Category Archives: Republic Airlines (2nd)

Republic Airways Holdings reports preliminary 2Q results, will reduce contract flying

Republic Airways Holdings Inc. (Republic Airlines 2nd and Shuttle America) (Indianapolis) has announced its preliminary second quarter 2015 financial results. The company also gave guidance from its perspective on the on-going contract negotiations with its pilots, represented by the IBT. The company also warned of possible operational disruptions (see below – the highlights are mine)

Preliminary Second Quarter 2015 Results

The Company expects to report second quarter net income of $4.0 to $5.0 million or $0.08 to $0.10 per diluted share, and pretax margins of 2.5% to 3.0% on operating revenues of $338 to $340 million. The second quarter results were negatively impacted by, among other factors, an operation that produced approximately 4% fewer block hours than forecasted due to the ongoing operational disruption caused by regulatory changes and further intensified by our ongoing pilot labor dispute.

National Pilot Shortage and Labor Dispute Continue to Disrupt Operations

The Airline Safety and Federal Aviation Administration (FAA) Extension Act of 2010 directed the FAA to enact significant regulatory changes. The law had several elements, one of which was a change to pilot qualification standards that became effective on August 1, 2013, adding new requirements for first officers to hold an Airline Transport Pilot (ATP) certificate, requiring additional training and a minimum 1,500 hours total flight time as a pilot. Previously, first officers were required to have only a commercial pilot certificate, which required 250 hours of flight time before beginning an FAA approved commercial airline training program. Another element of the law required the FAA to implement more restrictive limits on pilot flight and duty times. The new limits became effective on January 1, 2014 and immediately had the effect of reducing pilot productivity 5-7%, further exacerbating the growing pilot shortage.

The Company’s ongoing labor dispute with the International Brotherhood of Teamsters (IBT), the union which represents the bargaining rights of all Republic pilots, is further amplifying our pilot staffing challenges. The IBT and the Company are currently negotiating under the supervision of the National Mediation Board for an amended collective bargaining agreement. Since April 2015, limited progress has been made in the negotiations due to the IBT’s unrealistic and unsustainable demands. The Company has presented a comprehensive proposal to the IBT that would place our pilots ahead of their peers in the regional airline industry for both compensation and work rules. The lack of a new agreement for our pilots requires the Company to maintain its below market contract and is contributing to increased levels of attrition and an inability for the Company to attract new pilots.

Due to the IBT’s unrealistic bargaining position, the Company cannot predict with any certainty a timeline for resolution. As a result, the Company anticipates continued operational disruption related to the ongoing labor dispute and the growing national pilot labor shortage. The Company has initiated discussions with our mainline partners to take the necessary actions to both temporarily and permanently reduce scheduled flying commitments for the remainder of 2015 and the first half of 2016.

In light of the anticipated fleet reductions, the Company is rescinding all previously issued financial and operational guidance.

On July 9, 2015, the IBT filed suit against the Company alleging that the Company unilaterally increased compensation for its pilots and new hire pilots in violation of the Railway Labor Act. We believe the suit is completely without merit, and the Company will take appropriate steps to respond.

The Company is exploring all of its options to mitigate any adverse impact from these matters and restore its operational and financial performance to normal levels. The Company has engaged Seabury Group as an advisor to assist in these efforts.

Copyright Photo: Brian McDonough/AirlinersGallery.com. From this statement, it is unclear which mainline partner contracts could be reduced creating opportunities for other carriers. In the case of Shuttle America, it flies Embraer aircraft for both Delta and United. Shuttle America’s Embraer ERJ 170-200LR (ERJ 175) N209JQ (msn 17000258) approaches the runway at Washington’s Reagan National Airport (DCA) in Delta Connection colors.

Delta Connection-Shuttle America aircraft slide show:

Current Combined Route Map (click to expand):

Teamsters file a lawsuit against Republic Airways, Republic responds

Teamsters Local 357 has filed a lawsuit against Republic Airways Holidays (Indianapolis) charging the company has unilaterally changed the working conditions for its pilots regarding “open time” flying. Here is the full statement:

On July 9, Teamsters Local 357 in Plainfield, Indiana, filed a lawsuit against Republic Airways for unilaterally changing pilots’ working conditions regarding “open time” flying without first agreeing with the union about those changes. More than 2,200 Republic pilots are members of Local 357 and have been seeking a fair contract from the company since 2007.

The lawsuit asserts that the company’s changes are unlawful alterations in the status quo and that they took place even while the items changed were the subject of ongoing bargaining between Local 357 and Republic. The purpose of the lawsuit is to compel Republic’s compliance with its lawful duties under the Railway Labor Act (RLA), the federal law which governs labor relations in the airline industry.

To uphold the principle that Republic can only make changes to the pilots’ agreement through the bargaining process, Local 357 filed a lawsuit in the U.S. District Court in Indianapolis (case number: 1:15-cv-01066-WTL-MJD) seeking injunctive relief, declaratory judgment and other appropriate relief against the company’s unlawful changes in the status quo of pilot contractual rates of pay, rules and working conditions.

“Republic has had eight years to come to an agreement. The pilots are seeking a fair contract that spells out pay, benefits and working conditions, so that the company can’t give something and take it back at their whim. That’s what these hardworking, skilled pilots deserve now—plain and simple,” said Jim Clark, President of Local 357.

Pending the outcome of this lawsuit, the pilots will maintain their normal practice with regard to flying.

Republic Airways Holdings (Indianapolis) has responded to the lawsuit:

On Thursday, July 9, 2015, the International Brotherhood of Teamsters (IBT) Local 357, representing Republic’s pilots, filed suit against the Company alleging that the Company unilaterally increased compensation for pilots and new hires in violation of the Railway Labor Act. We believe the suit is completely without merit, and the Company will take appropriate steps to respond. The specific allegations made by IBT Local 357 are incomplete and factually incorrect.

The IBT and the Company are currently in the middle of negotiations supervised by the National Mediation Board for an amended collective bargaining agreement.

The Company stands ready with its current proposal to make a significant investment in our pilots, which is not only fair and equitable, but would place our pilots ahead of their peers in the regional airline industry. This lawsuit is nothing more than an improper tactic by IBT Local 357 to distract our employees and pressure the Company with respect to the negotiations process.

Top Copyright Photo: Formerly operated for Frontier Airlines (2nd), Embraer ERJ 190-100 IGW N163HQ (msn 19000255) is painted in the Republic Airways house livery, but it is operated by Republic Airlines (2nd). The regional jet lines up for the runway at Baltimore/Washington (BWI).

Republic Airways aircraft slide show:

Republic Airways Holdings reports first quarter net income of $6.4 million

Republic Airways Holdings Inc. (Republic Airlines 2nd and Shuttle America) (Indianapolis) reported its financial results for the first quarter of 2015.

Republic’s pre-tax income for the first quarter of 2015 was $11.2 million, compared to $22.8 million for the prior year’s first quarter. Republic’s net income for the first quarter of 2015 was $6.4 million, or $0.13 per diluted share. The Company incurred approximately $8.0 million, or $0.09 per diluted share, for charges related to fleet transition expenses and employee severance costs, which are included in other operating expense.

The first quarter of 2015 results also were negatively affected by a reduction in operational reliability. Republic’s operating performance, as measured in block hours, departures and available seat miles was approximately 4 percent lower than planned.

Since March 31, 2014, the Company added 23 E-Jet aircraft and removed 25 ERJ aircraft.

The Company took delivery of the final six E-Jet aircraft for its American Airlines E-Jet agreement, which now totals 47 aircraft. The Company expects to take delivery of 15 additional new E-Jet aircraft in the second half of 2015, which it will operate under its United E-Jet agreement. As of March 31, 2015, the Company operated 41 aircraft with 44-50 seats and 201 aircraft with 69-99 seats under its fixed-fee code-share and charter agreements.

During the first quarter of 2015, Delta Air Lines exercised its right to extend 24 aircraft under the Shuttle America ERJ code-share agreement from May 2016 to May 2021. The Company currently operates 41 aircraft under the agreement with Delta, of which 17 can be removed by Delta with 90 days prior written notice.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Shuttle America will continue to operate for Delta as a Delta Connection carrier until at least May 2021. Embraer ERJ 170-200LR (ERJ 175) N213JQ (msn 17000265) completes its final approach to the runway at Washington’s Reagan National Airport (DCA).

Republic Airways aircraft slide show:

Delta Connection-Shuttle America aircraft slide show:

Combined Route Map:

United Express Q400 flight 4882 is forced to make an emergency landing at Philadelphia with an engine fire

Republic Airlines’ (2nd) (Indianapolis) United Express flight UA 4882 from Raleigh-Durham (RDU) to United Airlines’ hub at Newark Liberty International Airport (EWR) was forced to make an emergency landing at Philadelphia International Airport (PHL) yesterday afternoon (April 28). The Bombardier DHC-8-402 (Q400) N336NG (msn 4336) with 71 passengers and four crew members on board safely landed on runway 9R-27L. The ARFF personnel put out the fire on the ground. The fire broke out in the number 2 engine.

PHL Airport put out this short statement:

United Express #4882 diverted from Raleigh to EWR. Right engine was on fire. Passengers evacuated, fire extinguished. Pax being bussed to EWR.

Read the full report from Reuters: CLICK HERE

Read the full report from NBC 10: CLICK HERE

Top Twitter post by ABC 11 EyewitnessNews.

Copyright Photo Below: Brian McDonough/AirlinersGallery.com. N336NG arrives at Washington (Reagan National) prior to this incident.

Video:

American Airlines to expand Embraer 175 operations and routes

American Airlines (Dallas/Fort Worth) is further expanding its American Eagle Embraer 175 operations, routes and schedules from its Los Angeles, Chicago (O’Hare), Miami and New York (JFK) hubs per Airline Route. The new routes will be operated by its various partner airlines.

From Los Angeles, effective September 9, E175 service will be started to El Paso, Fayetteville (Northwest Arkansas), Oklahoma City, Salt Lake City and San Jose, California. Service to Phoenix starts the following day.

From Chicago (O’Hare), starting on March 29, E175 service will be initiated to Madison and Richmond. This will be expanded on May 7 with new E175 service to Austin and on June 4 to Memphis.

From Miami, starting on May 7, E175 service will be offered from the MIA hub to various domestic and Caribbean routes by Republic Airlines (2nd) (Indianapolis), replacing Embraer ERJ 145 flights operated by Envoy Air (Dallas/Fort Worth). On May 7, the new type will be operated to Charleston, South Carolina, Norfolk and North Eleuthera. Starting on June 4, the E175 will be assigned to the Fort-de-France, Greensboro, La Romana, Marsh Harbour, Memphis and Port-au-Prince routes. Finally on August 19, the E175 will be operated to Providenciales (Provo) in the Turks and Caicos Islands.

From New York (JFK), new Embraer E175 aircraft will be assigned to the Norfolk route starting on May 7 followed by Indianapolis route on June 4.

Copyright Photo: Mark Durbin/AirlinersGallery.com. As planned, Compass Airlines (Minneapolis/St. Paul) started the Los Angeles – San Francisco E175 Shuttle on April 13. Officially certified as the Embraer ERJ 170-200LR (ERJ 175), N201NN (msn 17000461) taxies at San Francisco International Airport (SFO).

American Airlines aircraft slide show (current livery only):

American Eagle-Republic aircraft slide show:

Republic Airlines Q400 flight blows tire on takeoff, makes an emergency landing at Denver

Republic Airlines (2nd) (Indianapolis) United Express flight UA 4870 from Denver to Kansas City yesterday (March 14) with a Bombardier DHC-8-402 (Q400) blew a tire on takeoff. After burning off fuel, the aircraft made a safe emergency landing back at DEN. The blown tire and landing were captured on video.

Another Video:

Republic Airways Holdings orders five additional Embraer E175 regional jets

Embraer and Republic Airways Holdings Inc. (Republic Airlines 2nd) (Indianapolis), operator of the largest E-Jet fleet in the world, signed an order for five new E175 jets. The contract, with an estimated value of $222 million, based on Embraer’s list price, will be included in the 2015 first-quarter backlog. The aircraft, configured in dual class with 76 seats, are expected to be delivered in mid- 2016.

This order of five E-Jets is in addition to the previous two orders for E175s placed by Republic in January 2013, for 47 firm aircraft, and in September 2014, for 50 firm aircraft. Apart from this new order, Republic maintains 32 options for the E175s.

Copyright Photo: Rob Finlayson/AirlinersGallery.com. Republic Airlines (2nd) Embraer ERJ 170-200LR (marketed now as the E175) N401YX (msn 17000363) lands at Miami International Airport (MIA).

American Eagle-Republic Airlines Slide Show:

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:

American takes delivery of the first Embraer 175 to be operated by Compass Airlines

American Airlines Group (Dallas/Fort Worth) yesterday (February 11) took delivery of the first Embraer ERJ 175 (ERJ 170-200LR) (N200NN, msn 17000456) to be operated by newcomer Compass Airlines (Minneapolis/St. Paul). Compass will operate the first 20 aircraft. The remaining 40 ERJ 175s will be operated by American Airlines Group subsidiary Envoy Air (Dallas/Fort Worth).

Embraer issued this statement:

At a ceremony held on February 11 at the Company’s headquarters in São José dos Campos, Embraer delivered to American Airlines the first of 60 firm order E175 jets under the contract signed between the two companies in December 2013. The contract also included options for another 90 E175s, taking the total order potential to 150 aircraft.

American Airlines selected Compass Airlines, a wholly owned subsidiary of Trans States Holdings, to operate the first 20 E175 aircraft under the American Eagle brand. The E175s will be configured with 12 First Class, 20 Main Cabin Extra and 44 Main Cabin seats, for a total of 76 seats.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Republic Airlines is already an Embraer ERJ 175 operator for American Eagle. Republic Airlines’ (2nd) Embraer ERJ 170-200LR (ERJ 175) N407YX (msn 17000370) completes the final approach to Washington’s Reagan National Airport.

American Eagle-Republic aircraft slide show:

American Airlines to introduce Embraer ERJ 175 service between Los Angeles and San Francisco

American Airlines (Dallas/Fort Worth) will introduce Embraer ERJ 175 American Eagle service between Los Angeles and San Francisco starting on April 14. Compass Airlines (Minneapolis/St. Paul) will operate the twice-daily service per Airline Route.

Compass Airlines will operate 20 ERJ 175s as a new American Eagle carrier. The first delivery is due in March.

Currently Envoy Air (CRJ700s), Mesa Airlines (CRJ900s) and SkyWest Airlines (CRJ200s) operate American Eagle regional routes from Los Angeles International Airport (LAX).

Copyright Photo: Jay Selman/AirlinersGallery.com. Republic Airlines (2nd) (call sign “Brickyard”) currently operates the type as an American Eagle carrier. Embraer ERJ 170-200LR (ERJ 175) N136HQ (msn 17000226) approaches the runway at Charlotte Douglas International Airport.

American Eagle-Republic aircraft slide show:

http://airlinersgallery.smugmug.com/Airlines-UnitedStates-1/Airlines-UnitedStates-1/American-Eagle-2nd-Republic-Ai