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Republic Post Q1 Profit - $0.3mil Net  
User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Posted (1 year 4 months 4 days 20 hours ago) and read 3915 times:

Barely, but its a profit.

Republic Airways Holdings reported first quarter 2013 net income of $0.3 million, compared to a net loss of $7.1 million in 2012. This was the first time in 4-years RJET managed a profit in Q1.

Frontier's portion however posted a pre-tax loss of $20.1 million compared to a loss of $21.6mil in 2012. They recorded a $5.9 million charge on return cost in 5 Airbus aircraft during the quarter.

Press release:
http://finance.yahoo.com/news/republ...gs-reports-improved-234600675.html

=


From the desert to the sea, to all of Southern California
14 replies: All unread, jump to last
 
User currently offlineRaddek From United States of America, joined Feb 2013, 129 posts, RR: 0
Reply 1, posted (1 year 4 months 4 days 20 hours ago) and read 3888 times:
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Interesting that Republic was still able to pull a profit in the slowest quarter of the year for airlines, even when they have that money bleeding operation of F9 bogging their profits down.

I hope poor Republic can just do a fire-sale and just get rid of this F9 experiment and get back on track with what their business model was before that has been profitable.


User currently offlinemariner From New Zealand, joined Nov 2001, 25170 posts, RR: 85
Reply 2, posted (1 year 4 months 4 days 19 hours ago) and read 3715 times:
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Quoting Raddek (Reply 1):
I hope poor Republic can just do a fire-sale and just get rid of this F9 experiment and get back on track with what their business model was before that has been profitable.

The Frontier loss for Q1 was almost exactly what they predicted Frontier would be in the last conference call - "a loss only slightly less than last year's Q1".

They also said they are expecting Frontier to be full year profitable, as happened last year.

mariner

[Edited 2013-04-29 18:26:41]


aeternum nauta
User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Reply 3, posted (1 year 4 months 4 days 11 hours ago) and read 3301 times:

Yes good on improved Q1 2013 results for RJET, and yes shame on the F9 loss albeit it was certainly expected as Mariner stated.

I do wonder however why F9 saw its cost rise so much in the quarter? Even with a shift to larger aircraft its ex-fuel CASM was up to 8.08 cents - quite far from ULCC range of 5-6 cents. F9 also it saw its operation margin slip slightly for the worse this year -6.5% from -6.3% last year on about a 9% drop on total revenues(less flying).

Lets see what they have to say at the earnings call.



From the desert to the sea, to all of Southern California
User currently offlinemariner From New Zealand, joined Nov 2001, 25170 posts, RR: 85
Reply 4, posted (1 year 4 months 4 days 10 hours ago) and read 3251 times:
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Quoting LAXintl (Reply 3):
I do wonder however why F9 saw its cost rise so much in the quarter?

They dealt with that on the last cc, too, and - again - predicted exactly this.

A lot of it, including the revenue, has to do with the reduction in fleet size and the costs of that - five Airbus aircraft were gone from the fleet in Q1. Aircraft return costs were $6 million.

Another A318 left in April and the last leaves in August, but now aircraft are starting to come in, so the fleet is stabilizing.

mariner

[Edited 2013-04-30 03:46:22]


aeternum nauta
User currently offlinejfklganyc From United States of America, joined Jan 2004, 3451 posts, RR: 5
Reply 5, posted (1 year 4 months 4 days 6 hours ago) and read 3090 times:

Quoting Raddek (Reply 1):
I hope poor Republic can just do a fire-sale and just get rid of this F9 experiment and get back on track with what their business model was before that has been profitable.

Poor Republic, led by BB, walked right into this mess. Still one of the most puzzling moves in aviation history. I am not sure what he expected or was trying to do.


User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Reply 6, posted (1 year 4 months 3 days 22 hours ago) and read 2386 times:

Earnings call notes


FINANCIAL

o Net income of $0.3 million
o Republic revenues down 8.6% to 324.7mil; Frontier down 9.2% to 310.9mil
o Frontier pre tax loss - $20.1. Took $6mil charge for returned Airbii
o Frontier hedged abut 60% for Q2
o Republic segment producing pre-tax margin of 6.5-7.5%
o Cash on hand $426mil of which $246 unrestricted.


TRAFFIC / NETWORK

o Pleased with Chautauqua restructuring, and network changes at Frontier
o Frontier ASMs down 12.6% due smaller fleet
o CASM up at Frontier 5.2% to 8.08 cents partly due Airbus return charge, expect more CASM headwinds in Q2 - up 4-7%
o Record LF at F9 - 87.8%
o Frontier Denver networks revised schedule structure to focus on local markets - seeing improved traffic mix
o Industry capacity more favorable in DEN now.
o F9 noted some yield softness in April, but good volume especially for May & June

FLEET

o 5 Airbus leases ended in Q1 - left fleet 56
o Expect 18 E175s in 2013 for AA. 1st one arrives in July, in service August.
o 18 Q400s on the way into UAX system for total of 32 - on 8-year agreement.
o 9 E145s coming out of the US system
o Down to 5 E190s - 4 of which with F9

OTHER

o Company focus on 3 things 1) reaching labor agreements 2) completing Frontier sales transaction 3) growing fixed fee business
o Continue to work towards "seperation process" for Frontier - June/July timeframe assuming can reach a satisfactory agreement. Will continue to operate as subsidiary and carry out business plans in the mean time.
o Expect further market opportunities to become available in 2014-2015. For example UAX E175 flying.
o Sequestration caused some entroute delays at F9, and issues at ORD and LGA for UA and DL flying. - about 40-50 cancels.

=



From the desert to the sea, to all of Southern California
User currently offlineF9animal From United States of America, joined Dec 2004, 5029 posts, RR: 28
Reply 7, posted (1 year 4 months 3 days 19 hours ago) and read 2053 times:

I have to say, BB has saved F9 from likely failure. If they sell F9 to a private investor, I am concerned for its future. F9 wants to emulate Spirit, but Spirit just barely squeezed a tiny profit of over $30 Million this last quarter. Unless F9 can generate profits similar in the 1st quarter, me thinks there is still much more work to be done. I wish Bedford had done the YX/F9 deal much differently. He royally fudged up, and bit off way more than he could chew.


I Am A Different Animal!!
User currently offlinemariner From New Zealand, joined Nov 2001, 25170 posts, RR: 85
Reply 8, posted (1 year 4 months 3 days 19 hours ago) and read 2027 times:
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Quoting LAXintl (Reply 6):
o F9 noted some yield softness in April, but good volume especially for May & June

On the Frontier side, the guidance was interesting - they expect a profit similar to Q2 2012 ($20 million last year).

I think CEO Siegel has done a remarkable job so far. It's a pity he couldn't break the Curse of Q1 - but I can't recall the last time Frontier made more than a million or so profit in Q1 and that was a long, long time ago.

Hopefully, the new concentration on north/south winter flying - TTN/ILG-Florida and more Apple - will go some way to changing that.

mariner



aeternum nauta
User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Reply 9, posted (1 year 4 months 3 days 19 hours ago) and read 2010 times:

Quoting F9animal (Reply 7):
but Spirit just barely squeezed a tiny profit of over $30 Million this last quarter.

Tiny  

They had extremely strong profit margin of 14.4% and forecast an EBITDAR margin 25% to 27% for the year !

Hardly tiny !



From the desert to the sea, to all of Southern California
User currently offlineF9animal From United States of America, joined Dec 2004, 5029 posts, RR: 28
Reply 10, posted (1 year 4 months 3 days 18 hours ago) and read 1954 times:

LAXIntl!!   I hope you know I was being a total animal tail when I said that! LOL! Read what I said a few times!!  


I Am A Different Animal!!
User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Reply 11, posted (1 year 4 months 3 days 5 hours ago) and read 1756 times:

Quoting F9animal (Reply 10):
I hope you know I was being a total animal tail when I said that! LOL! Read what I said a few times!!

Ha ha --

Quoting mariner (Reply 4):
They dealt with that on the last cc, too, and - again - predicted exactly this.

A lot of it, including the revenue, has to do with the reduction in fleet size and the costs of that - five Airbus aircraft were gone from the fleet in Q1. Aircraft return costs were $6 million.

Another A318 left in April and the last leaves in August, but now aircraft are starting to come in, so the fleet is stabilizing.

Well they did say F9 would see more CASM "headwinds" in Q2. Again not very positive, fleet transitions or not.

To be firmly positioned in the ULCC field, F9 needs almost a 25% trim in its ex-CASM down to the 6 cent range. They are very far from what today.

I worry that unless the underlying cost base is adjusted enough, just making shifts in the network becomes half steps in a much larger needed revamp.



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 25193 posts, RR: 48
Reply 12, posted (1 year 4 months 3 days 4 hours ago) and read 1690 times:

I saw in the UA E175 order thread, that ExpressJet COO said they were not expecting the fly the aircraft for UA.
So maybe RAH indeed will have a good chance to get this business.



From the desert to the sea, to all of Southern California
User currently offlinemariner From New Zealand, joined Nov 2001, 25170 posts, RR: 85
Reply 13, posted (1 year 4 months 3 days 2 hours ago) and read 1621 times:
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Quoting LAXintl (Reply 11):
To be firmly positioned in the ULCC field, F9 needs almost a 25% trim in its ex-CASM down to the 6 cent range. They are very far from what today.

Oh, I agree. And while the fleet is a considerable issue, it is surely not the only one. But the figures quoited in the cc as to the difference the fleet issue would have made to CASM were - I thought - very interesting.

mariner



aeternum nauta
User currently offlinen7371f From United States of America, joined Jul 2008, 1723 posts, RR: 12
Reply 14, posted (1 year 4 months 2 days 17 hours ago) and read 1494 times:
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Quoting LAXintl (Reply 11):
Well they did say F9 would see more CASM "headwinds" in Q2. Again not very positive, fleet transitions or not.

To be firmly positioned in the ULCC field, F9 needs almost a 25% trim in its ex-CASM down to the 6 cent range. They are very far from what today.

I worry that unless the underlying cost base is adjusted enough, just making shifts in the network becomes half steps in a much larger needed revamp.

And much of this is due to the Trenton and Wilmington experiments. The flying is more short-haul than Denver and that's increasing CASM; someone from Republic even alluded to it being a factor on the call. Fly longer routes - spread out the cost further.

This is a fair criticism of the new experiment. Maybe in the longer term F9 can drive a premium with these new focus cities but for now much of the flying is higher cost strictly on a CASM basis.

You don't see Spirit adding a lot of less than 1k mileage new routes - and Southwest is dropping under 250 miles routes like flies.


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