magnus0322

Dear Team Members,

Republic hosted an “Investor Day” in New York today. The event allowed for our shareholders, members of the investment community and the media to meet with our management team and discuss the future of our business. A copy of the presentation is available for your review on our web site.

During these meetings, we discussed the continued transformation of our business model and began highlighting a concept of Simplification and Streamlining. It’s this concept of Simplification and Streamlining that I want to provide some further clarity around.

You all are aware that Republic currently operates under three distinct operating certificates: Chautauqua, Republic and Shuttle America. Additionally, we operate four aircraft fleets: E140s/E145s; E170s/E175s; E190s; and Q400s. Today we announced our intent to Simplify and Streamline both our operating structure and our fleet. Specifically, we intend to consolidate down to two operating certificates and are planning for the orderly wind down of our E140/E145 and E190 aircraft assets.

I am sure you have several questions, and although we may not have all the answers at this time I would like to provide you as much detail as is available. In particular, I would like to address why we are announcing this change and what it means to our Associates.

In reality, this was a process initiated in 2009. At that time, Republic operated under six operating certificates and had a fleet of six unique aircraft types. Since 2009, we optimized our core business by eliminating three operating certificates and winding down to four fleet types. Today’s announcement just continues us down the same path of optimization. The removal of an additional operating certificate will lead to more administrative efficiencies and greater consistency in best practices. The further consolidation of our fleet will allow for more efficient training programs; greater efficiencies in spare parts and supply-chain management; and greater labor efficiencies for crews, mechanics, and operations support. In short, the changes should make us a more efficient and productive airline at a time when more efficiency is being demanded from our partner airlines.

I imagine you are wondering which certificate will be eliminated, when aircraft will leave our operation, and most importantly, how you personally will be affected by these changes. These are important questions, and the management team is committed to providing updates as soon as we can make these decisions public. At this time, dialogue is underway with the operations team and our mainline partners to identify the best path forward. Until this process is further along, it will be hard to answer questions regarding the final structure and timeline.

What I can tell you today is the following: We still need all of our current Associates, and we are not walking away from any of our maintenance bases. Despite several headwinds in the regional space, Republic continues to grow. In 2014, we will add 23 E175 regional jets to our fleet and despite the removal of 27 small regional jets, and we will grow block hours and ASM by 4.9 percent and 9.5 percent, respectively. In fact, I like to think that it is exactly the proactive approach to our business discussed today that has allowed Republic to continually outperform our peers in the regional airline industry for the past 10 years.

We remain committed to all of our Associates, and although some of our roles may change under the new structure, we intend to utilize all of you to help build out our current growth plan. What is new is that we now expect to be able to staff our future growth by refocusing current Associates within the new organizational structure versus having to add new Associates. Lastly, let me reiterate our commitment to maintenance, specifically in SDF. Our maintenance bases are a critical component of our long term business success. A component of this change will include the necessary investments to the SDF facility that will allow it to support our future Ejet operations.

2014 is shaping up to be another transformational year for Republic, and I recognize that change can be a bit unsettling at times. However, I am confident that the changes being outlined today will result in a stronger Republic and a brighter future for all of our more than 6,300 Associates. As we go through the change together, you have the commitment of your entire leadership team that we will communicate updates in a timely and transparent manner. In the meantime, I again encourage you to review the “Investor Day” slide deck on our web site. It underscores the exceptional performance that each of you has contributed, and it highlights the broad strokes of our certificate and fleet plans for the future.

As always, thank you for all you do to keep our airline safe and reliable.

God Bless,

BB

prior121

God Bless

(Eye roll)

amcnd

How many times does he call everyone "Associates".. Makes it sound like a grocery store job!!!

air101

So they are going to obviously shutdown Chautauqua and park the remaining 41 ERJ's that are on contract with Delta, or orderly wind down as BB so eloquently put it. This is what happens when you bid on flying you can't staff. They have what, 33 175's for AA to still be delivered?

God told me this was the right thing to do. This dude is a whack job.

Amjadian

Not exactly. They could very well merge shuttle and republic together and keep CHQ on the side

EvilMonkey

He's been touting the demise of the 145's for years. While you are technically correct, I would bet money CHQ and the 145's will be gone...

BenS

I had given that thought, but it seems that he was talking about parking more "small jets" and use those to staff his "new jets".. but until told otherwise I suppose any guess will do..

air101

Well it says the 145's are going to be out... so what good does it do to keep CHQ?

Amjadian

Yes it does say the 145s are going but also watch his latest investor's meeting in NYC and see how he defends the 50 seaters. For the first time, I think he's right. There is and will be a market for 50 seaters. Perhaps, not as much of a market as we see today but they will still be needed.

Someone in our union message board posted about the possible scope we have at republic and shuttle in regard to 'no more than 76 seats'. If that's true, he could very well merge republic and shuttle, keep some of the 145s and also bring the C series into CHQ certificate (if we ever get them).

I've seen our 140's parked in SDF for a while. Something tells me if we wanted to get rid of them, they'd be in Arizona by now!

But really, who knows!!

What

What certificate where the E-190s operated on? IIRC it was the republic cert.