Republic Airways Holdings Inc. · NASDAQ:RJET
Republic Airways — Cowen and Company Global Transportation & Aerospace/Defense Conference 2014
19 slides from Republic Airways's conference presentation, Sep 3, 2014
Slide 1: Republic Airways: Getting Back to Basics
Republic Airways: Getting Back to Basics Cowen and Company Global Transportation & Aerospace/Defense Conference September 3, 2014
Slide 2: Safe harbor disclosure
Safe harbor disclosure 2 Statements in this presentation, as well as oral statements that may be made by officers or directors of Republic Airways Holdings Inc., its advisors, affiliates or subsidiaries (collectively or separately the “Company”), that are not historical fact constitute “forward-look
Slide 3: Big moves to de-risk our model
Big moves to de‐risk our model 5/20/2014 3 2011 – Successfully restructured Frontier Mark-to-market aircraft lease costs Reduced labor costs to better compete with ULCCs Network Improvements provided for outsized RASM gains Returned Frontier to a profitable LCC 2012 – Successfully restructur
Slide 4: Reducing Risks in Our Business Model
Reducing Risks in Our Business Model 4 Talent Risk Business Risk Financial Risk Focus our energy on making good things happen and reduce risk in our model • Invest in our employees and renew our winning employee culture through enhanced employee engagement • Resolve our open pilot labor agreement in
Slide 5: Getting back to basics
Getting back to basics 5 Safe, clean, reliable and cost‐efficient air service for our Partners • An experienced and established management team with 100+ years of combined industry leadership • Corporate objectives aligned with long-term shareholder value • Stable financial performance – Predictable
Slide 6: Our 2014 Corporate Objectives
Our 2014 Corporate Objectives 6 Be the industry‐leading provider of safe, clean, reliable and cost‐efficient air service Renew focus on our guiding principles • Improve employee satisfaction and engagement • Retain our best and brightest talent • Recruit the best talent • Resolve our open labor cont
Slide 7: Gaining Earnings Momentum
Gaining Earnings Momentum 7 First Half 2014 Highlights • Placed 12 E175 aircraft into revenue service for American • Removed 12 E145 aircraft from revenue service with United • Removed 11 of 15 E140 aircraft from revenue service with American (final four aircraft were removed in August 2014) • Annou
Slide 8: Expect Solid 2014 Financial Performance
Expect Solid 2014 Financial Performance 8 Stable, predictable earnings growth and margin expansion throughout 2014 First Half 2014 Actuals 3rd Qtr 2014 Estimate Full Year 2014 Estimate Full Year 2013 Actuals Operating revenues ($M) $680.5 $340 ‐ $350 $1,350 ‐ $1,400 $1,346.5 Pre‐tax income ($M) $56.
Slide 9: Best in class fleet mix and CPA diversity
Best in class fleet mix and CPA diversity 9 10 16 8 3 0 4 13 5 9 11 2 1 14 12 15 7 6 15.1 10% 88% 2014(F) M i l l i o n s o f A S M s 2% 12% 69% -2% 15.3 2010 19% 400 450 150 50 0 600 550 500 350 250 200 300 100 800 750 700 650 4% AA/US DL 770 UA/CO T h o u s a n d s o f B l o c k h o u r s Other 20
Slide 10: Expanding our 70+ seat fleet
Expanding our 70+ seat fleet 10 60 20 31 86 72 41 47 68 14 4747 0 50 100 150 200 67 189 Republic 42 Compass EndeavorSkywest 128 A i r c r a f t PSAGojetEnvoyMesa CRJ900 E175 E170 CRJ700 Q400 70+ seat jet fleets by regional operator (operating under CPA as of 8/31/14) Fleet counts as of 12/31/13
Slide 11: Winding-down our 50-seat fleet
Winding‐down our 50‐seat fleet 11 3341 177 253 35 71 140 247 0 100 200 300 400 500 EnvoySkywest A i r c r a f t Endeavor 500 PSAChautauquaAir Wisconsin TSA E135/140/145 CRJ 200 50 seat jet fleets by regional operator (Operating under CPA as of 8/31/14) Fleet counts as of 12/31/13 Fleet counts as of
Slide 12: Mainline partner scope changes
Mainline partner scope changes 5/20/2014 12 Trading ~ 550 small jet aircraft in favor of ~ 300 larger aircraft (76 seat) Why does this make sense? Taking more connections over fewer hubs means revenues are produced more efficiently Economies of scale (spreading the fixed cost of the business
Slide 13: Keep it Simple
Keep it Simple 13 Current scope restrictions will allow us to consolidate operations with a goal to be down to 2 operating certificates by the end of 2014. Key benefits of fewer certificates: More organizational productivity Lower infrastructure and administration burden Consistency in process
Slide 14: Fleet Simplification
Fleet Simplification 14 Expanding our 69+ seat fleet and winding down our 50 seat and 99 seat fleet 129 78 41 15 195 200 150 250 100 50 +66 241 5 2014F2010 222 99 seats44-50 seats 69-80 seats A C i n S e r v i c e a t D e c 3 1
Slide 15: RJET's proven track record
RJET’s proven track record 15 Republic celebrated its 40th anniversary this August 2014 Perfect passenger safety record First regional airline to operate under fixed-fee agreements with multiple Mainline Partners Smart fleet management to match capability with industry demand (eliminating 50
Slide 16: Our five-year plan targets
Our five‐year plan targets 16 We have a high level of confidence in our ability to extend expiring CPAs for E170 & E175 aircraft We will repay almost half of our existing aircraft debt by YE 2018 We are focused on managing aging aircraft costs We desire to resolve our open pilot labor agreem
Slide 17: Q&A Session
Q&A SESSION 17
Slide 18: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS 18
Slide 19: Non-GAAP Reconciliations
Non‐GAAP Reconciliations 19 Reconciliation of non-GAAP to GAAP financial measures: Pre‐tax income (loss) to adjusted pre‐tax income: ($ in millions) 2010 2011 2012 2013 Pre‐tax income from continuing operations 76.8$ (149.1)$ 51.1$ 81.3$ Adjust: Impairment charges ‐ 191.1 ‐ 21.2 Adjusted pre‐tax inc