Category Archives: Chautauqua Airlines

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: AG Slide Show

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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: 

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.

Copyright Photo: Michael B. Ing.

Frontier Slide Show: CLICK HERE

Frontier and Chautauqua to lay off 213 employees in Milwaukee

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

Copyright Photo: Tony Storck. Please click on the photo for additional information.

Frontier Airlines to drop service to Manistee on March 8

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

Copyright Photo: Tony Storck. Please click on the photo for additional information.