Republic Airways Holdings Inc. · NASDAQ:RJET

Republic Airways — Shareholder Meeting (August 2012)

29 slides from Republic Airways's shareholder meeting presentation, Aug 1, 2012

  1. Slide 1: Annual Shareholder's Meeting August 1, 2012

    Annual Shareholder’s Meeting August 1, 2012

  2. Slide 2: Disclaimer

    Disclaimer 2 © Republic Airways Holdings Inc. 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 con

  3. Slide 3: Agenda

    Agenda I. 2011 in review II. 1 st Half 2012 results III. 2012 Objectives IV. 2013 and the Future at RJET V. Questions VI. Contacts VII. Appendix © Republic Airways Holdings Inc. 3

  4. Slide 4: I. 2011 in Review

    I. 2011 IN REVIEW ► Additional EJets with Delta ► Successful restructuring of Frontier ► Announcement of separation 4 © Republic Airways Holdings Inc.

  5. Slide 5: 2011 Consolidated Results

    2011 Consolidated Results 5 © Republic Airways Holdings Inc. ► Revenue increased from additional CPA flying on the EJets, and stronger fares on the branded business ► Increased maintenance expenses on 50 - seat ERJs deteriorated Republic profits ► Impairment of 50 - seat ERJs and related assets was

  6. Slide 6: 2011 Business Improvement Plan

    2011 Business Improvement Plan ► Frontier restructuring scorecard shows significant turn around ► Continued efforts to optimize the network and reduce spending ► New management team engaged and on - site in Denver 6 © Republic Airways Holdings Inc. (a) Included ERJ lease reductions not yet achieved.

  7. Slide 7: Frontier Restructuring Was Very Successful

    Frontier Restructuring Was Very Successful 7 © Republic Airways Holdings Inc. ► Frontier saw significant improvements from the first half of 2011 to the second half 2011, largely due to the restructuring efforts June 30, Dec 31, 2011 2011 Change Percent Operating Revenues 620.4$ 710.1$ 89.7$ 14.5% O

  8. Slide 8: 2011 Accomplishments

    2011 Accomplishments Fleet ► Implemented an aggressive restructuring at Frontier, resulting in better than targeted results ► Focusing Frontier with single fleet, with six new A320s, four used Airbus aircraft, and an order for 80 fuel - efficient Airbus NEO aircraft ► Amendment with Delta provided f

  9. Slide 9: II. 1st Half 2012 Results

    II. 1 ST HALF 2012 RESULTS ► Additional CPA flying announced on ERJs and Q400s with United ► Streamlining Frontier Network ► Separate Frontier management in Denver 9 © Republic Airways Holdings Inc.

  10. Slide 10: 1st Half 2012 Republic Results

    1 st Half 2012 Republic Results 10 © Republic Airways Holdings Inc. ► More aircraft under fixed - fee arrangements ► Significantly reduced pro - rate losses by grounding 50 - seat regional jets ► We continue to grow our Republic business with new CPA opportunities 13.1 31.9 27.6 (11.3) 2.5 - 10.0 20

  11. Slide 11: 1st Half 2012 Frontier Results

    1 st Half 2012 Frontier Results 11 © Republic Airways Holdings Inc. ► 2011 restructuring positioned Frontier for solid business improvement ► Significant Network Improvement (APAS drives TRASM gains) ► Lower fuel burn per ASM, but higher price per gallon ► New Management team focused on Transformati

  12. Slide 12: 1st Half 2012 Consolidated Results

    1 st Half 2012 Consolidated Results 12 © Republic Airways Holdings Inc. ► Significant improvement as a direct result of business improvements at Frontier in the second half of 2011 ► Utilization of EJet aircraft under fixed - fee agreements mitigated parked aircraft costs ► RJET management now focus

  13. Slide 13: 2012 Liquidity Improvements

    2012 Liquidity Improvements 13 © Republic Airways Holdings Inc. ► Total cash at approximately 14% of trailing twelve month revenue, which is considered below adequate levels for an airline of our size. ► Remain in compliance with our debt covenants ► Cash is in line from previous quarter with goal t

  14. Slide 14: III. 2012 Objectives

    III. 2012 OBJECTIVES ► Continued growth on the Republic segment ► Reduce CASM on the Frontier segment 14 © Republic Airways Holdings Inc.

  15. Slide 15: Growth into 2012

    Growth into 2012 ► Signed CPA for extended flying of twelve E145s for United - Continental through 2014 ► Executed an eight year CPA agreement for 32 Q400 aircraft flying with United - Continental, which includes our 4 owned aircraft previously parked ► Reduced parked aircraft by putting them to bac

  16. Slide 16: Our Fleet Plan

    Our Fleet Plan 16 Frontier ► Frontier fleet will include Airbus only, with pro - rate flying on E190 aircraft through Republic Airline ► More A320 aircraft with more seats per aircraft © Republic Airways Holdings Inc. Republic ► Pro - rate flying of E190 aircraft for Frontier ► New CPA for Q400 airc

  17. Slide 17: Guidance – Q3 2012

    Guidance – Q3 2012 ► Consolidated EPS ► Range of $0.50 - $0.55 earnings per share ► Unrestricted Cash ► Unrestricted $190 - $200 million ► Fuel Cost per Gallon ► $3.05 - $3.15 per gallon ► Frontier TRASM ► $0.124 - $0.126 ► Frontier CASM (excluding fuel) ► $0.074 - $0.076 ► Load factor ► 90% - 92% ►

  18. Slide 18: IV. 2013 and the Future at RJET

    IV. 2013 AND THE FUTURE AT RJET 18 © Republic Airways Holdings Inc.

  19. Slide 19: History of IBT Negotiations

    History of IBT Negotiations 8/1/2012 19 © Republic Airways Holdings, Inc. 2007 2008 2009 2010 2011 2012 07/07 – negotiations begin between Teamsters (IBT) and Republic (RJET) 01/08 - 11/08 – IBT and RJET meet and agree on substantial portions of new contract 04/14/09 – IBT and RJET agree to approx.

  20. Slide 20: Industry Concessions Over Time

    Industry Concessions Over Time 8/1/2012 © Republic Airways Holdings, Inc. 20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 American Eagle: 1.5% an. increase Bankruptcy ASA: 1% annual increase Merger with ExpressJet Acq . by SkyWest Air Wisconsin: 10 year contract 1.5% annual increase until last

  21. Slide 21: Republic vs. OA per diem

    Republic vs. OA per diem $ / hour Note: See appendix for additional base pay data (by aircraft type & position) Source: Seabury analysis; public data 1.651.65 0.0 0.5 1.0 1.5 2.0 Peer group average Current Republic per diem 1.6 1.7 1.5 1.7 1.4 1.8 1.6 1.8 1.6 1.8 1.7 1.9 1.6 Trans States SkyWest PSA

  22. Slide 22: Bid/Ask Overview

    22 © Republic Airways Holdings, Inc. Bid/Ask Overview Republic Offer includes: ► Significant pay increase for First Officers, valued at ~$4M per year ► Increased per diem rate, valued at ~$1M per year ► Total increased Comp over 5 - year period of ~$25M IBT Offer includes: ► Grossly above - market p

  23. Slide 23: Scope Opportunities into 2013

    Scope Opportunities into 2013 ► AMR bankruptcy continues to progress ► Current agreement for 15, 44 - seat E140 aircraft expires in February 2013 ► Opportunity to gain relief from scope restrictions through labor discussions and allow larger aircraft to fly on regional carriers ► We continue to part

  24. Slide 24: Frontier Separation – The Plan

    Frontier Separation – The Plan ► Several options ► Spin - off - IPO ► Sale to another airline ► Sale to private equity ► Any combination of the above ► Hired advisors – Barclay’s Capital ► Designated management team to focus on Frontier Operations ► Transformation of Frontier into an ultra low cost

  25. Slide 25: RJET's Vision

    RJET’s Vision 25 © Republic Airways Holdings Inc. ► Spin off Frontier Airlines while maintaining, where profitable, E190 flying on prorate basis ► Return to CPA only operations – focusing the business ► Restructure ~$600M of debt and lease obligations for 84 50 - seat or smaller aircraft ► Fully ali

  26. Slide 26: V. Questions

    V. QUESTIONS 26 © Republic Airways Holdings Inc.

  27. Slide 27: Contact Info

    V. CONTACT INFO Media Inquiries: Peter Kowalchuk RJETMedia@rjet.com (317)471 - 2470 27 © Republic Airways Holdings Inc. Investor Inquiries: Margaret Miller Margaret.Miller@rjet.com (317)246 - 2628

  28. Slide 28: VII. Appendix

    VII. APPENDIX 28 © Republic Airways Holdings Inc. ► Reconciliations to GAAP basis accounting

  29. Slide 29: Appendix A: Description of items

    Appendix A Description of items: 29 © Republic Airways Holdings Inc. 2010 Republic Frontier 2011 Integration and fleet transition expenses 56.4 13.3 40.0 53.3 Non-recurring impairment 11.5 191.1 - 191.1 Fuel excise tax and mark-to-market hedge adjustments 6.2 - (3.8) (3.8) Gain on sale of assets - (

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