Indianapolis, Indiana, (April21, 2005) - Republic Airways Holdings Inc. (NASDAQ/NM: RJET), announced today that it has made a conditional offer to purchase Shuttle America Corporation fromShuttle Acquisition LLC, an affiliate ofWexford Capital LLC, for the purchase price of $1 million plus the assumption of less than $1 million in debt. Wexford Capital LLC, isthe majority shareholder of Republic Airways Holdings.
The conditional offer is subject to a variety of conditions, includingdue diligence, the negotiation and execution of definitive documentation, approval by the independent members of the Board of DirectorsofRepublic and the receipt of a fairness opinion. The company believes that if all the conditions are satisfied the transaction would close in May of 2005.
Because Republic and Shuttle America are controlled by a common entity, Republic will be obligated to restate its historical financial statements foreach ofthe three years in the period ended December 31, 2004 to reflect the results and financial position of Shuttle America for these periods. The restatement will reflect such acquisition as a transaction accounted for under a method similar to “pooling of interests” accounting rather than purchase accounting.The preliminary estimate, based on unaudited financial information of Shuttle America for the year ended December 31, 2004, is that such restatement may result in a reduction of our net income for 2004in the range ofapproximately $4.0 to $7.0 million. The change intotal stockholders’ equityat December 31, 2004 is estimated to be in the range of a reduction of $3.0 million to an increase of $2 million. These preliminary estimates may change upon the completion of the audit ofthe “pooled” consolidated financial statements of Republic andShuttle America for the year ended December 31, 2004.
Republic’s decision to purchase Shuttle America is in anticipation of increased demand for the Embraer 170 andto provide Republic with the opportunity tooperate aircraft larger than 70 seatssuch asthe Embraer 190 while complying with certain scope restrictions that some of its major airline partners currently have in place. Republic intends to add the Embraer 170 to the Shuttle America operation as soon as possible and plans to phase out all turboprop flying by the end of 2005.
Shuttle America today operates under a fixed feeairline servicesagreement with United Airlines out ofits Washington Dulleshub. The airline operates a fleet of 11 Saab 340 aircraft, eight of which are leased and have expirations in 2005 andthefirst quarter 2006. The company is headquartered in Fort Wayne, Indiana and employsapproximately200aviation professionals throughout its system.
Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that operates Chautauqua Airlines, Inc. and Republic Airlines Inc. Its principal operating subsidiary, Chautauqua Airlines offers scheduled passenger service on more than 700 flights daily to 75cities in 32 states, Canada and the Bahamas through code sharing agreements with four major U.S. airlines. All of its flights are operated under its major airline partner brand, such as AmericanConnection, Delta Connection, United Express and US Airways Express. The airline employs more than 2,400 aviation professionals and operates 116 regional jets including 16 Embraer 170 aircraft.
Additional Information
In addition to historical information, this release contains forward-looking statements. Republic Airways may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass Republic Airways’ beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Republic Airways as of such date. Republic Airways assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this release by reference.
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