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Allegiant Tumbles Following ‘60 Minutes’ Report on ‘Midair Breakdowns’

Bloomberg 2018-04-16 19:25:19

The parent of Allegiant Airlines dropped following a “60 Minutes” segment detailing a high number of what the program called “midair breakdowns” at the budget carrier.

“Public documents show an alarming number of aborted takeoffs, cabin-pressure loss, emergency descents and unscheduled landings,” according to a report the CBS program aired Sunday evening.

The segment included interviews with shaken passengers and prominently featured a former member of the National Transportation Safety Board, John Goglia, who said he discourages family and friends from flying the carrier. Almost 30 percent of Allegiant’s planes are “antiquated” McDonnell-Douglas MD-80 aircraft, the program said.

Allegiant Travel Co. dropped 5.1 percent to $143.30 at 9:33 a.m. in New York. That followed an 8.6 percent decline on Friday in anticipation of the “60 Minutes” segment, the most since late April 2017.

“We found little in the way of incrementally negative data points concerning Allegiant’s operational challenges over the past few years,” Joseph Denardi , an analyst at Stifel Nicolaus & Co., wrote in a note to investors. “The bottom line is that, true or false, that was 30 minutes of horrible publicity for Allegiant with sound bites that will extend the story.”

Allegiant responded that it emphasizes safety, meets all federal requirements and that the “60 Minutes” report dealt with old incidents that had been investigated by the Federal Aviation Administration.

“Safety is at the core of every aspect of our operation, every day,” Eric Gust, the airline’s vice president of operations, wrote to customers. “Allegiant complies with all FAA requirements and participates in numerous voluntary safety programs to ensure we operate at the highest possible standard.”