Stock Market Watch

Republic Airways Shares Surge on Plans to Sell or Spin-Off Frontier Airlines (RJET)

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Republic Airways Holdings Inc. (NASDAQ: RJET) shares are seeing a huge rally in trading today after the company said that it is looking to separate its Frontier unit. The Indianapolis, Indiana-based company said that it is considering a sale of spin-off of Frontier Airlines.

Following the announcement, Republic Airways surged in trading today. The stock rose to an intra-day high of $4.45, and is currently trading 59.85% higher at $4.30 on above average volume of 3.23 million. Prior to today’s gains, Republic Airways shares had fallen more than 60% this year.


Bryan Bedford, CEO of Republic Airways, said in a conference call that the company plans to engage financial advisors to determine the most shareholder friendly method to return Frontier Airlines to a healthy, well capitalized and independent, low-cost airline. Bedford believes that Frontier could be attractive to private equity or to the company’s shareholders of potentially to a strategic investor.

Republic Airways had acquired Frontier Airlines out of bankruptcy two years ago, which moved the company away from its traditional business of offering regional flights for carriers such as Delta Air Lines Inc. (NYSE: DAL).

Republic Airways also released its third-quarter financial results. The company reported third-quarter operating revenue of $767.9 million, representing an increase of 7.9% over the same period in the previous year. The increase in third-quarter revenue was driven by a 10% rise in Frontier Airlines’ unit revenues.

Republic Airways reported third-quarter net income of $9 million, or $0.18 per share, compared with net income of $21.2 million, or $0.58 per share reported for the same period in the previous year.

Bedford said that the company is pleased to report ex-item profitability on each of its business segments for the quarter, especially in light of stubbornly high oil prices.

 

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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