During an earnings conference call to discuss Allegiant Travel’s 39th consecutive profitable quarter, chairman and CEO Maury Gallagher said the main intent of the company’s newly formed joint venture, Allegiant Systems or “G4 Systems”, is “to create automation software services for inside the cabin to begin with.
“We think [that] some of the most backward places on technology are inside an airplane cabin, be it the cockpit or the main cabin, and so we’re working on things such as using iPads for buy-on-board, much more modern stuff and we want to bring in some people who had a better ability to market and sell this stuff to third-party than us. While we’ll be a customer of the company, we primarily want to work on developing that.”
Earlier this month Allegiant announced the formation of G4 Systems, saying the joint venture includes airline operational technology consultancy AvIntel and software firm Lixar IT.
The JV will provide “software-as-a-service” solutions to the market.The cloud-based model will assist airline operations in a number of areas, including electronic flight bag (EFB), inflight operations (including buy-on-board), and cabin crew automation.
The partnership also comes at a time when Allegiant is tiptoeing into inflight entertainment, having inked an arrangement with Row 44 for a wireless IFE system on long-haul Boeing 757 routes.
Meanwhile, Allegiant continues to move from strength to strength. The company generated a third quarter net income of $17 million on revenues of $217 million, a 13% increase year-over year. It achieved an operating profit of $29 million, while the associated operating margin was 13%.
Allegiant says its CapEx spend of $28 million during the quarter “primarily consisted of the initial deposits for 10 Airbus A319 aircraft and the continuation of our 166-seat modification project”.
At the end of the quarter, Allegiant had modified 36 MD-80s from 150 seats to 166 seats for a total spend of $32 million.