Tag Archives: Bruce Drum

Republic Airways Holdings’ second quarter net income increases 23% to $24.6 million, Frontier Airlines reports pre-tax 2Q income of $13.7 million

Republic Airways Holdings Inc. (Republic Airlines 2nd) (Indianapolis) reported diluted earnings per share of $0.46, which is a 15.0% increase from the $0.40 per diluted share result in the second quarter of 2012. Net income increased 23.0% to $24.6 million for the quarter ended June 30, 2013, compared to net income of $20.0 million for the same period last year. Operating revenues totaled $664.4 million, a decrease of 8.7%, compared to $728.1 million for the second quarter of 2012.

“We are pleased to report improved financial results for the second quarter, driven primarily by the year over year improvement in our small regional jet operations at Chautauqua,” said Republic Chairman, President and CEO Bryan Bedford. “Our process to sell Frontier continues and I am very pleased that we were able to reach tentative labor agreements with both our Flight Dispatchers and Flight Attendants, which remain subject to membership ratification. I am thankful for the continued professionalism and dedication of my 10,000 co-workers on behalf of our passengers.”

Republic Segment Summary

Republic’s pre-tax income improved 45.8% to $27.7 million from $19.0 million in the prior year’s second quarter, due mainly to the redeployment of idled 50-seat aircraft and the successful completion of our Chautauqua restructuring efforts in late 2012.

Total Republic revenues decreased $20.6 million, or 5.8%, from the second quarter of 2012 to $336.8 million in the second quarter of 2013. Fixed-fee service revenue increased $34.9 million, or 12.4%, to $316.9 million, despite the removal of fuel expense and related reimbursement on our United E170 fixed-fee agreement, which accounted for $25.1 million of revenues in the prior year’s second quarter. The majority of the increase in fixed-fee revenues relates to Republic’s Q400 agreement with United that began in the second half of 2012 and Republic’s E190 charter agreement, which began in January 2013. Republic passenger service revenue decreased $56.1 million due to a reduction of pro-rate operations with Frontier, as aircraft previously operating in pro-rate service were either transitioned to other fixed-fee agreements or sold.

Fuel costs for Republic decreased $42.3 million to $12.1 million for the quarter, due mainly to the removal of fuel expense on our United agreement as noted above. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.34 per gallon in the second quarter of 2013, compared to $3.26 per gallon in the prior year’s second quarter. The fuel cost per gallon related to our fixed-fee charter agreement is generally higher than our pro-rate operations with Frontier and is treated as a pass through cost under the agreement.

As of June 30, 2013, Republic operated a fleet of 232 aircraft. Within our fixed-fee commercial and charter agreements, Republic operated 70 aircraft with 44-50 seats and 157 aircraft with 69-99 seats. In addition, Republic operated five 99-seat aircraft under the pro-rate agreement with Frontier, down from seventeen, 99-seat aircraft operated in pro-rate service during the second quarter of 2012.

The Company expects to take delivery of 18 Embraer ERJ 175 aircraft to operate under its American capacity purchase agreement by the end of 2013. Additionally, the Company expects to place into service the final six Q400 aircraft under its United capacity purchase agreement over the next two quarters.

Frontier Segment Summary

For the quarter ended June 30, 2013, Frontier Airlines (2nd) (Denver) posted pre-tax income of $13.7 million, which is down slightly from $14.1 million of pre-tax income for the quarter ended June 30, 2012.

Frontier’s capacity, as measured by available seat miles (ASMs), was down 10.1% from the prior year’s second quarter, as a result of operating fewer Airbus aircraft. Frontier’s total revenues decreased 11.6% to $327.6 million for the quarter, compared to $370.7 million for the same period in 2012. Total revenue per ASM (TRASM) decreased 1.6% to 11.98 cents in the second quarter of 2013 from 12.18 cents in the second quarter of 2012.

Fuel costs decreased from the prior year’s second quarter by $22.6 million to $114.2 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, decreased to $3.14 per gallon in the second quarter of 2013, compared to $3.35 per gallon in the prior year’s second quarter. The second quarter of 2013 results included a loss on fuel hedges of $1.7 million, or $0.05 per gallon.

The operating unit cost for Frontier, excluding fuel, was 7.27 cents per ASM for the second quarter of 2013, a 1.3% increase compared to 7.18 cents per ASM for the same quarter of 2012.

As of June 30, 2013, Frontier operated 52 Airbus aircraft, compared to 58 Airbus aircraft as of June 30, 2012. All six aircraft removed were returned to lessors.

Recent Business Developments

On June 17, 2013, the Company announced it had reached a tentative agreement (TA) on a new five-year contract with the Transportation Workers Union (TWU) Local 540 Dispatchers. This TA is currently being voted on by union membership and we expect the voting results on August 1, 2013.

On June 24, 2013, the Company announced it had reached a TA on a new five-year contract with the International Brotherhood of Teamsters (IBT) Local 135 Flight Attendants. This TA is currently being voted on by union membership and we expect the voting results on July 29, 2013.

On July 15, 2013, the Company announced that it had entered into an agreement with an affiliate of the Brazilian Development Bank (BNDES) for the financing of 47 Embraer E175 aircraft. These aircraft will provide service under the terms of the capacity purchase agreement with American Airlines announced in January. The first aircraft was delivered on July 15, 2013, and is scheduled to go into service with American on August 1, 2013.

Balance Sheet and Liquidity

The Company’s total cash balance increased $44.8 million to $439.1 million as of June 30, 2013, compared to December 31, 2012. Restricted cash increased $53.2 million, to $200.3 million, from December 31, 2012. The Company’s unrestricted cash balance decreased $8.4 million, to $238.8 million, from December 31, 2012. A condensed consolidated balance sheet and cash flow statement have been included in the tables section of this release.

The Company’s debt decreased to $1.98 billion as of June 30, 2013, compared to $2.12 billion at December 31, 2012. As of June 30, 2013, approximately 90% of the debt is at a fixed interest rate. The Company has significant long-term lease obligations for aircraft that are classified as operating leases and are not reflected as liabilities on the Company’s consolidated balance sheet. At a 6% discount factor, the present value of these lease obligations was approximately $0.9 billion and $1.0 billion as of June 30, 2013, and December 31, 2012, respectively.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Republic Airways (Republic Airlines 2nd) Embraer ERJ 170-100SU N821MD (msn 17000042) departs from Fort Lauderdale-Hollywood International Airport.

Frontier Airlines (2nd): AG Slide Show

Republic Airways (Republic Airlines 2nd):

AG Slide Show

Southwest Airlines to fly to San Juan, Puerto Rico (replacing AirTran)

Southwest Airlines (Dallas) and its wholly owned subsidiary AirTran Airways announced an extension of flight schedules for travel through November 1, 2013. In extending both carriers’ bookable inventory, Southwest introduces four new nonstop routes, including the first Southwest service from Des Moines to the West through Las Vegas, and the return of seasonal service in three markets. The carrier also announced new Southwest Airlines service between Fort Lauderdale-Hollywood and San Juan, a conversion from AirTran service in the market, beginning on September 29, 2013.  Southwest Airlines begins its initial service in San Juan, Puerto Rico on April 14 with nonstop service between both Tampa Bay and Orlando.  AirTran introduces additional seasonal flying to and from Florida.

Southwest’s new markets:

  • Two daily nonstop flights between Fort Lauderdale-Hollywood and San Juan
  • One daily nonstop flight between Nashville and Pittsburgh
  • One daily nonstop flight between Atlanta and San Diego
  • One daily nonstop flight between Des Moines and Las Vegas
  • One daily nonstop flight between Jacksonville and Chicago

Southwest’s returning seasonal markets:

  • One daily nonstop flight between Indianapolis and Orlando
  • One daily nonstop flight between Jacksonville and Las Vegas
  • One daily nonstop flight between Orlando and Minneapolis-Saint Paul

AirTran’s new markets:

  • Seasonal service between Orlando and Houston (Hobby)
  • Seasonal service between Orlando and New Orleans
  • Seasonal service between Fort Myers and Columbus
  • Seasonal service between Fort Lauderdale-Hollywood and Pittsburgh

Top Copyright Photo: Bruce Drum. Southwest Airlines Boeing 737-7H4 WL N944WN (msn 36659) with extra “Free Bags Fly Free” markings arrives on runway 9L at Fort Lauderdale-Hollywood International Airport.

Southwest Airlines: AG Slide Show

AirTran Airways: AG Slide Show

Bottom Copyright Photo: Tony Storck. The special AirTran schemes are not expected to survive the integration into Southwest. The pictured Boeing 737-7BD WL N354AT (msn 36725) in the special Georgia Aquarium  “Dolphin 1” scheme is due to become N7724A with Southwest.

JetBlue names San Juan a “focus city”

JetBlue Airways (New York) has named its growing San Juan operation a “focus city”. During a ribbon-cutting ceremony held yesterday (June 28) in celebration of JetBlue Airways’ new home at Terminal A in San Juan’s Luis Munoz Marin International Airport (SJU), the airline’s President and CEO Dave Barger, together with Puerto Rico’s Governor Luis Fortuno, announced that San Juan has become the sixth focus city in JetBlue’s 71-city network.

San Juan joins Boston, Fort Lauderdale, Los Angeles, New York and Orlando as the sixth focus city in JetBlue’s network. The designation of San Juan as a focus city in JetBlue’s growing route network underscores the airline’s ever-increasing commitment to the Puerto Rican community and its expansion into the new Terminal A at Luis Munoz Marin International Airport, which will be able to accommodate further growth.

In Puerto Rico, JetBlue currently serves Aguadilla, Ponce and San Juan, with service to 13 nonstop destinations, nine within the continental US: Boston, Fort Lauderdale/Hollywood, Hartford/Springfield, Jacksonville, New York, Newark, Orlando, Tampa and West Palm Beach and; four within the Caribbean: Santo Domingo, Dominican Republic, St. Maarten, St. Thomas, and St. Croix. The airline has announced it will begin the only direct nonstop to Washington Reagan National Airport, its 14th city out of San Juan, on August 23, 2012.

Copyright Photo: Bruce Drum.

JetBlue: 

American Airlines cancels 296 flights at DFW yesterday

American Airlines Boeing 737-823 N907AN (msn 29509) MIA (Bruce Drum). Image: 100043.

American Airlines (Dallas/Fort Worth) cancelled 296 flights yesterday due to the hail damaged aircraft at its Dallas/Fort Worth (DFW) hub. American and American Eagle have cancelled already around 1900 flights since the hail storm hit the airport.

Read the full report from Bloomberg Businessweek: CLICK HERE

Copyright Photo: Bruce Drum.

American Slide Show: CLICK HERE

US Airways launches flights to 14 new destinations from Washington, D.C.’s Reagan National Airport

US Airways (Phoenix) yesterday (March 25) began new service to 11 communities and improved service to three from Washington, D.C’s Reagan National Airport. The airline launched nonstop flights to Birmingham, Ala.; Fayetteville, N.C.; Islip, N.Y.; Little Rock, Ark.; Jacksonville, N.C.; Pensacola, Fla.; Tallahassee, Fla. and Ft. Walton Beach, Fla. US Airways will be the sole carrier to provide service to customers in these communities to Washington’s downtown airport.

New service also began to Memphis, Tenn.; Omaha, Neb. and Ottawa, Ontario.  These communities are currently served by other carriers at Reagan National. In addition to the 11 new communities the airline did not previously serve, it has also added improved service on existing routes between Reagan National and Savannah, Ga.; Bangor, Maine and Hartford, Conn.

On March 21, the airline also announced that it would begin service to six additional communities from the District’s downtown airport. Once these flights commence in June and July, the airline will have a total of 22 new routes served from Reagan National. The new flights are a part of US Airways’ plan to focus on its core service areas of Washington, D.C., Philadelphia, Phoenix and Charlotte, N.C.

Beginning July 11, 99 percent of the airline’s available seat miles (ASMs) will operate to or from its core service areas and US Airways Shuttle that operates hourly between Washington, Boston and New York’s LaGuardia Airport.

Copyright Photo: Bruce Drum.

US Airways Express-Republic Slide Show: CLICK HERE

Frontier Airlines adds new flights from Milwaukee

Frontier Airlines (2nd) (subsidiary of Republic Airways Holdings, Inc.) (Denver) announced it will launch new seasonal nonstop service between Milwaukee’s General Mitchell International Airport (MKE) and Seattle/Tacoma (SEA) and will increase service to Phoenix (PHX) this winter. The MKE-SEA flight will be operated by Republic Airlines (2nd) Embraer ERJ 190s.

Twice-weekly nonstop service to SEA will be provided for the peak holiday travel season December 16, 2010, through January 4, 2011. A second daily nonstop service to Phoenix will be provided February 14 through April 17, 2011.

Frontier also announced that it would be increasing its nonstop service between Indianapolis International Airport (IND) and Cancún, Mexico (CUN) to twice-weekly flights with a new Sunday flight from Feb. 13 through April 17, 2011. Frontier offers nonstop service between Indianapolis and Cancún on Saturdays from November 6, 2010 to May 1, 2011.

Both the MKE-PHX and IND-CUN flights will be operated with Airbus A319s.

Copyright Photo: Bruce Drum. Please click on photo for more details.

Aerolineas Argentinas to join SkyTeam in 2012

Aerolineas Argentinas (Buenos Aires) is planning to join the SkyTeam Alliance in 2012.

Copyright Photo: Bruce Drum. Please click on photo for additional details.