Allegiant Air can ride out safety questions raised by ’60 Minutes’ report

Allegiant Air faces bumpy air after CBS report

Allegiant Air may be able to weather a scathing “60 Minutes” report on the low-cost airline’s ugly safety record.

The airline as well as some of the analysts who cover the item say the item will be safe as well as on track to put many of its operational problems behind the item.

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Sunday’s “60 Minutes” report detailed more than 100 of what the item described as serious mechanical incidents between the start of 2016 as well as October 2017. Those incidents included mid-air engine failures, smoke as well as fumes within the cabin, rapid descents, flight control malfunctions, hydraulic leaks as well as aborted takeoffs. Allegiant has no fatal crashes since its 2001 founding, although the item reported at least 60 unscheduled landings as well as 47 in-flight emergencies, over the past two years, according to “60 Minutes.”

The number of Allegiant’s serious safety problems were three-as well as-a-half times greater than the nation’s additional major airlines, according to the report. Most of the problems were associated with the MD-80 aircraft, which are among the oldest aircraft operating today. They have not been built since 1999, nearly 20 years ago. According to AirFleets.net, a service in which tracks aircraft owned by airlines, the average age of the MD-80s in which Allegiant still operates will be 28.2 years old.

although Allegiant has been retiring those MD-80 planes, which frequently encounter service problems. At the start of 2017 the item had 47 MD-80 planes, 34 Airbus planes as well as four older style Boeing jets. Today the item has 27 MD-80s as well as 73 Airbus jets. the item plans to retire the last of the MD-80s by the end of This specific year.

“CBS produced a one-sided narrative by cherry-picking interviews as well as ignoring publicly-available facts,” said Allegiant’s response to the report.

Shares of Allegiant (ALGT) fell nearly 9% dive on Friday, as well as shares fell another 2% in Monday.

Related: Boeing clinches deal to sell 47 jets to American Airlines

Some of the analysts who follow the stock said they agreed with the airline in which the report overstated the extent of the problems.

“By end of the year their fleet age will be much more in line with the rest of the industry,” said Joseph DeNardi, an analyst with Stifel who incorporates a buy recommendation on the stock.

Both DeNardi as well as Savanthi Syth, airline analyst at Raymond James, said they expect the airline to lose relatively few bookings because of the 60 Minutes report. They say in which the airline serves smaller airports in which are often not well served by major carriers as well as in which the item offers the low fares in which are likely to keep customers booking flights.

Syth incorporates a neutral rating on the stock although said she believes the sell-off in shares associated with the report was not justified.

Neither DeNardi as well as Syth have ever flown the airline, though both said they could have no reservations doing so. Syth said her inlaws frequently fly on the airline. The “60 Minutes” report quoted several experts saying they could not fly the airline themselves.

The airline’s statement said the item expects employees to adhere to all company procedures as well as policies, including safety procedures, as well as denied the claims of critics within the report in which there will be pressure to put profitability over safety. the item said a pilot who was fired after ordering an evacuation of a plane which was a focus of the report was not fired for putting passenger safety ahead of airline assets, as the report said, although because the airline determined he unnecessarily evacuated a plane “at great risk to the crew as well as passengers” even though there “was no smoke, fire, or an aircraft malfunction.” The report said there was smoke within the cabin as well as a fire within the engine in which prompted the evacuation.

The pilot involved in in which incident will be suing the airline for wrongful termination.

CNNMoney (brand new York) First published April 16, 2018: 3:56 PM ET



Source : Allegiant Air can ride out safety questions raised by ’60 Minutes’ report