By Stephen Nakrosis
Allegiant Travel said its Allegiant Air subsidiary amended a delivery agreement with Boeing, giving the aircraft maker two additional years to deliver 50 737 MAX jets.
The new pact, which amends a December 2021 deal, moves the delivery deadline for Boeing to the end of 2027 from the end of 2025. The amended agreement also provides for other benefits and considerations related to delivery delays in 2024, Allegiant disclosed in a Securities and Exchange Commission filing Wednesday.
The company accepted delivery of its first 737-8200 aircraft in September, it said. It also expects that it could receive up to three additional aircraft from Boeing during the fourth quarter with the eight-week machinist strike at the aircraft maker now ended.
In a companywide meeting earlier Wednesday, Boeing CEO Kelly Ortberg said the company won't turn cash-flow positive until it accelerates 737 production to the target of 38 jets a month it aimed to hit by the end of 2023, The Wall Street Journal reported.
In addition to recent job cuts and furloughs, some research-and-development spending may need to be delayed, Ortberg said, as the company is burning through cash. It previously warned that its operations would continue to use up cash through next year as it reported a $6.17 billion quarterly loss last month.
Allegiant Travel, meanwhile, last month reported a third-quarter loss of $2.05 a share on revenue of $565.2 million during its generally weakest quarter by season, according to CEO Gregory Anderson. The quarterly results were also hurt by the CrowdStrike outage that afflicted a number of carriers in July and the effects of Hurricane Helene.
Allegiant reported holding cash and cash equivalents of $265.9 million at Sept. 30.
Shares of the leisure-travel company closed up 2.7%, at $72.70. Boeing shares ended the day about flat, at $146.08.
Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
(END) Dow Jones Newswires
November 20, 2024 18:19 ET (23:19 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments