Allegiant Travel CO 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are subject to certain market risks, including changes in interest rates and commodity prices (specifically, aircraft fuel). The adverse effects of changes in markets could pose potential loss, as discussed below. The sensitivity analysis does not consider the effects that such adverse changes may have on overall economic activity, nor does it consider additional actions we may take to mitigate our exposure to such changes. Actual results may differ. Aircraft Fuel Our results of operations can be significantly impacted by changes in the price and availability of aircraft fuel. Aircraft fuel expense during 2021 represented 30.5 percent of our total operating expenses. Increases in fuel prices, or a shortage of supply, could have a material impact on our operations and operating results. Based on our fuel consumption during 2021, a hypothetical ten percent increase in the average price per gallon of fuel would have increased fuel expense by approximately $44.9 million. We have not hedged fuel price risk for many years. Interest Rates As of December 31, 2021, we had $927.5 million of variable-rate debt, including current maturities and without reduction of $12.4 million in related costs. A hypothetical 100 basis point change in interest rates would have affected interest expense on variable rate debt by approximately $10.3 million during 2021. 51