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Frontier turnaround stokes Republic profits

 IBJ Staff
August 1, 2012
Keywords
Airlines, Republic Airways, Transportation, Distribution & Logistics
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A turnaround in its Frontier Airlines unit propelled Republic Airways Holdings Inc. to a second-quarter profit.

Indianapolis-based Republic earned $20 million, or 40 cents a share. That compares with a loss of $14.9 million, or 31 cents a share,  for the same quarter last year.

Revenue fell 1.6 percent, to $728 million, led by a 12-percent decrease in revenue from its regional airlines, which fly on contract with major airlines.

Frontier revenue grew 11.3 percent.  Republic CEO Bryan Bedford pointed to restructuring efforts and changes in Frontier’s Denver-based network.

Bedford said Republic Airways nevertheless consumed $39 million in cash in the first six months of this year. “This is unsustainable over the long term,” he said.

Having brought Frontier into profitability, Republic is turning to an overhaul of its regional flying unit.

Republic has offered to sell all or part of Frontier, but has so far found no takers.  The scheduled airline faces tough competition in Denver from Southwest Airlines and United Airlines.

Efforts to reduce costs at Frontier have included pay concessions from flight crews and changes in route structure.

Republic is scheduled to hold its annual meeting Wednesday in New York City.

The Teamsters union, which represents pilots, marched at Republic’s annual meeting in Indianapolis last year. The union said it planned to be on hand for this year's meeting.

Republic announced the results after the market closed Tuesday. Shares closed Tuesday at $4.55 each, up 5 cents on the day.

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