Republic Airways Sees Weak Q2 Results Due To Fewer Block Hours, Labor Dispute

(RTTNews) - Republic Airways Holdings Inc (RJET) on Friday said it expects to report second-quarter net income of $4 million to $5 million or $0.08 to $0.10 per share and revenues of $338 million to $340 million.

Analysts polled by Thomson Reuters expect the company to report earnings of $0.28 per share and revenues of $349.9 million for the quarter. Analysts' estimates typically exclude special items.

The company expects second-quarter pretax margins of 2.5% to 3%.

Delving into its pallid expectations, the company said its second-quarter results were hurt by, among other factors, an operation that produced about 4% fewer block hours than expected due to the ongoing operational disruption caused by regulatory changes and further intensified by our ongoing pilot labor dispute.

Apart from regulatory requirements that hinder pilot staffing and productivity, the company said it is also facing a labor dispute with the International Brotherhood of Teamsters ("IBT"), the union which represents the bargaining rights of all Republic pilots, further amplifying its staffing challenges.

On July 9, 2015, the IBT filed suit against the company alleging that the company unilaterally increased compensation for its pilots and new hire pilots in violation of the Railway Labor Act. The company said it believes the suit is completely without merit, and the Company will take appropriate steps to respond.

The company said is exploring all of its options to mitigate any adverse impact from these matters and restore its operational and financial performance to normal levels.

The company has engaged Seabury Group as an advisor to assist in these efforts.