Republic Airways Holdings Inc. is studying whether to sell planes and airport-landing rights in Washington to help raise about $113 million in a second round of restructuring at its unprofitable Frontier Airlines unit.
The plans would include removing a lavatory to make room for three more seats on some Airbus jets and indefinitely deferring some Embraer SA aircraft purchases, chief executive Bryan Bedford told employees in a memo obtained by Bloomberg News.
Republic came up $15 million short of its goal for an unrestricted cash reserve of at least $200 million in the third quarter, Bedford wrote. The Indianapolis- based airline is projected to post a profit when it reports results next month, based on estimates from seven analysts surveyed by Bloomberg.
“Absent asset sales, we will be even further below that target by the end of the year,” Bedford said. “So again, we have to make tough choices, and we will.”
Republic isn’t discussing Bedford’s memo because it was an internal letter to employees and not intended for distribution outside the company, spokesman Peter Kowalchuk said Wednesday in an e-mail.
Bedford took on a new business model by operating Frontier under its own brand after Republic bought the Denver- based airline out of bankruptcy in October 2009 for $108.8 million. Republic’s previous focus had been regional flights for carriers such as Delta Air Lines and American Airlines.
