RENO, Nev., July 29 /PRNewswire/ -- Reno Air Inc.
(Nasdaq: RENO; PCX: RNO) today announced a substantial improvement over its
first quarter 1997 results, reporting net income of $224,375, or $0.02 per
share of common stock, for the second quarter ending June 30, 1997. While the
second quarter earnings were positive, they were lower than the earnings in
the same quarter of 1996. Although the first two months of the second quarter
1997 were unprofitable, the company achieved approximately the same level of
profitability in the month of June 1997 as in June 1996. "The return to the
prior year's profit level in June is especially encouraging in light of our
lack of aircraft availability during the month due to our engine difficulties
and the fact we are entering what has traditionally been Reno Air's strongest
quarter," said Robert Reding, Reno Air's President and CEO.
Operating Revenues
Operating revenues increased seven percent to $97 million during the
second quarter of 1997 compared to $91 million during the second quarter of
1996. During the first six months of 1997, operating revenues increased 14
percent to $187 million compared to $164 million in the first six months of
the previous year.
The second quarter's load factor of 69.1 percent was an increase of 3.2
points over the second quarter of 1996. In spite of the "100 Year" flood in
Reno and severe West Coast weather during the first quarter 1997, year-to-date
1997 load factor has equaled 1996's first six months' load factor of 66.9
percent.
Yield increased from 11.2 cents per RPM during the second quarter of 1996
to 11.4 cents per RPM during the second quarter of 1997 and from 11.0 cents
reported for the first six months of 1996 to 11.5 cents during the first six
months of 1997 despite the reinstatement of the 10% ticket tax on March 10,
1997.
"Demand for our low fare, full service product is strong," said Robert
Reding, President and CEO, Reno Air. "As a result of limited availability of
Pratt & Whitney spare engines used on our MD-80 aircraft, the quarter's
improvements in yield and load factor were not fully reflected in our reported
earnings. The shortage of engines caused a decrease in fleet utilization and
an increase in overall unit cost. Available flying days were reduced by 143
days (5.2% of available days) out of 2,700 total available days for the second
quarter. Despite this problem, we maintained excellent on-time and flight
completion ratios of 88 percent and 98 percent, respectively, but lost
significant opportunities to fly profitable charter flights. Several
management actions have been implemented to minimize any future impact of a
shortage of engine parts. Currently all aircraft are operational."
Operating Expenses
Operating cost per available seat mile increased to 8.3 cents in the
second quarter of 1997 compared to 7.5 cents during the same quarter of 1996.
The unavailability of aircraft and a 4.5 percent decrease in aircraft stage
length during the second quarter 1997 resulted in a .6 percent decrease in
ASM's quarter over quarter despite the addition of three aircraft to the
fleet.
Third Quarter Outlook
"Traditionally, the third quarter is our strongest financial quarter due
to a heavy increase in vacation and leisure travel," said Reding. "Our
advance bookings are strong to date in the third quarter and we expect our
yield to continue to outperform last year. Demand for the Anchorage, Alaska
market influenced our decision to add a seasonal non stop Reno to Anchorage
flight commencing August 8, 1997. This five hour, 1,969 mile trip will help
to increase aircraft utilization and total ASM's in the third quarter."
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995:
Information about the third quarter of 1997 set forth in this press
release is forward-looking, and actual results could differ materially from
expected results. Factors that could significantly affect unit revenue per
share include: the airline pricing environment, fuel prices, excise taxes and
increased competition.
Reno Air, Inc.
Statement of Operations
(unaudited)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
OPERATING REVENUES:
Passenger $91,467,514 $86,496,903 $175,762,153 $155,182,459
Other 5,954,331 4,418,999 11,343,562 8,553,304
Total operating
revenues 97,421,845 90,915,902 187,105,715 163,735,763
OPERATING EXPENSES:
Salaries, wages
and benefits 16,862,974 13,566,229 32,185,423 25,041,827
Aircraft fuel
and oil 16,162,531 16,593,053 34,240,572 29,374,864
Aircraft leases 17,512,672 15,560,498 34,115,919 28,479,879
Handling, landing
and airport fees 9,788,778 8,922,283 19,166,872 16,292,713
Maintenance 8,068,183 6,311,736 15,648,162 12,130,503
Advertising, sales
and distribution 7,609,444 7,911,286 15,074,568 14,683,175
Commissions 5,062,922 5,147,843 9,962,908 9,320,990
Facility leases 3,500,157 2,814,055 6,590,272 5,373,468
Insurance 1,389,744 2,031,174 3,222,628 3,952,842
Communications 1,442,510 1,022,559 2,740,702 2,017,206
Depreciation and
amortization 2,483,798 1,386,266 4,701,502 2,367,335
Other 6,593,752 6,022,714 12,684,052 10,630,744
Total operating
expenses 96,477,465 87,289,696 190,333,580 159,665,546
OPERATING INCOME (LOSS) 944,380 3,626,206 (3,227,865) 4,070,217
NON - OPERATING INCOME (EXPENSE):
Interest expense (1,167,096) (856,893) (2,435,150) (1,652,409)
Interest income 537,668 728,679 1,025,629 1,452,386
Other, net (90,577) (85,761) (135,656) (182,859)
INCOME (LOSS)
BEFORE INCOME TAXES 224,375 3,412,231 (4,773,042) 3,687,335
INCOME TAX PROVISION --- 137,321 --- 137,321
NET INCOME(LOSS) $224,375 $3,274,910 $(4,773,042) $3,550,014
Net income (loss) per common share
and common share equivalent:
Primary $0.02 $0.30 $(0.46) $0.33
Fully diluted $0.02 $0.28 $(0.46) $0.32
Weighted average number of common shares
and common share equivalents outstanding:
Primary 10,749,046 11,063,877 10,409,315 10,855,017
Fully diluted 10,887,526 13,962,798 10,409,315 11,001,210
Reno Air, Inc.
Selected Operating Data
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
Revenue Passenger Miles
(RPMs; 000 omitted) 802,508 769,876 1,525,126 1,415,080
Available Seat Miles
(ASMs; 000 omitted) 1,161,784 1,169,078 2,278,595 2,116,423
Load Factor (%) 69.1 65.9 66.9 66.9
Revenue Passengers 1,404,943 1,298,135 2,677,818 2,396,099
Average passenger stage
length (in miles) 571 593 570 590
Average aircraft stage
length (in miles) 513 537 515 544
Yield per RPM (cents) 11.4 11.2 11.5 11.0
Passenger revenue per
ASM (cents) 7.9 7.4 7.7 7.3
Cost per ASM (cents) 8.3 7.5 8.4 7.5
Break-even load factor (%)68.9 63.4 68.7 65.3
Average fuel cost
per gallon $0.71 $0.74 $0.82 $0.72
SOURCE Reno Air Inc.
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CONTACT:
Connie Huff, Director Corporate
Communications of Reno Air, 702-686-3874, or Evening-Weekend
1-888-396-0817
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