Frontier Airlines

Republic Airways profitable but down 57.5%

While its peers posted losses, Republic Airways Holdings managed a USD9 million profit on a 7.9% increase in operating revenues to USD767.9 million during the third quarter, despite struggles with its branded division, Frontier, which posted a USD4 million GAAP loss.

Frontier was the company’s answer to revenue diversification in the changing regional airline space even as peers SkyWest and Pinnacle sought increased diversification from adding new major-carrier partners to their capacity purchase portfolios. While Frontier has been troubled since its 2009 acquisition and integration with Midwest Airlines, CEO Bryan Bedford painted a promising future for the division.

Frontier cuts capacity at Milwaukee, Kansas City

As part of its restructuring plan, Frontier is cutting Milwaukee and Kansas City capacity effective 01-Nov-2011 resulting in 213 layoffs at the airport and eliminating six destinations out of Milwaukee.

Frontier has been clawing its way out of bankruptcy while combining operations with merger partner Midwest Airlines, and is now in the middle of a USD120 million cost-cutting restructure that includes capacity and employee cuts. The story is told with the impact on its Denver market where it is competing with Southwest/AirTran as well as United.

Frontier drags on Republic as it prepared to reveal restructuring plan for the entire company

Set for its third quarter earnings call next week, Republic Airways Holdings (RJET) will be presenting its strategy not only for its ailing branded subsidiary, Frontier, but for its three capacity purchase agreement (CPA) subsidiaries.

It is following both SkyWest and Pinnacle in restructuring the company as the result of changes in CPA business imposed by mainline partners. It, too, is feeling the strain and, as with SkyWest and Pinnacle, is in talks with partners to increase the remuneration for its 50-seat aircraft in CPA operations. CEO Bryan Bedford echoed SkyWest in citing rising maintenance costs but added lease rates were now more than the aircraft was worth given the market lease rates for the type.

Republic reports double-digit 2Q loss with 631% swing

Once the analysts’ darling and a top performer in the regional airline industry, Republic’s fortunes have fallen dramatically since its acquisition of Frontier and Midwest and that is reflected in its second quarter earnings when it posted a USD14.9 million net loss, a 631.1% swing from the USD2.6 million profit earned in the previous corresponding quarter. It joins just American in posting losses for the quarter. The results only served to exacerbate the USD55 million lost in the first quarter.