Tag Archives: TMK Photography

Republic Airways Holdings reports on its third quarter performance, will stop operating Embraer 190s for Frontier

Republic Airways Holdings Inc. (Indianapolis) reported diluted earnings per share from continuing operations for the third quarter of 2013 of $0.09 as compared to $0.13 for the same period in the prior year. During the third quarter of 2013, the company recorded a non-cash impairment charge of $21.2 million, $13.0 million after-tax or $0.25 per diluted share, to reduce the carrying value of seven owned Embraer ERJ 190 aircraft and write-off the maintenance deposits on three leased ERJ 190 aircraft. Income from continuing operations was $4.3 million compared to $6.3 million for the same period last year. Excluding the ERJ 190 impairment charge, pre-tax income from continuing operations was $26.6 million, resulting in an adjusted pre-tax margin from continuing operations of 7.9%. Operating revenues totaled $338.6 million, an increase of 0.4%, compared to $337.4 million for the third quarter of 2012.

The company classified its Frontier business as discontinued operations due to the expected sale during the fourth quarter of 2013. Unless otherwise specified, all financial information disclosed in this release is from continuing operations.

On October 1, 2013, the company reported that it had agreed to sell its Frontier business to an affiliate of Indigo Partners LLC (Indigo). Indigo will acquire all the outstanding shares of Frontier Airlines Holdings, Inc. As part of the transaction, under a separate agreement, Republic will assign to Frontier all of Republic’s rights under agreements relating to the Republic’s Airbus A320neo order. The transaction is subject to receipt of certain third-party consents and releases and other customary closing conditions.

On November 6, 2013, Indigo informed the company that it had satisfied or waived certain key conditions to close under the transaction. The company expects the transaction to close later this month.

For additional information on the divestiture of Frontier, please see the company’s separate news release dated October 1, 2013 and a separate filing with the U.S. Securities and Exchange Commission on Form 8-K filed on October 7, 2013.

“The sale of Frontier will allow our management team to re-focus on our core business,” said Republic Airways Chairman, President and Chief Executive Officer Bryan Bedford. “We continue to be excited about the growth opportunities for our fixed-fee business and are focused on providing safe, reliable and low-cost solutions to each of our airline partner brands, including American Eagle, Delta Connection, United Express and US Airways Express,” said Bedford.

Third Quarter Review

Operating Revenue Highlights

Total operating revenues increased $1.2 million, or 0.4%, from the third quarter of 2012 to $338.6 million in the third quarter of 2013. Fixed-fee service revenue increased $51.6 million, or 19.2%, to $320.3 million due to an increase in Bombardier DHC-8-402 (Q400) flying with United Airlines, new fixed-fee ERJ 190 charter flying and new ERJ 175 flying with American Airlines. Passenger service revenue decreased $50.5 million due to a significant reduction in the number of ERJ 190 aircraft operating under our pro-rate agreement with Frontier.

Operating Expense Highlights

Fuel costs for Republic decreased $14.1 million to $11.3 million for the quarter, due to a 4.7 million decrease in gallons consumed due to the reduced ERJ 190 pro-rate operations. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.55 per gallon in the third quarter of 2013, compared to $3.21 per gallon in the prior year’s third 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.

Landing fees and airport rents decreased $6.6 million to $7.9 million for the quarter. Beginning in June 2013, landing fee expense and the related pass-through reimbursement revenue were lower due to United paying airports directly for its associated landing fee costs.

At September 30, 2013, the company had a fleet of ten ERJ 190 aircraft, of which three were leased and seven were owned. Five of the aircraft operate within the fixed-fee charter agreement and the remainder were operating under the pro-rate agreement with Frontier. The company is working to sell, sublease or otherwise place into fixed-fee charter service the five aircraft operating in pro-rate service. During the third quarter of 2013, we recorded a non-cash impairment charge of $21.2 million to reduce the carrying value of our owned E190 aircraft and expensed the deferred maintenance deposits on the leased ERJ 190 aircraft.

Discontinued Operations

Income from discontinued operations, net of tax, increased 52.8% from $19.5 million in the third quarter of 2012 to $29.8 million in this quarter. The improvement is primarily due to Frontier TRASM increasing 6.6% over the prior period and lower fuel costs. The loss on disposal of discontinued operations, net of tax, is currently estimated to be $47.9 million. This estimate will adjust in future periods based on the actual results of the discontinued operations and the closing date of the transaction.

Fleet Highlights

As of September 30, 2013, Republic operated a fleet of 235 aircraft. Within our fixed-fee commercial and charter agreements, we operated 68 aircraft with 44-50 seats and 162 aircraft with 69-99 seats. In addition, we 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 third quarter of 2012.

During the quarter the company took delivery of nine ERJ 175 aircraft operating under its American Airlines capacity purchase agreement and expects to take delivery of an additional ten ERJ 175 aircraft by the end of 2013.

Balance Sheet and Liquidity

The company’s total cash balance decreased $6.3 million to $224.1 million as of September 30, 2013, compared to December 31, 2012. Restricted cash increased $12.6 million, to $32.2 million, from December 31, 2012 due to the escrow requirements under our fixed-fee charter agreements. The Company’s unrestricted cash balance decreased $18.9 million, to $191.9 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 increased to $2.00 billion as of September 30, 2013, compared to $1.97 billion at December 31, 2012, primarily related to the financing of ERJ 175 aircraft for the American Airlines fixed-fee agreement. As of September 30, 2013, approximately 95% of our 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 $0.5 billion and $0.6 billion as of September 30, 2013, and December 31, 2012, respectively.

At September 30, 2013 the company had assets held for sale of $594.8 million and liabilities held for sale of $517.8 million. The $77.0 million of value in net assets held for sale represents the estimated cash proceeds from the sale of Frontier. These amounts will adjust in future periods based on the actual results of discontinued operations and the closing date of the transaction.

Copyright Photo: TMK Photography/AirlinersGallery.com. Republic Airlines (2nd) is now only operating five 99-seat Embraer ERJ 190s for Frontier Airlines (down from 17) under the pro-rate agreement. Once the sale of Frontier to Indigo is completed, Republic will relocate these five aircraft to other areas. Frontier will only operate Airbus aircraft under Indigo. The pictured Republic Airlines (2nd) Embraer ERJ 190-100 IGW N164HQ (msn 19000275) with a Hummingbird on the tail taxies at Toronto (Pearson).

Frontier Airlines-Republic Airlines (2nd): AG Slide Show

Jet Airways seeks government approvals to expand international operations

Jet Airways Airbus A330-203 VT-JWH (msn 882) YYZ (TMK Photography). Image: 900289.

Jet Airways (Mumbai) is seeking Indian government approval to expand its international operations from the current 370 flights a week to 518 flights a week by the winter of 2012 (close to Air India) according to this report by the Economic Times.

According to the report, the carrier wants to add 35 new flights to Germany and seven to both France and Belgium, in addition to seven each to Qatar, Saudi Arabia, Sharjah and Vietnam.

Read the full report: CLICK HERE

Copyright Photo: TMK Photography.

Jet Airways Slide Show: CLICK HERE

Virgin America touches down in Orlando

Virgin America (San Francisco) today (October 13) celebrated its new nonstop service to Orlando International Airport (MCO) from both Los Angeles International Airport (LAX) and San Francisco International Airport (SFO). The airport welcome party was hosted by Orlando Mayor Buddy Dyer, Orange County Florida Mayor Richard T. Crotty, Virgin America CEO David Cush and Virgin Group Founder Sir Richard Branson.

Copyright Photo: TMK Photography.

Island Air celebrates its 30th anniversary

Island Air (Hawaii) (Honolulu) on Thursday (September 9) celebrated its 30th anniversary with special events in Honolulu. A orchid lei was given to each passenger departing from Honolulu and were also given a special music CD single recorded by Island Air employees.

Read the full story from HNL RareBirds:


Copyright Photo: TMK Photography. The Bombardier DHC-8-400 (Q400) proved to be too large for the Hawaiian market. DHC-8-402 (Q400) C-GAFM (msn 4017) became N814WP with the carrier during its short career.

Mexican consortium Tenedora K buys 95% of Mexicana

Mexicana (Mexico City) has a new majority owner and savior. Mexican consortium named Tenedora K has acquired 95 percent of the shares of the troubled airline through private equity firm Advent International.

Read the full story from Reuters:


Copyright Photo: TMK Photography. Airbus A319-112 N612MX (msn 1612) taxies at Toronto (Pearson).

Air Canada to add Vancouver-Tokyo Haneda service

Air Canada (Montreal) announced it is boosting service to Tokyo by adding a new daily, nonstop flight between Vancouver and Haneda Airport, conveniently located near the Japanese capital. The new route begins on January 29, 2011 and will complement existing daily flights to Narita International airport, meaning Air Canada is doubling daily service between Vancouver and Tokyo as part of its international expansion strategy.

The airline’s new flights to Haneda will be operated onboard 211-seat Boeing 767-300 ER aircraft.

Copyright Photo: TMK Photography. Boeing 767-38E ER C-GBZR “Free Spirit” (msn 25404) is tugged from the gate at Toronto (Pearson).

Mexicana needs at least $100 million to keep flying

Mexicana (Mexico City) needs at least $100 million to keep flying according to its CEO and this report by Reuters.


Copyright Photo: TMK Photography. Airbus A319-112 N612MX (msn 1612) taxies past the camera at Toronto.