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Republic Airways Holdings Reports

The following excerpt is from the company's SEC filing.


financial results

Indianapolis, Indiana (

November 4, 2015

- Republic Airways Holdings Inc. (NASDAQ/NM: RJET) today reported financial results for the

quarter of 2015.

Republic's pre-tax income for the

quarter of 2015 was

$8.3 million

, compared to

$30.5 million

for the prior year's

quarter. Republic's net income for the

$2.9 million

per diluted share compared to prior year net income of

$18.5 million

per diluted share. The effective tax rate of

for the quarter was h igher than the normalized tax rate, primarily due to the impact of miscellaneous non-deductible expenses.

quarter 2015 financial results continued to be negatively impacted by our inability to fully utilize our aircraft due to regulatory changes that created a national pilot shortage which has been uniquely amplified by our ongoing labor dispute. As a result of this pilot labor shortage we operated approximately 6% fewer block hours during the third quarter of 2015 as compared to the third quarter of 2014. The

quarter results were also negatively impacted by fleet transition costs and idled aircraft costs totaling

$7.2 million

associated with our removal of E190 and Q400 aircraft and surplus E145 aircraft," said Republic Airways Holdings Chairman, President and CEO, Bryan Bedford. "The ratification of a new labor agreement with our pilots represents a significant positive step forward for our pilots and our airline and I would like to thank the leadership of the IBT Local 357 for their support through the ratification process. We simply could not move forward without a consensual agreement with our pilots; however, we still face several challenges as we continue our work to rebuild our operation and work to achieve a consensual restructuring with our other stakeholders."

The Company reported the following key metrics for the

months ended

September 30, 2015

, and

Three Months Ended September 30,

Nine Months Ended September 30,


% Increase / Decrease

% Increase/Decrease

(in millions, except as noted with *)

Available seat miles (ASMs)



Block hours (hours)










Operating revenues



Pre-tax income

Pre-tax Margin*

-6.3 pts

-5.6 pts

Diluted earnings per share*


EBITDA margin*

-5.0 pts

-6.1 pts

Operating Revenue Highlights

Operating revenues decreased

$9.2 million

, during the

quarter of 2015 to

$340.5 million

. Fixed-fee service revenue decreased

$9.7 million

$334.0 million

primarily due to a decrease in block hours flown and reduced revenues associated with the non-reimbursed aircraft ownership costs associated with aircraft temporarily removed from revenue service during the

Operating Expense Highlights

Wages and benefits expenses decreased

$1.5 million

, primarily due to lower employee expenses as a result of a decrease in flying levels.

Maintenance and repair expense increased

$5.6 million

, due to an increase in engine limited life part events, coupled with an increase in other engine repair costs.

Depreciation and amortization expense increased

$3.0 million

, due primarily to the increase in the number of owned aircraft.

Other expenses increased

$10.2 million

, primarily due to an increase in reorganization costs, coupled with an increase in costs for fleet transition, professional fees, crew hotels and increased crew training costs.

Balance Sheet and Liquidity Highlights

The Company's unrestricted cash balance increased

$8.9 million

$232.8 million

, from December 31, 2014, due mainly to the $74.0 million draw on the Company's revolving credit facility offset by the investment in new aircraft. A consolidated balance sheet and a condensed statement of cash flows have been included in the tables section of this release.

The Company's debt increased to

$2.40 billion

as of

$2.34 billion

at December 31, 2014, primarily related to the Company purchasing 12 E175 aircraft offset by scheduled principal repayments.

Recent Business Developments

On October 5, 2015, Delta Air Lines Inc. (Delta) filed suit against the Company alleging that the Company was in breach of its contractual obligations under both Delta Connection Agreements. Delta alleges among other things, that Shuttle America breached the Agreements by failing to operate all of Delta's flights, and claims damages. We believe the allegations are unfounded and without merit.

On October 22, 2015, Bombardier Commercial Aircraft (“Bombardier”) delivered a notice to the Company purporting to terminate, effective, October 31, 2015, the Smart Parts Q400 Agreement between the...