US regional carrier group Republic Airways Holdings has reported an almost tripling in third quarter net income to $25.8 million compared to a year earlier.
Consolidated operating revenues declined 7.1% to $713.1 million, while operating expenses fell 11% to $640 million for the three months ended 30 September.
Operating income grew 50.3% to $73.5 million, says Indianapolis-based Republic.
"We continue to see improved financial performance on our Frontier Airlines business segment, made possible through our restructuring efforts completed last year and the continued network and fleet optimisation," says Republic Airways Holdings chairman, president and chief executive Bryan Bedford. "We have been engaged in a similar restructuring effort with our Chautauqua Airlines subsidiary, our regional carrier which operates all of our smaller 44- and 50-passenger regional jets. Thus far, that effort has resulted in meaningful financial improvements."
Republic announced yesterday that it had reached key agreements with various parties to restructure Chautauqua, which will result in $45 million of annual cost savings over the next five years. It also said it had amended Chautauqua's capacity purchase agreement with Delta Air Lines to fly an additional seven Embraer E-145 aircraft for the SkyTeam carrier by end-2012.
Excluding Frontier Airlines, Republic's subsidiaries posted a 4.3% decline in passenger traffic for the third quarter and a 7.1% fall in capacity. The passenger load factor grew 2.3 percentage points to 78.6%.
The subsidiaries' cost per available seat mile (CASM) excluding fuel rose 7.7% to 8.74 cents.
Low-cost carrier Frontier Airlines posted pre-tax income of $29.8 million in the third quarter, reversing from a pre-tax loss of $1.5 million in the corresponding quarter a year ago.
"The significant improvement in Frontier's financial results was driven by solid unit revenue increases and lower unit costs as a result of the network and financial restructuring completed in 2011," says Republic.
Frontier's passenger traffic declined 3.2% in the quarter, while capacity was down 4%. The passenger load factor grew 0.8 percentage points to 91.6%.
Frontier's revenue per available seat mile grew 5.4% to 12.33 cents, while its CASM excluding fuel fell 3.1% to 6.86 cents.
As of the end of the third quarter, Republic's subsidiaries excluding Frontier operated 63 aircraft with 44-50 seats and 131 aircraft with 69-80 seats on fixed-fee commercial agreements. Republic also operated one aircraft with 50 seats and 17 aircraft with 99 seats under pro-rate agreements with Frontier. Nine aircraft, with 37 to 76 seats remain unassigned as of 30 September. Republic says it does not expect any unassigned aircraft by end-2012.
Frontier operated 57 Airbus narrowbodies as of 30 September, down from 59 aircraft a year ago. Republic says one A319 was removed from operations during the third quarter to prepare for its return to its lessor in the fourth quarter.