Allegiant’s Charlotte Harbor Sunseeker Resort construction on ‘pause’, still hope
It’s a case of good news-bad news for one of Southwest Florida’s largest airlines.
Allegiant Travel Company says more people are buying tickets during the pandemic, but the airline, which flies out of Punta Gorda, is still losing millions of dollars.
The airline also had big plans for the new Sunseeker Resort in Charlotte Harbor but that construction was suspended at the beginning of the pandemic.
Right now, at the development site, there are concrete walls but that’s it.
Allegiant says bookings are up and passengers spend about $3 million per day on flights, adding that’s a $1 million daily increase from September.
But the budget airline is still burning through its cash on hand.
It just spent $15 million to end the loan agreement to develop Sunseeker – think of it as an early termination fee.
“They are using this as a way to minimize their cash flow,” explains Tom Smythe, a finance professor at Florida Gulf Coast University. “They’ve evaluated it over the long term and see that as a better option.”
Allegiant says continuing that loan would’ve ended up costing the company more money.
They also wouldn’t have been able to meet the loan’s required milestones since construction is suspended until late 2021.
“This gives them that capability to step back but not completely abandon,” Smythe added.
They’re able to press pause instead of stop. So there’s still hope.
Our tourist-driven economy will bounce back.
Allegiant also said ending the loan gives the airline the option to bring on an investment partner or buyer.
Right now, all options are on the table.