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Allegiant Travel Company (NASDAQ:ALGT) shares took a nosedive on Thursday after company filings revealed that the company is suspending its dividend. The airline industry has struggled in 2024 with rising costs and margin contraction.
What Happened: Allegiant revealed the dividend suspension in an 8-K filing on Thursday — the same day the company announced that Gregory C. Anderson will be the next CEO as of Sept. 1.
Anderson will succeed Maurice J. Gallagher, who will be retiring.
“In anticipation of capital requirements related to fleet investments, the Company is suspending its quarterly cash dividend effective immediately,” the filing read.
Allegiant previously issued an annual dividend of $2.40 at a 4.6% yield, according to data from Benzinga Pro.
Why it Matters: The filing is unclear as to the extent of the fleet’s capital requirements. According to annual filings, company capital expenditures have ticked up in recent years.
Allegiant operates an Airbus SE (OTC:EADSY) fleet of 126 planes, according to airfleets.net. It operates Airbus A319 and Airbus A320 planes.
Price Action: Allegiant traded at $48.32, down 7% at the time of writing. The stock briefly traded up on the day but sank after the filing.
The Las Vegas, Nevada-based company’s shares are trading down over 40% in 2024.
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