Frontier Airlines 2010 Annual Report Download - page 81

REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
1. ORGANIZATION & BUSINESS
We are a Delaware holding company organized in 1996 that offers scheduled passenger services through our wholly-owned
operating air carrier subsidiaries: Chautauqua Airlines, Inc. (“Chautauqua”), Shuttle America Corporation (“Shuttle”), Republic Airline Inc.
(“Republic Airline”), Frontier Airlines, Inc. (“Frontier”), and Lynx Airlines, Inc. (“Lynx”). Unless the context indicates otherwise, the terms
the “Company,” “we,” “us,” or “our,” refer to Republic Airways Holdings Inc. and our subsidiaries.
As of December 31, 2010, our operating subsidiaries offered scheduled passenger service on 1,540 flights daily to 128 cities in 41
states, Canada, Mexico, and Costa Rica under our Frontier operations, and through fixed-fee code-share agreements with AMR Corp., the
parent of American Airlines, Inc. (“American”), Continental Airlines, Inc. (“Continental”), Delta Air Lines, Inc. (“Delta”), United Air Lines,
Inc. (“United”), and US Airways, Inc. (“US Airways”) (collectively referred to as our “Partners”). Currently, we provide our Partners with
fixed-fee regional airline services, operating as AmericanConnection, Continental Express, Delta Connection, United Express, or US Airways
Express, including service out of their hubs and focus cities.
The following table outlines the type of aircraft our subsidiaries operate and their respective operations within our business units as
of December 31, 2010:
Operating Aircraft Fixed-Fee Code-Share Agreement Partners Number of
Subsidiaries Size Frontier American Continental Delta United US Airways Spares Aircraft
Chautauqua Airlines 37 to 50 13 15 15 24
—
9 2 78
Shuttle America 70 to 76
—
—
— 16 38
—
— 54
Republic Airline 70 to 99 32
—
—
—
—
58 — 90
Frontier 120 to 162 50
—
—
—
—
—
— 50
Lynx 74 3
—
—
—
—
—
— 3
Total number of operating aircraft 98 15 15 40 38 67 2 275
During 2010, our operational fleet decreased from 290 to 275. The Company removed eight Q400 aircraft from its Frontier
operations. Five were returned to the lessor, two are held for sale, and one has been subleased. Seven CRJ aircraft were returned to the lessor
from our fixed-fee service with Continental. Four A318 aircraft were removed from our Frontier operation and sold or returned to the
lessor. Two E145 aircraft were subleased offshore and one E170 was sold. Four E190 aircraft and three A320 aircraft were placed into our
Frontier operation during the year.
We have long-term, fixed-fee regional jet code-share agreements with each of our Partners that are subject to us maintaining
specified performance levels. Pursuant to these fixed-fee agreements, which provide for minimum aircraft utilization at fixed rates, we are
authorized to use our Partners' two-character flight designation codes to identify our flights and fares in our Partners' computer reservation
systems, to paint our aircraft in the style of our Partners, to use their service marks and to market ourselves as a carrier for our Partners. Our
fixed-fee agreements have historically limited our exposure to fluctuations in fuel prices, fare competition and passenger volumes. Our
development of relationships with multiple major airlines has enabled us to reduce our dependence on any single airline, allocate our
overhead more efficiently among our Partners and reduce the cost of our services to our Partners.
Our branded operations are comprised of the former operations of Midwest Air Group, Inc. (“Midwest”) and Frontier, both of which
we acquired in 2009. As of October 2010, these operations now fly as a single consolidated branded network under the Frontier brand.
Frontier has the largest market share in Milwaukee and the second largest market share in Denver. Our branded operation have a significant
base of frequent flyer members and strong support in their local communities of Denver and Milwaukee.
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