Tag Archives: Republic Airways Holdings

Republic Airways Holdings’ second quarter net income increases 23% to $24.6 million, Frontier Airlines reports pre-tax 2Q income of $13.7 million

Republic Airways Holdings Inc. (Republic Airlines 2nd) (Indianapolis) reported diluted earnings per share of $0.46, which is a 15.0% increase from the $0.40 per diluted share result in the second quarter of 2012. Net income increased 23.0% to $24.6 million for the quarter ended June 30, 2013, compared to net income of $20.0 million for the same period last year. Operating revenues totaled $664.4 million, a decrease of 8.7%, compared to $728.1 million for the second quarter of 2012.

“We are pleased to report improved financial results for the second quarter, driven primarily by the year over year improvement in our small regional jet operations at Chautauqua,” said Republic Chairman, President and CEO Bryan Bedford. “Our process to sell Frontier continues and I am very pleased that we were able to reach tentative labor agreements with both our Flight Dispatchers and Flight Attendants, which remain subject to membership ratification. I am thankful for the continued professionalism and dedication of my 10,000 co-workers on behalf of our passengers.”

Republic Segment Summary

Republic’s pre-tax income improved 45.8% to $27.7 million from $19.0 million in the prior year’s second quarter, due mainly to the redeployment of idled 50-seat aircraft and the successful completion of our Chautauqua restructuring efforts in late 2012.

Total Republic revenues decreased $20.6 million, or 5.8%, from the second quarter of 2012 to $336.8 million in the second quarter of 2013. Fixed-fee service revenue increased $34.9 million, or 12.4%, to $316.9 million, despite the removal of fuel expense and related reimbursement on our United E170 fixed-fee agreement, which accounted for $25.1 million of revenues in the prior year’s second quarter. The majority of the increase in fixed-fee revenues relates to Republic’s Q400 agreement with United that began in the second half of 2012 and Republic’s E190 charter agreement, which began in January 2013. Republic passenger service revenue decreased $56.1 million due to a reduction of pro-rate operations with Frontier, as aircraft previously operating in pro-rate service were either transitioned to other fixed-fee agreements or sold.

Fuel costs for Republic decreased $42.3 million to $12.1 million for the quarter, due mainly to the removal of fuel expense on our United agreement as noted above. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.34 per gallon in the second quarter of 2013, compared to $3.26 per gallon in the prior year’s second quarter. The fuel cost per gallon related to our fixed-fee charter agreement is generally higher than our pro-rate operations with Frontier and is treated as a pass through cost under the agreement.

As of June 30, 2013, Republic operated a fleet of 232 aircraft. Within our fixed-fee commercial and charter agreements, Republic operated 70 aircraft with 44-50 seats and 157 aircraft with 69-99 seats. In addition, Republic operated five 99-seat aircraft under the pro-rate agreement with Frontier, down from seventeen, 99-seat aircraft operated in pro-rate service during the second quarter of 2012.

The Company expects to take delivery of 18 Embraer ERJ 175 aircraft to operate under its American capacity purchase agreement by the end of 2013. Additionally, the Company expects to place into service the final six Q400 aircraft under its United capacity purchase agreement over the next two quarters.

Frontier Segment Summary

For the quarter ended June 30, 2013, Frontier Airlines (2nd) (Denver) posted pre-tax income of $13.7 million, which is down slightly from $14.1 million of pre-tax income for the quarter ended June 30, 2012.

Frontier’s capacity, as measured by available seat miles (ASMs), was down 10.1% from the prior year’s second quarter, as a result of operating fewer Airbus aircraft. Frontier’s total revenues decreased 11.6% to $327.6 million for the quarter, compared to $370.7 million for the same period in 2012. Total revenue per ASM (TRASM) decreased 1.6% to 11.98 cents in the second quarter of 2013 from 12.18 cents in the second quarter of 2012.

Fuel costs decreased from the prior year’s second quarter by $22.6 million to $114.2 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, decreased to $3.14 per gallon in the second quarter of 2013, compared to $3.35 per gallon in the prior year’s second quarter. The second quarter of 2013 results included a loss on fuel hedges of $1.7 million, or $0.05 per gallon.

The operating unit cost for Frontier, excluding fuel, was 7.27 cents per ASM for the second quarter of 2013, a 1.3% increase compared to 7.18 cents per ASM for the same quarter of 2012.

As of June 30, 2013, Frontier operated 52 Airbus aircraft, compared to 58 Airbus aircraft as of June 30, 2012. All six aircraft removed were returned to lessors.

Recent Business Developments

On June 17, 2013, the Company announced it had reached a tentative agreement (TA) on a new five-year contract with the Transportation Workers Union (TWU) Local 540 Dispatchers. This TA is currently being voted on by union membership and we expect the voting results on August 1, 2013.

On June 24, 2013, the Company announced it had reached a TA on a new five-year contract with the International Brotherhood of Teamsters (IBT) Local 135 Flight Attendants. This TA is currently being voted on by union membership and we expect the voting results on July 29, 2013.

On July 15, 2013, the Company announced that it had entered into an agreement with an affiliate of the Brazilian Development Bank (BNDES) for the financing of 47 Embraer E175 aircraft. These aircraft will provide service under the terms of the capacity purchase agreement with American Airlines announced in January. The first aircraft was delivered on July 15, 2013, and is scheduled to go into service with American on August 1, 2013.

Balance Sheet and Liquidity

The Company’s total cash balance increased $44.8 million to $439.1 million as of June 30, 2013, compared to December 31, 2012. Restricted cash increased $53.2 million, to $200.3 million, from December 31, 2012. The Company’s unrestricted cash balance decreased $8.4 million, to $238.8 million, from December 31, 2012. A condensed consolidated balance sheet and cash flow statement have been included in the tables section of this release.

The Company’s debt decreased to $1.98 billion as of June 30, 2013, compared to $2.12 billion at December 31, 2012. As of June 30, 2013, approximately 90% of the 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% discount factor, the present value of these lease obligations was approximately $0.9 billion and $1.0 billion as of June 30, 2013, and December 31, 2012, respectively.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Republic Airways (Republic Airlines 2nd) Embraer ERJ 170-100SU N821MD (msn 17000042) departs from Fort Lauderdale-Hollywood International Airport.

Frontier Airlines (2nd):

Republic Airways (Republic Airlines 2nd):

Republic Airways Holdings improves in the 1Q to a net profit of $300,000

Republic Airways Holdings Inc. (Indianapolis) has reported first quarter 2013 net income of $0.3 million, or $0.01 per diluted share, compared to a net loss of $7.1 million, or $0.15 per diluted share, in the first quarter 2012.

“I am pleased that during our seasonally most challenging quarter, we were able to restore our consolidated results to profitability,” said Bryan Bedford, Chairman and CEO of Republic Airways Holdings. “This is the first time in four years that we have produced positive earnings during the first quarter and our results reflect the continued improvement in the business and the substantial efforts of my coworkers and our senior leadership team.”

Republic Segment Summary

Republic revenues decreased 8.6% from the first quarter of 2012 to $324.7 million in the first quarter of 2013. Republic passenger service revenue decreased $52.2 million due to operating 12 fewer Embraer ERJ 190 aircraft under pro-rate operations with Frontier Airlines (2nd) (Denver). Five of the aircraft were moved into fixed-fee charter service, five aircraft were sold over the last two quarters, and two aircraft were returned to lessors. Fixed-fee service revenues increased 9.4% to $304.0 million, despite the removal of fuel expense and the related reimbursement on our United Embraer ERJ 170 fixed-fee agreement, which accounted for $24.6 million of revenues in the prior year’s first quarter. This reduction was more than offset by revenue from the growth in our Bombardier Q400 operations at United and our new ERJ 190 fixed-fee charter service agreement.

Fuel costs for Republic decreased $46.2 million to $13.6 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.86 per gallon in the first quarter of 2013, compared to $3.33 per gallon in the prior year’s first quarter. The fuel cost per gallon related to our fixed-fee charter agreement is generally higher than our pro-rate operations and is treated as a pass through cost under the agreement.

Pre-tax income improved to $20.6 million, from $10.9 million in the prior year’s first quarter. The prior year’s first quarter included $5.3 million of expense for idled aircraft, and this year’s first quarter includes the benefit of our ERJ restructuring effort completed in late 2012.

As of March 31, 2013, Republic operated 70 aircraft with 44-50 seats and 152 aircraft with 69-99 seats to support its fixed-fee commercial agreements. Under the pro-rate agreement with Frontier, Republic operated five 99-seat ERJ 190 aircraft. Compared to March 31, 2012, this reflects a net increase of six aircraft for the Republic segment. The Company has returned or subleased three ERJ aircraft, placed 16 Q400 aircraft into service, sold five ERJ 190 aircraft, and returned two ERJ 190 aircraft to the lessor over the past year.

Frontier Segment Summary

Frontier total revenues decreased 9.2% to $310.9 million for the quarter, compared to $342.4 million for the same period in 2012. Capacity on Frontier, as measured by available seat miles (ASMs), was down 12.6% from the prior year’s first quarter, as a result of four fewer Airbus aircraft in operation. Load factor for the first quarter was 87.8%, an increase of 3.1 points from the first quarter of 2012. Total revenue per ASM (TRASM) increased 3.9% to 11.86 cents in the first quarter 2013 from 11.41 cents in the first quarter 2012.

Fuel costs for Frontier were $118.0 million for the quarter, a decrease of $13.9 million from the prior year’s first quarter. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.41 per gallon in the first quarter 2013, compared to $3.39 per gallon in the prior year’s first quarter. The first quarter 2013 result included a gain on fuel hedges of $0.4 million.

The operating unit cost for Frontier, excluding fuel, was 8.08 cents for the first quarter 2013, a 5.2% increase compared to 7.68 cents for the same quarter 2012.

For the quarter ended March 31, 2013, Frontier posted a pre-tax loss of $20.1 million compared to a pre-tax loss of $21.6 million for the quarter ended March 31, 2012. Frontier recorded $5.9 million, or 0.23 cents per ASM and $0.07 per diluted share, of aircraft return costs associated with the return of five leased Airbus A318 and A319 aircraft during the first quarter of 2013.

As of March 31, 2013, Frontier operated 56 Airbus aircraft compared to 60 Airbus aircraft as of March 31, 2012. Frontier returned two A318 aircraft and three A319 aircraft and took delivery of one leased A320 aircraft.

Recent Business Developments

On March 12, 2013, the Company received bankruptcy court approval of its capacity purchase agreement (CPA), as amended, with American Airlines to operate 47 ERJ aircraft in fixed-fee operations. The first aircraft is expected to be delivered in July and is scheduled to enter service for American on August 1, 2013. The Company anticipates taking delivery of 18 new E175 aircraft in 2013.

Balance Sheet and Liquidity

The Company’s total cash balance increased $34.2 million to $428.5 million as of March 31, 2013, compared to December 31, 2012. Restricted cash increased $35.8 million, to $182.9 million, from December 31, 2012. The Company’s unrestricted cash balance decreased $1.6 million, to $245.6 million, from December 31, 2012. A condensed cash flow statement has been included in the tables section of this release.

The Company’s debt decreased to $2.0 billion as of March 31, 2013, compared to $2.1 billion at December 31, 2012. As of March 31, 2013, almost 90% of the 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 6.0% discount factor, the present value of these lease obligations was approximately $0.9 billion and $1.0 billion as of March 31, 2013 and December 31, 2012, respectively. A condensed consolidated balance sheet has been provided in the tables section of this release.

Copyright Photo: Norbert G. Raith. Frontier is now expected to retire the last two Airbus A318s by early August. Airbus A318-111 N809FR (msn 3092) prepares to land in Atlanta.

Frontier Airlines:

Republic Airways Holdings improves to a 2Q net profit of $20 million

Republic Airways Holdings Inc. (Indianapolis) reported net income of $20.0 million, or $0.40 per diluted share, for the quarter ended June 30, 2012. This compares to a net loss of $14.9 million, or $0.31 per diluted share, for the same period last year, on operating revenues of $728.1 million, a decrease of 1.6%, compared to $739.7 million for last year’s second quarter on a 5.1% decrease in consolidated capacity.

The Company also reported the following key metrics for the second quarter of 2012:

	Three months ended June 30,
(Unaudited)	2012			2011			% Change

Consolidated operating revenues (millions)	$	728.1		$	739.7		-1.6	%
Consolidated ASMs (millions)		6,392			6,736		-5.1	%
Consolidated operating margin		9.0	%		1.6	%	7.4 pts
Consolidated net income (loss)	$	20.0		$	(14.9	)	nm
Diluted Earnings per share	$	0.40		$	(0.31	)	nm

Consolidated EBITDAR (millions)	$	174.6		$	128.7		35.7	%
Consolidated EBITDAR margin		24.0	%		17.4	%	6.6 pts

Frontier total revenue per ASM (cents)		12.18			11.25		8.3	%
Frontier operating income (loss) (millions)	$	15.5		$	(30.8	)	nm
Frontier operating margin		4.2	%		-9.2	%	13.4 pts

Business Segment Presentation
As announced on its fourth quarter 2011 conference call, the Company has adjusted its presentation of business segments in 2012 and has revised the prior year’s information to conform to the current period segment presentation. Reportable segments now consist of Republic and Frontier. The Republic segment includes all regional flying performed by sub-100 seat aircraft operating under either fixed-fee or pro-rate agreements, subleasing activities, regional charter operations and the cost of any unassigned regional aircraft. The Frontier segment includes passenger service revenues and expenses for operating Frontier’s Airbus fleet, as well as its charter and cargo operations.

Republic Segment Summary
Republic revenues decreased 12.1%; compared to the prior year’s second quarter on an 8.9% decrease in block hours. The block hour reduction was due to a significant reduction in the level of pro-rate flying performed on behalf of Frontier Airlines (Denver). As of June 30, 2012, Republic operated 14 fewer 37- to 50-seat aircraft than a year ago. Republic also redeployed 14 of 17 E170 aircraft that had been flown on behalf of Frontier in 2011 into fixed-fee service with Delta. The remaining three E170s are being subleased offshore.

Income before taxes for Republic was $19.0 million for the quarter, compared to a pre-tax income of $10.0 million for the second quarter of 2011. The improvement in Republic’s second quarter result stems from a significant reduction in pro-rate flying and related losses that were incurred in the second quarter of 2011 on sub-99 seat aircraft operating on behalf of Frontier.

Fuel costs for Republic were $54.4 million for the quarter, a decrease of $33.9 million from the prior year’s second quarter, due mainly to the reduction in pro-rate flying. The price per gallon decreased 8.2% from $3.55 to $3.26 year over year for the quarter.

Cost per Available Seat Mile (“CASM”), including interest expense but excluding fuel, increased 3.8% to 8.48¢ for the second quarter of 2012, from 8.16¢ for the same quarter of 2011. The increase is mainly due to expenses for aircraft that were unassigned and not producing ASMs during the quarter, and reduced seat count on our 58 US Airways E-jets, which have been reconfigured with first class cabins and total fewer seats.

As of June 30, 2012, Republic operated 56 aircraft with 44-50 seats and 126 aircraft with 69-80 seats under fixed-fee commercial agreements. Additionally, Republic operated one aircraft with 50 seats and 17 aircraft with 99 seats under pro-rate agreements with Frontier. Twenty 37- to 76-seat aircraft were unassigned as of June 30, 2012. Of the 20 unassigned aircraft, four ERJs and four Q400s will be returned to service for United-Continental under CPA agreements and two E170s will be subleased offshore during the third quarter.

Frontier Segment Summary
Total revenues increased 11.3% to $370.7 million for the quarter, compared to $333.2 million for the same period in 2011. Capacity on Frontier, as measured by ASMs, increased 2.7% from the prior year’s second quarter, due to a change in the Airbus fleet mix in 2012. Load factor for the second quarter was a record 90.1%, and an increase of 1.7 points from the second quarter of 2011. Total revenue per ASM (“TRASM”) was 12.18¢, an increase of 8.3% from the same quarter in 2011.

For the quarter ended June 30, 2012, Frontier posted pre-tax income of $14.1 million compared to a pre-tax loss of $32.6 million for the quarter ended June 30, 2011. The significant improvement in Frontier’s financial results was driven by solid unit revenue increases and lower unit costs as a result of the network and financial restructuring completed in 2011.

The operating unit cost for Frontier operations, excluding fuel, was 7.18¢ for the quarter, a 5.7% decrease compared to 7.61¢ for the same quarter of 2011, due primarily to lower non-fuel expenses and an increase in the average aircraft seat density in the current quarter.

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. Frontier’s unit cost for the second quarter of 2012 includes approximately 0.40¢ related to these expenses associated with pro-rate operations between Republic and Frontier.

Fuel costs for Frontier were $136.8 million for the quarter, a decrease of $1.7 million from the prior year’s second quarter. The fuel cost per gallon, including into-plane taxes and fees, decreased 4.0% to $3.35 for the second quarter of 2012, compared to $3.49 for last year’s second quarter. The second quarter result included expense on fuel hedges of $3.4 million, or $0.08 per gallon, for 2012 and $3.6 million, or $0.09 per gallon, for 2011. Of the $3.4 million second quarter 2012 fuel hedge expense, $1.2 million was settled during the quarter; the remaining $2.2 million was an unrealized loss as of June 30, 2012.

As of June 30, 2012, Frontier operated a total of 58 Airbus aircraft. During the second quarter of 2012, Frontier reconfigured its fleet of A320 aircraft to include six additional seats, increasing the seat density from 162 to 168 seats. Frontier added one A320 aircraft during the second quarter of 2012, increasing its A320 operational fleet to 16 aircraft. Two A319 aircraft were returned to lessors during the second quarter of 2012.

Recent Business Developments
On May 14, 2012, the Company announced that it had reached a tentative agreement with Continental Airlines, Inc. to operate 32 Q400 aircraft under the United Express brand. The agreement was finalized on July 20, 2012. The eight-year agreement includes the four Q400 aircraft Republic previously operated under pro-rate service in Denver for Frontier plus 28 additional aircraft leased from Export Development of Canada (“EDC”).

On June 26, 2012, the Company amended its capacity purchase agreement (“CPA”) between Chautauqua Airlines, its 50-seat subsidiary, and Continental Airlines. The amended terms of the CPA provide for an extension of service, and the operation of an additional four E145 aircraft through August 2014. Under the amended agreement, Chautauqua will operate a total of 12 aircraft by September 2012.

On July 25, 2012, the Company reached an agreement in principle to sell five E190 aircraft to US Airways. The sale of the aircraft is subject to final documentation. If completed, the first two aircraft would be scheduled for delivery in the fourth quarter of 2012, with the remaining three to be delivered in early 2013.

Balance Sheet and Liquidity
The Company’s total cash balance increased $39.7 million to $410.4 million as of June 30, 2012, compared to Dec. 31, 2011. Restricted cash increased $78.7 million, to $230.1 million, from Dec. 31, 2011. The Company’s unrestricted cash balance decreased $39.0 million, to $180.3 million, from Dec. 31, 2011. A condensed cash flow statement has been provided in the tables section of this release.

The Company’s debt decreased to $2.25 billion as of June 30, 2012, compared to $2.36 billion at Dec. 31, 2011. As of June 30, 2012, approximately 85% of the total 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 6.0% discount factor, the present value of these lease obligations was approximately $1.12 billion and $1.20 billion as of June 30, 2012 and Dec. 31, 2011, respectively.

Copyright Photo: Brian McDonough. Republic is now expecting to spin off Frontier Airlines in the first half of 2013. Frontier Airlines’ Airbus A320-214 N211FR (msn 4688) completes its river approach into Washington’s Reagan National Airport (DCA).

Frontier 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.

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

Republic Airways reports potential buyers for Frontier Airlines

Frontier Airlines (2nd) Airbus A319-111 N919FR (msn 1980) FLL (Bruce Drum), originally uploaded by Airliners Gallery.

Republic Airways Holdings (Indianapolis) has announced some potential buyers have approached Republic about possibly buying subsidiary Frontier Airlines (2nd) (Denver). According to this article by Bloomberg Business week, Republic has not yet decided to sell or spin it off to the stockholders. Republic is also set to hire a consulting firm to help them with a decision. Republic did say it is unlikely they will sell Frontier to another ultra low-fare carrier like Allegiant or Spirit.

Read the full article: CLICK HERE

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Frontier (2nd) Slide Show: CLICK HERE

Route Map:

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Republic names David Siegel as the new CEO of Frontier Airlines

Frontier Airlines (2nd) Denver International Airport (DEN) Hub (Bruce Drum), originally uploaded by Airliners Gallery.

Republic Airways Holdings (Indianapolis) has announced that David Siegel will become the new CEO, President, and interim Chief Operating Officer of Frontier Airlines (2nd) (Denver), a wholly owned subsidiary of Republic Airways Holdings, Inc.

Siegel’s appointment is another step towards Republic’s goal of making Frontier Airlines a viable, strong and independent business. Siegel and the entire Frontier executive team will be based at Frontier’s headquarters in Denver, Colorado.

Republic is re-inventing Frontier Airlines as an Ultra Low-Cost Carrier which it hopes to sell off.

According to the release, Siegel comes to Frontier with a wealth of relevant CEO experience. Siegel previously served as CEO of XOJET, gategroup, US Airways and Avis Budget, in addition to other key leadership roles in the airline industry.

Siegel served as lead independent director on the Republic Airways (RAH) Board of Directors and will give up that role, but will remain on the board in this new position.

Republic also announced the addition of new senior officers for Frontier’s finance and commercial team, among other changes in the executive leadership team.

Robert Ashcroft has joined Frontier as Senior Vice President, Finance. Ashcroft will work closely with Siegel and Bedford in the project of moving Frontier towards independence, as well as defining opportunities to ensure profitable growth for the Company. Ashcroft has an unusually diverse background encompassing finance, planning and IT. Most recently he was at Allegiant Travel Company overseeing network and capacity planning, scheduling, pricing and investor relations.

Daniel Shurz has been promoted to the role of Senior Vice President, Commercial for Frontier and will have responsibility for all commercial activities, including network planning, pricing and revenue management, marketing, product and brand definition. Daniel joined Frontier as Vice President of Strategy and Planning in 2009.

Greg Aretakis is assuming an expanded role as Vice President of Network and Revenue Management, adding responsibility for scheduling and planning, sales and distribution to his current portfolio. Greg previously served as the Company’s Vice President of Revenue Production.

Dan Krause has been promoted to Vice President of Marketing and Customer Experience for Frontier. Dan has been with Frontier since 2004 and most recently served as Senior Director, Commercial Strategy and Customer Experience.

Frontier Slide Show: CLICK HERE

Copyright Photo: Bruce Drum. Frontier operates mainly from Concourse A at Denver International Airport (DEN). Oddly the Airbus A318s (with their taller tails) cannot taxi under the pedestrian overpass (left) connecting the concourses with the main terminal.

Republic Airways confirms order for 80 Airbus A320neo Family aircraft

Frontier Airlines (2nd) Airbus A319-111 N929FR (msn 2240) FLL (Bruce Drum), originally uploaded by Airliners Gallery.

Republic Airways Holdings Inc. (Indianapolis), the parent of Frontier Airlines (2nd), today announced it has confirmed its order with Airbus to purchase 60 A320neo (New Engine Option) and 20 A319neo aircraft. Republic had previously signed a letter of intent (LOI) for the purchase in mid-June.

The aircraft, which will be powered by CFM’s LEAP-X engines, will be flown by Republic’s Frontier Airlines subsidiary. Frontier currently operates 59 Airbus A318, A319 and A320 aircraft.

Republic is making Frontier as attractive as it can to attract potential buyers as it seeks to separate the Frontier branded flying from its traditional contract flying for others.

Read the full story from Bloomberg Businessweek: CLICK HERE

Frontier Slide Show: CLICK HERE

Republic Airways Holdings remains profitable in the third quarter

Frontier Airlines (2nd)-Republic Airlines (2nd) Embraer ERJ 190-100 IGW N162HL (msn 19000231) LAX (Michael B. Ing), originally uploaded by Airliners Gallery.

Republic Airways Holdings (Indianapolis) on a GAAP basis, reported net income of $9.0 million, or $0.18 per diluted share, for the quarter ended September 2011, compared to net income of $21.2 million, or $0.58 per diluted share, for the same period last year.

On an ex-item basis, Republic is reporting net income of $20.4 million, or $0.40 per diluted share, compared to an ex-item net income of $25.9 million, or $0.70 per diluted share, for the three month periods ended September 2011 and 2010, respectively.

Republic Airways Holdings Inc. is an airline holding company that owns Chautauqua Airlines, Frontier Airlines (2nd), Republic Airlines (2nd) and Shuttle America

The Company’s branded business segment includes all operations flown as Frontier Airlines and Frontier Express. Total branded revenues increased 9.0% to $485.9 million for the quarter, compared to $445.9 million for the same period in 2010. Capacity on Frontier, as measured by ASMs, was down 0.9% from the prior year’s third quarter. Load factor for the quarter was a record 89.7%, which was an increase of 2.3 points from the third quarter of 2010. Total revenue per ASM (TRASM) was 12.26¢, up 10.0% from the same quarter in 2010. For the quarter ended September 2011, Frontier posted ex-items pre-tax income of $15.3 million compared to $19.4 million for the quarter ended September 2010.

The unit cost for Frontier, excluding fuel, was 7.23¢ for the quarter, a 0.8% increase from 7.17¢ for the same metric for the third quarter of 2010. The unit cost in the current quarter was negatively impacted by integration and fleet transition expenses as well as the July hailstorm in Denver, which reduced ASMs and increased expenses. Also, the current quarter’s results include only limited benefit from our restructuring efforts.

Fuel costs for Frontier were $196.5 million for the quarter. The fuel cost per gallon, including into-plane taxes and fees, increased 45.7% to $3.38 for the third quarter of 2011 compared to $2.32 for the prior year’s third quarter. This price increase resulted in $61.6 million of additional fuel expense in the third quarter of 2011, as compared to the third quarter of 2010. The third quarter 2011 result includes a mark-to-market loss on fuel hedges of $5.0 million, or $0.09 per gallon. The Company realized gains of $1.2 million, or $0.02 per gallon for hedges that were settled during the quarter. The Company has hedged approximately 25% of Frontier’s fourth quarter fuel consumption and currently does not have any hedge positions for 2012.

On July 13, a severe hailstorm occurred at the Denver International Airport, damaging 22 aircraft that operate on behalf of Frontier. In the following days, Frontier cancelled approximately 250 flights while the aircraft were being repaired. The Company accommodated affected passengers on other airlines and contracted with other carriers to operate flights on behalf of Frontier. On July 23, Frontier resumed its full flight schedule. The Company estimates that its pre-tax income on Frontier was negatively impacted by approximately $10.0 million, including the insurance deductible, in the third quarter due to the hailstorm.

In May 2011, the Company announced its program to restructure Frontier to reduce costs, improve profitability and ensure the viability of the carrier. Throughout the restructuring of Frontier, the Company has emphasized our plan to increase the seat density operating within our branded business. In May 2011, when the Company unveiled the plan, we operated 37 aircraft with 76 seats or less. By May 2012, the Company expects to have approximately five such aircraft in operation for Frontier. The Company believes these fleet adjustments, combined with other restructuring efforts, will greatly improve the unit cost and financial performance of Frontier in 2012.

Frontier branded aircraft with 99 or more seats, which are expected to produce more than 95% of Frontier’s capacity in 2012, had an ex-item, ex-fuel operating unit cost of 6.31¢ in the third quarter of 2011 and 6.54¢ for the nine months ended Sept. 30, 2011.

As of November 7, 2011, the Company has finalized agreements with its A319 aircraft lessors that will provide for an annual reduction in lease expense of more than $26 million in 2012. These agreements also provide for the return of four A319 aircraft during the first quarter of 2012.

The Company has finalized its agreement with Airbus to purchase 80 A319/320 New Engine Option (NEO) aircraft. The aircraft will be powered by CFM International, Inc. (“CFM”) LEAP-x engines. These aircraft will be operated by Frontier and are expected to be placed into service beginning in the second half of 2016.

Frontier-Republic Slide Show: CLICK HERE

Republic Airways Holdings loses $14.9 million in the second quarter

Frontier Airlines (2nd)-Republic Airlines (2nd) Embraer ERJ 170-100SE N872RW (msn 17000143) SFO (Mark Durbin), originally uploaded by Airliners Gallery.

Republic Airways Holdings (Indianapolis) reported operating revenues of $739.7 million for the quarter ended June 30, 2011, an increase of 8.3%, compared to $683.3 million for the same period last year. The increase in revenues is primarily due to a 10.6% increase in Frontier Airlines’ unit revenues. On a GAAP basis, the Company reported a net loss of $14.9 million, or $0.31 per diluted share, for the quarter ended June 30, 2011, compared to net income of $2.6 million, or $0.08 per diluted share, for the same period last year.

The total operational fleet of all subsidiary airlines increased from March 31, 2011, by two aircraft to 282 aircraft as of June 30, 2011. The Company increased its Frontier Airbus fleet by leasing five additional A320 aircraft during the quarter. Also, the Company returned two Embraer ERJ 145 aircraft to the lessor and sold one Airbus A318 aircraft.

By the end of September 2011, the Company expects to have transitioned all 14 Republic Airlines (2nd) Embraer ERJ 170 aircraft from its Frontier operation into fixed-fee service on behalf of Delta Air Lines. In order to backfill a portion of the capacity vacated by these aircraft, the Company expects to place into service for Frontier five of the seven Chautauqua Airlines ERJ 145 aircraft being removed from the Continental Express fixed-fee service during 2011. The other two ERJ 145 aircraft removed from Continental were returned to the lessor in the second quarter. The Company also expects to take delivery of six Embraer ERJ 190 aircraft beginning in September. Those aircraft are expected to be placed into the Frontier operation by January 2012.

Frontier Airlines-Republic Airlines Slide Show: CLICK HERE