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Allegiant Travel Co (ALGT) Q1 2021 Earnings Call Transcript

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Allegiant Travel Co (NASDAQ: ALGT)

Q1 2021 Earnings Call

May 4, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and thank you for standing by, and welcome to the Q1 2021 Allegiant Travel Company Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Sherry Wilson. Thank you. Please go ahead.

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Sherry Wilson -- Director, Investor Relations

Thank you, Cherie [Phonetic]. Welcome to the Allegiant Travel Company's First Quarter 2021 earnings call. On the call with me today are Maury Gallagher, the Company's Chairman and Chief Executive Officer; John Redmond, the company's President; Greg Anderson, our EVP and Chief Financial Officer; Scott Sheldon, our EVP and Chief Operating Officer; Scott DeAngelo, our EVP and Chief Marketing Officer; Drew Wells, our SVP of Revenue and Planning; and a handful of others to help answer questions. We scheduled today's call for 75 minutes to ensure sufficient time for questions. We will start with some commentary and then open it up for questions. We ask that you please limit yourself to one question and one follow-up.

The company's comments today will contain forward-looking statements concerning our future performance and strategic plan. Various risk factors could cause the underlying assumptions of these statements and our actual results to differ materially from those expressed or implied by our forward-looking statements. These risk factors and others are more fully disclosed in our filings with the SEC. Any forward-looking statements are based on information available to us today. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information, or otherwise. The Company cautions investors not to place undue reliance on forward-looking statements, which may be based on assumptions and events that do not materialize. To view this earnings release as well as the rebroadcast of the call, feel free to visit the Company's Investor Relations site at ir.AllegiantAir.com.

With that, I'll turn it over to Maury.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Thank you, Sherry. Good afternoon, everyone. Thank you again for joining our Q1 call. First, let me take a moment and thank all of our team members, their spouses, families, as they continue to fly our passengers in these difficult times. They have been the true warriors for our side of the house here. So, thank you again. I'm extremely excited about our future, more so than I have been in previous quarters. I expect traffic to continue to grow in the coming months. Based on the data we're seeing, I would say we are back. 2021 to beyond I believe will be as good or better than I could have hoped. In Q1, we had EPS of $0.42 and EBITDA total of $68 million for the quarter, but the thing that is very positive is each month of the quarter was a positive EBITDA number. Understand both of these numbers include our PSP amounts of $92 million. I want to share with you some interesting facts and I've seen, considering the impact of the pandemic, how it's affected us and others, one, our balance sheet is in a much better shape than before we entered the pandemic, particularly as it relates to cash. By the end of Q2, our cash balance will have more than doubled to a billion dollars, and this is measured since the end of 2019.

While our cash balance has been growing, our net debt balance has actually declined over $50 million. By the end of the year, we could be approaching $500 million of net debt down from $950 million at the end of 2019. An interesting stat I was taken with, last year, was we generated $235 million of positive cash from our operational statement, off our cash flow things, for 2020 as a whole. The industry during this time lost $18 billion from operations. And I might add, this includes $800 million of losses from the other ULCCs. Lastly, as a factoid, during our Q1, without any PSP, we only had a $15 million EBITDA loss or a negative 5.5% margin. The remainder of the industry's EBITDA loss for this quarter, just ended, was $9 billion on $15 billion of revenues or a 60% negative margin. My conclusion from that is our personnel, our model, and our excellent management team have done yeoman's work during this difficult year. We were the first to get back to positive growth. We did this, just this previous quarter. We were the first to achieve positive EBITDA late last year. And we are among the first to achieve positive EPS and we did that again this quarter.

We are fortunate to be a domestic leisure-oriented carrier. Leisure is king today. Business and international traffic continued to substantially underperform. Profiles of our customer and their behaviors and [Technical Issues] an important distinction in our model. Our leisure customers, who are made up of millions of individuals, families, small independent units to make personal, individual decisions to travel, and spend their funds. Business traffic has a different decision process. While there are millions of business travelers as we know, their decision to travel in most cases is ultimately controlled by the company's senior management, namely given dramatic [Phonetic] circumstances, company business travel is stopped. We have seen this phenomenon three times in the past 20 years. 9-11, obviously. The great financial crisis shut down a good chunk of business traffic, and obviously, this past year with the pandemic. These have been full-tilt stop, traveling business -- traveling decisions for business customers. This has been devastating to the airline and travel industries, particularly those focused on that business customer. Allegiant has went through two of these massive shutdowns, and while we were certainly impacted by the pandemic this past year, we candidly didn't even feel the GFC.

Our leisure customer profile and our flexible model allow us to bounce back faster than everyone else, including our other ULCC compatriots. This has been the backbone of how we have built this great Company. We had a terrific 2019 and we're off to an excellent start in early 2020. We just had to wait -- delay a year, so we could get back to it. Vaccines have been a terrific catalyst, as we all know, and combined with people's strong desire to get out and go has made it for a really nice rebound that we're seeing these days. We believe our income levels for the remainder of 2021 and '22, and beyond, will meet or exceed our last full year of '19. We want to be a leader in this effort and take advantage of our great model in the coming years, and plant flags as we attack more than 1,000 markets that we have -- routes we have targeted. We've upped our game substantially in the past three years to four years. Our brand is extremely well-positioned. We made some bold moves that have worked out extremely well as Allegiant Stadium has been all we could have hoped for and more. I continue to be in a drum for our model, its flexibility, which allows us to both shrink and rebound. It continues to demonstrate its benefits, allowing us to separate ourselves from the competition. This is particularly evident when you review the industry's operating margin results for the past 20 years. From our beginning in 2001, we've averaged over 15% in operating margin during this 20-year period. On the next close is carriers, Alaska and Southwest, have been at 10% margins. Perhaps, the best highlight of the past few months has been the elevation of our status from a noun to a verb. From what I've heard, we were the standard comparison for recent IPO roadshow efforts as well as for the group of start-ups that are showing up at this point. 20 years ago, most in the airline space didn't consider us an airline, which was fine by me. No one pays attention to us, but today we are the model to follow. This is the ultimate compliment from your industry peers.

In closing, I can't tell you how proud [Phonetic] I'm again of this group of team members, particularly those who carried water on the front lines this past year. They have been the true heroes in our part of the world. Every day they have boarded airplanes and carried our passengers safely and on time during these trying days. John?

John Redmond -- President

Well, thank you very much, Maury. Good afternoon, everyone. As I did in the previous earnings call, I thought it would be helpful to provide some directional data points to help you understand how we see things in 2021. Given our domestic leisure-focused business model, we are in a better position than other carriers to look beyond the month without hope and a prayer being part of the commentary. Having said that, these directional guides assume no significant changes to the environment we are operating in. The industry and the country are seeing a slow and steady return to normalcy and expect that to continue as more restrictions are lifted. All financial data provided is on an adjusted basis, which excludes of course the benefits from the CARES Act and PSPs. Furthermore, fuels assumed at $1.99 a gallon. We expect our cash balance to be around $1 billion at the end of each quarter, going forward, for the balance of '21. And, of course, with an ever-improving net debt. And looking at cost, we see full year CASM-ex less than Q1 '21. Supporting that view, our FTEs per aircraft should be down more than 10% versus 2019, even though our average number of aircraft are expected to be up over 20% by year-end. Furthermore, our Q2 CASM-ex would be less than 6. Greg will provide further commentary on Q1 CASM-ex. Every quarter, in '21, [Technical Issues] show a positive EBITDA, and Q2 EBITDA will be around $100 million. EPS, every quarter for '21, should be positive as well.

In regards to Airline growth, I mentioned in my comments in the last earnings call, we have never been more excited about the growth opportunities in '21 and beyond. To that end, it is our intention to grow the airline by the end of 2024 to north of 145 planes. It goes without saying, there is a lot of planning that goes into such growth and we have been working on that in earnest for the last several months. Our deep knowledge of the domestic leisure customer, coupled with our aircraft acquisition experience in strong, and getting stronger, balance sheet allows us to execute on such a strategy better than anyone. In regards to Sunseeker, we've been getting quite a bit of interest of late, and we're hoping to get something done, that would allow the project to start before the end of the year. We are exploring many different approaches as to how the additional funds will be raised, so the comment on how [Indecipherable] transaction could shake out or look like would be premature. While the speed of our recovery may be surprising to some, if not all, it has come about due to the dedication, passion, and hard work from our incredible employees, you're simply the best and our results are proving it.

With that, I'll turn it over to Scott Sheldon.

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Thank you, John, and good afternoon, everyone. Thanks for joining the call. Let me first start out by saying thanks and expressing how proud I am of the entire Allegiant team and all of our partners throughout the network. Our operational results in the first quarter were terrific, despite some unique challenges. It goes without saying, our team members and partners are truly the ones that make this business successful and this entire management team salutes you each and every day. Congrats.

Moving on, what a difference a quarter makes? Plane [Phonetic] production continued to build as we turned the page on 2020. For the first time in what seems like forever, we experienced our first normalized operating quarter in more than a year as we ended up with just over 3% capacity growth compared to the first quarter of '19. Our core operating operational performance metrics were up virtually across the board with the exception of controllable completion, which I'll touch on that in a second. Our team's execution produced seasonal best for D-0 and A-14, at 72% and 80.7%, respectively, once again, on a full schedule as compared to the first quarter of '19. Excluding the impact of extended weather delays, which was particularly bad this quarter, our control on [Phonetic] A-14 was exceptional at 93%. Although our flying activity returned to pre-COVID levels in the first quarter, it wasn't without significant challenges. Our controllable completion percents which ended up just north of 99.5% for the quarter was far below our historical norms. A key driver of this were bottlenecks encountered in bringing flying assets back on the line to match first-quarter capacity demand, particularly for the ramp-up in late February and March.

As was most carriers throughout 2020, we deferred as much heavy maintenance and induction work as possible to minimize cash burn until there is a much better line of sight on-demand. While these deferrals created much-needed cash savings, it also created a significant backlog of aircraft with enhanced work scope requirements, required to return to service. During the quarter, we inducted five used aircraft and had as many as 32 separate heavy maintenance events. Not an ideal scenario as our core MRO partners, OEM, and part suppliers and logistic companies have been slow to ramp back to full capacity. The end result was north of 85%, maintenance cancellations due to lack of aircraft, it drove just over $6 million in the regular ops cost. In closing, I'm excited to maintain the momentum we built as we move into the second quarter, and into the back half of the year. We've weathered the induction and heavy maintenance constraints from the first quarter and we appear to be back on a normal cadence, which is critical. Although the back half of the year is aggressively scheduled and MRO pipelines are getting tighter, our plan is largely to undo risks, then to the tireless efforts and creativity of our maintenance, planning, induction, and engineering teams. Equally as important is looking forward to having all of our third-party suppliers and partners back online and operating at full capacity. Currently, the majority of our ground handling service providers are experiencing staffing challenges, namely, they are finding it difficult to recruit and/or retain the necessary headcount to run their businesses at pre-COVID labor rates, which is a direct result of the multiple stimulus rounds.

On the direct labor front, our pilots, flight attendants, mechanics who are either furloughed or are on extended voluntary time off programs have been recalled and we are pushing them through the respective pipelines as we speak. Training classes for all disciplines will begin in summer and into the fall to meet March-peak and summer of '22 flying.

And with that, I'll turn it over to Scott D.

Scott DeAngelo -- Chief Marketing Officer

Thanks, Scott. Building on prior comments, this past quarter clearly marked a positive turning point in customer sentiment and demand for leisure travel. Talking of first week of January, only one-third of our customers said they believed things were getting better in terms of Covid19. Yet, by mid-March, that number had nearly tripled and around 90%, so things were getting better. This fundamental customer sentiment driven by a combination of vaccine progress and destination reopening was highly correlated with when and with how we saw demand return. That is that the each [Phonetic] month of the quarter showed market improvement, with March booking levels, as already mentioned, performing around 2019 levels. However, it's worth calling out that while demand is increasing upward, it's also expanding outward, and we're beginning to see more normalized leisure travel search and booking behaviors. Advanced purchase timing for the first week of 2021, with nearly half of what it was in 2019. Yet, as we finished the quarter, advanced purchase timing for the last week of March had greatly increased and was virtually identical to that same week in 2019. Further to this dynamic, the volume of flight searches being performed by customers at allegiant.com continues to outpace 2019 levels, especially for mid-to-late summer months, suggesting additional waves of leisure travel demand are continuing to reenter the market and are searching for travel time period that they're most comfortable with. Of those customers who have already flown have booked Allegiant this year. More than 70% reported to having already been vaccinated.

As mentioned last call, staying close to and winning back those customers who flew Allegiant in 2019, but haven't flown since the pandemic began is our priority focus. And I'm pleased to report that we've already recaptured nearly 20% of these customers and our itinerary and that those who are still not booked, report overwhelmingly that they informed no other airline during this time and consider Allegiant their top choice by a wide margin over all other airlines considered for their next trip. Once again, our direct-to-consumer approach has remained a critical differentiator, not only for selling directly to, but also communicating directly with our customers, enabling us to stay close this past year. Our approach to capturing demand continues to be rooted in cost discipline by heavily leveraging our owned media channels, namely our website and email marketing, both of which achieved first quarter web traffic increases versus 2019. This helped us once again achieving incredibly low sales and marketing costs on a per booking basis that were 80% below pre-pandemic levels.

And lastly, with our enhanced digital commerce assets in place, that is both our new website and new mobile app, we turn our focus to launching our broad-based, non-card loyalty program later this year. And to expanding our leisure offerings as allegiant.com, not only in existing hotel and rental car categories, but also to launching vacation rental inventory, more than 80,000 properties nationwide with our newest partner BookingPal.com. And, of course, we look forward to soon offering travel packages for Allegiant Stadium event this fall. Moreover, we continue to explore asset-light co-marketing and sales channel partnerships that enable us to broaden our leisure travel ecosystem and that give us privileged partner relationships that enable us to reach millions of new customers and markets that we and those partners collectively serve.

With that, I'll turn it over to Drew.

Drew Wells -- Senior Vice President, Revenue

Thank you, Scott, and thanks to everyone for joining us this afternoon. We continue to see sequential revenue improvement in the first quarter with scheduled Service and total revenues, each down 38% versus the first quarter of 2019. Our ancillary revenue per passenger was down just 0.2% against the same timeframe. It remained a great story considering that it's half of the scheduled Service revenue. This contributed in a large way to our total fare per passenger being down just 8.9%. We ended the quarter with significant momentum through the back half of March that carried into April. April revenue will be quite close to the March number, even despite less capacity for the first time in Company history. A lot of this is due to what Maury mentioned, our April load factors were roughly 10 points higher than March. And, in fact, despite moving beyond the peak spring break and Easter timeframe, loads had improved in each of the last eight weeks. Furthermore, most of those weeks were also positive ASMs, year-over-two-year as they ramped into the peak. In total, April and May will be roughly flat capacity versus 2019 before the growth resumes in earnest during June, producing the 2Q ASM guide of plus 2% to plus 6% versus 2019. Some of that growth is slated for the newest Allegiant cities of Portland, Oregon, which began service in April, along with Jackson Hole Wyoming in Key West Florida, which takes flight in June. Those are among the 51 new routes beginning service in the quarter. We are thrilled with the booking performance of our new contingent [Technical Issues] and what they add to the Allegiant network. Along with the ASM guide, we are guiding 2Q scheduled Service revenue to be between down 6% and down 10% versus 2019. I'm ecstatic to see numbers in the single digits. And I really look forward to flipping that sign in time.

Fixed fee margins have been greatly impacted by the amount of supply and lower demand in the market and we responded by looking to deploy more flying and, in particular, valuable peak day flying to the better current returns on the scheduled Service side. While we had a great run of fixed-fee flying through the college basketball March Madness tournament, it is certainly more of a one-off benefit for 2021 and fixed-fee revenues are likely to remain under pressure. The strength and demand we're seeing continues to give us conviction in the potential for the back half of the year. We have the crew and the aircraft in place to grow approximately 20% and our current selling scheduled through mid-December reflects that intention. That selling schedule includes the announcement of our newest base in Austin, Texas. We've served Austin since October 2013 that had success growing a wide range of route opportunities and are elated to make it a stronger presence in the future of our network.

And with that, I'd like to pass it over to Greg.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Thank you, Drew, and good afternoon -- good afternoon, everyone. We continue on our path of leading the way in restoring earnings power as we deliver on our tried and true business model that provides affordable, convenient, and reliable air travel to residents of underserved cities. Over the years, we have consistently produced industry-leading returns for our shareholders. We are a long-term focused bunch and taught to think like owners, particularly when the tone is set at the top by Maury, who since our Company's inception, has not only been at the helm but also our single largest shareholder. One of our key focus metric is restoring our EBITDA production to pre-pandemic levels, which is more than $6 million in annual EBITDA per aircraft.

So, starting with the current tone of the business. During the first quarter, our average daily bookings came in just under $5 million per day, which translated into an average daily revenue of $3 million. The quarter ended strong as March came in like a lion with average daily bookings exceeding $6.5 million per day, ahead of 2019 levels and driving more cash flow as our ATL increased by $100 million or 33% from December to March. This despite the travel voucher portion being down 19%. Additionally, we saw a couple of key metrics during the first quarter, which already outperformed 2019 results. One is capacity. Our focus on 100% leisure, 100% domestic, and our only nonstop flights plus strengthened demand resulted in March capacity of nearly 1.9 billion ASMs, the highest single month in our history. And other is cost. Our first-quarter adjusted CASM-ex, which excluded PSP benefit, is 6.36% since or 5% below the same period in 2019. And perhaps worth noting, our adjusted CASM-ex for the quarter is by far the lowest reported by a carrier. It is half of the industry's reported average of $0.0127. We are excited and getting back to pre-pandemic results and the catalyst that enables us to lead the way is the flexibility of the business model. Our one-of-a-kind, low utilization, and high variable cost structure aided us in generating $168 million cash from operations during the first quarter, which is more than the first quarter in 2019, and helped to push our ending March cash balance of just $730 million. Additionally, we have $260 million in cash that comes in after March, roughly $150 million from our NOLs, $98 million for PSP3, and a $14 million top-up for PSP 2. Pro forma, the $260 million in these cash proceeds brings our first quarter cash balances to nearly $1 billion, thus resulting in a March pro forma net debt position of roughly $630 million or a 33% reduction from year-end 2019 balance.

Moving to our second-quarter outlook. We expect to end up five aircraft during the quarter to bring our total in-service fleet count to 105 by June's end, an increase of 19 aircraft compared to June of 2019. These additional aircraft are already being put to work at capacity during the second quarter, is expected to be up around 4% year-over-two-year. It is also notable, second-quarter daily bookings haven't skipped a beat. April continued to roar with average daily bookings around 6.5 million per day, which is 8% higher than April of 2019. The strong rebound we are seeing in our business supports our second quarter of scheduled Service revenue guided down 6% to 10% year-over-two-year which translates into revenue per day of $4.8 million, nearly 60% higher per day than the first quarter and within striking distance of 2019's average revenue per day. And on the midpoint of our capacity guide, we expect our adjusted CASM-ex to come in under $0.06 during the second quarter, so combining our expected daily revenue of $4.8 million in the second quarter with our expected cost performance, suggests an adjusted EBITDA margin of around 25% for the June quarter. That 25% EBITDA margin excludes the benefit of PSP. If you include the benefit of PSP, that suggests an EBITDA margin of more than 35%. Turning to Fleet. During the first quarter, we acquired three aircraft at an average all-in price of $16.5 Million per tail [Phonetic]. These aircraft were paid for with cash and remain unencumbered, which brings our current unencumbered aircraft count to 29. In the used A320 market, our fleet team is in no short supply of deals coming across their desks at prices that reflect a 30% discount on average to pre-pandemic levels. Based on current commitments, we expect to end the year with 108 aircraft, which supports our ability to increase capacity in the back half of '21 by as much as 20% as Drew and his team see no shortage of opportunities to put aircraft to work. This level of capacity suggests our adjusted CASM-ex for the back half of the year should be around the low $0.06 level. In the event, we come across sustained weakness in the demand environment, our highly variable cost structure along with our fleet flexibility provides us a built-in safety valve to let off the gas as needed. Not only is our industry-leading cost structure advantage expanded due to the structural cost savings removed during the pandemic, other carriers have increased their leverage significantly more than we have. Our expected full-year '21 interest expense should be around 14% less than full-year '19. And dditionally, our full-year '21 scheduled debt maturity and interest payment, using our 2019 passenger counts, is actually $6 per passenger, less than it was in 2019.

You know, [Phonetic] let's take our word on how well-positioned we are. Recently, S&P upgraded our corporate rating and changed our outlook to stable. I believe among the first-rated US airlines to see such a change. And in terms of capex, our full-year '21 guide remains largely unchanged, with the exception of our other capex category and that we increased by $20 million for the opportunistic purchase of spare parts at an average price per part at 50% less than pre-pandemic levels. And I'll close with Teesnap. Recently, we completed the sale of 85% of our Teesnap subsidiary to TELEO Capital and at an undisclosed amount. We are excited to partner with TELEO as they are committed to positioning Teesnap for a bright future, with plans to further invest and accelerate growth of the business. And I'd like to take a moment to thank our Teesnap team members who have done an incredible job of building the platform, creating a deep and growing customer base, and bringing the program to its next evolution. With this team and TELEO's good stewardship, the future will be very bright.

And with that, I will turn it over to questions.

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Mike Linenberg from Deutsche Bank. Your line is now open.

Michael Linenberg -- Deutsche Bank -- Analyst

Hey. Good afternoon, everyone. Good quarter. This is a question probably, Maury and/or John. You know, look, Maury, you alluded to competition out there, what is it, imitation is the sincerest form of flattery? And the fact is, we do have a fairly -- several new entrants. It seems like there is more in the -- waiting in the wings and they are targeting your market segments. They're not -- I don't think we're getting any carriers that are going to start flying say, San Francisco-Tokyo. It's all about Austin and Nashville to Florida and Vegas, etc, etc. I'm curious about how you're thinking about it and even just in the last couple of weeks, I think we've had two airlines announce new service to Phoenix-Mesa. We've seen someone announced additional state new service into [Indecipherable]-St. Pete. These are sort of the Allegiant mainstays. And so, how do you think about long-term opportunities? Do you think that you know with this area becoming more fragmented, the ULCC states becoming more fragmented that maybe consolidation is more likely over the next few years? A fairly broad question to one or both of you, however you want to answer. Thanks.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

That's a mouthful. We got half an hour.

Michael Linenberg -- Deutsche Bank -- Analyst

Well, I hope to catch up later, will call [Technical issues]

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Certainly, I think I classify [Phonetic] this last year, and this, ironically, is a financial year rather than an operational year. You see opportunistic financial plays that are -- the market has been very receptive to them with the IPOs, you have a lot of money that got there, known quantities there for the most part. But, on the new front, they each have their own personality. Drew has been following them very quickly. He may have some opinions in the near term, but Andrew, we know each other. He knows how to do what we do, but we've gotten very big. While we're certainly there to pay attention to people, that's not our first thing we look at, at this point in time. With the breeze outside of the house, they have an ambitious growth schedule, but with their airplane size and some things, I'm not terribly concerned about flying against a 110-seat airplane, which I'll start with. Number 220 is a good airplane, but they claim to be good just in longer-haul thinner markets. So, we'll just have to wait and see. I don't think it's so much us. I think the really interesting play is, other than big three react -- you're going with there -- this -- I'm just wondering if those [Indecipherable] of ton of debt. Their cost structure is twice, whatever those are. I mean, I just don't know how those guys kind of come down the hill, not to say, they won't, but long-term. So the issue, I don't know, gets us so much worried about start-ups is I think you're going to see the ULCC side able to really gain a lot of market share, potentially over the next couple of years. And that's why we are so bullish on because we can really stand alone in what we do and how we've done it. And we were ready for this in 2019 and into 2020. And like I said, we just took a year off but we're stepping on the gas. John, if you have any thoughts?

John Redmond -- President

Yeah, I think when you look at it, we've never been afraid of competition. But when you financially -- where we stood some time ago versus where we stand now, Maury made it in his comments, we all kind of alluded to it, but we've never been stronger with a stronger balance sheet in history of the Company, frankly. So we're well-positioned to take on any one. When you look at the start-ups, there are literally -- they don't have a brand. No one knows that brand in the marketplace. So, they're coming in as a brand that no one's ever heard of, and as Maury points out, maybe with a plane type that's not as cost effective as ours in some cases. So, I think we're very comfortable with where we stand, going forward. We're in great position to do it and growing quickly.

Michael Linenberg -- Deutsche Bank -- Analyst

Great. Great, thanks. And just a quick one to Greg. Aircraft rent expense, Greg, it's a fairly new concept for you guys. As I think about, you mentioned that the last three sales were financed out of cash. You're taking a few more later this year. Is -- are they operating leases or should we assume kind of March quarter is a good run rate for the rest of the year on aircraft rental expense? Thank you.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Thank you, Michael, for the question. Yeah. The three that we acquired in the first quarter are not op-leases. So, those are purchases. We do have a couple op-leases that we'll be bringing on in the next coming 12 months or so. But what I'd say is that that number that you saw in the March quarter, or where we sit today from a rental expense perspective is a good number for the remainder of the year.

Michael Linenberg -- Deutsche Bank -- Analyst

Great. Thanks, everyone.

Operator

Your next question comes from the line of Duane Pfennigwerth from Evercore ISI [Phonetic]. Your line is now open.

Duane Pfennigwerth -- Evercore ISI -- Analyst

Hey. Good afternoon. Thanks. Thanks for the time. So, your guidance implies nice sequential improvement in RASM. We really haven't had an opportunity for a while to talk about RASM, so it's nice to see a sequential improvement there. I wonder if you could comment on the balance between load factor. I mean, you noted that 10-point improvement in April, but the balance between load factor and yields, because it does feel like perhaps your average fares don't drop off as much as they might normally would from 1Q to 2Q?

Drew Wells -- Senior Vice President, Revenue

Yeah. Thanks, Duane. Drew here. I think we're kind of in the middle of the inflection point. We predominantly tried to keep fares and yields relatively in line under the theory that -- and what we experienced, the dropping of fair wasn't stimulating enough incremental load for us to make sense for us. As the demand pool, in general, is growing more see-through [Phonetic] out there, we're seeing more and more inroads to where dropping fair and creating a stimulation makes more sense for us. And I think, right now, kind of the inflection point there where you'll see yields hold up really I think fairly well over the first, probably, half of this month before as we get into summer seeing that kind of conversion take place. I know, Maury kind of alluded to some of the cadence of load there, but I do expect to see us cross 70 in June and continue kind of that steady improvement that we've seen from March to April.

Duane Pfennigwerth -- Evercore ISI -- Analyst

Yeah. Sequential improvement in RASM and sequentially in CASM, so that feels like -- it feels like a good outcome. [Technical Issues] Lastly, but can you talk about your growth outlook for the balance of the year? And maybe, relatedly, what would it take for you all to think about bringing back EPS guidance? Because we're going to have to think about positive EPS here again, really the first one to contemplate that.

John Redmond -- President

On the EPS front, I mean, we've had some conversation about that. I'd imagine, we'd start looking at that probably next quarter.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Yeah. But that's a nice transition back to a really positive way to look at the business so, yes.

Duane Pfennigwerth -- Evercore ISI -- Analyst

Agreed.

John Redmond -- President

I did mention to you that it's going to be positive every quarter for the full balance of the year.

Duane Pfennigwerth -- Evercore ISI -- Analyst

You did, John. Thanks. And then, just with respect to kind of the growth outlook, you gave us 2Q, how have your expectations about the second half kind of changed relative to past calls?

Drew Wells -- Senior Vice President, Revenue

No, I think we're still very much in line with what we suggested in the January, February call. If anything, I think we have a bit more conviction in what the back half of the year can bring. I feel stronger about our ability to be near that 20% mark. So, it's not providing an official guide, but you can look toward our selling scheduled at least for what we intend to be able to fly.

Duane Pfennigwerth -- Evercore ISI -- Analyst

Thank you very much.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

[Speech Overlap] Just to add to your comment -- you comment, Duane, I think Las Vegas is as exemplary of a leisure marketplace in the country as any place. And we go down to the Strip -- I was down there last week, and I mean I had to wait on a green light to make a left turn again. I haven't seen traffic like that in a long time. Headline today, Wind opens 100%. 80% of their people are inoculated -- 88% or something like that [Speech Overlap] And it's -- it just gave me this feel and our talent here that the leisure -- the Leisureworld's back, and frankly, Las Vegas has been one of the weaker cities over the last year just because it's been shut down so much. I think Orlando, obviously, comes back stronger with the disease of the world. So, the idea that we're back is a statement of the day. I think is -- if it's not today, it's not -- it's tomorrow or the next day.

Duane Pfennigwerth -- Evercore ISI -- Analyst

Thank you very much.

Operator

Your next question comes from the line of Andrew Didora from Bank of America. Your line is now open.

Andrew Didora -- Bank of America -- Analyst

Hi. Good afternoon, everyone. Thanks for the questions. Just my first question is for Drew. I guess, with what you're seeing and just in broader leisure travel and your booking curve lengthening and everything, but do you think you're at an inflection point in your business where it kind of reverts to more normal seasonality with 2Q strongest, 3Q the weakest, or do you continue to see the ability to continue to grow revenue sort of sequentially from here based on what you're seeing from the leisure traveler?

Drew Wells -- Senior Vice President, Revenue

So, A, I think we still have the ability to grow sequentially. Obviously, we're making it harder and harder on ourselves with each quarter. But I don't think we're back to a fully normalized world there. As we cited last September, October, we had great shoulder and not peak demand and I think we'll see that at least here in the shorter term, as all leisure travel patterns are a little bit different, VFR patterns are a little bit different than they've been in the past. So, I do think that there is at least some short-term runway to kind of maybe get some incremental lift in, in what would normally be an off-peak or shoulder before presumably returning to more normality in maybe a year or two.

Andrew Didora -- Bank of America -- Analyst

Got it. Interesting. And then, Maury, kind of strategic question here. But with what you've seen from the leisure traveler, do you have any regrets for not finishing Sunseeker on your original timetable? And I guess, what would you have to see for you to go through with it on your own again? Thanks for the questions.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

I've got a lot of regret. I wish we woud've finished it, we'd be in great shape right now with what's going on in Southwest Florida. I don't know if all are experiencing -- or seeing the numbers down there, but a couple of weeks ago, I was looking at hotel rooms. They were three-factor higher, can't get rental cars down there. It's -- and people we have down there are just -- they have never seen anything like this. So, having said that, we made the right decision not to do it and our go-forward approach is going to be, it will stand on its own with its own debt and things like that. But, John can talk about -- we're seeing some good activity and that part of the world is definitely being recognized for what it is as a vacation destination.

John Redmond -- President

It's unbelievable. We knew it made sense some time ago, of course, we made the decision. It makes even hell of a lot more sense now as everyone seeing. I already, earlier in my comments, made the comment that we expect to start that project back up again before the end of the year given the conversations we're having to date. There is quite a bit of interest in seeing that project get completed. So stay tuned. And we'll [Phonetic] have more to report down the road, but just now there's too many different directions. They -- this opportunity can take for me to make any particular comments on any one, but that's why I just made, pretty much a global one, that we think we're going to get started back up before the end of the year.

Andrew Didora -- Bank of America -- Analyst

Thank you.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Thanks, Andrew.

Operator

Your next question comes from the line of Helane Becker from Cowen. Your line is now open.

Helane Becker -- Cowen -- Analyst

Hi and thanks very much, operator. Hi, everybody, and thank you also for the time. Just two questions. One is, as you think about passengers coming back and airfares versus ancillaries, obviously, without the passengers, you're not getting the ancillaries. So -- are you -- is it -- is there a percent that you're thinking about that you want ancillaries to grow to versus there, and I think in answer to somebody's question, maybe Duane's question about leverage versus yields, you talked a little bit about it. But how are you thinking about ancillary?

John Redmond -- President

Sure. I would love ancillary to be at 100% of the portfolio. I mean that's -- that we're going to be there. We've been fairly solidly at or above 50% now for, at least, last five quarters, six quarters, even including pandemic time. I certainly want to see that continue to grow. We launched our bundled ancillary program shortly before the pandemic it -- and frankly haven't had as much time to see that grow as we would like, as we were kind of back into more scramble mode. I think there are several evolutions of that that will help boost as well as performance from the new website. A lot of things that Scott DeAngelo mentioned during his remarks and other things he is working on. So, there is not necessarily a targeted percentage in mind, other than, let's get that thing as high as we can get, and we'll be in the best overall position.

Helane Becker -- Cowen -- Analyst

Got you. And then, my follow-up question is: you were talking about -- and I think just, I'm not sure, maybe it was Scott Sheldon talking about finding it hard to attract people. I mean are the OEMs and your MROs that do your maintenance, are they finding that they have to raise hay to attract people or are they sending the work outside the country? I don't know what percent of your own maintenance or of your maintenance you're doing in the United States versus outside, but now I know most of it is third-party.

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Yeah. I think my comments on the labor rate itself as -- was more above and below wing and our ground service providers. Our MRO business was spread upwards of nine different, locations in six different countries. So it was difficult. They were slow to ramp up. And just parts and logistics, that was probably the long pole in the tent. If you look at kits that we would use to convert to a max pax [Phonetic], bad weather, I mean not played into it, but it's more on the ground handling side. It's the -- is the near-term rate constraints for us. It's not on the MRO side.

Helane Becker -- Cowen -- Analyst

Okay. And then, are you finding -- just as a follow-up to that, are you finding it hard to find people to work in the airports for you or some of your lower-wage workers versus [Indecipherable] -- I mentioned the higher-wage workers maybe knock you hard?

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

No, I think that you're seeing across the board. I mean, obviously, it's a part-time workforce. There's a lot of companies out there that are starting well north of what our hourly rates would be even if we outsource it. So, at some point, you're going to have to start creeping up that direction. Florida, right now. If you look at Sanford, St. Pete, Nashville's really tough. I mean some of these larger cities that we're operating into, our service providers are having a hard time finding bodies. And so, we're having to chase rate up here in the near term. Whether that's sticky long-term, that's yet to be seen.

John Redmond -- President

And, Helane, I think if you look at -- if it's happening in all industries, especially at the lower wage level just because of the unemployment benefits and whatnot. So, we could -- we could be seeing this problem in the US through September, frankly, just because of some of these policies. So, you'll have to wait and see but. But you see it across industries at -- at these rates.

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

You can't even find an Uber driver.

Helane Becker -- Cowen -- Analyst

Very true. I'm finding that out. Okay. Thank you very much, everybody.

Operator

Your next question comes from the line of Joseph DeNardi from Stifel. Your line is now open.

Joseph DeNardi -- Stifel -- Analyst

Thanks. Good afternoon. Maybe prefer Maury or Drew, just want to talk about kind of your bullishness on the outlook, the performance of the business through COVID? And yet, kind of the goal of getting to 145 aircraft by the end of '24, that's fairly measured growth. And so, is that kind of what you think is appropriate over the next few years? Is that the base case or are there kind of things that throttle growth in terms of aircraft availability or things like that? Can you grow more than that?

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Yeah, we can certainly grow more than that. We want to be measured. One of the interesting things we are finding is as we get to the size we have, you now have to go find 15 airplanes, 20 airplanes a year and use them. And we think that, over time, that could present some problems. So, we don't want to get out ahead of our skis too much. The other piece of this is, if you go back and look at Southwest over time, they've grown 10% to 15% a year. When you have very chunky growth, when you accelerate, many try and back off, giving you resources to accelerate quickly where you need to train the crews, you need to have all the stuff, particularly, with used airplanes. It's one thing to order a new airplane, and we have to be more measured in our planning at that rate. So, there is a side of me too that says the race ultimately goes through the tardis [Phonetic]. That's been the southwest story continuously for 50 years. So, we can certainly grow more. We think that's a good amount of growth for us in the coming years. I'll let Drew talk about markets and our ability to grow into them, but it's a good number to put out there at this point.

Drew Wells -- Senior Vice President, Revenue

Yeah, then I mean, it comes out to about just over 10% CAGAR there. In the short term, we're talking about 20% or so in the back half of this year that wouldn't likely continue into the beginning of next year just because if -- we can't then change that dramatically. So, we think there's a lot of near-term availability to grow in of it. Certainly, the market presence to do that and we're built structurally right now, with the aircraft, with the crew. The headcount's there to be able to accomplish that. So, kind of to echo Maury's comments, let's get to the back half of this year right now and continue to push forward at a measured rate that the entire Enterprise is comfortable with. I'll give one shoutout to Christine [Phonetic] on my team who told PJM at [Phonetic] fleet side, if you buy it, we'll fly it. So, we're ready to spool up.

Joseph DeNardi -- Stifel -- Analyst

Okay. [Speech Overlap]

John Redmond -- President

When you look at the -- is it the governor or the accelerator? Depends on you want to look at it. It is really the rate of retirement, right? So, we can push them up or slow them down depending, all depending on how we feel on what the market feels like. So, that's always a governor or an accelerator.

Joseph DeNardi -- Stifel -- Analyst

Okay. And then, Scott DeAngelo, you ran through some of the third-party revenue opportunities you're looking at. I think you all are doing around $5 per passenger in the third-party products excluding the air portion. What's the opportunity there, longer-term, next call it three years or four years, when you consider kind of better selling what you're already selling? And then, the vacation properties whatever Sunseeker turns into, kind of what's the medium-term opportunity there?

Scott DeAngelo -- Chief Marketing Officer

Yeah. So, I think the medium opportunity now with the digital commerce platform that enables us to showcase more inventory across hotel, rental car, now vacation rental. But as and more, importantly, take a more personalized approach to that, so having more to sell, being better at getting the right thing in front of the right person. And then, the third leg on that still will be the stay-tuned for bringing on additional things that we can make part of that ecosystem. I know, traditionally we think about marketing and all of the traditional advertising. But, if you think about what I just said, a loyalty program layered on top of that, and then, the ability to, as I like to put it, interweave the Allegiant brand into the things that people love whether that's the resort they stay at, whether that's a sporting event or concert that they go to, and/or whatever other leisure activity -- they need air travel too. It does all the same work that a traditional advertising would do but brings with it a much tougher way to dislodge and think of Allegiant just as an airline that goes up against either new entrants and or incumbents. So, no number there, but we are -- now have the platform and certainly are going that direction in the medium term for that to improve materially.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Yeah, Joe, [Speech Overlap] I just want -- we will plan on to that. Our ability to improve our brand in the last couple of years has really been exceptional. And that's really important for, we want to go with the third-party revenues. And hats off to Scott and [Indecipherable] what his team's done out there for that. But the other piece that he is pushing, which is very important I think is we're moving toward as much frictionless efforts as you can to get into this stuff. And we all shop at Amazon and we know how friction-free that is. And it's amazing to me today, you can't buy an airplane ticket without having to put your credit card in every time. Think about that in today's technical world, where it's just an amazing thing that you still can't have that type of customer engagement if you will. And part of it is fractionalized. You've got Expedia people going through there, you've got -- the airlines don't control their customers nearly as well as a lot of other people do. And that's our goal, is to have that direct control. Those are -- those are just some fees that become very powerful long term, and bring in lot of Scott's big things is if once you've got that guy, don't lose him. You have him keep coming back. So, that's been a big piece of what we're doing as well, anyways.

Joseph DeNardi -- Stifel -- Analyst

Okay. That's helpful. John, if I can just squeeze in -- the commentary around Sunseeker is an option now that you will put Allegiant capital into that project to get that restarted?

John Redmond -- President

And again, we're having so many different conversations and so many different term sheets being exchanged that I don't want to -- I don't want to jump out too far and give any kind of direction that might end up being somewhat misleading. Wouldn't look -- when you look at the final deal, I just know, all right, you have a good feeling that something's going to happen that's going to allow us to get started before the end of the year. There is -- there is enough interest there. We're making a lot of progress and having conversations with these folks, but they all have different designs and have put something together. So, I think, stay tuned. I don't think you'll have to wait that long to hear more out of us. But, I just thought to have some -- give them ourselves till the end of the year, but it could be much sooner.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

And, Joe, just to [Indecipherable] no meaningful capital will go into it at this point. So [Speech Overlap] that's not to say we won't do some, but -- before it was going to be all off our balance sheet or a good piece of it, that's not going to be the case this time.

Joseph DeNardi -- Stifel -- Analyst

Okay. Thank you.

Operator

Your next question comes from the line of Dan McKenzie from Seaport Global Securities. Your line is now open.

Daniel McKenzie -- Seaport Global Securities -- Analyst

Yeah. Hey. Thanks for the time you guys. This actually -- I'm going to try to ask Joe's question, maybe a little bit differently here, but the -- Scott, the asset-light partnerships where Allegiant benefits from a privileged relationship, I'm just wondering, what does that mean exactly? Is that a reference to Sunseeker by any chance or something else?

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

No.

Daniel McKenzie -- Seaport Global Securities -- Analyst

And [Speech Overlap] OK.

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

No, I'm happy to explain at a high level without any spoiler alert. We look for partners that can come to the table that give us something in the leisure ecosystem to sell. But moreover, that have a bunch of customers their own -- of their own that live in the markets that we serve, that they can introduce us to. So, the partnerships hereto for anything that's bigger than a bread box, likely has both yes. It's something that we can -- sell them in asset-light fashion, a high-margin fashion, but also then kicks back on the other side and brings with it millions of new customers that we can go or market to, and when they're buying their products, they can send them our way. So, a perfect world is everyone in our ecosystem wherever you go to, first, it's been around the carousel and in the most technically elegant environment. Right?

You would have an integration where someone will certainly buy all those things at Allegiant.com, but in the same way, when you book that hotel somewhere else, when you buy that game and or a concert ticket, digitally we know where you are and we know by definition of what you bought that ticket for, and where you're going. And to be able to present Allegiant as the right option for air travel to that, that's -- that's what that implies. Certainly, Sunseeker will be one of those things and it will introduce itself, but no, that was no allusion to that, that was other partnerships that we hope to announce in the upcoming future that are true -- what I would characterize that -- business and channel distribution relationships.

Daniel McKenzie -- Seaport Global Securities -- Analyst

Just following up on that, just -- can you translate that into some aspirational metrics and how they might roll up to the system metrics, just to try and bring that home somewhat?

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Yeah, I mean the answer is not here -- I think there is no number I could give you, but I can [Technical Issue] I thought l'll translate. It will translate certainly in the new visitors we get to the website times the conversion which will manifest themselves in both pax counts going up and in the average transaction size as you have more to sell and people attach those things. So, pax counts and then that third-party revenue per ITIN or per pax that Joe referenced would be the two metrics that you would expect to be impacted by that.

Daniel McKenzie -- Seaport Global Securities -- Analyst

I see. Okay. Second question here. It looks like, from the schedules data, 40% of the ASMs in the second quarter are going to fall in the month of June, which has implications for revenue in CASM-ex for the quarter. So, it looks like June could maybe account for 50% or more of the revenue in the quarter, but please correct me on that. But more interesting is the CASM-ex, so with CASM -- with capacity up 16% in June, I think is what the schedules are saying, versus '19, and you're seeing the CASM sub $0.06 for the full second quarter. And I guess, what I'm wondering is that, that seems to imply a CASM-ex close to $0.055 for the month of June, and I'm just kind of wondering how that wrinkles out through the -- phases out through the remainder of the year? And I guess, where I'm going with this is, it's June, CASM-ex being impacted by heavy maintenance, and I just wonder if you can just provide a little bit more perspective because it seems like there should be a step down in CASM-ex too in the month of June that essentially gets straight-lined through the rest of the year.

Drew Wells -- Senior Vice President, Revenue

So, maybe, Daniel [Phonetic], I'll kick it off at a very high level. You're right. We are looking at about 40% of the ASMs to happen in the month of June. So, I think at -- that the core base is going to come down a lot of way to how June is variable from now. And I don't know if Greg wants to handle any parts of the comp component?

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Yeah, Dan. Thank you for the question. And -- the June quarter will come in really strong from a CASM-ex perspective. I think when I look -- when we look at the cadence quarter-by-quarter, I would think the June quarter would actually be the lowest. And I say that because as we look into the back half of the year, your -- we're anticipating a couple of things, one, increased profitability, which would roll through into profit sharing. So that's going to drive it up a little bit more as compared to what we're projecting right now for the first half of the year. And then, you also -- you're gearing up or anticipating gearing up for growth into 2022, in the back half of the year. So, I think that too will provide a little more unit cost pressures compared to the second quarter. But I mean, we feel good about where we're coming in at the second quarter. I think an interesting data point, perhaps, worth noting is like on the D&A front or the fixed costs, as you look on a unitized basis, perhaps, in the first quarter that had a little bit of a headwind, but as you take-up utilization a little bit more, that's going to drive it down and provide some strength there. And I think in the first quarter from a salary and benefits perspective, you saw that's choppy in the first quarter just because -- and I think I mentioned this on the last call, we have with our pilots -- we recognize our PTO upfront in the very -- in the first quarter. And then you just -- you run that out to the rest of the year. So, it's almost $12 million in the first quarter alone, and PTO, and then we'll get some benefit on that in the second quarter. But then, once you get into the back half of the year and you're starting to hire or expecting to hire some crew members to support that '22 growth.

So, yeah, I'm happy to add some more detail, if that's helpful. But I think just, at a high level, that should be a good indicator of the cadence when it comes to unit cost by quarter, and what some of the pressure points or tailwinds may be.

Daniel McKenzie -- Seaport Global Securities -- Analyst

Yeah. Thank you for that clarification. And it is -- if I can just squeeze in one last quick housecleaning question. So, the percent of second-quarter fine [Phonetic] that's in new routes, less than 12 months, I think there is 51 new markets. I'm just curious how those yields are spooling up versus the system average? I'm thinking there's probably not a whole lot of difference, actually.

Drew Wells -- Senior Vice President, Revenue

There's always a little bit of difference as you can imagine, as you're trying to introduce, you'll have varying levels of confidence by route as you move in. But either way, the core goal in the first year is to ensure that you can fill the plane. And so we'll sacrifice yield initially in order to make sure we can accomplish that. So, you'll see a little bit of a headwind from that. I don't know that you'll see it at a system level. It was just shy of 13% or so of our ASMs. 2Q will be on route in the first 12 months. So, happy with where it's at. But we're focused more on being able to fill the planes and build that on that. And then, we aren't gaining yield initially.

Daniel McKenzie -- Seaport Global Securities -- Analyst

Very good. Thanks for the time, you guys.

Operator

Your next question comes from the line of Hunter Keay from Wolfe Research. Your line is now open.

Hunter Keay -- Wolfe Research -- Analyst

Hey, everybody. Your -- looks like you're guiding revenue excluding charter and other. Obviously, you mentioned you sold the majority of Teesnap. But what does this say about Charter? Why are you guiding excluding Charter, while Charter revenues in first-quarter looked pretty fine in there. Are you saying that we should expect that business, ultimately, to go away at some point? Are you de-emphasizing it? Why would you exclude that from the guide?

Drew Wells -- Senior Vice President, Revenue

Yeah. One of the -- the reason why I wanted to go to scheduled Service only is we're putting our growth of ASMs into the scheduled Service world, that's where we're seeing the better returns. And I wanted to ensure a lot of focus on that piece of it. The fixed-fee realm, and I mentioned this in my opening comments, margins are down fairly significantly across the board there. In first quarter, we had a solid amount of March Madness flying, which boosted that -- the 60 number in March. But like I mentioned, I think that's a one-off for '21. We won't get a lot of great insight into what fixed-fee will do in the back half of the year until we get a little bit further along with college football contracts. So, for now, I wanted to keep focus on, A, scheduled Service ASMs are growing here, why here's the scheduled Service rev guide and kind of move with that. To your point, the other rev line will largely move to zero as we move forward with the Teesnap sales, that become the deminimum. 50 is not going away. I think we're just trying to be good stewards of our assets in the short term and get better returns on scheduled Service side, right now.

Hunter Keay -- Wolfe Research -- Analyst

All right. That's cool, Drew. And then, Maury, I realize a little bit of an offer question, but we've been talking about this for years. I'm wondering how you might talk about succession planning. I know it's -- you can't really quit and hit the middle of a crisis, but you sound so excited now, it's maybe even harder to leave, given the opportunity you have in front of you. So how are you thinking about your future CEO?

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Well, it's guaranteed I'm going to leave. So, that part [Speech Overlap] without [Indecipherable]. Yeah. Question of where I'm seeing my succession, sitting around the table here, some place. I'm going to do is, we'll get to spin the parallel [Phonetic] on him, and we'll sit down one day and do it that way or something.

No, I -- it's certainly been a long run and couldn't be happier with the management team that's here, and I'm still the largest shareholder and intend on being that. So, I don't know that I will ever go away, but I don't have to be here day-to-day, certainly. And this group here is -- are good stewards of this great business. So yeah, stay tuned.

Hunter Keay -- Wolfe Research -- Analyst

Okay, Maury. Thank you.

Operator

Your next question comes from the line of Catherine O'Brien from Goldman Sachs. Your line is now open.

Catherine O'Brien -- Goldman Sachs -- Analyst

Hey. Good afternoon, everyone, and thanks for the time. Maybe a bit of a follow-up to the medium-term, more muted growth story. With spare parts and aircraft available at the pretty attractive prices versus pre-COVID, you guys noted earlier in the prepared remarks, is there not more of an opportunity to add to your fleet here and just lock in lower ownership costs for the coming years, or is it really just like those maintenance bottlenecks, you mentioned earlier, that quell that or it's just you guys really think the current fleet plan is sufficient for what demand is going to be? Thanks, guys.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Hey, Catie. It's Greg. Perhaps, I'll kick it off and maybe others will jump in if they like. I think a way to describe is when John gave that 2024 aircraft guide, as that 10% is -- I mean, we're still going to be opportunistic. And BJ and his fleet team, they're seeing totally just -- given a lot of opportunities to bring on used A320s, and there is a bunch out there that fit our -- kind of fit our profile and make a lot of sense to bring on. And you know, I mean it -- I would think of those as incremental kind of growth and maybe it's above 10%. But, we're certainly looking at that and we see a lot of opportunity there. I think from a spare parts perspective, similarly, we've seen some opportunistic purchases there where -- off of 50% of pre-pandemic levels. So, we're excited about that. We'll start bringing those into help, support ramp-up of growth. I think Scott Sheldon and his maintenance team and organization have done a great job of positioning us to be able to get these aircraft into the pipeline moving forward, in a good amount of time.

But I mean, I wouldn't -- I guess, ultimately, what I'm saying is we're going to be opportunistic. And as we see nice aircraft deals come our way, we're going to continue to look at those. I think it's a great opportunity for us to continue to look to average down our ownership costs given what we're seeing here and stay tuned. But we have quite a few irons in the fire.

Catherine O'Brien -- Goldman Sachs -- Analyst

That's great. If I could maybe just sneak two quicker modeling ones in, again here. I guess, first, just really quick clarification. Did you say 2.5% CASM-ex is going to be low $0.06 range? Or did I -- am I hearing things? Thanks.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

No. You heard that right, Catie. So, I think that just that second half should be just in the low $0.06 range.

Catherine O'Brien -- Goldman Sachs -- Analyst

All right, great. And then, maybe just the second little modeling one here. It looks like in terms of your ATL, current quarter, you saw positive impact of new bookings outpace some of the drawdown of credits used from prior periods. Any thoughts on how we should expect that to trend going forward to stay [Phonetic] on your current forward bookings? And thanks so much for the time.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Yeah, I mean, I'm going to kick it off, but we're seeing Drew from an accounting perspective, and maybe if you see any forward, but what we saw in this last quarter, Catie, in terms of redemptions, it was just in gross numbers. I think it was like $40 million, which reduced it by 19%, that credit voucher's level. So, what I would say is, we're not issuing nearly as many as we did last year. You're starting to see those be redeemed at a nice rate. We did extend our expiry during the middle of the pandemic or early on in the pandemic, I should say, to two years. So that's keeping them out a little bit longer, but the cadence of them coming down is pretty nice. Whereas, I think by the mid of -- mid-2022, you'll kind of get back to that normal percentage of ATL in terms of credit vouchers. And then, I think, do you want to talk change piece or [Speech Overlap]

Drew Wells -- Senior Vice President, Revenue

Surely, if we can touch on it quickly. Yes, we brought -- changed it back in a mitigated sense on May 1, so they came back at $25 versus our original previous number of $75 something was -- it was really John's idea of bringing back something that was not zero, but not all the way to -- just trying to help one that put the threshold a bit on our side, but to restore some normalcy there. And thus far, very, very early to see no real pushback on that front.

Catherine O'Brien -- Goldman Sachs -- Analyst

Got it. Thank you so much.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Operator? Hey, operator? There?

Operator

Are you bringing Fabian?

John Redmond -- President

[Indecipherable]

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Put it, Savi.

Savanthi Syth -- Raymond James -- Analyst

Could you hear me?

Sherry Wilson -- Director, Investor Relations

Yes.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Yes.

Savanthi Syth -- Raymond James -- Analyst

All right, great. Thanks [Speech Overlap] Good afternoon, everybody. Greg, if I can ask a little bit more on the CASM-ex question. You reached the upper end of that CASM-ex that you were looking to achieve. And could you kind of walk through your expectations for your major cost-side line items over the next couple of years or just a bit of a longer-term view. I'm trying to understand like what might get you to the lower end of that target, or perhaps, what might -- going to cause you to move up from that low $0.06 that you are seeing in the second half?

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Sure. Yeah, thanks for the question, Savi. I think -- I think an area that I get pretty excited about is, in terms of helping improve or a tailwind to our unit cost, as I mentioned earlier, was on the ownership side. Just some of the deals that we're seeing were potential aircraft deals we're seeing coming our way and as a result of the pandemic could meaningfully help us drive that down. In addition to that from another tailwind perspective, I get pretty excited of what Sheldon and his team's doing on the op-side of the house. You know, doing things to make sure we're running a good airline. I know it's expensive when you're running a -- it's not as good an airline, so that's always helpful. We talked about Skywise and the investment in Skywise, which is our predictive maintenance platform. And I think the team today, we have about 25 aircraft that are retrofitted with the complete capabilities of Skywise. By the end of the year, we think that will be up to 75% of our fleet -- by mid-next year, that would be about 95%. I mentioned that, Savi, because that not only helps us run a better airline with dispatch reliability and things of that nature, it also allows us to handle maintenance when we want to, not in an unscheduled type environment. Again, saving on cost, that's a really big deal for us. Where we're seeing some headwinds that we're looking at currently, and I don't know if this is here to stay candidly, Savi, is on the station front. Given that with the pandemic, in a few of our airports, in which perhaps there was a budget deficit that they're going back and trying to reclaim that for the moment. But we're seeing some pressures there, but I think if industry capacity picks back up, potentially that could help level that back up. But what I'd say, ultimately, Savi, is I think where we're at from a cost perspective, we're in a good spot. And we're not here to tell you we need to be at 5% -- I'm sorry, in a 5 handle of CASM-ex. That's a nice to have, but candidly, if that was like our [Indecipherable] we would just increase utilization from eight hours a day to 12 hours per day.

Now, we've been talked to look at this from a profitability perspective and there's two sides to the equation, you have the revenue and the cost side. And so, ultimately, that's what we're doing and we're going to focus on maximizing our profitability, and if down the road, we need to spend above to make 2 or 3 [Phonetic], we're willing to do that because that's where we're going to be keenly measured on. But I don't know if that's a lot of information, maybe I'll pause there, if I -- hope that I answered or helped to answer your question or -- provide any other detail.

Savanthi Syth -- Raymond James -- Analyst

No, that was great. That was great, thank you. And if I might, for Scott, just quickly clarify with the new rental inventory that you're talking about, how meaningful is that? And just what are you doing that maybe your competitors can't do? Is it similar to just Allegiant being better with kind of putting people in hotels because you have a direct relationship or is there something differentiated about this new opportunity?

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Yeah. So, at the moment, obviously, it's going to be crawl, walk, run. But I think what's differentiated about is the booking window for vacation rentals is much different than hotels, on average there's three months to six months, whereas we see with hotels, it's much shorter, specifically Las Vegas hotels, which could be, hey, you want to go grab on this weekend-type booking window. So, I think, strategically, going forward, the big thing to think about is it gives us something to both attract and sell to a customer much further out than our hotel inventory.

The second thing real quick is hotels have been a great story here in Las Vegas, but increasingly, as you look around. all the coastal markets that we fly into and/or all the national parks that we fly into, both very big success stories, during and coming out of the pandemic. Increasingly, vacation rentals are a big part of how you can sell to those customers. Right? There's not a lot of Park Hyatts sitting right inside of Yellowstone. And so, I think that those are the strategic thing that it gives us, and us being able to sell it, sell it at scale, that's something that comes over time as we just optimize the digital channels to do that. So, hopefully that's helpful.

John Redmond -- President

Now, I think the thing is worth -- so, it's worth pointing out to is the average trend size on that kind of transaction is much higher. And it's due to the length of stay being much longer on a vacation rental. So, we make a lot more money on a long length of stay type product than you do a short length of stay product.

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Yeah. Even in the early days, it's in the several thousands versus hotels which will be more in the 100s to low single-digit-thousand. So, to John's point, the margins are the same, and of course, for us meaning that the net revenue margin are over 90%of that. Virtually, all of it falls to the bottom line. So, just a highly accretive piece of business that had no real carrying cost, just the ability to get in front of the right customer to buy it from Allegiant.com.

Savanthi Syth -- Raymond James -- Analyst

Perfect. Alright. That answers my question. Thank you.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

It looks like she went home.

Drew Wells -- Senior Vice President, Revenue

So, we're on our own.

John Redmond -- President

[Indecipherable]

Sherry Wilson -- Director, Investor Relations

Brandon, are you on the line?

Brandon Oglenski -- Barclays -- Analyst

Yeah. Hey, this is Brandon. Can you guys hear me?

Drew Wells -- Senior Vice President, Revenue

Yes.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

We were right.

Brandon Oglenski -- Barclays -- Analyst

Thanks. I don't know what happened to the operator. But [Technical Issues]

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Join the crowd.

Brandon Oglenski -- Barclays -- Analyst

I'll just ask one because I know it's been a long call. And I did join late, so apologies if this was already discussed, but I think you guys said income in the remaining quarters of '21 that should exceed 2019 levels. So, I just wanted to confirm that. And then, I guess, as a follow-up to that question, you guys did draw up some margin guidance in the second quarter. How do you think about margin progression in the back half of the year, especially in relation to the ability to potentially be growing 20% above where you were in '19? Thank you.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Hey, Brandon. It's Greg. Why don't I, maybe, on your first question, just as we're seeing the positivity in the back half and I think the way we're thinking about it -- and I'll start, and maybe Drew wants to come in on the revenue front. But as we look at kind of where our guide gets you on the second quarter and I think that gets you -- so let's just call it roughly $2 on EPS. I think if we look at the back half of the year, though, when you see that growth that we're talking about it and the team has conviction around is 20% year-over-two-year. You're entering into the back half of the year at 70% load factors, and so, I think what Drew and team are getting excited about is the ability to yield up and drive revenues there. I mean, we're certainly not trying to put a forecast out there, but what we're saying is we're cautiously optimistic on where we're going to go on that front.

I think on the cost side, we're just -- we feel good where we're at there, we're pretty baked in. So yeah, it'd be on the revenue side that I think we bring that home. And then, on your second question, I'm sorry, was just on margins, second quarter, and how they would compare to the rest of the year?

Brandon Oglenski -- Barclays -- Analyst

Yeah. Yeah, that's right.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Yeah. Okay. Yeah, I mean, I think, again, I think this is one where I'm not trying to go out and give a guide or a forecast, but I do think the second quarter will have a strong margin. We talked about on an unadjusted basis 35%, on an adjusted basis -- so adjusted excluding the benefit of the PSP. you're at a 25% margin. Can we hold that for the rest of the year?

I mean, we see a line of sight and the ability to do that. But again, I just want to be careful or cautious that we're not -- I don't want to come out here and forecast, but we like where we sit, and Drew and his team are seeing a lot of strength in the back half, I think, but I don't want to put words in your mouth, Drew. So, maybe I'll pause and anything you want to add on the -- on the revenue front, or anything else?

Drew Wells -- Senior Vice President, Revenue

I think seeing the strength now and I think the booking curve normalizes, giving us more and more conviction for the back half. I wouldn't say that we have a significant line of sight to what October, November, are going to look like at this point. But you're trying to extrapolate forward the strength we've seen in the cadence, kind of gives us that conviction toward the end.

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

Just to be clear, this is a claim I'd still without -- or you referenced to last year, which will bring us back to more of a normalized. We're pretty comfortable on cost. We know what to think we can do and we're going to spend that money to fly. So, you just have to be careful, even if you hesitate a little, you could be underneath because we just don't have the ability to be -- look back a year or two years back, so.

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Yeah. And then, Brandon, maybe just a housekeeping item. All that assumes like $2 per gallon in fuel too, so fuel could be a big variable in that.

Brandon Oglenski -- Barclays -- Analyst

Really appreciate the response. Thank you.

John Redmond -- President

Cut it off.

Sherry Wilson -- Director, Investor Relations

Maury, closing remarks?

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

I think we're all done folks. I appreciate your time this -- the call and we will have follow-up conversations, I'm sure. So, thank you again. We'll talk to you in a couple of months. Bye-bye.

Duration: 79 minutes

Call participants:

Sherry Wilson -- Director, Investor Relations

Maurice J. Gallagher, Jr. -- Chairman and Chief Executive Officer

John Redmond -- President

D. Scott Sheldon -- Executive Vice President and Chief Operating Officer

Scott DeAngelo -- Chief Marketing Officer

Drew Wells -- Senior Vice President, Revenue

Gregory Anderson -- Executive Vice President, Chief Financial Officer and Principal Accounting Officer

Michael Linenberg -- Deutsche Bank -- Analyst

Duane Pfennigwerth -- Evercore ISI -- Analyst

Andrew Didora -- Bank of America -- Analyst

Helane Becker -- Cowen -- Analyst

Joseph DeNardi -- Stifel -- Analyst

Daniel McKenzie -- Seaport Global Securities -- Analyst

Hunter Keay -- Wolfe Research -- Analyst

Catherine O'Brien -- Goldman Sachs -- Analyst

Savanthi Syth -- Raymond James -- Analyst

Brandon Oglenski -- Barclays -- Analyst

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