Republic narrows 1Q loss to $7.1 million
Published: April 30, 2012
Republic Airways Holdings (RAH), parent of Chautauqua Airlines, Frontier Airlines (F9), Republic Airlines and Shuttle America, posted a net loss of $ 7.1 million in the first quarter 2012, narrowed from a $ 22.4 million net loss in the year-ago period (ATW Daily News, May 4, 2011).
“The [first quarter] result was negatively impacted by expenses for aircraft, which were unassigned as well as pro-rate losses,” CFO Ken Dooley said. “The loss on these sub-optimally deployed aircraft was approximately $ 9 million in total, which was about an $ 8 million improvement from our prior year’s first quarter. The majority of 50-seat aircraft that were operating in pro rate service last year are now unassigned.”
First-quarter operating revenues rose 5.8% year-over-year to $ 697.6 million while expenses increased 2.4% to $ 675.4 million, producing an operating profit of $ 22.2 million, up from the prior period’s $ 600,000 operating loss. Mainline passenger traffic decreased 8.6% to 2.30 billion RPMs on a 7.1% drop in capacity to 3.37 billion ASMs, producing a load factor of 68.3%, down 1.1 points.
The company said it has engaged Seabury Advisors to assist in a comprehensive restructuring effort of Chautauqua Airlines, its loss-making subsidiary that operates 50-seat regional jets.
“Every one of our Chautauqua small jet CPA contracts is actually loss making,” RAH chairman and CEO Bryan Bedford said. “We’re targeting a $ 40 million to $ 60 million annual economic improvement by the start of 2013.”
Dooley said that 14 of the 17 E-170 aircraft, which were flying in pro-rate service a year ago, have been reallocated to Delta CPA flying. “We continue to evaluate the use of the remaining 22 regional aircraft deployed on our Frontier pro-rate operation and we do expect to remove two E-190 aircraft by the end of the summer flying season. Those two aircraft will be returned to their lessors,” he said.