Republic Airways Holdings Inc. · NASDAQ:RJET
Republic Airways — Bank of America Merrill Lynch 2013 Global Transportation Conference
20 slides from Republic Airways's conference presentation, May 15, 2013
Slide 1: Bank of America Merrill Lynch 2013 Global Transportation Conference
Bank of America Merrill Lynch 2013 Global Transportation Conference Boston, MA May 15, 2013
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure DISCLAIMER 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 “for
Slide 3: Executive Summary
Executive Summary • RJET reporting improved financial results driven by 2011 restructuring of Frontier and 2012 restructuring of 50 - seat subsidiary, Chautauqua Airlines • RJET well positioned in contracting regional industry with multiple partnerships and focus on growing larger regional aircraft
Slide 4: Financial Progress 2010 - 2012
Financial Progress 2010 - 2012 5/15/2013 © Republic Airways Holdings Inc. 4 2.49 3.36 2.00 2.50 3.00 3.50 2010 2012 Fuel Cost per Gallon (52.8) 23.9 (75.0) (25.0) 25.0 2010 2012 Pre - tax Income Frontier • Frontier restructuring complete in Sep 2011 • Secured > $120 million of annual improvements fr
Slide 5: Republic Segment Improvement
Republic Segment Improvement 5/15/2013 © Republic Airways Holdings Inc. 5 • CHQ restructuring completed in Q4 2011 • Approximately $25 million of improvements driven by fewer aircraft, especially 50 - seat aircraft, operating under pro - rate agreement at Frontier $44.0 $62.3 $24.9 $11.2 $(17.8) $-
Slide 6: Frontier Segment Improvement
Frontier Segment Improvement 5/15/2013 © Republic Airways Holdings Inc. 6 • Network improvement drove unit revenue increases that outperformed the industry • Unit cost improvement driven by increase in seat density and restructuring in second half 2011 $(95.3) $23.9 $88.1 $32.1 $16.8 $8.3 $(100.0) $
Slide 7: Q1 2013 Improvement
Q1 2013 Improvement 5/15/2013 © Republic Airways Holdings Inc. 7 • Returned all idled aircraft to service by year end 2012 • $5.9 million in Q1 2013 for Airbus AC returns on lease $10.9 $20.6 $5.3 $4.0 $0.4 $- $5.0 $10.0 $15.0 $20.0 $25.0 Q1 2012A Idled AC CHQ Rest Other Q1 2013A Republic Q1 Pre - T
Slide 8: Republic 2011 - 2013 Trend
Republic 2011 - 2013 Trend 5/15/2013 8 © Republic Airways Holdings Inc. (1) Represents the midpoint of 2013 full year guidance. (2) Includes $48.2 million and $102.5 million of fuel expense reimbursement for the year ended December 31, 2012 and 2011. Effec tiv e July 1, 2012 United agreed to supply
Slide 9: 2013 Republic Fleet Plan
2013 Republic Fleet Plan Republic AC Republic Partners 5/15/2013 © Republic Airways Holdings Inc. 9 70 126 10 21 Q1 2013 (225) E140/145 E170/175 E190 Q400 70 141 10 32 Q4 2013 (253) E140/145 E170/175 E190 Q400 6.7% 29.3% 31.6% 28.0% 4.4% Q1 2013 AA US UA DL F9/CT 12.1% 23.3% 32.9% 28.5% 3.2% Q4 2013
Slide 10: Growth at Republic in 2013 and Beyond
Growth at Republic in 2013 and Beyond • Q400 contract ramping up with UA – Total of 32 aircraft, additional 17 in service in 2013 • E175 contract to begin in Q3 2013 with AA – Total of 47 aircraft, 15 in - service in 2013 • Option for 47 additional E175 aircraft beginning in 2015 – Optimal time fram
Slide 11: State of the Airline Industry
State of the Airline Industry • Macro economic factors are creating headwinds on industry revenues: higher personal taxes, stagnant jobs recovery and sequester are holding back the economic recovery • However the sluggish economy is also being reflected in lower energy costs • US Airways/AA merger w
Slide 12: Mainline Scope Changes
Mainline Scope Changes Large RJ’s grow at the expense of small RJ’s 125 370 195 225 75 141 75 102 102 150 47 48 34 34 318 450 223 Previous 573 153 Potential 194 85 Current 260 85 Current 325 202 Previous Current 272 Current 450 255 Previous 552 32 Delta United American US Airways Note: Where scope i
Slide 13: Small RJ Distribution by Carrier
Small RJ Distribution by Carrier 13 13 5/15/2013 © Republic Airways Holdings Inc. 341 12 17 147 31 12 15 15 12 3 515 198 140 71 70 35 20 5 SkyWest Eagle Pinnacle Air Wisconsin Republic PSA TransStates Mesa US AA DL UA UA DL AA US SkyWest 341 147 12 15 515 Eagle 198 198 Pinnacle 140 140 Air Wisconsin
Slide 14: Large RJ Distribution by Carrier
Large RJ Distribution by Carrier 14 14 5/15/2013 © Republic Airways Holdings Inc. 70 70 22 20 30 122 67 36 58 39 47 40 9 205 192 89 76 68 47 14 Republic SkyWest TransStates Pinnacle Mesa Eagle PSA Growth US AA DL UA Note: Information obtained from company public filings. United has placed order for
Slide 15: Small RJ Distribution by Fleet Type
Small RJ Distribution by Fleet Type Total 1,054 small RJs 4% 41% 49% 6% E145 CRJ200 E140 E135 Market share split ~ 50 / 50 DL AA UA 287 31 318 92 271 370 12 118 74 225 US 7 21 141 126 15 CRJ200 E145 E140 E135 15 15 15 5/15/2013 © Republic Airways Holdings Inc.
Slide 16: Large RJ Distribution by Fleet Type
Large RJ Distribution by Fleet Type 43% 24% 5% 15% 13% CRJ700 CRJ900 Q400 E175 E170 Total 595 large RJs Market share split ~ 70 / 30 47 85 38 255 20 112 DL AA UA 98 32 182 111 52 US 39 14 20 38 CRJ900 CRJ700 Q400 E175 E170 16 16 16 5/15/2013 © Republic Airways Holdings Inc.
Slide 17: IBT Labor Update
IBT Labor Update • Last, Best and Final Offer (“LBFO”) extended to local IBT leadership in mid - April • IBT declined offer • NMB Mediator determined no further meetings until at least Q4 • Hope remains the National IBT leadership will put this LBFO Offer out for a vote and that it passes 5/15/2013
Slide 18: Frontier Sale Update
Frontier Sale Update • Negotiating final term sheets with interested parties • Expect transaction, if it occurs, to close in early third quarter • Will know more in the next 30 days and will update you when we have something we can say publicly • Due to NDA, we cannot discuss publically at this poin
Slide 19: Questions
QUESTIONS 5/15/2013 © Republic Airways Holdings Inc. 19
Slide 20: Non - GAAP Reconciliation
Non - GAAP Reconciliation 5/15/2013 20 © Republic Airways Holdings Inc. 2011 GAAP Pre-Tax Loss (147.1)$ Adjustments: Impairment Charge 191.1 Ex-item Pre-Tax Income 44.0$ Reconciliation of Non - GAAP to GAAP Pre - Tax Income: