Allegiant Travel Co.’s Florida resort project sustained $35 million in damages from Hurricane Ian, after cranes fell on the project and water got in, the company said.
The Las Vegas-based airline on Wednesday reported a net loss of $46.5 million for the three months ended Sept. 30, compared with a $39.3 million profit during the same period last year.
The company said in a news release that it incurred a $35 million “special charge” related to property damages at its under-construction Sunseeker Resort Charlotte Harbor project in southwest Florida, a region that was devastated by widespread flooding and destruction from Hurricane Ian in late September.
The resort “survived” the storm but suffered damage from “falling cranes” and “water intrusion,” President and CEO John Redmond said on a conference call with analysts Wednesday.
He said the company believes all storm damages to the project are fully insured, and its insurance carriers put the initial estimated damages at $35 million. The amount is subject to change after “further assessment and understanding of impacted supply chains,” Redmond added.
He also noted Sunseeker’s expected opening was delayed by roughly 90 days, with its debut now scheduled for Sept. 1, 2023.
Sunseeker, which is being built along the Peace River in Port Charlotte, is slated to feature 500 hotel rooms and more than 180 extended-stay suites, as well as bars, restaurants and conference space.
Greg Anderson, Allegiant’s chief financial officer, said on the call that more than 550 employees live in and around Port Charlotte and nearby Punta Gorda. All were “safe and accounted for, although the recovery for many of them continues,” he said.
Anderson said the physical damage to Sunseeker was “primarily caused by subcontractor cranes hitting” the project. Accounting procedures required the company to record the estimated financial loss, which will be “offset in subsequent quarters as insurance proceeds are collected,” he said.
An ultra-low-cost carrier, the company’s Allegiant Air is known for flying from small, underserved cities to warm-weather vacation spots, often without competition on its routes.
It has a captive audience of sorts for Sunseeker, as Allegiant accounts for nearly all airline traffic in and out of Punta Gorda Airport, located about 6 miles from the resort project.
Allegiant broke ground on the resort in 2019, suspended construction in March 2020 amid the early chaos of the pandemic, and resumed construction in summer 2021.
It obtained a $350 million construction loan for the project last year.