Republic Airways Holdings reports net income of $2.6 million in 2Q

Republic Airways Holdings Inc. (Indianapolis) reported operating revenues of $683.3 million for the quarter ended June 30, 2010, a 113.6% increase, compared to $320.0 million for the same period last year. The increase in revenues is primarily due to the acquisition of Frontier Airlines and Midwest Airlines during 2009. The Company also reported net income of $2.6 million, or $0.08 per diluted share, for the quarter ended June 30, 2010, compared to $14.1 million of net income, or $0.41 per diluted share, for the same period last year.

During the second quarter of 2010, the Company’s pre-tax income of $4.8 million was negatively impacted by a total of $19.7 million of items: $18.5 million of expenses related to the integration of the branded business and accruals for the lease return costs of two A318 and five Q400 aircraft; $6.4 million in negative adjustments for fuel hedges and prior period fuel excise taxes; and a $5.2 million positive adjustment due to a reduction in lease obligations for Midwest aircraft and office facilities.

During the quarter the Company took delivery of two Airbus A320 aircraft and the final two Embraer ERJ 190 aircraft previously purchased from US Airways and removed six Bombardier DHC-8-402 (Q400) aircraft from service. The Company also placed back into service two Embraer ERJ 145 aircraft that were previously removed to be returned to the lessors. The total operational fleet remains unchanged from March 31, 2010 at 282 aircraft as of June 30, 2010.

On April 13, 2010, the Company announced the selection of the Frontier Airlines name for its consolidated branded network.

As a reminder, Midwest and Frontier Airlines were acquired on July 31, 2009 and October 1, 2009, respectively.

On July 1, 2010, the Company announced that it will remove four 120-seat Airbus A318s and one 76-seat Embraer ERJ 170 aircraft from scheduled service for Frontier in September 2010. Three of these aircraft will be sold to third parties and two will be returned to their lessors. Beginning in January 2011, Frontier will accept the first of six new 162-seat A320 aircraft. All six aircraft have firm lease financing arranged and will be arriving during the first two quarters of 2011.

On July 21, 2010, the Company announced a letter of intent with Embraer to acquire 24 Embraer ERJ 190 or ERJ 195 aircraft with deliveries beginning in the mid 2011. The Embraer 190 would offer 99 seats, while the ERJ 195 would be configured with 116 seats if the Company chose to convert any of the orders. Both aircraft types would be configured with STRETCH seating. The aircraft would be used to replace smaller regional jets in the Company as well as create growth for Frontier into 2012.

Copyright Photo: Bruce Drum. Republic Airlines’ (2nd) Embraer ERJ 170-100SU N821MD (msn 17000042) is painted in the house colors of its parent Republic Airways Holdings. The regional jet is pictured departing from runway 27R at Fort Lauderdale/Hollywood.