blip in the timing of Halloween and election more than anything else. But I mean, all in all, demand still looks incredible. I commented on cash sales in the remarks. And as long as cash coming in the door continues to outpace our forward seat growth by the rate it is. I continue to feel real bullish about the demand outlook going forward.

Operator

Your next question comes from the line of Chris Stathoulopoulos with Susquehanna.

Christopher Stathoulopoulos

So going back to the earlier question on if fuel prices do retreat here and you being able to, I guess, flex up on capacity, I think you mentioned to look at utilization, so average block hours per aircraft day and perhaps on a 2-year basis or what that might look like. But there are a lot of moving pieces, as you just commented to Andrew's question around headcount. So if that were to happen and fuel is lower and it's kind of a mid- to high single-digit 2027. Could you walk us through what needs to be done, I guess, on the headcount piece, getting folks into the network? It sounds like you're able to fill the classes now, but I want to hear your thoughts on pilots and crew if fuel does move lower and of course, capacity moves to the higher end.

Drew Wells

I'm happy to start off here, and then we'll look to the others to help fill in. Through most of the year, I think we have the slack in the schedule right now to be able to react. And again, going back to those shoulder periods, going back to off-peak such that oil drops to that extent. I think there's even still some slack in the midweek during the peak periods. As we think about raising our peak day and peak period profile, that's going to come back a little bit to aircraft, it's going to come back to headcount. There's a lot of pieces that need to go into that to be able to support. So I do -- I feel pretty good about the vast majority of the schedule being able to be filled in without significant headcount need, but...

Gregory Anderson

Yes. I'd just add, Chris, kind of more of a high-level comment. And that's that, as we mentioned earlier, we're going to plan for fuel to be higher. We have flexibility built into our model naturally. And we're going to stay disciplined. And if we're able to, as Drew said, if fuel comes down in the shoulder or off-peak periods, there's an opportunity to take up utilization a little bit more, we're going to do that. But where we sit today, we'd rather take a more disciplined, conservative approach on fuel. And then we'll react accordingly, which we've done, and it's a hallmark of our model, that flexible capacity approach.

Christopher Stathoulopoulos

Okay. Great. And then as a follow-up on the induction of the MAX aircraft, could you help us think about what utilization or ASMs per gallon might look like next year based on the current capacity plan?

Gregory Anderson

Yes. I would say with -- so in '26, what do we trended to about 86 ASMs per gallon thereabout. I would think next year, we could get that up to 88, maybe even closer to 90 and just depending on how -- what we're talking about in terms of capacity where that's at and how much is flown by the MAX aircraft. But that's a good story beyond as well as we continue to take more MAX aircraft, we would expect that fuel burn efficiency to continue to go up throughout the system.

Drew Wells

And maybe just think about utilization, right? I mean these -- almost to a tail, these are the highest utilized aircraft in our network. You're already teasing a little bit of what I plan to talk about at the Analyst Day in December. So I probably won't go into too much detail, but the opportunity for high utilization lines within a low utilization carrier exists, and that will continue, I think, through the deliveries we see in '27 as we turn over a few extra bases to make sure that these things are flying.

Operator

Your next question comes from the line of Dan McKenzie with Seaport Research Partners.

Daniel McKenzie

Congrats on the quarter here and the outlook. It would be great to go back to the operational challenges at Minneapolis. And I dropped off the call a bit, so please skip this question if you've already talked about this. But did you -- or can you put some brackets around what the earnings impact was in the third quarter and then the impact here in the fourth quarter as well. There's a pretty sharp pull down in flying that I'm guessing cost a lot of revenue. I'm just trying to get a sense of what that noise is that goes away next year.

Gregory Anderson

Dan, it's Greg. I don't know that we're going to get -- go into the depth of what the impact was specifically from pulling down that flying. What I would just reiterate, though, is that demand in the Twin Cities remains are really strong. And it's -- we're focused on adding capacity at the pace we can. And what I talked about earlier on the call is that staffing levels with our Sun Country pilots are still below where we'd like. We're working through that. And it's just a matter of time, I think, before we get to manage through it. And our goal is to restore and grow capacity when we can as soon as we can in the Twin Cities, and we see a lot of opportunity there.

Daniel McKenzie

Yes. Okay. And then going back to the earlier conversation around the 30% discount to an average -- industry average fare. Is that level of -- is the level of that discount a deliberate strategy that you're targeting? Or is it just a trough period discount? And then just setting aside the first-class product on the way, which is going to narrow that, but what is that right discount? And the reason I ask is that we've seen other sort of ultra-low-cost carriers over the years target a 25% discount. But I'm not sure what -- that that's the right discount either. I'm just curious how we can sort of think about that discount over time.

Gregory Anderson

I'll hit it at a high level. Drew can add. And to compare it to other low-cost carriers, I would just push back on the flexible capacity. I think our TRASM is over $0.14 fourth quarter. It's going to be a record as well. So we have a higher TRASM than I think a lot of the low cost or typical -- or the traditional high ULCCs had as well. But what the point that I'm trying to get across with that statement, Dan, is that the value proposition that we offer our customers is convenience, it's affordability. -- and it's a great service in terms of operations.

And we have a loyal customer base. 70% of our customers are repeat customers. They love our service. They love what we're doing, and we do it -- and we provide that at affordable fares. We're fortunate to have the best cost structure in the industry because we're allowed and that provides us an opportunity to pass those savings on to our customers. So -- but in terms of any -- I wouldn't view it as discounting. We're maximizing or we're driving revenues to where we think they should be, and we're doing that at an affordable price relative to the industry.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Sherry for closing remarks.

Sherry Wilson

Thank you all for joining today's call. We hope to see you at December 7 at our Investor Day here in Las Vegas.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.