Exhibit 99
For Immediate Release Contact: Rick DeLisi
October 27, 2004 Director, Corporate Communications
(703) 650-6019
FLYi, Inc. Reports Third Quarter 2004
Financial and Operating Results
Dulles, VA, (October 27, 2004) - FLYi, Inc. (Nasdaq/NM:
FLYi), parent of low-fare airline Independence Air, reported
a net loss of $82.7 million ($1.82 per share) for the third
quarter 2004 in accordance with Generally Accepted
Accounting Principles (GAAP). This compares to net income
of $21.3 million ($0.47 per share) for the third quarter
2003. Total operating revenues for the quarter were $119.6
million as compared to $221.0 million in the year ago
quarter. The company's results for the third quarter 2004
continue to reflect the transition costs associated with the
start-up of Independence Air and cessation of service as a
United Express carrier. The company's results for the third
quarter 2004 also reflect the following items:
- --$7.4 million (pre-tax) in additional revenue as a result
of agreeing on 2004 rate adjustments with Delta Air Lines
- --$10.5 million (pre-tax) credits to aircraft maintenance
and materials and $0.8 million of accrued interest expense
credits as a result of settling the arbitration and
terminating the CRJ engine power-by-the-hour maintenance
agreement with GE Engine Services
- --$19.9 million (pre-tax) in early retirement charges for
the remaining eight leased J-41 turboprop aircraft that came
out of service during the third quarter
- --$7.1 million (pre-tax) charge to write-down the value of
the owned 328JET and 328JET spare parts to estimated fair
market value
Chairman and CEO Kerry Skeen said, "Despite operating in one
of the most challenging economic environments in recent
airline industry history, we have made significant
achievements in the four months since Independence Air began
initial operations and we remain confident in our business
model. Our Independence Air load factor for October is
expected to finish five to seven points higher than
September, and early indications show that November is
expected to be higher than October. We are grateful for the
overwhelming level of support we are receiving for bringing
new low-fare air service to our 39 communities and are
particularly proud of the thousands of positive customer
comments we have received praising the enthusiasm and
professionalism of our 4,700 employees. As a result of our
team's commitment to creating the Independence Air brand by
putting the customer first, in just a few months we have
already welcomed over a half-million members to our iCLUB
frequent flyer program. After all the hard work and
dedication our people have put into the FLYi launch, it's
rewarding for all of us to hear so many people say they are
excited to become regular Independence Air customers."
Mr. Skeen continued, "While we have had many successes
during our initial rollout, the prolonged adverse industry
environment has inhibited our ability to perform to plan.
We recognize the need to adjust to the current industry
realities of record high fuel prices and continued revenue
weakness and are already taking immediate actions to reduce
costs, increase revenue and strengthen our cash position.
We are committed to ensuring that Independence Air will be
well-positioned to continue expanding and to meet the
challenges we-and the entire airline industry-are facing."
The company ended the third quarter 2004 with cash and short
term investments totaling $198.0 million. The company
continues to expect a significant operating loss for the
fourth quarter. Under the terms of its current leases, the
company has approximately $80 million in payments due in
January 2005, plus another $18 million which is currently
expected to be paid by Delta Air Lines. To address
liquidity, Independence Air is now in discussions with its
various lessors to reduce and/or defer its aircraft lease
payments. In addition, the company is also pursuing the
sale or re-financing of certain of its owned aircraft and
parts inventory.
Third Quarter Achievements
During the third quarter, Independence Air made significant
progress in building its route network and growing the
brand:
- --The rollout of the Independence Air system was
accomplished with regional jet service beginning on schedule
in every market in accordance with the plan announced in May
- --The Independence Air route network has grown to include
low-fare service to 39 destinations, including over 600
daily flights systemwide
- --The airline's operation at Washington Dulles International
Airport is now the largest low-fare hub in America in terms
of total departures
- --Low-fare service to Orlando and Tampa from Washington and
six other cities (Knoxville, Columbia, Greenville-
Spartanburg, Charleston (SC), Huntsville and Greensboro) is
scheduled to begin on November 3rd (service from Knoxville
and Columbia to Orlando started on October 13th)
Independence Air has now received the first two of 28 brand
new 132-passenger Airbus A319s, which will be deployed on
non-stop flights from Washington Dulles to Orlando and
Tampa, subject to final FAA approval. The new Airbus
aircraft will allow Independence Air to offer low-fare
service from Washington to other major destinations in
Florida, as well as the Midwest and across the country to
the West Coast. Independence Air plans to add live
satellite TV, digital audio and other programming in every
seatback of its Airbus aircraft early next year.
Webcast Information
FLYi, Inc. will conduct a live audio webcast today, October
27, at 1:00pm Eastern to discuss its third quarter financial
results. The webcast will be available at www.FLYi.com. An
archive of today's webcast will be available on the
company's website beginning a few hours following the live
event, and will be available for replay for one week
afterward.
The company employs over 4,700 aviation professionals. For
more information about FLYi, Inc., please visit our website
at www.FLYi.com.
Independence Air is the low-fare airline that makes travel
fast and easy for its customers with a customer-first
attitude, innovative thinking and a willingness to challenge
the status quo.
# # #
Statements in this press release and by company executives
regarding its implementation of its Independence Air
operations, as well as regarding operations, earnings,
liquidity, revenues and costs, include forward-looking
information. A number of risks and uncertainties exist
which could cause actual results to differ materially from
these projected results. Such risks and uncertainties
include, among others: the ability of the company to
successfully complete negotiations with its various lessors
to reduce and/or defer its aircraft lease payments; the
ability to successfully raise cash through the sale or re-
financing of company-owned aircraft and parts inventory; the
ability of the company to effectively implement its low-fare
business strategy utilizing regional jets and Airbus
aircraft, and to compete effectively as a low-fare carrier,
including passenger response to the company's new service,
and the response of competitors with respect to service
levels and fares in markets served by the company; the
effects of high fuel prices on the company; the ability to
successfully and timely complete the acquisition of, obtain
certification for, and secure financing of, its Airbus
aircraft, and to successfully integrate these aircraft into
its fleet; the ability to implement its assignment to Delta
of leases for 30 of the 328JET aircraft that have been used
in the company's Delta Connection operations and otherwise
to implement its transition out of the Delta Connection
program; the expectation that the company will remain
obligated under the leases for 328JET aircraft to be
assigned to Delta, and would be obligated to fulfill these
obligations should Delta default at any time prior to the
expiration of the leases; unexpected costs or procedural
complications arising from the insolvency of Fairchild
Dornier GmbH, the manufacturer and equity owner of the
328JETs; the ability to successfully remarket or otherwise
make satisfactory arrangements for its J-41 aircraft and for
three 328JET aircraft not assigned to Delta; the ability to
successfully hire, train and retain employees in sufficient
numbers to implement the transition; the ability to reach
agreement with AMFA and AFA-CWA on mutually satisfactory
contracts; the ability of government agencies involved in
airport operations to handle the increased number of flights
and passengers at Washington Dulles without interference
with airline operations; and general economic and industry
conditions, any of which may impact the company, its
aircraft manufacturers and its other suppliers in ways that
the company is not currently able to predict. Certain of
these and other risk factors are more fully disclosed under
Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2003 and in its Quarterly Report on Form 10-Q
for the period ended June 30, 2004. These statements are
made as of October 27, 2004 and FLYi, Inc. undertakes no
obligation to update any such forward-looking information,
including as a result of any new information, future events,
changed expectations or otherwise.
Condensed Consolidated Financial Results
(in thousands, except per share amounts)
Unaudited
Third Quarter Ended, September 30
2004 2003 Pct.
Change
Operating revenues:
Passenger revenue $117,690 $217,279 (45.8%)
Other revenue 1,944 3,757 (48.3%)
Total operating revenues 119,634 221,036 (45.9%)
Operating expenses:
Salaries and related costs 54,099 51,845 4.3%
Aircraft fuel 44,192 35,119 25.8%
Aircraft maintenance
and materials 16,080 20,317 (20.9%)
Aircraft rentals 29,832 32,406 (7.9%)
Sales and marketing 13,633 5,682 139.9%
Facility rents and
landing fees 13,942 13,102 6.4%
Depreciation and
amortization 14,447 7,780 85.7%
Other 22,000 17,411 26.4%
Aircraft early retirement
charge 19,894 - nmf
Total operating expenses 228,119 183,662 24.2%
Operating income (loss) (108,485) 37,374 nmf
Non-operating expense (2,403) (1,219) 97.1%
Income (loss) before taxes (110,888) 36,155 nmf
Income tax provision (28,215) 14,823 nmf
(benefit) (28,215) 14,823 nmf
Net income (loss) $(82,673) $21,332 nmf
Net income (loss) per common and common
equivalent shares:
Basic $(1.82) $0.47
Diluted $(1.82) $0.47
Weighted average number of common
and common equivalent shares
Basic 45,340 45,333
Diluted 45,340 45,425
Consolidated Operating Statistics-Third Quarter
(includes Independence Air, United Express and Delta
Connection operations)
2004
Revenue passenger miles (000's) 563,471
Available seat miles (000's) 1,046,942
Load factor 53.8%
Passengers 1,626,162
Revenue departures 67,532
Revenue block hours 92,716
Yield per RPM (cents) 20.9
Passenger revenue per ASM (cents) 11.2
Operating cost per ASM (cents) 21.8
Operating cost per ASM excluding
aircraft early retirement
charges (cents) 19.9
Operating cost per ASM excluding
fuel and aircraft early
retirement charges (cents) 15.7
Average passenger trip length (miles) 347
Condensed Consolidated Financial Results
(in thousands, except per share amounts)
Unaudited
Nine Months Ended September 30,
2004 2003 Pct.
Change
Operating revenues:
Passenger revenue $516,836 $639,601 (19.2%)
Other revenue 5,335 12,774 (58.2%)
Total operating revenues 522,171 652,375 (20.0%)
Operating expenses:
Salaries and related costs 161,603 161,023 0.4%
Aircraft fuel 122,184 107,428 13.7%
Aircraft maintenance
and materials 60,270 62,967 (4.3%)
Aircraft rentals 92,793 96,501 (3.8%)
Sales and marketing 38,717 17,949 115.7%
Facility rents and
landing fees 39,744 37,803 5.1%
Depreciation and
amortization 32,141 20,899 53.8%
Other 67,434 63,960 5.4%
Aircraft early retirement
charge 48,512 (34,586) nmf
Total operating expenses 663,398 533,944 24.2%
Operating income (loss) (141,227) 118,431 nmf
Non-operating expense (7,609) (2,897) 162.7%
Government compensation - 1,520 nmf
Income (loss) before taxes (148,836) 117,054 nmf
Income tax provision
(benefit) (42,711) 47,992 nmf
Net income (loss) $(106,125) $ 69,062 nmf
Net income (loss) per common and common
equivalent shares:
Basic $(2.34) $1.53
Diluted $(2.34) $1.52
Weighted average number of common
and common equivalent shares:
Basic 45,336 45,269
Diluted 45,336 45,365
Consolidated Operating Statistics-Nine Months Ending
September 30,2004
(includes Independence Air, United Express and Delta
Connection operations)
Revenue passenger miles (000's) 2,078,114
Available seat miles (000's) 3,231,026
Load factor 64.3%
Passengers 5,485,715
Revenue departures 203,138
Revenue block hours 288,665
Yield per RPM (cents) 24.9
Passenger revenue per ASM (cents) 16.0
Operating cost per ASM (cents) 20.5
Operating cost per ASM excluding
aircraft early retirement charge (cents) 19.0
Operating cost per ASM excluding fuel
and aircraft early retirement charge
(cents) 15.2
Average passenger trip length (miles) 379
Selected Balance Sheet Data
(in thousands)
September 30, December 31,
2004 2003 %
Unaudited Audited Change
Cash, cash equivalents, and
short-term investments $ 197,999 $ 297,934 (33.5)
Restricted cash 40,643 14,829 174.1%
Aircraft deposits 105,337 46,990 124.2%
Stockholders' equity 253,233 359,414 (29.5%)
Working capital 203,026 270,849 (25.0%)
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