Allegiant Travel Co. (ALGT: Quote) said Friday that it has terminated the proposed deal to buy ten Airbus A319 aircraft from Cebu Pacific Air due to the failure of the parties to satisfy certain conditions to proceeding with the transaction.
The Las Vegas, Nevada-based leisure travel company had previously announced the deal on July 30, 2012 after the signing the letter of intent. At that time, Allegiant said it plans to lease 9 Airbus A319 aircraft from GE Capital Aviation Services, and also lease and eventually purchase 10 Airbus A319 aircraft from Cebu Pacific Air.
Andrew Levy, President of Allegiant said, "We are disappointed that we were not able to finalize this agreement on which we spent a substantial amount of time and effort. Unfortunately we were unable to come to terms on some of the economic provisions of the transaction and as we have demonstrated in the past, we will not purchase aircraft just for the sake of growth."
Levy added that seven of the nine used A320 aircraft, which the company previously said on December 19 that it plans to acquire, are expected to be delivered in 2013. The company now plans to introduce these aircraft into service at a faster pace so as to offset the capacity that had been planned with the Cebu A319s.
Allegiant is now expecting total capex for 2013 between $170 and $180 million, down from the prior range of between $270 million and $280 million.
The company has signed operating leases for nine A319 aircraft with GECAS and purchase agreements for nine A320 aircraft formerly operated by Iberia. Allegiant said it will remain active in the market for the purchase or lease of additional Airbus aircraft.
In Friday's regular session, ALGT is trading at $72.54, up $0.26 or 0.36 percent on a volume of 6,213 shares.
by RTT Staff Writer
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