RENO, Nev., Aug. 26 /PRNewswire/ -- Reno Air, Inc.
(Nasdaq: RENO; PSE: RNO) today announced that the company's board of directors
has authorized management to repurchase up to two million shares of its
outstanding stock. The airline also announced that it has agreed in principle
to sell a surplus aircraft that has been operated by BWIA International
Airways to Pegasus Aviation, Inc. of San Francisco. The stock repurchase plan
and aircraft disposition are part of management's action plan to return the
airline to profitability and enhance shareholder value.
Reno Air further announced that it expects record earnings for the third
quarter and reiterates that it expects to be profitable for the full-year
1998, notwithstanding significant losses in the first quarter and
restructuring charges of $.7 million in the second quarter. The carrier
suffered a $8.6 million loss in the first quarter of 1998 after posting a
$12.3 million loss in fiscal year 1997.
"The Pegasus transaction is a 'win-win' for both parties," said
Joseph R. O'Gorman, Chairman, President, and Chief Executive Officer of Reno
Air. "It generates cash flow to strengthen our competitive position and
allows us to concentrate on running the airline."
The company's action plan has streamlined operations, significantly
reduced costs, optimized scheduling and aircraft utilization, and improved the
operational and customer service performance of the airline. In May, June,
and July, the airline's on-time performance exceeded 86%. Reno Air's on-time
performance was superior during those periods to all of the major airlines,
based upon statistics reported to the Department of Transportation. In
addition, the customer service performance in reservations now exceeds
industry responsiveness standards.
Passenger traffic and yield met or exceeded expectations for July. The
company reports that unit revenue appears to be on track for August and unit
costs continue on a downward trend.
"Based on the continued strong demand for travel in the domestic markets,
the significant improvement we have made in operational and customer service
performance and the current fuel-price environment, the outlook remains
favorable for Reno Air in 1998," said O'Gorman. "Obviously, the credit for
our enhanced financial and operational performance goes to the hard work and
dedication of our employees."
Earlier this year, the airline announced that it had reduced its workforce
by more than 15%, sold two non-operating aircraft to Spirit Airlines of
Detroit, outsourced its revenue accounting systems and tour operator business,
and completely revamped its senior management team with seasoned airline
executives. In addition, the company continues to pursue synergistic
strategic alliances with domestic and international airlines. "With lower
unit costs and the enhancements we have made, we think we can bring
significant value to a strategic partner," commented O'Gorman.
Stock repurchases, including block repurchases, may be made in the open
market or private transactions from time to time, depending on market
conditions, and may be discontinued at any time.
Pegasus Aviation and its affiliates are leading owners and operating
lessors of commercial jet aircraft with more than 144 aircraft on lease to
more than 25 air carriers worldwide.
This news release contains forward-looking information. Actual results
for the third quarter and full year 1998 may differ materially from projected
results due to risks and uncertainties. Some factors that could significantly
impact expected operating results include airline pricing environment;
industry capacity decisions; jet fuel costs; success of the company's cost
control efforts; travel patterns; the economic environment of the airline
industry, and general economic conditions.
The web page address for Reno Air, Inc. is http://www.renoair.com.
SOURCE Reno Air, Inc.
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http://www.renoair.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 740075
CONTACT:
Connie Huff of Reno Air Corporate
Communications, 702-954-5097, or evening/weekend, 888-396-0817
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