Republic Airways Holdings Announces Third Quarter 2009 Results

Third Quarter Financial Highlights

Total fixed-fee service revenues declined $99.7 million from prior year's third quarter. However, excluding fuel reimbursement from our partners, fixed-fee service revenues decreased $17.6 million, or 6.2% for the third quarter of 2009 due to a reduction in block hour activity, which is the result of removing 22 aircraft from operations under our fixed-fee agreement with Continental. Seventeen of the aircraft removed were returned to the lessor, three were subleased offshore and two are expected to be subleased offshore in the first quarter of 2010. Income before taxes on the fixed-fee operations was $20.4 million for the quarter. Fixed-fee operating cost per ASM (CASM), including interest expense but excluding fuel, increased to 7.61c for the third quarter of 2009, from 7.57c for the same quarter of 2008.

Total revenues flown on our branded airlines were $73.9 million for the quarter. Load factor was 78.2% for the quarter and total revenue per ASM (TRASM) was 12.83c. The branded operations posted a loss before taxes of $15.9 million for the third quarter. Operating cost per ASM (CASM), excluding fuel, was 10.64c for the third quarter of 2009.

During the quarter, the Company added five E190 and five E135 aircraft on short-term leases. These aircraft will be operated in the Company's branded business replacing B717 and CRJ aircraft. At September 30, 2009, the Company's fleet consisted of 228 aircraft, including six B717 aircraft that are expected to be returned to the lessor by the end of 2009.

Balance Sheet Information

At September 30, 2009 the Company had $148.7 million in cash, of which $63.2 million was restricted. This compares to $130.9 million in cash, of which $1.2 million was restricted as of December 31, 2008. The Company's long-term debt decreased to $2.23 billion as of September 30, 2009, compared to $2.28 billion at December 31, 2008. As of September 30, 2009 all of the Company's aircraft-related debt is at fixed interest rates and is secured by the aircraft. 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 sheets. At a 7.0% discount factor, the present value of these lease obligations was approximately $690 million as of September 30, 2009 compared to approximately $685 million reported as of December 31, 2008.

Business Developments

On July 31, 2009 the Company completed its acquisition of Milwaukee-based Midwest Airlines from TPG Capital, a Ft. Worth, Texas-based private equity firm. Republic paid TPG $6 million in cash and has issued a $25 million five-year, interest-only note, which may be converted to RJET stock at $10 per share.

On August 13, 2009 the Company announced that it had been declared the winning bidder in the auction to acquire Frontier Airlines. Pursuant to the investment agreement, Republic agreed to purchase 100% of the stock of Frontier Holdings upon its emergence from bankruptcy for $108.75 million. On October 1, 2009 the Company completed its acquisition of Frontier.

On October 14, 2009 the Company announced that it will acquire 10 Embraer 190AR jets from US Airways. Republic applied the full balance of its $35 million unsecured loan to US Airways toward the purchase of the aircraft and assumed the existing variable-rate debt on the aircraft. The aircraft are expected to enter into branded service between November 2009 and the second quarter of 2010.

On October 16, 2009 the Company entered into an agreement with Mesa Air Group, Inc. ("Mesa") to form Mo-Go, LLC, a new business partnership that will provide inter-island commercial airlines services in Hawaii. Pursuant to the Agreement, Mesa now owns 75% of Mo-Go and the former Mokulele shareholders own the remaining 25%. Additionally, the partners have agreed to capitalize the new business with up to $6.0 million, $1.5 million of which would be funded by Mokulele's former shareholders. Republic, which was the majority shareholder of Mokulele, cancelled Mokulele's $3.1 million outstanding debt to Republic, net of surrendered aircraft deposits. The Company expects to record a non-cash charge of approximately $5-$6 million in the 4th quarter to deconsolidate its investment in Mokulele.

Corporate Information

Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that owns Chautauqua Airlines, Frontier Airlines, Lynx Aviation, Midwest Airlines, Republic Airlines and Shuttle America, collectively "the airlines." The airlines offer scheduled passenger service on approximately 1,600 flights daily to 118 cities in 43 states, Canada, and Mexico under branded operations at Frontier and Midwest, and through fixed-fee airline services agreements with five major U.S. airlines. The fixed-fee flights are operated under an airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, United Express, and US Airways Express. The airlines currently employ over 11,000 aviation professionals and operate 286 aircraft.

The Company will conduct a telephone briefing to discuss its third quarter results tomorrow, November 5th, at 10:00 a.m. EST. For those wishing to participate please call 866-804-6925 and for international calls please dial 857-350-1671, the passcode is 76791934. A live Webcast 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)
 Financial Highlights                                               Three Months Ended September 30,      Nine Months Ended September 30,
                                                                    2009           2008           Change  2009            2008            Change
 OPERATING REVENUES
 Fixed-fee service                                                  $    281,415   $    381,121   -26.2%  $    913,524    $    1,127,681  -19.0%
 Passenger service                                                       64,876         -         NM           70,388          -          NM
 Cargo and other                                                         13,336         4,127     223.1%       20,982          12,823     63.6%
 Total operating revenues                                                359,627        385,248   -6.7%        1,004,894       1,140,504  -11.9%
 OPERATING EXPENSES
 Wages and benefits                                                      76,864         61,898    24.2%        207,446         190,627    8.8%
 Aircraft fuel                                                           39,477         97,613    -59.6%       100,179         279,974    -64.2%
 Landing fees and airport rents                                          20,026         15,340    30.5%        55,434          45,085     23.0%
 Aircraft and engine rent                                                33,592         33,422    0.5%         95,400          101,319    -5.8%
 Maintenance and repair                                                  58,852         45,630    29.0%        151,487         124,723    21.5%
 Insurance and taxes                                                     6,648          6,255     6.3%         19,930          18,295     8.9%
 Depreciation and amortization                                           38,398         35,666    7.7%         112,002         99,149     13.0%
 Promotion and sales                                                     5,341          -         NM           5,341           -          NM
 Goodwill Impairment                                                     -              -         0.0%         13,335          -          NM
 Other                                                                   43,834         29,220    50.0%        109,340         89,553     22.1%
 Total operating expenses                                                323,032        325,044   -0.6%        869,894         948,725    -8.3%
 OPERATING INCOME                                                        36,595         60,204    -39.2%       135,000         191,779    -29.6%
 OTHER INCOME (EXPENSE)
 Interest expense                                                        (34,862)       (33,762)  3.3%         (105,246)       (96,572)   9.0%
 Other income                                                            2,779          1,280     117.1%       10,418          11,167     -6.7%
 Total other income (expense)                                            (32,083)       (32,482)  -1.2%        (94,827)        (85,405)   11.0%
 INCOME BEFORE INCOME TAXES                                              4,512          27,722    -83.7%       40,172          106,374    -62.2%
 INCOME TAX EXPENSE                                                      1,864          10,715    -82.6%       23,894          40,786     -41.4%
 NET INCOME (INCLUDING NONCONTROLLING INTERESTS)                         2,648          17,007    -84.4%       16,278          65,588     -75.2%
 Net loss (income) attributable to noncontrolling interest in MFSI       (623)          -         NM           (3,270)         -          NM
 NET INCOME OF THE COMPANY                                               3,271          17,007    -80.8%       19,548          65,588     -70.2%
 PER SHARE, BASIC                                                   $    0.09      $    0.50      -82.0%  $    0.57       $    1.87       -69.5%
 PER SHARE, DILUTED                                                 $    0.09      $    0.50      -82.0%  $    0.57       $    1.86       -69.4%
 Weighted Average Common Shares
 Basic                                                                   34,449         34,169    0.8%         34,449          35,084     -1.8%
 Diluted                                                                 34,529         34,169    1.1%         34,462          35,196     -2.1%

 Unaudited Operating Highlights
 Operating Highlights - Fixed Fee                                    Three Months Ended                     Nine Months Ended
                                                                     September 30,                          September 30,
                                                                     2009           2008           Change   2009            2008            Change
 Fixed-fee service revenues, excluding fuel (000)                    $   265,899    $   283,508    -6.2%    $   839,473     $   847,707     -1.0%
 Passengers carried                                                      4,881,571      4,884,439  -0.1%        14,365,238      14,418,453  -0.4%
 Revenue passenger miles (000)                                           2,510,784      2,456,925  2.2%         7,359,971       7,394,022   -0.5%
 Available seat miles (000)                                              3,242,019      3,290,132  -1.5%        9,930,228       9,957,376   -0.3%
 Passenger load factor                                                   77.4%          74.7%      2.7 pts      74.1%           74.3%       -0.2 pts
 Cost per available seat mile, including interest expense (cents)        8.09           10.54      -23.2%       8.55            10.26       -16.7%
 Fuel cost per available seat mile (cents)                               0.48           2.97       -83.8%       0.75            2.81        -73.3%
 Cost per available seat mile, including interest and excluding fuel     7.61           7.57       0.5%         7.80            7.45        4.7%
 expense (cents)
 Operating Aircraft at period end: ³
 37-50 seat jets                                                         79             101        -21.8%       79              101         -21.8%
 70-86 seat jets                                                         113            119        -5.0%        113             119         -5.0%
 Block hours                                                             165,779        183,293    -9.6%        518,255         565,208     -8.3%
 Departures                                                              97,897         107,072    -8.6%        304,905         321,268     -5.1%
 Average daily utilization of each aircraft (hours)                      9.4            10.0       -6.0%        9.8             10.2        -3.9%
 Average length of aircraft flight (miles)                               500            496        0.8%         495             508         -2.6%
 Average seat density                                                    66             62         6.5%         66              61          8.2%

 Operating Highlights - Branded                                         Three Months   Nine Months
                                                                        Ended          Ended
                                                                        September 30,  September 30,
                                                                        2009           2009
 Total revenues                                                         73,892         79,904
 Passengers carried                                                     669,901        757,933
 Revenue passenger miles (000)                                          450,437        462,598
 Available seat miles (000)                                             575,785        607,183
 Passenger load factor                                                  78.2%          76.2%
 Total revenue per ASM (cents)                                          12.83          13.16
 Passenger revenue per ASM (cents)                                      11.27          11.59
 Cost per available seat mile (cents)                                   14.78          15.67
 Fuel cost per available seat mile (cents)                              4.14           4.26
 Cost per available seat mile, excluding fuel expense (cents)           10.64          11.41
 Operating Aircraft at period end: ³
 37-50 seat jets (including ten aircraft operated by regional partner)  12             12
 70-99 seat jets                                                        25             25
 Block hours                                                            23,346         25,660
 Departures                                                             15,422         18,695
 Average daily utilization of each aircraft (hours)                     10.0           10.0
 Average length of aircraft flight (miles)                              551            476
 Average seat density                                                   68             68

Costs (in all periods) exclude expenses not attributable to either fixed-fee or branded segments (e.g. subleased aircraft and amortization of slots).

Includes Mokulele from April 2009 to September 2009 and Midwest from August and September 2009.

³ Excludes six idle 37-50 seat aircraft and three idle 70-99 seat aircraft.

SOURCE: Republic Airways Holdings Inc.

Republic Airways Holdings 
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