News Release

Printer Friendly Version View printer-friendly version
<< Back
Republic Airways Holdings Announces Third Quarter 2007 Results

INDIANAPOLIS--(BUSINESS WIRE)--Oct. 23, 2007--Republic Airways Holdings Inc. ("the Company") (NASDAQ:RJET) today reported operating revenues of $330.1 million for the quarter ended September 30, 2007, a 7.8% increase, compared to $306.1 million for the same period last year. The Company reported net income of $20.2 million for the quarter ended September 30, 2007, an 8.0% decrease from the $21.9 million reported in the prior year's third quarter. The Company also reported earnings per diluted share of $0.49 for the quarter compared to $0.50 per diluted share for the same period last year.

The primary items of significance affecting the third quarter of 2007 are outlined below.

Third Quarter Highlights

Excluding reimbursement for fuel expense, which is a pass-through cost to our partners, passenger revenues increased 20.2% for the third quarter of 2007. This increase was primarily as a result of a 22.6% increase in available seat miles (ASMs) to 3.0 billion ASMs, up from 2.5 billion ASMs, and an 18.3% increase in block hours. These increases reflect the addition of 21 E170/175 regional jet aircraft placed into fixed-fee service since September 30, 2006 and 24 CRJ-200 regional jet aircraft placed into fixed-fee service during the first nine months of 2007.

Total operating expenses for the third quarter of 2007, including interest expense but excluding fuel charges (which are reimbursable by the Company's partners), of $227.9 million, increased 24.7% from $182.8 million for the same quarter of 2006. Operating cost per ASM (CASM), including interest expense but excluding fuel, increased 1.8% to 7.50 cents compared to the prior year's 7.37 cents.

The impact on pre-tax earnings for transition expenses, which include unreimbursed aircraft costs, increased pilot training expenses, and forgone profits on the Company's reduced scheduled operations during the 3rd quarter, was approximately $7 million for the quarter, which was consistent with the guidance provided by the Company during its second quarter update.

During the quarter the Company took delivery of six new 86-seat E175 aircraft and entered into long-term, fixed rate debt financing arrangements for all six aircraft. The Company also took delivery of two 50-seat CRJ-200 regional jet aircraft on short-term leases which were placed into service with Continental. The Company removed one E145 from its charter operation and subleased the aircraft offshore. At September 30, 2007, the Company's fleet consisted of 211 regional jets including 94 E145 family aircraft, 93 E170/175 aircraft and 24 CRJ-200 aircraft. In addition to 41 regional jets added to the Company's operations in the first nine months of 2007, the Company has also completed the transition of 20 E145s and 7 E170s from existing partners to Continental Airlines and Frontier Airlines, respectively.

On August 22, 2007, the Company amended its Jet Services Agreement with Delta Air Lines, Inc. to provide for the replacement of sixteen, 70-seat E170 aircraft with sixteen, 76-seat E175 aircraft. The new aircraft are expected to be placed into service during the second half of 2008 and the first quarter of 2009.

On August 22, 2007, the Company amended its Jet Services Agreement with United Air Lines, Inc. to provide for the operation of ten additional 70-seat E170 aircraft. The aircraft are expected to be placed into service during the fourth quarter of 2008 and the first quarter of 2009.

On August 28, 2007, the Company announced an authorization to purchase up to $100 million of its common stock. As of September 30, the Company had repurchased approximately 3.3 million shares for $64.3 million.

Future Commitments

The Company expects to take delivery of 7 new E175s in the fourth quarter of 2007 and 27 new E175s during 2008. Additionally, 3 new E175s are scheduled for delivery in the first quarter of 2009. The Company has firm financing commitments in place for 28 of its 37 remaining firm aircraft at competitive interest rates. The Company expects to obtain competitive financing commitments on its remaining firm aircraft.

The Company also maintains options for up to 74 E170/190 aircraft for delivery beginning in March 2009.

Balance Sheet Information

At September 30, 2007 the Company had $183.1 million in cash and cash equivalents compared to $195.5 million as of December 31, 2006. The Company has an aircraft deposit balance of $62.1 million as of September 30, 2007 for future aircraft deliveries and option positions. The Company's long-term debt increased to $1.68 billion as of September 30, 2007, compared to $1.48 billion at December 31, 2006. All of the Company's long-term debt carries fixed interest rates, and is secured by the aircraft. The Company also has significant long-term operating lease obligations. At a 7% discount factor, the present value of these lease obligations was approximately $793 million as of September 30, 2007.

Corporate Information

Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on over 1,200 flights daily to 118 cities in 37 states, Canada, Mexico and Jamaica through airline services agreements with six U.S. airlines. All of the airlines' flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, Frontier Airlines, United Express and US Airways Express. As of September 30, 2007, the airlines employed approximately 4,500 aviation professionals and operated 211 regional jets.

The Company will conduct a telephone briefing to discuss its third quarter results tomorrow, October 24th at 10:30 a.m. EDT. For those wishing to participate please call 800-798-2864 and for international calls please dial 617-614-6206; the pass code is 86274649. A live Web cast of this briefing will also be available online at www.rjet.com - investor relations.

Additional Information

In addition to historical information, this release contains forward-looking statements. Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Republic Airways' beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.


           REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME
     (Dollars and Shares in Thousands, Except per Share Amounts)
                             (Unaudited)


                        Three Months Ended       Nine Months Ended
Financial Highlights      September 30,            September 30,
                     ------------------------ ------------------------
                       2007     2006   Change   2007     2006   Change
OPERATING REVENUES
   Passenger         $325,974 $301,314   8.2% $926,861 $828,920  11.8%
   Other                4,108    4,818 -14.7%   13,977   18,869 -25.9%
                     ------------------------ ------------------------
      Total
       operating
       revenues       330,082  306,132   7.8%  940,838  847,789  11.0%

OPERATING EXPENSES
   Wages and
    benefits           58,187   46,415  25.4%  163,685  130,155  25.8%
   Aircraft fuel       71,682   89,766 -20.1%  216,815  248,426 -12.7%
   Landing fees        14,140   11,382  24.2%   39,376   30,468  29.2%
   Aircraft and
    engine rent        33,706   25,130  34.1%   91,037   69,876  30.3%
   Maintenance and
    repair             36,115   28,953  24.7%   95,601   75,856  26.0%
   Insurance and
    taxes               5,567    4,710  18.2%   14,216   13,980   1.7%
   Depreciation and
    amortization       27,061   23,824  13.6%   77,729   67,322  15.5%
   Other               26,197   19,398  35.1%   75,577   54,675  38.2%
                     ------------------------ ------------------------
      Total
       operating
       expenses       272,655  249,578   9.2%  774,036  690,758  12.1%
                     ------------------------ ------------------------
OPERATING INCOME       57,427   56,554   1.5%  166,802  157,031   6.2%

OTHER INCOME
 (EXPENSE)
   Interest expense   (26,903) (22,942) 17.3%  (78,435) (66,772) 17.5%
   Other income         3,108    2,633  18.0%    9,030    7,247  24.6%
                     ------------------------ ------------------------
      Total other
       income
       (expense)      (23,795) (20,309) 17.2%  (69,405) (59,525) 16.6%

INCOME BEFORE INCOME
 TAXES                 33,632   36,245  -7.2%   97,397   97,506  -0.1%
                     ------------------------ ------------------------

INCOME TAX EXPENSE     13,462   14,313  -5.9%   38,906   38,419   1.3%

                     ------------------------ ------------------------
NET INCOME             20,170   21,932  -8.0%   58,491   59,087  -1.0%
                     ======================== ========================
PER SHARE, BASIC     $   0.50 $   0.52  -3.8% $   1.41 $   1.41   0.0%
PER SHARE, DILUTED   $   0.49 $   0.50  -2.0% $   1.38 $   1.36   1.5%
Weighted Average
 Common Shares
   Basic               40,583   42,205  -3.8%   41,502   41,996  -1.2%
   Diluted             40,868   43,539  -6.1%   42,315   43,297  -2.3%
----------------------------------------------------------------------

Unaudited Operating Highlights

Operating         Three Months Ended           Nine Months Ended
 Highlights          September 30,               September 30,
              --------------------------- ----------------------------
                2007      2006    Change     2007      2006    Change
Passenger
 Revenues,
 excluding
 fuel (000)     254,292   211,548   20.2%    710,046   580,494   22.3%
Passengers
 carried      4,435,108 3,456,979   28.3% 11,820,385 9,340,356   26.6%
Revenue
 passenger
 miles (000)  2,343,771 1,808,115   29.6%  6,248,072 4,918,383   27.0%
Available
 seat miles
 (000)        3,039,510 2,479,659   22.6%  8,293,452 6,702,458   23.7%
Passenger
 load factor      77.1%     72.9% 4.2 pts      75.3%     73.4% 1.9 pts
Cost per
 available
 seat mile,
 including
 interest
 expense
 (cents)           9.86     10.99  -10.3%      10.27     11.30   -9.1%
Fuel cost per
 available
 seat mile
 (cents)           2.36      3.62  -34.8%       2.61      3.71  -29.6%
Cost per
 available
 seat mile,
 excluding
 fuel expense
 (cents)           7.50      7.37    1.8%       7.66      7.60    0.8%
Operating
 Aircraft at
 period end:
37-50 seat
 regional
 jets               118        95   24.2%        118        95   24.2%
70+ seat
 regional
 jets                93        75   24.0%         93        75   24.0%
Block hours     176,623   149,288   18.3%    492,241   407,540   20.8%
Departures      100,168    86,093   16.3%    276,532   234,123   18.1%
Average daily
 aircraft
 utilization
 (hours)           10.3      10.5   -1.9%       10.3      10.3    0.0%
Average
 aircraft
 stage length       523       512    2.1%        522       517    1.0%
CONTACT: Republic Airways Holdings Warren R. Wilkinson, 317-484-6042

SOURCE: Republic Airways Holdings Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Republic Airways Holdings's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the summary of risk factors contained in our earnings release.