Budget airline operator, Allegiant Travel Company (NASDAQ: ALGT), is facing some serious pressure after a scathing “60 Minutes” report highlighted the company’s safety and maintenance records.
The CBS Corporation (NYSE: CBS)’s “60 Minutes” double-length program on Sunday, April 15, 2018 comes after a seven-month investigation that found around 100 instances where major mechanical failures had occurred. Specific incidents include: “cabin pressure loss, unscheduled landings, aborted takeoffs, and emergency descents. One case involved a former pilot who was fired after making an emergency landing after smoke filled the cabin.”
According to Federal Aviation Administration (FAA) documents that were utilized by the news program, “Allegiant Air’s planes are three and half times more likely to have mid-air mechanical failures than American, Delta, United, JetBlue and Spirit Airlines.” The CBS report also questions how the safety concerns with Allegiant Air have managed to stay hidden from public knowledge for so long and even “alleges that Allegiant has a culture of putting profits ahead of safety.”
While Allegiant Travel Company has not directly commented on the “60 Minutes” report, the airline’s Vice President of Operations Eric Gust sent out a letter to customers defending the company.
“I want to tell you personally that I am outraged and astounded by the irresponsible, grossly misleading story aired by CBS 60 Minutes,” Gust said in the letter. “The story is outdated, bears no resemblance to the Allegiant I know, and shows a real and troubling misunderstanding of the FAA’s rigorous oversight of Allegiant and all US airlines.”
Allegiant Travel Company’s fleet is comprised of around 100 Airbus A320 series and McDonnel-Douglass MD80 series jets, which are mostly second-hand. While Airfleets.net notes that the average age of the company’s fleet is 18.70 years, its 30 MD80s average around 28 years old. Allegiant Air has announced it plans to retire its aging MD80s in November this year.
Over the past week, Allegiant Travel Company has seen its stock slide nearly 12.50%, which effectively puts the company in negative territory for 2018.