Republic Airways profit soars on acquisitions

November 8, 2010

Republic Airways Holdings Inc. said Monday that its third quarter profit soared, mostly due to the addition of carriers Frontier Airlines and Midwest Airlines last year.

In addition, the company announced Monday that it intends to offer 12 million shares of its common stock in an underwritten public offering that could raise more than $100 million based on the company's current stock price.

The company, based in Indianapolis, reported third quarter profit of $21.3 million, or 58 cents per share, for the three months ended Sept. 30 compared with $3.3 million, or 9 cents per share, in the same period a year ago.

The company said its earnings in the most recent quarter were reduced by 4 cents per share for a charge related to convertible debt.

Revenue doubled to $711.9 millionin the quarter, from $359.6 million a year ago.

Analysts polled by Thomson Reuters expected net income of 62 cents per share on revenue of $713.7 million.

On Oct. 1, all of Republic's branded operations moved under the Frontier Airlines banner. The company integrated Frontier and Midwest's frequent-flyer programs on Oct. 30.

Republic said it intends to use the net proceeds from the stock offering for general corporate purposes, including to finance a portion of a new Embraer 190 aircraft order, and to bolster its liquidity position.

In addition, the company plans to grant the underwriters a 30-day option to purchase up to an additional 15 percent of the shares sold. Goldman Sachs & Co. and Deutsche Bank Securities Inc. are serving as joint bookrunners for the offering.

On Friday, Republic announced it had ordered for six Embraer 190 jets and placed a conditional firm order for 18 Embraer 190 or 195 jets. Republic plans to take delivery of the first six jets between August and December 2011.

In addition to Frontier, Republic operates regional flights for major airlines under the names AmericanConnection, Continental Express, Delta Connection, United Express and US Airways Express.


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