Republic Profits Fall Sharply

[meyers9163]

So wake up this morning and just got to thinking how stupid the local paper really is. As if they know a damn thing about the airlines. All were talking about how RAH was going to make a killing with this new Frontier and Midwest flying. How its going to be so great for indy and then this article.... Made me shake my head... So Midwest is still losing cash? SO will a change of planes to an all E190 and regional fleet and a cheaper pilot group really turn that place into a profitable place? I just dont see how that will make up for the nearly 15 million lost (I realize its the 3rd quarter, but still seems like it might be a long road).






Indianapolis-based Republic Airways reported a smaller third-quarter profit Wednesday despite the addition of Midwest Airlines.

Republic reported earnings of $3.3 million or 9 cents per share, an 80 percent drop from $17 million, or 50 cents from a year earlier.



Analysts surveyed by Thomson Reuters were expecting, on average, a profit of 29 cents a share.


More coverage: Click here for a roundup of Indianapolis-area business news and state updates.


Revenue fell 6.7 percent to $359.6 million, from $385.2 million a year earlier.

Midwest had a pretax loss of $15.9 million during the two months of the quarter it was owned by Republic, The Associated Press reported.

http://www.indystar.com/article/2009...its+fall+in+3Q

[surreal1221]

Oh noes.

[meyers9163]

Originally Posted by surreal1221

Oh noes.

I am curious is the nearly 16 million lost in only TWO months that RAH owns them what is reported in their 3rd quarter earnings, or are all the losses for that quarter reported with RAH's earnings? SOmething the article sort of avoided.... SO did midwest lose even more then nearly 16 million this quarter?

[Airdale]

I've been hearing Midwest planes aren't flying close to full. Maybe the brand is just dying along with the old Midwest name.

[SoCalAprch]

Originally Posted by Airdale

I've been hearing Midwest planes aren't flying close to full. Maybe the brand is just dying along with the old Midwest name.

Look at the link directly under the profits on the Rjet investors page and you will see that on average our branded flying has been right at 80% since its inception and it moved up a tiny bit to 81.2% for October. Granted there is room for improvement but saying they aren't anywhere close to full is a bit misleading.

The Midwest Day trip I did had 6 legs and 5 of the flights had more than 34 people on em (EMB-135 37 seats). The last flight got back into CMH at midnight and only had a handful of PAX but was pretty surprised how full all of them were. Cold cookies in the small jets though

[falconvalley]

As compared to the same quarter last year. 6million was lost at Mokulele. Without looking at the numbers, I believe the entire remaining 10 million was Midwest. You guys need to understand, Midwest was a complete disaster. TPG wasn't interested in running an airline. They just wanted an investment. So, little changed in how the airline was run. IMO, RAH is going to need to change the marketing strategy, pronto. Has anyone seen the Midwest commercials?? HORRIBLE. They are so 1985 it's not even funny. If you weren't paying attention, a little blue airplane flashed on the screen and Frasier's dad said a few words about cookies or something...

That being said, I think a 10 million dollar loss is quite a turn around and could turn into a profit down the road. Remember, this is an airline in transition. I'm certain that a profit is attainable if the marketing is a winner.

[meyers9163]

Originally Posted by falconvalley

That being said, I think a 10 million dollar loss is quite a turn around and could turn into a profit down the road. Remember, this is an airline in transition. I'm certain that a profit is attainable if the marketing is a winner.

You MIGHT be right, but my question is will marketing alone bring Midwest to a profitable airline? I mean at the end of the day a customer will base who they fly with mostly on price alone, would you not agree? If Midwest is not cheap or does not have the scheduled needed by a pax they will simply go else where. I think there's a whole lot more to it then just marketing needed. And simply a cheaper pilot group and workforce will not make a place profitable as proven time and time again.

[Baronman]

Well...like they say, a plane can be 100% full and still lose money if the yield is low. With the competition getting ratcheted up in MKE I'm sure there is pressure to keep tickets low.

[Airdale]

I know everybody thinks Bedford is God's greatest gift to Airline CEO's, but can you honestly expect him to do well running against Airtran and Southwest?

I guess time will tell.....

[Baronman]

Who knows how well he'll do....The role he has now is quite different than the one he had a year ago. Success at the regional level means flying as many block hours for as much money as you can....He was successful at growing an airline with bigger planes and through investing.

Now as the CEO of a stand alone carrier the equation shifts. Where to fly...how to get people in the seats....how much to charge etc. Remember, throughout history most airlines lose money.

[Kingairer]

Too many seats not enough passengers.

[Doug Taylor]

Mergers and acquisitions are tremendously expensive.

Some merge/acquire to consolidate.

Some merge/acquire to grow.

If you're acquiring/merging to grow during a downtown, that's about like selling a truckload of watermelons below cost and hoping to make it up with volume.

[falconvalley]

Originally Posted by meyers9163

You MIGHT be right, but my question is will marketing alone bring Midwest to a profitable airline? I mean at the end of the day a customer will base who they fly with mostly on price alone, would you not agree? If Midwest is not cheap or does not have the scheduled needed by a pax they will simply go else where. I think there's a whole lot more to it then just marketing needed. And simply a cheaper pilot group and workforce will not make a place profitable as proven time and time again.

Part of it is about the money. I remember when I was in the service, I would look for the absolute cheapest I could possibly find to get home on the holidays. I didn't care about anything but the price. I had good food and a girl waiting for me at the airport. Nowadays, I have a family and look for other things as well. As few connections as possible, nice employees, etc...I'm willing to pay extra for that. Southwest wins in a lot of categories, but they don't win in comfort and connections. I don't know if RAH can beat them at their own game. That's a long shot. But mke does have a market and I think as long as RAH puts Midwest out there, on the air in a way today's flier can relate, they will be successful. Someone on my company board mentioned that they think Southwest isn't aiming to control mke and I agree. That wouldn't be the smartest move and they know it. They're going to profit off their bread and butter, nonstops to cities that mke peeps wanna hit. However, mke capacity is big enough to make room for another airline, but not profitable to share. The real battle will be between Midwest and AirTran. The winner will have the best balance of availability and price, but not necessarily be the cheapest.

When you line up the three operations and compare them on one route, you'll see a micro market. Take LA for example. If I'm by myself, going to visit my brother, I'm willing to take a red eye if it's cheap. But if I'm with my family, I want comfort and good service. Southwest is great, but I've actually taken them on long legs westward and it's not fun at all. AirTran and RAH can easily take a chunk of a route like that if they play their cards right. RAH can actually win that one, but they have to be the alternative, IMO. It's those shorter nonstops that they are going to have trouble with Southwest on.

[Airdale]

I used to fly Southwest a lot before I got into this mess. I flew them quite often when I was in the military as well. I hate to say it, because I work for Republic, but if I had to buy a ticket somewhere, I'd look to Southwest first. But not because of price.

Every Southwest flight I was on as an outsider passenger, was very enjoyable. The flight attendants were funny, and they made the flight enjoyable. The pilots were always in great moods and the whole atmosphere on the plane was very positive. The product Southwest provides is leaps above what any of the Lecacy carriers provide. I would actually rank Frontier second to Southwest in service. I flew them a few times while I was in the military and they were also enjoyable flights. I particularly liked the animal snacks and the in flight movie.

Unless Bryan Bedford plans to seriously improve the working conditions and pay at Republic, the passengers will never get the service that they get at Southwest. Why? Because their employees are happy and they are passionate about where they work. We lack both of those at Republic. We're just happy to get beat into submission.

[SoCalAprch]

Originally Posted by Airdale

I used to fly Southwest a lot before I got into this mess. I flew them quite often when I was in the military as well. I hate to say it, because I work for Republic, but if I had to buy a ticket somewhere, I'd look to Southwest first. But not because of price.

Every Southwest flight I was on as an outsider passenger, was very enjoyable. The flight attendants were funny, and they made the flight enjoyable. The pilots were always in great moods and the whole atmosphere on the plane was very positive. The product Southwest provides is leaps above what any of the Lecacy carriers provide. I would actually rank Frontier second to Southwest in service. I flew them a few times while I was in the military and they were also enjoyable flights. I particularly liked the animal snacks and the in flight movie.

Unless Bryan Bedford plans to seriously improve the working conditions and pay at Republic, the passengers will never get the service that they get at Southwest. Why? Because their employees are happy and they are passionate about where they work. We lack both of those at Republic. We're just happy to get beat into submission.

Airdale you are starting to sound like ToiletDuck over at APC when you start making blanket opinions on how the whole RAH pilot group feels. Speak for yourself there are several thousand other guys here that don't have such a bad attitude toward aviation as a whole.

[Hootie]

It's an airline, I'd say any profit no matter how small is pretty spectacular.

[meyers9163]

Originally Posted by Hootie

It's an airline, I'd say any profit no matter how small is pretty spectacular.

Its not uncommon for a "regional" to have a profit. The fact the profit has slipped this much is concerning I would think. Especially the 16 million lost with the Midwest flying in only two months. 8 million lost per month in the 3rd quarter?

[upup89]

Originally Posted by meyers9163

Its not uncommon for a "regional" to have a profit. The fact the profit has slipped this much is concerning I would think. Especially the 16 million lost with the Midwest flying in only two months. 8 million lost per month in the 3rd quarter?

How does that compare to what Midwest lost in Q2 just curious. I'm too lazy to look it up but I think it was 21 million??? perhaps?

[A-300F4-622R]

Originally Posted by SoCalAprch

Airdale you are starting to sound like ToiletDuck over at APC when you start making blanket opinions on how the whole RAH pilot group feels. Speak for yourself there are several thousand other guys here that don't have such a bad attitude toward aviation as a whole.

Maybe he is?

[joliet]

Looks like the one who is commonly referred to as a genius has finally faltered by purchasing something similar to prime real estate in the Mississippi delta...

[falconvalley]

Originally Posted by upup89

How does that compare to what Midwest lost in Q2 just curious. I'm too lazy to look it up but I think it was 21 million??? perhaps?

I believe they were still private back then, but before TPG owned them, they lost quite a bit of money here and there.

[falconvalley]

Originally Posted by SoCalAprch

Airdale you are starting to sound like ToiletDuck over at APC when you start making blanket opinions on how the whole RAH pilot group feels. Speak for yourself there are several thousand other guys here that don't have such a bad attitude toward aviation as a whole.

I'm a pretty optimistic person, but when I was active at RAH, I saw signs that the average pilot at the company wasn't very well supported. I had some things happen to me that were completely out of line. I don't know how everybody feels over there, but IMO Bedford is going to need to rethink his intra-strategy "going forward". LOL he uses that phrase a lot, but in all seriousness, he appears to be so focused outside the company, he's forgotten his employees. They put a lot of blame on the rapid growth of the company before, but now I see a lot of ignoring the pilots. We may not be able to achieve the level of Southwest but we certainly can achieve our own, unique level of company synergy. Unfortunately, I'm having reservations about whether Bedford is capable of leading that. He's certainly a very smart businessman. We'll see whether employee and customer appreciation take his plan well.

[SoCalAprch]

Originally Posted by falconvalley

I'm a pretty optimistic person, but when I was active at RAH, I saw signs that the average pilot at the company wasn't very well supported. I had some things happen to me that were completely out of line. I don't know how everybody feels over there, but IMO Bedford is going to need to rethink his intra-strategy "going forward". LOL he uses that phrase a lot, but in all seriousness, he appears to be so focused outside the company, he's forgotten his employees. They put a lot of blame on the rapid growth of the company before, but now I see a lot of ignoring the pilots. We may not be able to achieve the level of Southwest but we certainly can achieve our own, unique level of company synergy. Unfortunately, I'm having reservations about whether Bedford is capable of leading that. He's certainly a very smart businessman. We'll see whether employee and customer appreciation take his plan well.

I agree. All Im saying is that there are a handful of pilots that like to bitch and moan about how bad their lives are and how the union let them down and how they hate aviation and management yet they still keep flying the line, a real man who is that upset would quit or do something about it. Things need to get better at RAH and I think everyone over here knows that. However getting on message boards and bashing everything from management down to the union doesn't do any good unless you are taking action to make it better. Im cautiously optimistic as well. Things will get better next time around.

[meritflyer]

Originally Posted by meyers9163

I am curious is the nearly 16 million lost in only TWO months that RAH owns them what is reported in their 3rd quarter earnings, or are all the losses for that quarter reported with RAH's earnings? SOmething the article sort of avoided.... SO did midwest lose even more then nearly 16 million this quarter?

The reduction in gross revenue appears to be mostly from a reduction in their fixed fee services.

[upup89]

Originally Posted by SoCalAprch

I agree. All Im saying is that there are a handful of pilots that like to bitch and moan about how bad their lives are and how the union let them down and how they hate aviation and management yet they still keep flying the line, a real man who is that upset would quit or do something about it. Things need to get better at RAH and I think everyone over here knows that. However getting on message boards and bashing everything from management down to the union doesn't do any good unless you are taking action to make it better. Im cautiously optimistic as well. Things will get better next time around.

Very true. I often wonder this myself.

Why not work to make your situation better rather than keyboard commandoing your day away. So to speak.