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.

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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.

Copyright Photo: Bruce Drum. Please click on the photo for additional information.