Posted on: 04 November 2015 by Ross McSweeny
Republic Airways Holdings has announced its financial results for the third quarter of 2015 (3Q15) featuring a net income of $2.9 million, an increase over the net income for the same quarter last year (3Q14) of $18.5 million.
Republic’s pre-tax income in 3Q15 was $8.3 million, compared with $30.5 million for 3Q14. The effective tax rate of 65.1% for 3Q15 was higher than the normalised tax rate, primarily due to the impact of miscellaneous non-deductible expenses.
“The 3Q15 financial results continued to be negatively impacted by our inability to fully utilise our aircraft due to regulatory changes that created a national pilot shortage which has been uniquely amplified by our ongoing labour dispute. As a result of this pilot labour shortage, we operated approximately 6% fewer block hours during 3Q15 compared with 3Q14. The third quarter results were also negatively impacted by fleet transition costs and idled aircraft costs totalling $7.2 million associated with our removal of E190 and Q400 aircraft and surplus ERJ 145 aircraft,” commented Republic Airways Holdings chairman, president and CEO Bryan Bedford.
“The ratification of a new labour agreement with our pilots represents a significant positive step forward for our pilots and our airline, and I would like to thank the leadership of the IBT Local 357 for their support through the ratification process. We simply could not move forward without a consensual agreement with our pilots. However, we still face several challenges as we continue our work to rebuild our operation and work to achieve a consensual restructuring with our other stakeholders.”
Operating revenues decreased by $9.2 million, or 2.6%, during 3Q15 to $340.5 million. Fixed-fee service revenue decreased $9.7 million, or 2.8%, to $334.0 million primarily due to a decrease in block hours flown and reduced revenues associated with the non-reimbursed aircraft ownership costs associated with aircraft temporarily removed from revenue service during the third quarter.
The Company’s unrestricted cash balance increased $8.9 million, to $232.8 million, from 31 December 2014, due mainly to the $74.0 million draw on the company’s revolving credit facility offset by the investment in new aircraft.
The Company’s debt increased to $2.40 billion as of 30 September 2015, compared with $2.34 billion at 31 December 2014, primarily related to the company purchasing 12 Embraer 175 aircraft offset by scheduled principal repayments.