Many US airlines pledge allegiance to Republic Airways. The airline holding company's subsidiaries Chautauqua Airlines, Republic Airlines, Shuttle America, and Frontier Airlines offer passenger flight service to major airports and smaller markets, as well as regional service under code-sharing agreements with American, Continental, Delta, United, and US Airways. (Code-sharing allows airlines to sell tickets on one another's flights and extend their network.) Republic carriers serve more than 130 cities in 46 US states, the Bahamas, Canada, Costa Rica, the Dominican Republic, Jamaica, Mexico, and Turks and Caicos. The company maintains a fleet of some 270 Embraer regional jets and Airbus narrow-body jets.
The acquisitions of Frontier and Midwest Air (which was integrated into Frontier) in 2009 signaled a shift in Republic's focus to larger aircraft that optimizes asset use and a move to diversify its revenue stream between fixed-fee regional jet operations and its branded passenger service. But high fuel costs that put more of a strain on mainline carriers like Frontier gave Republic second thoughts about acquiring it. In late 2011 Republic announced that it would sell or spin off Frontier and concentrate on feeder flights for major airlines. The feeder market is better able to weather higher fuel costs because its clients -- the major airlines -- cover them.
But, even with high fuel prices, Frontier rapidly expanded its seasonal nonstop flights to attract more passenger traffic. In mid-2011 it also undertook a $120 million restructuring program. Republic won pay and benefit-concessions from pilots and flight attendants and made significant cuts to operations. The company is pursuing new financial alternatives to buoy business, as well.
Republic Airways is also overseeing a restructuring at Chautauqua Airlines that it hopes will generate some $60 million in operating improvements.
Republic Airways reported revenue of $2.9 billion in 2011, up 8% from 2010 (which itself was up more than 60% from the prior year). The increase is a result of sales growth from its Frontier Airlines unit.
Net income fell precipitously, however, from a loss of $14 million in 2010 to a loss of more than $150 million in 2011 as fuel expense rose by a third and the company took an impairment charge related to its aircraft of $191 million.
Investment firm Donald Smith & Co. owns 10% of Republic Airways. – less