Category Archives: Chautauqua Airlines

Republic Airways Holdings narrows its loss in the 1Q, Frontier still a drag on the holding company

Republic Airways Holdings (Indianapolis) reported a net loss of $7.1 million, or $0.15 per diluted share, for the quarter ended March 31, 2012, compared to a net loss of $22.4 million, or $0.46 per diluted share, for the same period last year.

Republic revenues decreased 4.5%, compared to the prior year’s first quarter on a 4.7% decrease in block hours. As of March 31, 2012, Republic operated 19 fewer 37-50 seat aircraft than a year ago, resulting in lower block hour production. Republic also redeployed 14 of 17 EJet aircraft that were flown on behalf of Frontier in 2011 back into fixed-fee service with Delta.

Income before taxes for Republic was $10.9 million for the quarter, compared to a pre-tax income of $3.1 million for the first quarter of 2011. The improvement in Republic’s first quarter result stems from a significant reduction in pro-rate flying and related losses that were incurred in the first quarter of 2011 on sub-99 seat aircraft operating on behalf of Frontier.

Fuel costs for Republic were $59.8 million for the quarter, a decrease of $15.8 million from the prior year’s first quarter. The price per gallon increased 7.8% from $3.09 to $3.33 for the quarter, but the increase in pricing was more than offset by the reduction in consumption associated with the significant reduction in pro-rate operations.

Cost per Available Seat Mile (CASM), including interest expense but excluding fuel, increased 4.5% to 8.44¢ for the first quarter of 2012, from 8.08¢ for the same quarter of 2011. The increase is a result of unassigned aircraft expenses, increased employee benefit costs and higher maintenance expenses.

As of March 31, 2012, Republic operated 56 aircraft with 44-50 seats and 126 aircraft with 69-80 seats under fixed-fee commercial agreements. Additionally, Republic operated three aircraft with 50 seats and 19 aircraft with 74-99 seats under pro-rate agreements with Frontier. Seventeen 37-76 seat aircraft were unassigned as of March 31, 2012. The Company recently entered into long-term, offshore agreements to sublease three of its E170 aircraft, which are expected to be delivered to the new lessee between June and September of 2012.

The Frontier Airlines (2nd) (Denver) continues to be a drag for the holding company. However Frontier made improvements during this quarter. For the quarter ended March 31, 2012, Frontier posted a pre-tax loss of $21.6 million compared to a pre-tax loss of $39.0 million for the quarter ended March 31, 2011.

Frontier’s total revenues increased 19.2% to $342.4 million for the quarter, compared to $287.3 million for the same period in 2011. Capacity on Frontier, as measured by ASMs, was up 10.8% from the prior year’s first quarter, reflecting the year-over-year effect of the addition of A319 and A320 aircraft to the fleet during the first half of 2011. Load factor for the first quarter was a record 84.7%, and an increase of 4.1 points from the first quarter of 2011. Total revenue per ASM (TRASM) was 11.41¢, up 7.5% from the same quarter in 2011.

The operating unit cost for Frontier operations, excluding fuel, was 7.68¢ for the quarter, a 5.1% decrease compared to 8.09¢ for the same quarter of 2011, due primarily to an increase in average aircraft seat density and lower non-fuel expenses in the current quarter. Frontier’s unit cost for the first quarter of 2012 includes approximately 0.84¢ related to certain expenses associated with pro-rate operations between Republic and Frontier.

Under the Company’s arms-length pro-rate agreements, Republic is allocated an industry standard pro-rata portion of ticket revenue, while Frontier retains all connect revenues as well as ancillary revenues on regional flights. Frontier maintains certain rights to deploy the regional aircraft and maintains control of pricing and revenue management. Frontier also retains responsibility for all customer service expenses, including airport rents. Selling and distribution costs are shared between Republic and Frontier.

Fuel costs for Frontier were $131.9 million for the quarter, an increase of $26.8 million from the prior year’s first quarter. The fuel cost per gallon, including into-plane taxes and fees, increased 18.5% to $3.39 for the first quarter of 2012, compared to $2.86 for last year’s first quarter. The first quarter 2011 result included a gain on fuel hedges of $8.7 million, or $0.23 per gallon. There were no hedge positions for the first quarter of 2012.

As of March 31, 2012, Frontier operated a total of 60 Airbus aircraft. During the second-quarter of 2012, Frontier will be reconfiguring its fleet of 15 A320 aircraft (see above) to include six additional seats, increasing seat density from 162 to 168 seats. Frontier also plans to add one A320 aircraft during the second quarter of 2012, increasing its A320 operational fleet to 16 aircraft. Certain of Frontier’s aircraft operate under fixed-price, multi-year charter agreements. Revenues earned under these agreements are reported as other revenue in our consolidated statement of operations.

Republic’s total cash balance increased $25.8 million to $396.5 million as of March 31, 2012, compared to December 31, 2011. Restricted cash increased $67.6 million, to $219.0 million, from December 31, 2011. The Company’s unrestricted cash balance decreased $41.8 million, to $177.5 million, from December 31, 2011. A condensed cash flow statement has been provided in the tables section of this release.

Republic’s debt decreased to $2.31 billion as of March 31, 2012, compared to $2.36 billion at December 31, 2011. As of March 31, 2012, approximately 85% of the total debt is fixed-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 6.0% discount factor, the present value of these lease obligations was approximately $1.15 billion as of March 31, 2012. A condensed balance sheet as of March 31, 2012 and December 31, 2011 has been provided in the tables section of this release.

Republic has engaged Seabury Advisors to assist the company in a comprehensive restructuring effort for the Chautauqua Airlines subsidiary, which operates our small regional jets (see below).

Republic Airways Holdings is an airline holding company that owns Chautauqua Airlines, Frontier Airlines, Republic Airlines and Shuttle America.

Top Copyright Photo: Luimer Cordero.

Frontier Slide Show: CLICK HERE

US Airways Express-Chautauqua Slide Show: CLICK HERE

Bottom Copyright Photo: Tony Storck. Chautauqua’s future is somewhat murky pending recommendations for its future from Seabury.

Republic loses $151.8 million in 2011

Republic Airways Holdings (Indianapolis) is an airline holding company that owns Chautauqua Airlines, Frontier Airlines (2nd), Republic Airlines (2nd) and Shuttle America. The Company in the fourth quarter (ending on December 31, 2011) on a GAAP basis, reported a net loss of $123.5 million, or $2.55 per diluted share, compared to a net loss of $1.3 million, or $0.03 per diluted share, for the same period last year. On an ex-item basis, the Company is reporting net income of $17.0 million, or $0.34 per diluted share, compared to an ex-item net income of $7.4 million, or $0.18 per diluted share, for the three month periods ended Dec. 31, 2011 and 2010, respectively.

For the full year 2011, the Company reported revenues of $2.86 billion, compared to $2.65 billion for 2010. On a GAAP basis, the Company reported a net loss for 2011 of $151.8 million, or $3.14 per diluted share, compared to a net loss of $13.8 million, or $0.38 per diluted share for the full year 2010.

For the fourth quarter, the Company reported operating revenues of $697.8 million for the quarter ended Dec. 31, 2011, an increase of 7.4%, compared to $649.8 million for the same period last year. The increase in revenues is primarily due to an 11.0% increase in Frontier Airlines’ unit revenues.

During the quarter, the Company recorded an impairment charge of $191.1 million to reduce the carrying value of certain assets, mainly its 42 owned 37-50 seat aircraft. The Company also recorded non-cash charges of approximately $24.1 million related to the expected return of four leased A319 aircraft in 2012 and approximately $9.0 million related to the renegotiation of its ERJ 190 purchase order and the expected return of certain leased Embraer aircraft in 2012.

As of December 31, 2011, the Company operated 56 aircraft with 44-50 seats and 126 aircraft with 69-80 seats under our fixed-fee commercial agreements. Two 50-seat aircraft that were supporting our fixed-fee agreements as spares during the peak summer months were reallocated to charter operations during the fourth quarter.

The Company’s branded business segment includes all operations flown as Frontier Airlines and Frontier Express. Total branded revenues increased 8.9% to $422.4 million for the quarter, compared to $387.9 million for the same period in 2010. Capacity on Frontier, as measured by ASMs, was down 1.9% from the prior year’s fourth quarter. Load factor for the fourth quarter was a record 86.8%, an increase of 5.6 points from the fourth quarter of 2010. Total revenue per ASM (TRASM) was 11.90¢, up 11.0% from the same quarter in 2010. For the quarter ended Dec. 31, 2011, our branded business posted ex-item pre-tax income of $7.8 million compared to a loss of $11.2 million for the quarter ended Dec. 31, 2010.

The operating unit cost for branded operations, excluding fuel and impairments, was 7.93¢ for the quarter. However, excluding integration and fleet transition expenses of $40.1 million, or 1.13¢ per ASM, the unit cost was 6.80¢ for the fourth quarter of 2011.

Fuel costs for branded operations were $164.4 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, increased 27.3% to $3.22 for the fourth quarter of 2011, compared to $2.53 for the prior year’s fourth quarter. The fourth quarter 2011 result includes a gain on fuel hedges of $3.5 million, or $0.07 per gallon. The Company realized gains of $1.5 million, or $0.03 per gallon for hedges that were settled during the quarter. The Company currently has no hedge positions for 2012.

The Company’s Other business segment includes revenues from aircraft subleases, license fees on airport slots and expenses associated with those activities, as well as any unassigned aircraft expenses. The Company reported ex-item pre-tax loss of $2.2 million in the fourth quarter, compared to a pre-tax income of $1.2 million for the fourth quarter of 2010.

During the fourth quarter, the Company sold airport slots for a total of $47.5 million and recorded a gain on the sale of approximately $2.4 million, which is reflected in the Other segment.

As of Dec. 31, 2011, the Company has a total of 25 aircraft included in its Other segment that are not reflected as operating aircraft in the branded or fixed-fee operating highlights tables in this release. This includes 11 ERJ 145 aircraft that are being subleased offshore, eleven 37-50 seat aircraft that are being utilized for charter operations or are temporarily parked, and two Q400 aircraft and one ERJ 170 aircraft that are temporarily parked. During the quarter, the Company incurred approximately $2.7 million of expenses in its Other segment for aircraft that are temporarily parked. The Company is attempting to sell, place into fixed-fee service or otherwise sublease aircraft that are excess to its projected operating needs.

Total revenues for the year for Frontier were $1.76 billion, up 10.0% from the 2010 result of $1.60 billion on 1.1% fewer ASMs. Load factor was a record 85.8% for the year, up more than three points from the 2010 result, and TRASM was 11.74¢, up more than 11% from the 2010 result. Excluding items, Frontier reported a pre-tax loss of $70.4 million in 2011, compared to a pre-tax loss of $29.8 million in 2010.

Frontier fuel costs were approximately $718 million for the year, up 31%, or approximately $170 million from the 2010 level, on 8.1% fewer block hours. The fuel cost per gallon, including into-plane taxes and fees, was $3.25 for the year, up 35.4% from the 2010 level of $2.40.

The Company’s total operational fleet increased from September 30, 2011, by two aircraft, to 281 aircraft, as of December 31, 2011. The Company purchased two ERJ 190 aircraft and leased one A320 aircraft during the fourth quarter of 2011. These aircraft were placed into branded operations during the quarter. The Company also sold one Q400 aircraft in the fourth quarter of 2011.

The Company’s total cash balance decreased $59.6 million to $370.7 million as of Dec. 31, 2011, compared to Dec. 31, 2010. Restricted cash increased $12.3 million, to $151.4 million, from Dec. 31, 2010. The Company’s unrestricted cash balance decreased $71.9 million, to $219.3 million, from Dec. 31, 2010. A condensed cash flow statement for the years ended Dec. 31, 2011 and 2010 has been provided in the tables section of this release.

The Company’s debt decreased to $2.36 billion as of Dec. 31, 2011, compared to $2.58 billion at Dec. 31, 2010. As of Dec. 31, 2011, approximately 85% of the total debt is fixed-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 6.0% discount factor, the present value of these lease obligations was approximately $1.20 billion as of Dec. 31, 2011.

Frontier Slide Show: CLICK HERE

Frontier and Chautauqua to lay off 213 employees in Milwaukee

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Frontier Airlines (2nd) (Denver) is downsizing the Milwaukee hub as we previously reported. The downsizing will now affect 213 positions at MKE effective November 14.

Read the full report from Reuters: CLICK HERE

Frontier-Chautauqua Slide Show: CLICK HERE

Frontier Airlines to drop service to Manistee on March 8

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Frontier Airlines (2nd) (Denver) will drop Manistee, MI and the Milwaukee-Manistee route on March 8, 2012. Frontier launched the new route in April and is operated with Chautauqua Airlines Embraer ERJ 145 regional jets.

Read the full report from Mlive.com: CLICK HERE

Republic-Chautauqua Slide Show: CLICK HERE

Chautauqua Airlines to drop six Frontier destinations from the Milwaukee hub

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Chautauqua Airlines (Indianapolis) has announced to its employees it will suspend nonstop Frontier Airlines branded service from the shrinking Milwaukee hub to six destinations effective on November 1. The company will reduce its daily departures at MKE from 67 to 45 and ground its six ERJ 145s operated in Frontier colors. Five of the six removed aircraft will be re-deployed in temporary charter service from November through March 2012. The new schedule also includes service reductions in Kansas City from 26 daily departures to 20 and suspension of the Kansas City-Minneapolis/St. Paul service.

Frontier-Chautauqua Slide Show: CLICK HERE

Chautauqua and its parent Republic Airways Holdings have not yet publicly commented on these reductions.

Frontier Route Map:

Frontier Airlines launches new seasonal service between Branson, MO and both Austin and Phoenix

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Frontier Airlines (2nd) (Denver) has announced plans to add nonstop seasonal service between Branson, MO (BKG) and both Austin, Texas (AUS) and Phoenix (PHX) to its route map. The carrier will be the only airline offering nonstop service on these new routes.

Branson-Austin service will operate Monday, Wednesday and Friday from September 16 through December 14, 2011. Branson-Phoenix service will operate Saturdays from September 17 through December 10, 2011. Austin service will be operated by 50-seat Embraer ERJ 145 regional jet aircraft operated by Chautauqua Airlines. The Phoenix service will be operated with 138-seat Airbus 319 aircraft operated by Frontier.

Branson is recent years has become a growing tourist destination in the Ozark Mountains. Local attractions include The Hollywood Wax Museum, Silver Dollar City, White Water, Waltzing Waters, Mount Pleasant Winery, Stone Hill Winery, Ride The Ducks, Dolly Parton’s Dixie Stampede, The Haunted House and Monster Asylum, Butterfly Palace & Rainforest Adventure, Predator World and Branson Landing. Ripley’s Odditorium in Branson is housed in a building that has been made to look as if it is cracked wide open by an earthquake or other disaster.

Branson Landing opened in the summer of 2006 on the Lake Taneycomo waterfront in downtown Branson. The lakefront project includes retail space with Bass Pro Shops and Hudson Belk as anchors in an outdoor shopping mall of stores and restaurants. The new Branson Convention Center, which is situated between the Landing and Historic Downtown Branson, opened September 7, 2007. Two animal attractions are Butterfly Palace and Rainforest Adventure, a palace filled with thousands of flying butterflies in a mystical rainforest maze; and Wings of the World, a home to many birds of the world.

Frontier Slide Show: CLICK HERE

Route Map:

Delta starts daily nonstop flights between Austin and Kansas City

Delta Air Lines (Atlanta) yesterday (June 6) started daily nonstop Delta Connection service between Austin and Kansas City. The new service is currently operated by 50-seat Chautauqua Airlines Embraer ERJ 145 regional jets.

Frontier will resume seasonal nonstop service between Milwaukee and Branson

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Frontier Airlines (2nd) (Denver) will resume seasonal nonstop service between its Milwaukee hub and Branson, MO with three weekly roundtrips beginning on July 1, 2011, through December 14, 2011.

Frontier first launched its seasonal service between Milwaukee and Branson in the summer of 2010. Frontier also operates nonstop service between Branson and its Denver International Airport (DEN) hub with a year-round schedule.

The Milwaukee-Branson route will be operated for Frontier with Embraer ERJ 145 regional jets operated by sister airline Chautauqua Airlines.

Frontier Airlines adds new Michigan and Wisconsin destinations

Frontier Airlines (2nd)-Chautauqua Airlines Embraer ERJ 145LR (EMB-145LR) N270SK (msn 145304) PHL (Tony Storck) “Ginger”, originally uploaded by Airliners Gallery.

Frontier Airlines (2nd) (Denver) announced it will begin new service to Ironwood, MI (IWD), Manistee, MI (MBL), and Rhinelander, WI (RHI) from its Milwaukee hub beginning on April 18, 2011. These routes will be operated by Chautauqua Airlines’ 37-seat Embraer ERJ 135 regional jet aircraft.

The addition of these new markets will bring the number of destinations Frontier serves in both Michigan and Wisconsin to five.

Republic Airways reports net income of $21.3 million in the third quarter

Republic Airways (Republic Airlines 2nd) Embraer ERJ 170-100SU N821MD (msn 17000042) FLL (Bruce Drum), originally uploaded by Airliners Gallery.

Republic Airways Holdings Inc. (Indianapolis) reported operating revenues of $711.9 million for the quarter ended September 30, 2010, a 97.9% increase, compared to $359.6 million for the same period last year. The increase in revenues is primarily due to the acquisition of Frontier Airlines (2nd) and Midwest Airlines during 2009. The Company also reported net income of $21.3 million, or $0.58 per diluted share, for the quarter ended September 30, 2010, compared to $3.3 million of net income, or $0.09 per diluted share, for the same period last year. The diluted share count for the third quarter of 2010 includes 2.5 million shares for the $25 million of convertible debt at the Company, which decreases earnings per share by $0.04.

During the third quarter of 2010, the Company’s GAAP pre-tax income of $35.1 million was negatively impacted by a total of $7.8 million, or $0.14 per diluted share, of items: $4.7 million of expenses related to the integration of the branded business; $2.9 million of disposal costs for A318 and DHC-8-400 (Q400) aircraft; and $0.2 million in negative adjustments for fuel hedges.

Excluding the dilutive effect of the convertible debt ($0.04) and the negative impact on earnings of the integration expense items during the quarter ($0.14), the Company is reporting earnings per share of $0.76 for the third quarter of 2010.

The Company’s “Branded” business segment includes all operations at Frontier Airlines (2nd), Lynx Airlines, and Midwest Airlines, collectively referred to as “Frontier”. Total revenues on Frontier were $445.8 million for the quarter. Load factor was 87.4% for the quarter and total revenue per ASM (TRASM) was 11.15¢. Frontier posted income before taxes of $11.6 million for the third quarter. However, excluding the items outlined in the table above, Frontier produced a pre-tax profit of $19.4 million for the third quarter. Operating cost per ASM (CASM), excluding fuel, was 7.17¢ for the third quarter of 2010. Excluding integration and aircraft return expenses, the unit cost for Frontier, excluding fuel, was 6.98¢ for the quarter.

During the quarter the Company removed three Airbus A318 aircraft, one Bombardier DHC-8-400 (Q400) aircraft, and one Embraer ERJ 170 aircraft from service. The total operational fleet was 277 aircraft as of September 30, 2010 compared to 282 aircraft as of June 30, 2010.

On July 1, 2010, the Company announced that it would remove four 120-seat A318 aircraft and one 76-seat E170 aircraft from scheduled service for Frontier in September 2010. Three of these aircraft have been sold to third parties and two were returned to their lessors. Beginning in January 2011, Frontier will accept the first of seven new 162-seat A320 aircraft. All seven aircraft have firm lease financing arranged and will be delivered during the first two quarters of 2011. The Company will also be leasing three additional 136-seat A319 aircraft that are scheduled for delivery between February and April 2011.

On July 21, 2010, the Company announced it had signed a non-binding letter of intent with Embraer to acquire 24 ERJ 190 or ERJ 195 aircraft with deliveries beginning in the mid 2011. On November 5, 2010, the Company announced it had placed a firm order for 6 E190 aircraft with Embraer for delivery in 2011 starting in August. The Company also has conditional firm orders for 18 E190 or E195 aircraft. Both aircraft types would be configured with STRETCH seating. These aircraft will be used to replace smaller regional jets in the Company as well as provide flexibility for growth at Frontier through 2013.

All ERJ 170 aircraft operating for Frontier will be reconfigured with STRETCH seating by November 30, 2010, enabling its guests to take advantage of 5 extra inches of legroom. Also, all 32 E-Jet aircraft operating for Frontier will have Gogo WiFi installed by the end of 2010.