Category Archives: Chautauqua Airlines

Republic Airways Holdings reports net income of $64.3 million for 2014

Republic Airways Holdings Inc. (Republic Airlines and Shuttle America) (Indianapolis) has reported its financial results for the fourth quarter and full year ended December 31, 2014. The company reported net income of $64.3 million for 2014, a significant increase from its net income of $26.7 million in 2013.

As planned, Chautauqua Airlines ended operations on December 31, 2014 and was rolled into Shuttle America as previously reported.

The company issued this report:

Republic’s pre-tax income excluding special items, for the fourth quarter of 2014 was $32.1 million, an 8.4 percent increase over the fourth quarter or 2013. Republic’s adjusted income from continuing operations for the fourth quarter of 2014 was $19.8 million, or $0.39 per diluted share, and its adjusted pre-tax margin was 9.3 percent.

For the full year of 2014, Republic’s pre-tax income, excluding special items, was $120.2 million, a $17.7 million increase over 2013. Republic’s adjusted income from continuing operations for 2014 was $73.4 million, or $1.40 per diluted share, with an adjusted pre-tax margin of 8.7 percent.

On a GAAP basis, including special items, Republic’s fourth quarter 2014 pre-tax loss was $1.4 million, pre-tax margin was -0.4 percent and income from continuing operations was $11.7 million, or $0.23 per diluted share. On a GAAP basis, including special items, Republic’s 2014 pre-tax income was $85.2 million, pre-tax margin was 6.2 percent and income from continuing operations was $64.3 million, or $1.24 per diluted share.

On January 1, 2015, Republic completed its consolidation of all Chautauqua Airlines operations onto the Shuttle America operating certificate. All operating aircraft and related employees are now transferred to Shuttle America’s operation. Republic hopes to sell the remaining Chautauqua Airlines entity and related assets during the first half of 2015.

During the fourth quarter of 2014, Republic extended the service terms of aircraft under its fixed-fee capacity purchase agreements with US Airways, Inc. and Delta Air Lines, Inc. Republic also agreed to operate an additional nine E170 aircraft for Delta Air Lines, Inc.

“We took some significant steps in 2014 in our effort to simplify and streamline our business,” said Republic Airways Holdings Chairman, President and CEO Bryan Bedford. “While this simplification strategy results in near-term transition expenses, such as the fleet impairment charge we took this quarter, the actions that we’ve taken in 2014 and that we intend to take in 2015 are key to the future success of our airline.”

The impairment and other charges in 2014 were due to impairment and other charges on owned E140 aircraft which were abandoned of $19.9 million; owned E190 aircraft which are in the process of being sold of $14.4 million; owned Q400 aircraft which are scheduled to come out of service in the third quarter of 2016 of $13.3 million, and a loss on sale of E190 aircraft of $5.8 million. The 2013 impairment charges of $21.2 million related to owned E190 aircraft and the write-off of maintenance deposits on leased E190 aircraft.

Fleet Highlights

During 2014, our operational fleet decreased from 258 to 244. The company took delivery of 22 E175 aircraft, permanently parked 15 E140 aircraft, temporarily parked 13 E145 aircraft, sold two E190 aircraft and leased three E145 aircraft and three E190 aircraft.

During 2014, we took delivery of 22 E175 aircraft and removed 28 small regional jets.

In December 2014, we completed the sale of two E190 aircraft and executed an agreement to sell three other E190 aircraft. The sale of these five aircraft will leave us with two owned E190 aircraft and three leased E190 aircraft that are expected to be removed from fixed-fee charter service in August of 2015. We expect to return the three leased aircraft to the lessor in 2015 and the remaining two aircraft are under a firm sales agreement.

Balance Sheet and Liquidity

The Company’s total cash balance decreased $55.1 million to $245.6 million as of Dec. 31, 2014, compared to Dec. 31, 2013. Restricted cash decreased $2.3 million, to $21.7 million, from Dec. 31, 2013, due to the escrow requirements under our fixed-fee charter agreements. The Company’s unrestricted cash balance decreased $52.8 million, to $223.9 million, from Dec. 31, 2013, due primarily to equity investments in new aircraft and the redemption of the $22.3 million and $26.5 million convertible notes on April 7, 2014, and Oct. 28, 2014, respectively. The Company also purchased 212,881 shares of its common stock on the open market, during the third quarter of 2014 for total consideration of $2.1 million. A consolidated balance sheet and summary cash flow statement have been included in the tables section of this release.

The Company’s debt increased to $2.34 billion as of Dec. 31, 2014, compared to $2.17 billion at Dec. 31, 2013, primarily related to the financing of 22, new E175 aircraft purchased for our American Airlines fixed-fee agreement. As of Dec. 31, 2014, approximately 98 percent 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 percent discount factor, the present value of these lease obligations was approximately $0.48 billion and $0.59 billion as of Dec. 31, 2014, and Dec. 31, 2013, respectively.

Corporate Information

Republic Airways Holdings Inc., based in Indianapolis, Indiana, is an airline holding company that owns Republic Airlines, Shuttle America and Chautauqua Airlines, collectively “the airlines.” As of Dec. 31, 2014, the airlines operated a combined fleet of about 245 aircraft and offered scheduled passenger service on more than 1,300 flights daily to approximately 100 cities in the U.S., Canada and the Caribbean through fixed-fee flights operated under our major airline partner brands, including American Eagle, Delta Connection, United Express, and US Airways Express. The Company currently employs about 6,500 aviation professionals.

Copyright Photo: Brian McDonough/AirlinersGallery.com. During 2014 Republic took delivery of 22 Embraer E175 aircraft. Republic Airlines’ Embraer ERJ 170-200LR (ERJ 175) N415YX (msn 17000378) arrives in Washington (Reagan National).

American Eagle-Republic Airlines:

The end of the line for Chautauqua Airlines, aircraft, personnel and operations shifted to Shuttle America

Chautauqua Airlines (Indianapolis), as planned, ended operations yesterday at midnight (December 31). The Embraer ERJ 145s, operated as a Delta Connection carrier, were shifted to sister airline Shuttle America (Indianapolis) starting today (January 1).

The aircraft will now operate under the “Mercury” call-sign. The certificate is currently retained by parent company, Republic Airways Holdings, and is being considered for sale to an undisclosed company. Chautauqua aircraft and employees have been transferred to the new certificate.

Chautauqua Airlines was established on May 3, 1973 in Jamestown, Chautauqua County, New York (hence the name) and started operations on August 1, 1974 using two 15-passenger Beechcraft 99 aircraft.

Chautauqua Airlines has also operated as American West Express, American Connection, Continental Express, Frontier Airlines (2nd), Midwest Connect, Trans World Express, United Express, US Airways Express and USAir Express.

The ERJ 145s are being phased out from the Delta Connection contract agreement. Previously on December 11, 2014 parent Republic Airways Holdings Inc. announced it had reached an amendment to its Capacity Purchase Agreement with Delta Air Lines to operate nine additional 69-seat ERJ 170 aircraft. The aircraft are scheduled to be placed into service between the 3rd quarter of 2015 and the 2nd quarter of 2016 and will operate for a term of six years per aircraft. In addition, the Company and Delta have agreed to extend the term of the agreement for the existing 14 ERJ 170 aircraft by four years, or through October 2021, and the existing 16 ERJ 175 aircraft by approximately five years, or through February 2024.

The nine additional ERJ 170 aircraft will either be sourced internally by the Company or with used aircraft available in the open market.

Copyright Photo: Chautauqua Airlines started operations in 1974 as an Allegheny Commuter airline from Chautauqua County in western New York State.

Chautauqua Airlines to be merged into Shuttle America, ending a long career

Republic Airways Holdings (Indianapolis) is an airline holding company that owns Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America. The group is consolidating operations in order to reduce costs.

CEO Bryan Bedford issued a short statement to the employees of the group concerning the closure of Chautauqua Airlines before the end of the year. The group intends to consolidate the Chautuaqua Embraer ERJ operations into the Shuttle America operating certificate. Chautauqua will be shut down.

Chautauqua Airlines was established on May 3, 1973, in Jamestown, Chautauqua County, New York State and began operations on August 1, 1974 using two 15-passenger Beech 99 aircraft. It was one of earliest Allegheny Commuter carriers. It became an USAir Express (later US Airways Express) carrier in 1979.

Besides the Allegheny/USAir/US Airways lineage, Chautauqua has operated under the America West Express, American Connection, Continental Express, Frontier Airlines (2nd), Midwest Connect, Trans World Express and United Express brands.

Chautauqua to phase out its Embraer ERJ 140s, parent Republic will not cancel its Bombardier CSeries order

Chautauqua Airlines (Indianapolis) is phasing out its Embraer ERJ 140 regional jets it operates for American Airlines. According to ch-aviation, the company will operate the last ERJ 140 flight for AA on August 18. Pilots are being switched to the new Embraer 175s which will be operate under the American Eagle brand.

Republic Airways Holdings Inc. (Indianapolis) is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines operate a combined fleet of about 250 aircraft and offer scheduled passenger service on about 1,300 flights daily to about 100 cities in the U.S., Canada and the Bahamas through fixed-fee flights operated under our major airline partner brands, including American Eagle, Delta Connection, United Express, and US Airways Express.

In other news, Republic Airways Holdings CEO Bryan Bedford has stated the company has no intention of canceling its order for the new, but delayed, Bombardier CSeries aircraft. Republic has 40 CS300s on order. Republic has made the decision to phase out its 50-seat aircraft and will concentrate on the Embraer 170 and 175 series of aircraft and the Bombardier Q400 besides the the CS300s on order according to this interview in the Financial Post.

Read the full article: CLICK HERE

Copyright Photo: Bruce Drum/AirlinersGallery.com. Embraer ERJ 140LR (EMB-1135KL) N376SK (msn 145578) arrives in Minneapolis/St. Paul.

American Connection-Chautauqua:

Route Map of the Republic Airways’ airlines:

Republic Airways Holdings reports first quarter net profit of $14 million

Republic Airways Holdings (Indianapolis) reported financial results for the first quarter of 2014. Key points include:

Republic’s pre-tax income from continuing operations was $22.8 million, or $0.42 per diluted share, an 18.1% increase over the March 2013 quarter. As of Dec. 31, 2013, Republic had a significant amount of federal net operating loss carry forwards and does not anticipate paying significant federal taxes for the next several years.

Republic’s net income for the March 2014 quarter was $14.0 million, or $0.26 per diluted share. This is a $13.7 million increase from the prior year. The March 2013 quarter was negatively impacted by $11.1 million of losses from discontinued operations at Frontier Airlines.

Republic canceled more than 12,400 flights during the first quarter of 2014, primarily because of severe weather in January and February of 2014. That was a 145% increase from the number of canceled flights compared to the first quarter of 2013. These cancellations negatively impacted the pre-tax financial results by about $7.0 million during the first quarter of 2014.

On February 11, 2014, Republic announced the early termination of its 44 to 50 seat fixed-fee agreements with United Airlines and American Airlines, which were scheduled to terminate in 2014. These agreements wind-down beginning in March 2014 through August 2014 and will result in the indefinite grounding of 27 small jet aircraft.

In the first quarter of 2014, Republic recorded an impairment of its owned Embraer ERJ 140 aircraft of $19.9 million and an $18.4 million gain on its Chautauqua restructuring asset. The Company also sold one Embraer ERJ 145 aircraft for a book gain of $1.8 million during the quarter. The net of these three items improved pre-tax earnings by $0.3 million.

On April 4, 2014, Republic announced that members of the International Brotherhood of Teamsters (IBT) Local 357 failed to ratify a proposed four-year pilot labor agreement. The agreement would have significantly improved pay and work rules for our pilots.

On April 7, 2014, Republic’s Board of Directors authorized management to utilize up to $75 million of unrestricted cash to buy back common shares and/or early retire convertible debt during the next 12 months. Under the $75 million authorization, Republic may repurchase up to $50 million of common shares and early retire up to $50 million of convertible notes, or any combination thereof.

On April 7, 2014, Republic redeemed a $22.3 million convertible note, leaving $52.7 million remaining on the share repurchase and convertible debt retirement authorization. This will reduce the Company’s dilutive share count by about 2.2 million shares going forward.

“I am pleased we were able to report improved first quarter financial results despite the most severe weather events in a single quarter I can recall in my 27 years of experience in the airline industry. Our results demonstrate the stability and strength within our core fixed-fee business,” said Republic Airways Holdings Chairman, President and CEO Bryan Bedford. “We are committed to our guiding principles and strengthening our brand reliability and product quality for our partners, shareholders and employees,” Bedford said.

Republic Airways Holdings, based in Indianapolis, Indiana, is an airline holding company that owns Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Embraer ERJ 170-100SU N806MD (msn 170000019), as a spare aircraft, completes its Republic Airlines (2nd) flight into Charlotte.

Combined Route Map:

Republic Airways (Republic Airlines):

Republic Airways Holdings’ pilots reject the proposed tentative contract

Republic Airways Holdings‘ (Indianapolis) over 2,200 pilots of subsidiaries Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America have rejected by a 85-15 percent vote the tentative agreement with management.

According to ALPA, “While their Tentative Agreement contained some substantial contract improvements, including pay increases, it did not meet their pilots’ demands. After 7 years of negotiations, the pilots clearly felt that they deserved pay and benefits commensurate with their positions as professional air line pilots and the value they bring to the company. Also of note is that the negotiated TA only touched four areas of the contract and did not address many areas of pilot interest.”

In addition, Teamsters Local 357 Executive Board issued this statement to the pilots: “In rejecting the TA, the pilot group has stated clearly its demand that Republic must do better in establishing acceptable terms for a new agreement. The Company cannot ignore the pilots’ demands without risking the continued deterioration of its operation which drove it back to the bargaining table last year.”

In return, the company, Republic Airways Holdings issued this statement:

Republic Airways Holdings announced on April 4 that members of the International Brotherhood of Teamsters (IBT) Local 357 failed to ratify a proposed four-year pilot labor agreement.

IBT Local 357 represents more than 2,200 pilots for Republic’s sister companies Chautauqua Airlines, Republic Airlines and Shuttle America.

“We are extremely disappointed that the union’s membership failed to ratify the tentative agreement that was reached in mid-February. At a time when other regional airlines have been negotiating concessionary agreements for their pilots, we were able to reach an industry-leading contract that significantly improved pay and work rules for our pilots to vote upon,” said Republic Airways Executive Vice President and Chief Operating Officer Wayne Heller. “Despite the outcome of this vote, Republic remains committed to providing the safest, most reliable flight service for our legacy airline partners.”

The proposed contract included increases in pay that would have placed Republic pilots at or near the top of its regional airline peers. It also included improvements in quality of life enhancements and more flexibility in scheduling, as well as a significant signing bonus if it had been ratified.

Republic Airways Chairman, President and Chief Executive Officer Bryan Bedford said, “I am disappointed with the results of the IBT Pilot vote as I believe that the Tentative Agreement we reached with the IBT was in the best interest of our Pilots and an important step forward for our Company. We will work with the IBT to determine our next steps.”

Republic Airways Holdings, based in Indianapolis, Indiana, is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America, collectively “the airlines.” The airlines operate a combined fleet of about 250 aircraft and offer scheduled passenger service on over 1,350 flights daily to about 110 cities in the U.S., Canada and the Bahamas through fixed-fee flights operated under our major airline partner brands, including American Eagle, Delta Connection, United Express, and US Airways Express. The airlines currently employ about 6,300 aviation professionals.

As a result, Republic has delayed a decision on its order for 40 Bombardier CSeries aircraft. The order is not cancelled but it is pending according to Bedford after this vote.

Copyright Photo: Tony Storck/AirlinersGallery.com. Formerly operated in Frontier Airlines colors, Embraer ERJ 190-100 IGW N163HQ (msn 19000255) is now painted in the Republic Airways house colors and operated by Republic Airlines (2nd).

Republic Airways-Republic Airlines:

The combined route map of Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America:

Pilots, represented by the Teamsters, and Republic Airways Holdings reach a tentative agreement

Republic Airways Holdings (Indianapolis) and the Teamsters Airline Division have announced they have reached a tentative agreement on a new four-year contract. The more than 2,200 pilots of Republic are represented by Teamsters Local 357 in Plainfield, Indiana and fly for the Republic’s subsidiaries, namely Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America.

The tentative agreement includes increases in pay that will place Republic pilots at or near the top of its regional airline peers. It also includes improvements in work rules, quality of life enhancements and more flexibility in scheduling as well as a significant signing bonus if ratified.

Bryan Bedford, Chairman, President and Chief Executive Officer of Republic Airways offered comment in a press release today.

“At a time when many of our competitors are moving in the opposite direction on pilot compensation, we are thrilled that Republic is able to significantly improve the wages and benefits of the more than 2,200 women and men who safely fly more than 1,300 daily scheduled flights for our major airline partners,” Bedford said.

“This TA reflects the dedication and hard work of the union and the company’s negotiating committees,” said Republic Airways Executive Vice President and Chief Operating Officer Wayne Heller. “We thank the union representatives for their professionalism and commitment in reaching this agreement.”

The agreement will be presented to union members for review and a formal ratification vote, which is expected in March.

Copyright Photo: Keith Burton/AirlinersGallery.com. Shuttle America’s Embraer ERJ 170-200LR (ERJ 175) N202JQ (msn 17000240) operating as a Delta Connection carrier taxies at Boston’s Logan International Airport.

Delta Connection-Shuttle America:

Republic Airways Holdings to ground 27 regional jets due to a pilot shortage, Bloomberg Businessweek takes a look at the issue

Bloomberg Businessweek has taken a look at how the pilot shortage issue is affecting small carriers and how the low pay issue is making it worse.

Related to this, Republic Airways Holdings (Indianapolis), which owns regional carriers Chautauqua Airlines and Republic Airlines (2nd), today stated in a federal filing that it is no longer seeking lease extensions for 27 of 41 Embraer 50-seat regional jets. The holding company cited a “significant reduction” in pilots who meet the new U.S. experience rules according to Reuters.

Republic added that it will retire 27 50-seat regional jets this year

Read the full Bloomberg Businessweek article: CLICK HERE

Read the report by Reuters: CLICK HERE

Copyright Photo: Bruce Drum/AirlinersGallery.com. Chautauqua Airlines’ Embraer ERJ 145LR (EMB-145LR) N298SK (msn 145508) operating as an US Airways Express carrier departs from the Charlotte hub.

US Airways Express-Chautauqua Airlines:

Republic Airways Holdings issues a statement concerning subsidiary Chautauqua Airlines

Republic Airways Holdings (Indianapolis) today issued the following statement concerning its subsidiary Chautauqua Airlines (Indianapolis):

Republic Airways Holdings Inc. today (October 31) announced it has reached agreements with several key stakeholders which, combined with other initiatives taken, including placing idled aircraft back into revenue service, will mitigate future negative cash flows at its Chautauqua Airlines subsidiary on average by approximately $45 million annually over the next five years.

“This is an important milestone in our Chautauqua restructuring effort,” said Bryan Bedford, chairman, president and CEO of Republic Airways. “These agreements take us about three-quarters of the way to our stated need of $60 million in average annual cash flow improvements at Chautauqua in order to stabilize and secure its future. We still have approximately two-thirds of our small jet fleet of 70 aircraft operating under capacity purchase agreements (CPAs) with less than two years remaining, so we are focused on ensuring both our labor productivity and long-term maintenance costs of these aircraft remain competitive.”

The Company also announced it has amended its CPA between Chautauqua Airlines and Delta Air Lines to provide for the operation of an additional seven Embraer ERJ 145 aircraft for a period of one year for each aircraft. All seven aircraft are expected to be placed into service with Delta before the end of 2012. Prior to the amendment, Chautauqua operated a total of twenty-four Embraer ERJ 145 aircraft under a CPA which continues through May 2016.

“The deployment of these seven aircraft, combined with our other recent CPA activity, means we will have placed all remaining idle 50-seat regional jet aircraft back into revenue service by the end of 2012. Ensuring our 50-seat aircraft remain active under agreements with our major airline partners is an important component of our Chautauqua restructuring effort,” said Bedford.

Meanwhile the Teamsters Local 357 issued this statement:

Pilots who fly for one of the nation’s largest regional airline companies say it’s not a lack of qualified pilots, but rather a lack of pay and respect that’s grounding airplanes and could cause a ripple effect in the nation’s air transportation system.

This week, Republic Airways Holdings announced that it would operate 27 fewer airplanes and expects to hire almost half the number of pilots anticipated in 2014 due a lack of candidates who meet new FAA rules mandating 1,500 hours of experience. However, the issues are more complex according to International Brotherhood of Teamsters Local No. 357 which represents the 3000+ pilots who fly for the Indianapolis-based airline.

“Regional carriers as a whole need to offer better pay and work rules to attract new pilots,” said Local 357 President Craig Moffatt. “The lack of a competitive contract here at Republic contributes to poor quality of life with sub-standard pay to boot. This, in turn, leads qualified pilots to look elsewhere.”

The current collective bargaining agreement (CBA) or contract was ratified in 2003 and became amendable in October of 2007. Pilots are covered by the Railway Labor Act, so the contract does not expire. Negotiations began in April 2007 and entered mediation in 2011. Local 357 pilots have been without a contractual raise or an adjustment of work rules to reflect industry and economic changes for over six years—and counting.

Regional carriers are a key link in the nation’s air-transportation system. Approximately half of the nation’s domestic flights are outsourced to regional airlines rather than flown by a larger carrier. Republic Airways Holdings owns and operates Chautauqua Airlines, Republic Airlines and Shuttle America Airlines which in turn fly for American, United, Delta and US Airways.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Embraer ERJ 145LR (EMB-145LR) N272SK (msn 145306) arrives at Baltimore/Washington.

Delta Connection/Chautauqua Airlines:

Delta to drop the New York LaGuardia-Philadelphia route

Delta Air Lines (Atlanta) is planning to drop the New York (LaGuardia)-Philadelphia route on November 3 according to Airline Route. The route is currently operated with Embraer ERJ 135s and ERJ 145s.

Copyright Photo: Brian McDonough. Embraer ERJ 145LR (EMB-145LR) N568RP (msn 145800) in the special 800th (Embraer) logo arrives at Baltimore/Washington.

Delta Connection-Chautauqua: