RJET 10-K & 10-Q changes, risk factors and insider trading
Republic Airways Holdings Inc. · Nasdaq · Air Transportation, Scheduled · CIK 810332 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “In addition to factors discussed elsewhere in this Report, the following are important risks which could adversely affect our future results. Additional risks and uncertainties not presently known to us or that we currently do not deem material may also impair our business operations. If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.”
New heading “Risks Related to Disruption of our Operations”
New heading “We may experience disruption in service due to delays from key third-party service providers.”
New heading “We currently depend on Embraer, General Electric (“GE”) Aviation, and other original equipment manufacturers (“OEMs”) to support our fleet of aircraft.”
New heading “We are at risk of losses stemming from an accident or incident involving any of our regional or general aviation aircraft or personnel.”
New heading “Interruptions or disruptions in service at one of our hub airports, due to weather, system malfunctions, security closures, or for any other reason, could have an adverse impact on our operations.”
New heading “Risks Related to the Merger and Integration with Mesa Air Group, Inc.”
New heading “We may be unable to integrate Mesa’s business with ours successfully and realize any anticipated benefits of the Merger, which could negatively impact our stock price and our future business and financial results.”
New heading “We are expected to incur substantial expenses related to the Merger and the integration of Mesa Airlines’ business.”
New heading “Risks Related to our Capacity Purchase Agreements with our Partner Airlines”
New heading “Our business is dependent on our CPAs with our Partner Airlines.”
New heading “Reduced utilization levels of our aircraft under CPAs with our Partner Airlines would adversely impact our revenues, earnings, and liquidity.”
New heading “If the financial strength of any of our Partner Airlines decreases, our financial strength, in turn, is at risk.”
New heading “Our Partner Airlines may choose to operate their own regional aircraft, thus limiting the opportunity for expansion of our relationships with them.”
New heading “Our Partner Airlines may be restricted in increasing the level of business that they conduct with us, thereby limiting our growth.”
New heading “Disagreements regarding the interpretation of the CPAs with our Partner Airlines could have an adverse effect on our operating results and financial condition.”
New heading “Risks Related to our Operating Costs and Personnel”
New heading “We may experience difficulty hiring, training, and retaining qualified aviation professionals.”
New heading “Increases in our labor costs, which constitute a substantial portion of our total operating costs, will directly impact our earnings and ability to compete for new fixed-fee business.”
New heading “We have a significant amount of debt and other contractual obligations that could impair our liquidity and thereby harm our business, results of operations, financial condition, and the price of our common stock.”
New heading “Our business could be harmed if we are unable to attract, develop, and retain the services of our key personnel.”
New heading “Risks Related to Regulation and Litigation”
New heading “We may become involved in litigation that may have a material and adverse effect on our business and financial condition.”
New heading “We support our Partner Airlines’ goals and strategies to reduce carbon emissions on flights we operate under our code-share agreements and, as we work to support each of our Partner Airlines’ goals and strategies, initiatives to reduce emissions may not materialize and could materially and adversely affect the Company’s business plans, strategies, results of operations, and the price of our common stock.”
New heading “Airlines are often affected by factors beyond their control, including economic conditions, air traffic congestion at airports, air traffic control inefficiencies, government shutdowns, major construction or improvements at airports, FAA grounding of aircraft, increased security measures, new travel-related taxes and fees, adverse weather conditions and natural disasters.”
New heading “The airline industry is heavily regulated.”
New heading “The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential partners, which could adversely affect our operating results and financial condition.”
New heading “General Risks Related to Us”
New heading “We are increasingly dependent on technology, and if our technology fails, we do not adequately continue to invest in new technology or we are the subject of any cybersecurity incidents of our information technology infrastructure, our business may be adversely affected.”
Removed heading “Risk Factor Summary”
Removed heading “Risks Related to Our Business”
Removed heading “We are highly dependent on our agreement with United.”
Removed heading “Reduced utilization levels of our aircraft under our United CPA would have a material adverse impact our results of operations and financial condition.”
Removed heading “If United experiences events that negatively impact its financial strength or operations, our operations also may be negatively impacted.”
Removed heading “We have a significant amount of debt and other contractual obligations that could impair our liquidity and thereby harm our business, results of operations and financial condition.”
Removed heading “We are required to comply with certain ongoing financial and other covenants under certain credit facilities and leases, and if we fail to meet those covenants or otherwise suffer a default thereunder, our lenders and lessors may accelerate the payment of such obligations.”
Removed heading “The loss of key personnel upon whom we depend on to operate our business or the inability to attract additional qualified personnel could adversely affect our business.”
Removed heading “If the supply of pilots to the airline industry becomes constrained and pilot attrition levels increase, our results of operations and financial condition would be negatively impacted.”
Removed heading “Mechanic attrition, together with difficulty recruiting and retaining qualified maintenance technicians, may negatively affect our operations and financial condition.”
Removed heading “Increases in our labor costs, which constitute a substantial portion of our total operating costs, may adversely affect our business, results of operations and financial condition.”
Removed heading “United may expand its direct operation of regional jets or seek other independent airlines to service their regional aircraft needs, thus limiting the expansion of our relationships with them.”
Removed heading “We may be limited from expanding our flying within United flight systems and there are constraints on our ability to provide services to airlines other than United.”
Removed heading “The residual value of our owned aircraft may be less than estimated in our depreciation policies.”
Removed heading “The amounts we receive under our United CPA may be less than the corresponding costs we incur.”
Removed heading “Strikes, labor disputes and increased unionization of our workforces may adversely affect our ability to conduct our business and reduce our profitability.”
Removed heading “We may incur substantial maintenance costs as part of our leased aircraft return obligations.”
Removed heading “We may become involved in litigation that may materially adversely affect us.”
Removed heading “Disagreements regarding the interpretation of our CPA with United could have an adverse effect on our operating results and financial condition.”
Removed heading “We rely on third-party suppliers as the sole manufacturers of our aircraft and aircraft engines.”
Removed heading “Maintenance costs will likely increase as the age of our jet fleet increases.”
Removed heading “If we face problems with any of our third-party service providers, our operations could be adversely affected.”
Removed heading “Regulatory changes or tariffs could negatively impact our business and financial condition.”
Removed heading “The issuance of operating restrictions applicable to one of the fleet types we operate could negatively impact our business and financial condition.”
Removed heading “If we have a failure in our technology or security breaches of our information technology infrastructure our business and financial condition may be adversely affected.”
Removed heading “We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations and financial condition.”
Removed heading “Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.”
Removed heading “Our ability to obtain financing or access capital markets may be limited.”
Removed heading “Negative publicity regarding our customer service could have a material adverse effect on our business, results of operations and financial condition.”
Removed heading “Future public health threats that negatively impact the demand for air travel could adversely impact our business.”
Removed heading “The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential major partners.”
Removed heading “We are subject to significant governmental regulation.”
Removed heading “Airlines are often affected by factors beyond their control, including: air traffic congestion at airports; air traffic control inefficiencies; adverse weather conditions, such as hurricanes or blizzards; increased security measures; new travel-related taxes; or the outbreak of disease; any of which could have a material adverse effect on our business, results of operations, and financial condition.”
Removed heading “The occurrence of an aviation accident involving our aircraft would negatively impact our operations and financial condition.”
Removed heading “If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volume could decline.”
Removed heading “The value of our common stock may be materially adversely affected by additional issuances of common stock underlying our outstanding warrants.”
Removed heading “Our corporate charter includes provisions limiting ownership by non-U.S. citizens.”
Removed heading “Our corporate charter limits certain transfers of our stock, which limits are intended to preserve our ability to use our net operating loss carryforwards, and these limits could have an effect on the market price and liquidity of our common stock.”
Removed heading “Risks Related to our Merger with Republic Airways Holdings Inc.”
Removed heading “The merger of Republic Airways Holdings Inc. (“Republic”) with and into the Company (the “Merger”) is subject to conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the Merger in a timely manner or at all could have adverse effects on the Company.”
Removed heading “The market price of our common stock after the Merger may be affected by factors different from those affecting the price of our common stock before the Merger.”
Removed heading “Potential litigation against the Company and/or Republic could result in substantial costs, an injunction preventing the completion of the Merger and/or a judgment resulting in the payment of damages.”
Removed heading “The Merger is subject to the requirements of the HSR Act, and regulatory authorities may impose conditions that could have an adverse effect on the Company and/or Republic following the Merger or that could delay, prevent or increase the costs associated with completion of the Merger.”
Removed heading “General Risk Factors”
Removed heading “The requirements of being a public company may strain our resources, increase our operating costs, divert management's attention, and affect our ability to attract and retain qualified board members or executive officers.”
Removed heading “We are required to assess our internal control over financial reporting on an annual basis, and any future adverse findings from such assessment could result in a loss of investor confidence in our financial reports, result in significant expenses to remediate any internal control deficiencies and have a material adverse effect on our business, results of operations and financial condition.”
Largest changes
“We became a public company in August 2018. As a public company, we incur significant legal, accounting, and other expenses, including costs associated with public company reporting requirements. We also have incurred and will continue to incur costs associated with the Sarbanes-Oxley Act of 2002, as amended, the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules implemented or to be implemented by the SEC and the Nasdaq Capital Market. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. …”see in full comparison
“• actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, higher taxes and/or tariffs, public health emergencies, including pandemics, international hostilities (including the ongoing conflicts in the Middle East and between Russia and Ukraine), terrorist attacks or political instability;”see in full comparison
“Failure to comply with the terms of these credit facilities and financing arrangements and the ongoing financial and other covenants thereunder would result in an event of default (as defined in the applicable credit facility and financing agreement) and, to the extent the applicable lenders so elect, an acceleration of our existing indebtedness following the expiration of any applicable cure periods, causing such debt to be immediately due and payable. Acceleration of such indebtedness would also trigger cross-default clauses under our other indebtedness. …”see in full comparison
“The completion of the merger of Republic with and into the Company is subject to a number of conditions, including, among others: …”see in full comparison
“We are required to comply with certain ongoing financial and other covenants under certain credit facilities and leases, and if we fail to meet those covenants or otherwise suffer a default thereunder, our lenders and lessors may accelerate the payment of such obligations.”see in full comparison
“If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our existing debt obligations and impair our liquidity. Our ability to restructure or refinance our debt will depend on, among other things, our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates or otherwise on more onerous terms. …”see in full comparison
Full comparison: every changed paragraph (301)
In addition to factors discussed elsewhere in this Report, the following are important risks which could adversely affect our future results. Additional risks and uncertainties not presently known to us or that we currently do not deem material may also impair our business operations. If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.
Risks Related to Disruption of our Operations
Investing in our common stock involves a high degree of risk. Certain factors may have a material adverse effect on our business, financial condition, and results of operation. You should carefully consider the risks and uncertainties described below, together with all of the other information included in this Annual Report on Form 10-K, including our financial statements and the related notes, and in our other filings with the SEC. Our business, financial condition, operating results, cash flow, and prospects could be materially and adversely affected by any of these risks or uncertainties. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risk Factor Summary
The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations:
We are highly dependent on our agreement with United and our operations may be negatively impacted if United experiences events that negatively impacts its financial strength or operations.
Reduced utilization levels of our aircraft under our agreements with United would adversely impact our financial results.
If United experiences events that negatively impact its financial strength or operations, our operations may be negatively impacted.
We have a significant amount of debt and other contractual obligations, certain of which are subject to financial and other covenants.
The loss of key personnel or the inability to attract additional qualified personnel could adversely affect our business.
If the supply of pilots and mechanics to the airline industry becomes constrained and pilot attrition levels increase, our results of operations and financial condition would be negatively impacted.
Mechanic attrition and difficulty recruiting and retaining qualified maintenance technicians may negatively affect our operations and financial condition.
IncreasesVarious negative economic or industry conditions may result in reductions to our laborflight costsschedules, maywhich could materially and adversely affect our business, results of operations,operations and financial condition.
Our operations and financial condition are affected by many changing economic and other conditions beyond our control, including, among others:
• actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, higher taxes and/or tariffs, public health emergencies, including pandemics, international hostilities (including the ongoing conflicts in the Middle East and between Russia and Ukraine), terrorist attacks or political instability;
• impact on workforce availability and economic uncertainty;
• future public health threats, outbreaks of diseases or other illnesses could negatively affect travel behavior and the industry;
• changes in consumer preferences, perceptions, spending patterns or demographic trends;
• changes in the competitive environment due to industry consolidation, new airlines entering the market, our major Partner Airlines operating smaller sized aircraft that may reduce the demand for regional aircraft and other factors;
• actual or potential disruptions to U.S. air traffic control systems, caused by a government funding shutdown or otherwise;
• interference on aviation equipment from the deployment of 5G wireless telecommunications systems, or other factors disrupting communications;
• price of jet fuel and oil that may negatively impact the number of flights we are scheduled to operate by our major Partner Airlines under our CPAs and may negatively impact the profitability of our agreements;
• disruptions in the credit markets, which may impact availability of price competitive financing;
• weather and natural disasters.
The effect of any, or some combination, of the foregoing economic and industry conditions on our operations or financial condition is virtually impossible to forecast; however, the occurrence of any or all of such conditions in a significant manner could materially and adversely affect our operations and financial condition and could cause our major Partner Airlines to reduce the utilization levels of our aircraft under our code-share agreements.
We may experience disruption in service due to delays from key third-party service providers.
We rely on third-party vendors for a variety of services and functions critical to our business, including airframe and engine maintenance, telecommunication systems, and information technology infrastructure, as well as services and functions provided by our Partner Airlines such as ground handling, fueling, computer reservation system hosting, telecommunication systems, and information technology infrastructure and services.
Even though we strive to formalize agreements with these vendors that define expected service levels, our use of third-party vendors increases our exposure to several risks. In the event that one or more vendors goes into bankruptcy, ceases operation, or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all. If one of our vendors fails to perform adequately, we may experience increased costs, delays, maintenance issues, safety issues, or negative public perception. Vendor bankruptcies, unionization, regulatory compliance issues, or significant changes in the competitive marketplace among suppliers could adversely affect vendor services or force us to renegotiate existing agreements on less favorable terms. These events could result in disruptions in our operations or increases in our cost structure.
We currently depend on Embraer, General Electric (“GE”) Aviation, and other original equipment manufacturers (“OEMs”) to support our fleet of aircraft.
We currently rely on Embraer as the primary manufacturer of all of our regional jets and GE Aviation and its affiliates as the primary manufacturer for our supporting engines. Our risks in relying on a limited number of aircraft and engine manufacturers include:
•the failure or inability of Embraer, GE Aviation, or an OEM to provide sufficient parts or related support services on a timely basis;
•the interruption of scheduled passenger service as a result of unscheduled or unanticipated maintenance requirements for these aircraft;
•the issuance of DOT or FAA directives restricting or prohibiting the use of Embraer aircraft or GE Aviation engines or requiring time-consuming inspections and maintenance;
•the enactment of tariffs that will increase cost and/or delay parts at the border causing prolonged time of repair; and
•the adverse public perception of a manufacturer as a result of an accident or other adverse publicity.
Our operations could be materially and adversely affected by the failure or inability of Embraer, GE Aviation, or an OEM to provide sufficient parts or related maintenance and support services on a timely basis or by an interruption of fleet service as a result of unscheduled or unanticipated maintenance requirements for our aircraft or engines.
In addition, our Partner Airlines include both Embraer aircraft and aircraft manufactured by other OEMs as part of their networks. If we continue to operate a single manufactured fleet, we may not be able to compete for and win new regional flying opportunities, and our growth could be limited. Therefore, our growth plan may require us to expand our operations to flying regional jets manufactured by other OEMs. In such event, the introduction of additional aircraft types will require us to develop and implement specific operational proficiencies, including pilots, flight attendants, and maintenance technicians. Doing so may erode our operational efficiencies gained from flying a single aircraft type and could cause margin degradation.
We are at risk of losses stemming from an accident or incident involving any of our regional or general aviation aircraft or personnel.
It is possible that one or more of our commercial passenger aircraft or general aviation aircraft may be involved in an accident in the future, causing death or serious injury to individual air travelers and our employees, destroying our aircraft, and the property of third parties.
In addition, an accident involving one of our aircraft could expose us to significant tort liabilities. Such liabilities could include liability arising from the claims of those on board, including passengers or their estates seeking to recover damages for death or injury. There can be no assurance that the insurance we carry to cover such damages will be adequate. Accidents could also result in unforeseen mechanical and maintenance costs. In addition, any accident involving an aircraft type that we operate could create a public perception that our aircraft are not safe. Such an accident could materially and adversely affect our financial condition, results of operations, and the price of our common stock.
We are also at risk of adverse publicity stemming from any incident involving us, which could expose us or our Partner Airlines to reputational harm and potential legal liability. Our involvement in any such incident could negatively impact our relationship with our Partner Airlines or affect our Partner Airlines’ respective brands, and as a result, adversely impact our business, results of operations, financial condition, and the price of our common stock.
Interruptions or disruptions in service at one of our hub airports, due to weather, system malfunctions, security closures, or for any other reason, could have an adverse impact on our operations.
We currently operate primarily through hubs supporting our Partner Airlines’ respective route network across the Northeast, Midwest, and South regions of the United States. A significant portion of our flights either originate from or fly into one of these hubs. These regions tend to experience higher than average adverse weather events, air traffic control disruptions, and the airports within these regions tend to experience significant congestion relative to many other U.S. airports, each of which creates significant challenges to completing flights on time. Our revenues depend primarily on our completion of flights and, secondarily, on service factors such as timeliness of departures and arrivals. Certain revenues are also impacted by non-controllable conditions such as weather. Any interruptions or disruptions could, therefore, adversely affect us. Extreme weather such as blizzards, hurricanes or tornados can cause flight disruptions, and during periods of storms or adverse weather, our flights may be cancelled or significantly delayed. An interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, air traffic control disruptions, airport construction, security closures, or otherwise, could result in the cancellation or delay of a portion of our flights and, as a result, could have adverse impact on our operations and financial performance.
Risks Related to the Merger and Integration with Mesa Air Group, Inc.
We may be unable to integrate Mesa’s business with ours successfully and realize any anticipated benefits of the Merger, which could negatively impact our stock price and our future business and financial results.
We must devote significant management attention and resources to integrating the business practices and operations of Mesa Airlines. Potential difficulties we may encounter as part of the integration process include the following:
•integrating complex systems, operating procedures, regulatory compliance programs, technology, aircraft fleets, networks, and other assets of the two companies in a manner that minimizes any adverse impact on customers, suppliers, employees, and other constituencies;
•diversion of the attention of our management and other key employees;
•integrating the workforces of the two companies while maintaining focus on providing consistent, high quality customer service and running a safe, clean, and reliable flying experience;
•disruption of, or the loss of momentum in, our ongoing business;
•liabilities that are significantly larger than we currently anticipate and unforeseen increased expenses or delays associated with the Merger, including transition costs to integrate the two businesses that may exceed the costs that we currently anticipate;
•maintaining productive and effective employee relationships and achieving cost-competitive collective bargaining agreements that cover the combined union-represented work groups;
•the increased scale of our operations resulting from the Merger;
•retaining key employees of our company; and
•obligations that we will have to counterparties of Mesa that arise as a result of the change in control of Mesa.
If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business the size of Mesa, then we may not achieve any potential benefits of the Merger of Mesa and our revenues, expenses, operating results, and financial condition could be materially adversely affected.
We are expected to incur substantial expenses related to the Merger and the integration of Mesa Airlines’ business.
We are expected to incur substantial integration and transition expenses in connection with the Merger of Mesa Airlines related to a large number of processes, policies, procedures, operations, technologies, and systems that must be integrated. While we have assumed that a certain level of expenses will be incurred, there are many factors beyond our control that could affect the total amount or the timing of the integration expenses. Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately. These expenses could, particularly in the near term, exceed the financial benefits we expect to achieve from the Merger, including the elimination of duplicative expenses and the realization of economies of scale and cost savings. These integration expenses likely will continue to result in us taking significant charges against earnings in future periods, and the amount and timing of such charges are uncertain at present.
Risks Related to our Capacity Purchase Agreements with our Partner Airlines
Our business is dependent on our CPAs with our Partner Airlines.
Management's Discussion & Analysis (MD&A)
New heading “Factors, Trends, and Uncertainties Affecting Republic’s Business”
New heading “Wages and Benefits”
New heading “Aircraft and Engine Rent”
New heading “Maintenance and Repair”
New heading “Depreciation and Amortization”
New heading “Executive Separation and Merger-related Items”
New heading “Other Expense, net”
New heading “Year ended December 31, 2025 compared to the year ended December 31, 2024”
New heading “Year ended December 31, 2024 compared to the year ended December 31, 2023”
New heading “Operating expenses”
New heading “Other expense, net”
New heading “Income tax expense”
New heading “Letters of Credit”
New heading “Off-Balance Sheet Arrangements”
New heading “Commitments and Obligations”
New heading “Critical Accounting Policies and Estimates”
Removed heading “Glossary of Airline Terms”
Removed heading “2024 Financial Highlights”
Removed heading “Industry Trends”
Removed heading “Economic Conditions, Challenges and Risks”
Removed heading “Segment Reporting”
Removed heading “Comparison of our Fiscal Years Ended September 30, 2024 and 2023”
Removed heading “Operating Revenues/Statistics”
Removed heading “Cautionary Statement Regarding Non-GAAP Measures”
Removed heading “Adjusted EBITDA and Adjusted EBITDAR”
Removed heading “Operating Leases”
Removed heading “Working Capital Line of Credit”
Removed heading “Electric Aircraft Forward Purchase Commitments”
Removed heading “Maintenance Commitments”
Removed heading “Restricted Cash”
Removed heading “Net Cash Flow Provided by Operating Activities”
Removed heading “Net Cash Flows Provided by (Used in) Investing Activities”
Removed heading “Net Cash Flows Used in Financing Activities”
Removed heading “Critical Accounting Estimates”
Removed heading “Revenue Recognition”
Removed heading “Property and Equipment”
Largest changes
“In August 2016, we, as guarantor, our wholly owned subsidiaries, Mesa Airlines and MAG-AIM, as borrowers, CIT, as administrative agent, and the lenders party thereto (the “CIT Lenders”), entered into the CIT Revolving Credit Facility, pursuant to which the CIT Lenders committed to lend to Mesa Airlines and MAG-AIM revolving loans in the aggregate principal amount of up to $35.0 million. …”see in full comparison
“As of July 16, 2024, the Company was not in compliance with a financial covenant related to a minimum liquidity requirement of $15.0 million of cash and cash equivalents associated with its Second Amended and Restated Credit and Guaranty Agreement with United. …”see in full comparison
“On April 4, 2025, we entered into the Sixth Amendment to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period ended March 31, 2025, and a projected financial covenant default with respect to the periods ending June 30, 2025, September 30, 2025, December 31, 2025, and March 31, 2026, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.”see in full comparison
“On December 23, 2024, we entered into a Waiver to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period July 1, 2024 to December 23, 2024 and a projected financial covenant default with respect to the period December 24, 2024 to December 31, 2024, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.”see in full comparison
“On December 27, 2022, in connection with entering into the Amended and Restated United CPA, (i) United agreed to purchase and assume all of First Citizens’ rights and obligations as a lender under the Existing Facility pursuant to an Assignment and Assumption Agreement, (ii) United and CIT Bank agreed to amend the Existing Facility pursuant to an Amendment No. 1, dated December 27, 2022 (“Amendment No. 1”), and an Amendment No. 2, dated January 27, 2023 (“Amendment No. 2”; the Existing Facility as amended by Amendment No. 1 and Amendment No. …”see in full comparison
“On October 30, 2020, the Company entered into a Loan and Guarantee Agreement with the U.S Treasury under the CARES Act. The loan agreement provides for a secured term loan facility of up to $200.0 million (the “Treasury Loan” or "UST Loan"). On October 30, 2020, the Company borrowed $43.0 million under the Treasury Loan and on November 13, 2020, the Company borrowed an additional $152.0 million. No additional sums are available for borrowing under the Treasury Loan. …”see in full comparison
Full comparison: every changed paragraph (321)
The following discussion and analysis of our financial condition and results of operations should be read togetherin conjunction with our consolidated financial statements, the accompanying notes, and the other financial information included elsewhere in this Annual Report on Form 10-K.Report. The following discussion contains forward‑lookingforward-looking statements that involve risksrisks, uncertainties, and uncertaintiesassumptions suchthat ascould our plans, estimates, and beliefs. Ourcause actual results couldto differ materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to thosesuch differences in our actual results include, but are not limited to, those discussed below and those discussed elsewhere in this Annual Report on Form 10-K, particularly in the sections "“Cautionary NotesNote Regarding Forward-Looking Statements"” and Part I, Item 1A. "“Risk Factors"” above.in this Report.
We are the second largest independent regional airline in the United States based on total fleet and daily departures. As of December 31, 2025 and 2024, we had an operational fleet of 275 and 208 regional jet aircraft that regularly provides scheduled passenger service on approximately 1,300 and 1,000 daily flights, to approximately 130 and 90 cities, respectively, in the United States, Canada, Mexico, and the Caribbean.
On November 25, 2025, the Company and Mesa Air Group, Inc. (“Mesa Parent”), former parent company of Mesa Airlines, completed the Merger of Republic Airways Holdings Inc. and Mesa Air Group, Inc., whereby the Company merged with and into Mesa Air Group, Inc. (the “Merger”). The legal entity Mesa Air Group, Inc. continued as the surviving corporation; however, upon completion of the Merger, the legal entity was renamed Republic Airways Holdings Inc. The Company, on a pre-Merger basis, is referred to as “Legacy Republic.” The Company includes the operations of Legacy Republic and, beginning on November 25, 2025, also includes the operations, financial position, and cash flows of the former entity Mesa Air Group, Inc. and its wholly-owned subsidiaries. See Note 3, Merger with Mesa Air Group, Inc., in the notes to the audited consolidated financial statements included in this Report.
Substantially all of our flights are operated under multi-year CPAs with our Partner Airlines. We exclusively operate the dual class Embraer E170/175 family of aircraft and are one of the world’s largest operators of that popular aircraft type. Under the CPAs, we provide substantially all of our flight capacity to our Partner Airlines. Our compensation is not materially or directly affected by variations in fares or passenger load factors, nor by variations in the price of fuel, the cost of which is paid directly by our Partner Airlines, effectively providing us with contractual monthly revenues, while reducing our exposure to fluctuations in fuel prices, fare competition, and passenger loads. In 2025 and 2024, we carried passengers on more than 371,000 and 323,000 flights, generating revenues of $1,676.5 million and $1,474.0 million and pre-tax income of $113.4 million and $86.9 million, respectively.
We operate under our Partner Airlines’ two-letter flight designation codes, paint our aircraft in the style of our Partner Airlines’ brand requirements, and use our Partner Airlines’ service marks to market ourselves as a carrier for our Partner Airlines. Our Partner Airlines control route selection, pricing, seat inventories, marketing, and scheduling, and provide us with ground support services, airport take-off and landing slots, and gate access, allowing us to focus on operational excellence, positioning ourselves as the regional airline of choice for our Partner Airlines and passengers through the delivery of safe, clean, reliable, and efficient regional service. For the year ended December 31, 2025, American Airlines, Delta Air Lines, and United Airlines accounted for 43%, 28%, and 29% of our departures, respectively.
During the year ended December 31, 2025, Bryan K. Bedford, our former Chief Executive Officer, was nominated and subsequently confirmed for service as Administrator of the Federal Aviation Administration. In connection with such nomination, Mr. Bedford retired effective July 1, 2025. We paid a cash payment of $16.0 million related to his employment contract. Upon effectiveness of his retirement, 652,475 shares were considered earned and vested immediately, resulting in additional compensation expense of $9.8 million. We recorded total expense of approximately $20.8 million during the year ended December 31, 2025 related to Mr. Bedford’s separation and retirement, which includes $2.0 million related to subsequent remeasurements of Mr. Bedford’s awards. Matthew Koscal, Executive Vice President and Chief Administrative Officer, was promoted to President and Chief Commercial Officer, and David Grizzle, Chairman of the Board of Directors, began serving as Chief Executive Officer upon Mr. Bedford’s retirement on July 1, 2025. During the year ended December 31, 2025, we announced that the Board of Directors expects that Mr. Koscal will succeed Mr. Grizzle in the position of CEO during the year ending December 31, 2026, at which time David Grizzle will return to the position of non-executive Chairman of the Board of Directors. Any final succession decision will be determined at a future undetermined date, in the sole discretion of the Board of Directors and publicly announced, as legally required.
Factors, Trends, and Uncertainties Affecting Republic’s Business
Mesa Airlines is a regional air carrier providing scheduled passenger service to 67 cities in 34 states, Cuba, and Mexico. All of our flights are operated as United Express flights pursuant to the terms of our Amended and Restated CPA with United. Prior to the voluntary wind-down of the DHL FSA on March 1, 2024, Mesa also operated flights as DHL Express flights pursuant to the terms of the FSA. Under the United CPA, we operated a fleet of 67 aircraft with approximately 265 daily departures as of September 30, 2024. We also leased two CRJ-700 aircraft to a third party during fiscal year 2024 and operated MPD, our pilot development program. As of September 30, 2024, all of our aircraft in scheduled service were operated for United. All of our operating revenue in our 2024, 2023, and 2022 fiscal years were derived from operations associated with our United CPA, DHL FSA, leases of aircraft to a third party, and MPD. Operating revenue in fiscal years 2023 and 2022 were also derived from operations associated with our American CPA prior to the wind-down and termination of such CPA on April 3, 2023.
Our long-term agreement with United provides us guaranteed monthly revenue for each aircraft under contract, a fixed fee for each block hour and flight actually flown, and reimbursement of certain direct operating expenses in exchange for providing regional flying services on behalf of United. Our CPA also shelters us from many of the elements that cause volatility in airline financial performance, including fuel prices, variations in ticket prices, and fluctuations in number of passengers. In providing regional flying under our CPA, we use the logos, service marks, flight crew uniforms and aircraft paint schemes of United. United controls route selection, pricing, seat inventories, marketing, and scheduling, and provides us with ground support services, airport landing slots and gate access.
Glossary of Airline Terms
Set forth below is a glossary of industry terms used in this Annual Report on Form 10-K:
"Available seat miles" or "ASMs" means the number of seats available for passengers multiplied by the number of miles the seats are flown.
"Average stage length" means the average number of statute miles flown per flight segment.
"Block hours" means the number of hours during which the aircraft is in revenue service, measured from the time of gate departure before take-off until the time of gate arrival at the destination.
"CRASM" means contract revenue divided by ASMs.
"DOT" means the United States Department of Transportation.
"FAA" means the United States Federal Aviation Administration.
"FTE" means full-time equivalent employee.
"Load factor" means the percentage of aircraft seat miles actually occupied on a flight (RPMs divided by ASMs).
"NMB" means the National Mediation Board.
"Pass-through and other revenue" means costs from our major partners under our agreements that we equally recognize as both a revenue and an expense, including passenger and hull insurance, aircraft property taxes, landing fees, catering and certain maintenance costs related to our E-175 aircraft.
"Revenue Passenger Miles" or "RPMs" means the number of miles traveled by paying passengers.
"TSA" means the United States Transportation Security Administration.
"Utilization" means the percentage derived from dividing (i) the number of block hours actually flown during a given month under a particular CPA by (ii) the maximum number of block hours that could be flown during such month under the particular CPA.
2024 Financial Highlights
For our fiscal year ended September 30, 2024, we had total operating revenues of $476.4 million, a 4.3% decrease, compared to $498.1 million for our fiscal year ended September 30, 2023. Net loss for our fiscal year ended September 30, 2024 was $91.0 million, or $2.21 per diluted share, compared to net loss of $120.1 million, or $3.04 per diluted share, for our fiscal year ended September 30, 2023.
During our fiscal year ended September 30, 2024, our completed block hours decreased by 12,711, or 6.7%, compared to our fiscal year ended September 30, 2023.
Industry Trends
We believe our operating and business performance is driven by various factors that typically affect regional airlines and their markets, including factors and trends which affect the broader airline and travel industries, though the terms of our United CPA reduces our exposure to fluctuations in certain trends.industries. The following key factorsfactors, trends, and uncertainties have affected our historical results of operations and may materially affect our future performance.performance:
Availability and Training of Qualified Pilots. OnEffective July 8,15, 2013, as directed by the U.S. Congress, the FAA issued more stringent pilot qualification and crew member flight training standards, which, among other things, increased the required training time for new commercial airline pilots from 250 hours to 1,500 hours of flight time. With these changes, the supply of qualified pilot candidates eligible for hiring by the airline industry washas been dramatically reduced.reduced Toin addressrecent years. In addition, the diminishedFAA’s supplymandatory retirement age of qualified65 pilotis candidates,expected regionalto airlinescause implementeda significant pilotnumber wageof andpilots bonusto increases.retire over the next decade.
To address the expected increasingly diminished supply of qualified pilot candidates, we developed and launched a proprietary flight training school called LIFT Academy in 2018 and continue to develop relationships with flight schools across the country to help fulfill our need for pilots. Since its founding in 2018 in Indianapolis, IN, LIFT Academy expanded its operations with additional flight school locations in Columbia, SC, Myrtle Beach, SC, Galveston, TX, Columbus, IN and at Moton Field in partnership with Tuskegee University in Tuskegee, AL.
We also entered into a partnership with Hyannis Air Service Inc. d/b/a Cape Air and Nantucket Airlines (“Cape Air”) in order to create a pipeline of talent from LIFT Academy to Cape Air and then to Republic to provide additional structured pathways for accumulation of the FAA 1,500 flight hour requirement. This strategic partnership will help us retain talented pilots as they transition from LIFT Academy students to pilots at Republic in less time and with more experience. We also built a state-of-the-art aviation campus that opened in early 2023. Finally, we have undertaken substantial efforts to generate renewed interest in the industry, including developing partnerships with secondary education institutions to promote the availability of careers in aviation. Our ability to grow and continue to provide safe, clean, and reliable regional airline services to our Partner Airlines will depend on our ability to successfully attract, train, and develop pilots. Furthermore, pilot training and development is constrained by the availability of full motion flight simulation equipment in the marketplace. In order to ensure access to this equipment, we have acquired one flight simulator and have long-term lease agreements in place that guarantee a minimum level of flight simulator availability and provide for potential access to additional flight simulators.
Pilot Attrition and Staffing Base. We experience significant volatility in our attrition as a result of the demand for pilots at mainline, low-cost, and cargo carriers who obtain pilot hires, in part, from regional airlines. Pilot attrition could be a factor impacting our results and ability to acquire new market share in future periods. In addition, the lead-time in acquiring and training new pilots requires that we grow our pilot staffing base in excess of our then-current need when we accept new business and expand our fleet.
Workforce Development. Over the past few years we have expanded our investment in LIFT Academy to address workforce development needs to include a DOL approved maintenance technician apprenticeship program and CFR Part 145 repair station to expand the level of experience and learning opportunities afforded to technicians and other aspiring aviation operations personnel. In addition, we secured a partnership with Cape Air to create a flow program of talented aviators from LIFT Academy to Cape Air to supplement their workforce in exchange for flight hours and valuable experience. We also built a state-of-the-art aviation campus that houses simulators, a cabin trainer, and classrooms to train our pilots, flight attendants, maintenance technicians, dispatchers, and other employees. Our inability to source qualified aviation personnel, whether from LIFT Academy or externally, may adversely impact our ability to operate in a cost-effective manner, expand our fleet, and carry out reliable operations.
The Company also operates Bridge Air with a dedication to helping aviation professionals achieve their dream of becoming a commercial airline pilot as quickly, safely, and inexpensively as possible.
We launched the MPD Program to address the diminished supply of qualified pilots, provide a more affordable path for pilots to reach the 1,500 flight hours required to earn their Airline Transport Pilot certificate, and provide a pipeline of potential pilots at Mesa Airlines. As part of this program, we operate a fleet of 28 Pipistrel Alpha Trainer 2 aircraft. Currently, pilots pay out-of-pocket for the first 250 flight hours at a rate of $60 per hour. Subsequent flight costs of $75 per hour are financed by the Company at zero interest and, generally, require repayment of such financing over two years.
Although pilot attrition has returned to normal levels no assurance can be given that the measures we have taken or may take in the future will enable us to attract, hire and train pilots at a rate necessary to support our operations.
Pilot and Mechanic Attrition. In recent years, we have experienced significant volatility in our attrition as a result of pilot wage and bonus increases at other regional air carriers, the growth of cargo, low-cost and ultra-low-cost carriers, and the number of pilots at major airlines reaching the statutory mandatory retirement age of 65 years. If our actual pilot attrition rates are materially different than our projections, our operations and financial results could be materially and adversely affected. Although we target maintenance staffing levels above our projected needs in order to account for attrition, which is widespread in the industry, from time to time we have experienced attrition with our maintenance technicians, who have the option to seek employment at mainline airlines, which generally offer higher salaries and more extensive benefit programs than regional airlines are financially able to offer. Attrition of maintenance technicians has sometimes required us to supplement our staff with qualified temporary employees.
As discussed generally above, we implemented a new pay structure whereby as of September 15, 2022, we offer starting wages of $100 an hour for entry-level first officers, and $150 an hour for first-year captains while captains with 20 years of experience will be paid $215 an hour to remain competitive and attract and retain experienced, qualified pilots.
Economic Conditions, Challenges and Risks
Liquidity and Going Concern. During our fiscal year ended September 30, 2024, the decrease in scheduled flying activity associated with the transition of our operations with American to United, increased costs associated with pilot wages, together with increasing interest rates adversely impacted our financial results, cash flows, financial position, and other key financial ratios. Additionally, United has asked us to accelerate the removal of our CRJ-900 aircraft and transition the pilots to our E-175 fleet. These events will lead to increased costs and impact our block hour capabilities while these pilots are in training.
As a result of the decrease in scheduled flying activity for United, we produced less block hours to generate revenues. During the fiscal year ended September 30, 2024, these challenges resulted in a negative impact on the Company’s financial results highlighted by net loss of $91.0 million, primarily due to impairment expense of $73.7 million related to held for sale assets during the year. These conditions and events raised concerns about our ability to continue to fund our operations and meet our debt obligations over the next twelve months from the filing of this Form 10-K.
To address such concerns, management developed and implemented certain material changes to our business designed to ensure the Company could continue to fund its operations and meet its debt obligations over the next twelve months. The following measures were implemented during the year ended September 30, 2024, and through the date of issuance of the financial statements.
On April 4, 2025, the Company entered into the Three Party Agreement between United, Republic, and the Company, which provides for, among other things, the following, each subject to the completion of the Merger Agreement:
The Company to extinguish all remaining debt with cash and sale of assets. Any remaining debt will be assumed by the surviving corporation or forgiven by United.
The transfer of all of the Company's rights and obligations under its agreements with Archer (as discussed in Note 17).
On April 4, 2025, we entered into the Sixth Amendment to the Third Amended and Restated Capacity Purchase Agreement with United which provides for the following:
The extension of the CPA rate increases agreed upon in the January 2024 United CPA Amendments, retroactive to January 1, 2025, through March 31, 2026.
The extension of incentives for achieving certain performance metrics, retroactive to July 1, 2024, through March 31, 2026.
On April 4, 2025, we entered into the Sixth Amendment to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period ended March 31, 2025, and a projected financial covenant default with respect to the periods ending June 30, 2025, September 30, 2025, December 31, 2025, and March 31, 2026, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.
On April 3, 2025, we entered into a purchase agreement with a third party which provides for the sale of 23 GE model CF34-8C engines to the third party for expected gross proceeds of $16.3 million, which will be used to pay down our UST Loan.
On December 31, 2024, we entered into an Aircraft Purchase Agreement with United which provides for the sale of 18 E-175 aircraft to United for gross proceeds of $227.7 million and net proceeds of $84.7 million after the retirement of debt. Subsequently, we closed the sale of all 18 aircraft to United.
On December 30, 2024, we received notice from United that $4.5 million of our Effective Date Revolving Loan balance under our United Revolving Credit Facility has been forgiven for achieving certain operational performance metrics outlined in the United CPA.
On December 24, 2024, we entered into a purchase agreement with a third party which provides for the sale of 15 CRJ-900 airframes to the third party for expected gross proceeds of $19.0 million, which will be used to pay down our UST Loan. On April 3, 2025, the purchase agreement was amended to include an additional 14 CRJ-900 airframes to be sold to the third party for expected gross proceeds of $9.1 million. The total expected gross proceeds of $28.1 million will be used to pay down our UST Loan.
On December 23, 2024, we entered into an agreement with the UST to lower the minimum CCR covenant to .99 to 1.0 effective as of November 22, 2024 through February 28, 2025. After such date, the CCR will revert to 1.55 to 1.0. The agreement also requires the Company to use its reasonable best efforts to cause counterparties to all Receivables (as defined in the Treasury Loan) (whether or not constituting “Eligible Receivables” (as defined in the Treasury Loan)) of the Company to be paid to the Eligible Receivables Account (as defined in the Treasury Loan). Receivables generated from the sale of assets that are not Collateral (as defined in the Treasury Loan) are excluded from the scope of the foregoing requirement. As a result of the lower CCR covenant, we are in compliance with this covenant as of September 30, 2024. Additionally, on March 18, 2025, we entered into a new CCR Modification Agreement with the UST to lower the minimum CCR covenant to .91 to 1.0 effective as of February 28, 2025 through the maturity date of the loan.
On December 23, 2024, we entered into a Waiver to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period July 1, 2024 to December 23, 2024 and a projected financial covenant default with respect to the period December 24, 2024 to December 31, 2024, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.
On December 23, 2024, we entered into the Fourth Amendment to our Third Amended and Restated United CPA which provides for the following:
Added provisions relating to the reimbursement by United of up to $14.0 million of pilot training costs incurred by the Company with respect to its E-175 aircraft.
On September 25, 2024, we reached an agreement with United which provides for, among other things, the commitment to buy our two CRJ-700 aircraft out of their lease with GoJet and to purchase such aircraft for total proceeds of $11.0 million, $4.5 million of which will pay down the outstanding obligations. Subsequent to September 30, 2024, we closed the sale of the two CRJ-700 aircraft to United.
Based on the most recent appraisal value of our spare parts, we have $12.4 million of borrowing capacity under our United Revolving Credit Facility.
What changed in the latest 10-Q
Risk Factors
There have been no material changes in our risk factors as previously disclosed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition to the other information set forth in this Report, you should carefully consider the factors discussed under “Risk Factors” in our last annual report, and in our other filings with the SEC, which factors could materially affect our business, financial condition and results of operations. The risks described in our reports filed with the SEC are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “Website and Social Media Disclosure”
New heading “Recent Developments”
New heading “Six months ended June 30, 2026 compared to the six months ended June 30, 2025”
New heading “Operating expenses”
New heading “Other expense, net”
New heading “Income tax expense”
Largest changes
“Republic’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports are available free of charge on Republic’s website at investor.rjet.com, as soon as reasonably practicable after Republic electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. …”see in full comparison
“Six months ended June 30, 2026 compared to the six months ended June 30, 2025”see in full comparison
“In February 2026, following the United States Supreme Court's decision to invalidate certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), the Company became eligible to receive refunds on previously imposed import duties. During the three and six months ended June 30, 2026, the Company received cash payments of $20.1 million in refunded duties and related interest income. …”see in full comparison
Net cash used in investing activitiessee in full comparisonincreaseddecreased$50.4$109.6millionmillion, or 54.9% to$92.0$90.2 million net cash used during thethreesix months endedMarchJune31,30, 2026 from$41.6$199.8 million net cash used during thethreesix months endedMarchJune31,30, 2025. We acquiredthreefour E175 regional aircraft and made capital investments in the Company's aviation campus and corporate headquarters in Carmel, Indiana (the “Aviation Campus”) during thethreesix months endedMarchJune31,30, 2026, compared to the acquisition ofonefive E175 regional aircraft and six training aircraft during thethreesix months endedMarchJune31,30, 2025, which increased overall capital expenditures by$53.8$73.1 million. Additionally, we purchased$38.7$77.3 million and redeemed$40.0$80.0 million in marketable securities and investments during thethreesix months endedMarchJune31,30, 2026, compared to purchases of$38.4$94.2 million and redemptions of$45.0$92.5 million in marketable securities and investments during thethreesix months endedMarchJune31,30, 2025. Lastly, we received proceeds from tariff refunds of $20.1 million during the six months ended June 30, 2026.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based upon our condensed consolidated financial statements, which have been prepared in accordance withsee in full comparisonU.S.Generally Accepted AccountingPrinciples.Principles (United States). The preparation of financial statements in conformity with those accounting principles requires us to make judgments and estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Those judgments and estimates have a significant effect on the financial statements because they result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Actual results could differ from those estimates. Our critical accounting estimates, which are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, are frequently evaluated as our judgment and estimates are based upon historical experience and on various other assumptions that we believe to be reasonable under the circumstances. During the firstthreesix months of fiscal year 2026,therethewereCompanynomadematerialachanges$12.5 million adjustment to the carrying value of goodwill related to revisions of ourcritical accountingprovisional estimates of fair values assigned to the Mesa balance sheet at closing of the Merger on November 25, 2025, asdescribedfurther discussed in Note 3, Merger with Mesa Air Group, Inc. in theMD&AaccompanyingincludedcondensedinconsolidatedourfinancialAnnual Report on Form 10-K for the year ended December 31, 2025.statements.
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Certain of the statements contained in this Report should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance. These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on Republic’s business, financial condition and results of operations, integration progress related to the merger with Mesa Air Group, Inc., the timing of scheduled aircraft deliveries, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for Republic in upcoming periods, expected production levels in future periods, pilot attrition trends, mechanic attrition trends, Republic’s coordination with American Airlines, Inc., Delta Air Lines, Inc., and United Airlines, Inc. (each, a “Partner Airline” and together, “Partner Airlines”) regarding the delivery of aircraft under previously announced agreements and timing of placing new aircraft deliveries into service, the expected terms, timing and benefits related to Republic’s leasing, strategic arrangements, strategic agreements and equity investments in third parties, scheduled flight service to smaller communities, increasing the utilization and efficiency of all fleet types as well as Republic’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this Report are made as of the date hereof and are based on information available to Republic as of such date. Readers should note that many factors could affect the future operating and financial results of Republic and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this Report. These factors include, but are not limited to the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending; potential staffing shortages affecting pilots, air traffic controllers, or maintenance technicians; uncertainty regarding potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major Partner Airlines in general and the financial condition and operating results of RepublicRepublic, in particular; the prospects of entering into agreements with existing or other carriers to fly new aircraft; uncertainty regarding timing and performance of key third-party service providers; ongoing negotiations between Republic and its major Partner Airlines regarding their contractual obligations; uncertainties regarding operation of new aircraft; the ability to attract and retain qualified pilots, mechanics and other personnel in operations; the impact of regulatory issues such as pilot rest rules and qualification requirements; the ability to obtain aircraft financing; the financial stability of theRepublic's Partner Airlines and any potential impact of their financial condition on the operations of Republic; fluctuations in flight schedules, which are determined by the major Partner Airlines for whom Republic conducts flight operations; variations in market and economic conditions; significant aircraft debt commitments; estimated useful lifelives of long-lived assets, residual values of aircraft values and related asset impairments; labor relations and costs; the impact of global instability; rapidly fluctuating fuel costs and potential fuel shortages; the impact of weather-related, natural disasters and other air safety incidents on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing international hostilities, including conflicts in the Middle East andEast, between Russia and Ukraine, and involving the United States and Iran, and the related impacts on macroeconomic conditions and on the international operations of any of our major Partner Airlines as a result of such conflicts; the availability of parts used in connection with maintenance and repairs of the aircraft; the availability of suitable replacement aircraft for aging aircraft; the impact of enactedenacted, proposed, and proposedrescinded U.S. tariffs on global economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of the United States; the impact of potential future U.S. government shutdowns on air traffic controller staffing and flight cancellations; and other unanticipated factors.
There may be other factors that maycould affect matters discussed in forward-looking statements set forth in this Report, which factors may also cause actual results to differ materially from those discussed. We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by applicable law.
Website and Social Media Disclosure
Republic’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports are available free of charge on Republic’s website at investor.rjet.com, as soon as reasonably practicable after Republic electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. Republic uses its investor relations website as a means of disclosing material non-public information and for complying with Republic’s disclosure obligations under Regulation Fair Disclosure. Investors should monitor Republic’s website, in addition to following Republic’s press releases, SEC filings and public conference calls and webcasts. Information relating to Republic’s corporate governance is also included on Republic’s investor relations website. The information in or accessible through the SEC's and Republic’s websites are not incorporated into, and are not considered part of, this filing. Further, Republic’s references to the URLs for these websites are intended to be inactive textual references only.
We are the second largest independent regional airline in the United States based on total fleet and daily departures. As of MarchJune 31,30, 2026, we had an operational fleet of 275 regional jet aircraft that regularly provides scheduled passenger service on approximately 1,300 daily flights, to approximately 125 cities in the United States, Canada, Mexico, and the Caribbean.
On November 25, 2025, the Company and Mesa Air Group, Inc. (“Mesa Parent”), former parent company of Mesa Airlines, Inc. (“Mesa Airlines”) completed the Merger of Republic Airways Holdings Inc. and Mesa Air Group, Inc., whereby the Company merged with and into Mesa Air Group, Inc. (the “Merger”). The legal entity Mesa Air Group, Inc. continued as the surviving corporation; however, upon completion of the Merger, the legal entity was renamed Republic Airways Holdings Inc. The Company, on a pre-Merger basis, is referred to as “Legacy Republic.” The Company includes the operations of Legacy Republic and, beginning on November 25, 2025, also includes the operations, financial position, and cash flows of the former entity Mesa Air Group, Inc. and its wholly-owned subsidiaries. See Note 3, Merger with Mesa Air Group, Inc., in the notes to the unaudited condensed consolidated financial statements included in this Report.statements.
Substantially all of our flights are operated under multi-year fixed-fee capacity purchase agreements (“CPA,” or collectively, our “CPAs”) with our three Partner Airlines: American Airlines, Inc. (“American Airlines”), Delta Air Lines, Inc. (“Delta Air Lines”), and United Airlines, Inc. (“United Airlines”). We exclusively operate the dual class Embraer E170/175 family of aircraft and are one of the world’s largest operators of that aircraft type. Under theour CPAs, we provide substantially all of our flight capacity to our Partner Airlines. Our compensation is not materially or directly affected by variations in fares or passenger load factors, nor by variations in the price of fuel, the cost of which is paid directly by our Partner Airlines, effectively providing us with contractual monthly revenues, while reducing our exposure to fluctuations in fuel prices, fare competition, and passenger loads. During the three months ended MarchJune 31,30, 2026 and 2025, we carried passengers on approximately 107,000120,000 and 85,00090,000 flights, generating revenues of $527.4$571.1 million and $394.8$405.6 million and pre-tax income of $37.6$43.4 million and $36.6$50.7 million, respectively. For the six months ended June 30, 2026 and 2025, we carried passengers on approximately 226,000 and 176,000 flights, generating revenues of $1,098.5 million and $800.4 million and pre-tax income of $81.0 million and $87.3 million, respectively.
We market under our Partner Airlines’ two-letter flight designation codes, paint our aircraft in the style of our Partner Airlines’ brand requirements, and use our Partner Airlines’ service marks to market ourselves as a carrier for our Partner Airlines. Our Partner Airlines control route selection, fare pricing, seat inventories, marketing,marketing and scheduling, and provide us with ground support services, airport take-off and landing slots, and gate access, allowing us to focus on operational excellence, positioning ourselves as the regional airline of choice for our Partner Airlines and passengers through the delivery of safe, clean, reliable, and efficient regional service. For the three and six months ended MarchJune 31,30, 2026, American Airlines, Delta Air Lines, and United Airlines accounted for 37%,35%, 21%,19%, and 42%45% and 35%, 19%, and 44% of our departures,revenues, respectively.
Recent Developments
Effective June 15, 2026, the Company’s Board of Directors, upon the recommendation of its Corporate Governance Committee, promoted Matthew J. Koscal to the position of President and Chief Executive Officer. Concurrently with Mr. Koscal's appointment, David Grizzle, serving in the role of Chairman and Chief Executive Officer vacated the position of Chief Executive Officer and resumed the role of non-executive Chairman of the Board of Directors, a position previously held by Mr. Grizzle for the Legacy Republic Board of Directors since 2017, until assuming the Chief Executive Officer role prior to the Merger.
In February 2026, following the United States Supreme Court's decision to invalidate certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), the Company became eligible to receive refunds on previously imposed import duties. During the three and six months ended June 30, 2026, the Company received cash payments of $20.1 million in refunded duties and related interest income. The Company recorded refunded amounts as a reduction to property and equipment, net in the condensed consolidated balance sheets using a loss recovery methodology as set forth in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410, Asset Retirement and Environmental Obligations.
During the three and six months ended June 30, 2026, certain of the Company’s maintenance technicians voted in favor of representation by the International Brotherhood of Teamsters (“IBT”) under a National Labor Relations Board election. As of June 30, 2026, the represented class includes more than 700 associates, which includes maintenance technicians, among other related associates, under representation by IBT, Local 135.
The Company and IBT, Local 135 have not yet reached agreement on the related collective bargaining agreement. As a result, the Company cannot reasonably estimate the impact, if any, that the outcome of these negotiations may have on its condensed consolidated financial statements.
Revenues associated with regional jet services are generally derived from (i) a fixed fee per departure, flight hour, and/or block hour of time incurred and a fixed rate for available-to-schedule aircraft, payable on a monthly basis; and (ii) a premium amount, which is earned monthly or quarterly by maintaining minimum aircraft utilization levels and exemplary operating results. To the extent that minimum targets are not achieved, we could be subject to financial penalties. These fixed-fee rates are contractually subject to periodic economic adjustment. We also receive reimbursement from our Partner Airlines for direct expenses incurredincurred, such as qualifying maintenance activities, property taxes, and miscellaneous operating expenses. The Company refers to Partner reimbursements as “pass-through charges.” Certain charges such as fuel, landing fees, and certain ownership costs are generally paid directly by the Partner Airlines, although the charges were incurred by the Company in ongoing operations. The Company refers to these charges as “Partner direct charges.” Pass-through charges are primarily recorded to revenues and the corresponding operating expense on a gross basis. Pass-through charges recorded on a net basis are not material.
Amounts recognized as regional jet services revenues are measured at the contractual amount we expect we will be entitled to in exchange for the promised services. We allocate the transaction price as flights are completed with variable consideration that relates specifically to our efforts in delivering each flight recognized in the period in which the individual flight is completed and measured on a monthly basis. We record an estimate for incentive revenue based on our expected performance at the end of each period. These estimates are derived under accounting guidance related to variable consideration constraints and based on amounts expected to be collected. We have concluded that allocating the variability directly to the individual flights results in an overall allocation meeting the objectives in Financial Accounting Standards Board (“FASB”) ASC 606, Revenue Recognition. This results in a pattern of revenue recognition that generally follows the variable amounts billed from us to our Partner Airlines.
This expense includes salaries and wages earned by our pilots, flight attendants, dispatchers, and other associates, as well as expenses associated with various employee benefit plans, stock-based compensation, employee incentives, and payroll taxes. These expenses fluctuate primarily based on our level of operations, changes in wage rates for contractour and non-contract employees,associates, and changes in costs of our benefit plans.
Executive separation and Merger-related items primarily consist of non‑recurring transaction and integration‑related costs incurred in connection with the Merger. These costs include legal, audit, and advisory fees supporting Merger due diligence, securities registration and Securities and Exchange CommissionSEC filings, Merger planning, and integration activities. Integration costs include the elimination of duplicate overheads and abandonment of certain operating agreements, including fleet-specific training and facilities. The Company has additionally incurred integration costs related to aircraft maintenance bridging,bridging and standardization of crew training. The Company separately classifies these items as they are not expected to be incurred on a recurring basis and does not anticipate incurring costs of this nature following the completion of Merger‑related integration activities.
Other expense, net is comprised of interest expense on secured and unsecured debt and finance lease obligations, realized and unrealized gains and losses on fair value adjustments to marketable securities and non-current investments, warrants, and put options held with EVE Holdings, Inc. (“EVE”), and our minority interest in Cape Air and our proportionate share of income or losses of Cape Air. Additionally, we have a strategic partnership with EVE for the development of electric vertical takeoff and landing (“eVTOL”) aircraft.
Three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025
The following table sets forth information regarding our operating results for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025:
(2)Adjusted EBITDA represents net income before executive separation and Merger-related items, interest expense, investment income,income and other, net, income taxes, and depreciation and amortization expense. Adjusted EBITDAR represents net income before executive separation and Merger-related items, interest expense, investment income,income and other, net, income taxes, depreciation and amortization expense, and aircraft and engine rent.rent expense. Adjusted EBITDA % and Adjusted EBITDAR % are non-GAAP measures that represent Adjusted EBITDA and Adjusted EBITDAR, respectively, expressed as a percentage of revenues. Republic’s management uses these metrics, and it believes these metrics are also useful to investors to understand Republic’s financial performance. Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % are included as supplemental disclosure because Republic’s management believes that they are well recognized valuation metrics in the airline industry that are frequently used by companies, investors, securities analysts, and other interested parties in comparing companies in Republic’s industry. Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools. Some of the limitations applicable to these measures include: (i) Adjusted EBITDA and Adjusted EBITDAR do not reflect the impact of certain cash charges resulting from matters Republic considers not to be indicative of its ongoing operations; (ii) Adjusted EBITDA and Adjusted EBITDAR do not reflect Republic’s cash expenditures for capital expenditures or contractual commitments; (iii) Adjusted EBITDA and Adjusted EBITDAR do not reflect changes in, or cash requirements for, Republic’s working capital needs; (iv) Adjusted EBITDA and Adjusted EBITDAR do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on its debts; (v) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA and Adjusted EBITDAR do not reflect any cash requirements for such replacements; and (vi) other companies in Republic’s industry may calculate Adjusted EBITDA and Adjusted EBITDAR differently than Republic does, limiting their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, Adjusted EBITDAR should not be viewed as a measure of overall performance because it excludes aircraft and engine rent, which is a normal, recurring cash operating expense that is necessary to operate Republic’s business. For the foregoing reasons, each of Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % has significant limitations which affect its use as an indicator of Republic’s profitability. Accordingly, readers are cautioned not to place undue reliance on this information.
The following table summarizes certain operating data that we believe are useful indicators of our operating performance for the three months ended MarchJune 31,30, 2026 and 2025. We believe block hours, departures, and average daily utilization of each aircraft are our primary measures in evaluating aircraft production, incurrences of revenues and operating expenses, and efficiency of theour Airline.airline operations.
(1)Excludes eight and onetwo spare aircraft as of MarchJune 31,30, 2026 and 2025.2025, respectively.
(2)Excludes 31 aircraft that have been leased under customary leasing arrangements to American Airlines as of MarchJune 31,30, 2026 and 2025.
(5)“Completion factor” means the percentage of scheduled flights that are completed.
(6)“Controllable completion factor” means the percentage of completed scheduled flights over which we had control, excluding cancelled flights due to uncontrollable factors such as weather, air traffic control, and partner requested cancellations.
Revenues increased $132.6$165.5 million, or 33.6%,40.8%, to $527.4$571.1 million for the three months ended MarchJune 31,30, 2026 compared to $394.8$405.6 million for the three months ended MarchJune 31,30, 2025, due to 30.4%35.9% increase in block hour production and a 24.4%32.6% increase in departures due to increased daily utilization and contribution of additional flying under the new CPA with United Airlines as a result of the Merger, beginning November 25, 2025.
Wages and benefits expense increased $56.8 million, or 32.6%,30.8%, to $231.2$241.4 million for the three months ended MarchJune 31,30, 2026 from $174.4$184.6 million for the three months ended MarchJune 31,30, 2025. The increase was primarily attributable to a $48.2$51.2 million increase in salaries and wages due largely to the 30.4%35.9% increase in block hour production coupled with a $8.0$5.6 million increase in employee benefits expense due to increasedan increase in associate headcount from the Merger.
Maintenance and repair expense increased $37.1$60.2 million, or 48.6%,81.2%, to $113.4$134.3 million for the three months ended MarchJune 31,30, 2026 from $76.3$74.1 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to the increase of the operating fleet by 60 aircraft related to the Merger, increasing shop level maintenance expenses by $26.0$48.9 million.million, reimbursable as pass-through revenues, as well as a $10.4 million increase due to the increase in block hour production.
Depreciation and amortization expense increased $3.9$4.3 million, or 12.7%,13.9%, to $34.5$35.2 million for the three months ended MarchJune 31,30, 2026 from $30.6$30.9 million for the three months ended MarchJune 31,30, 2025. The increase was due to the addition of 149 new E175 aircraft, excluding the 60 E175 aircraft owned by United Airlines related to the Merger delivered since MarchJune 31,30, 2025.
OtherExecutive operatingseparation expenseand Merger-related items increased $26.5$11.2 million, or 47.2%,million to $82.7$13.6 million for the three months ended MarchJune 31,30, 2026 from $56.2$2.4 million for the three months ended MarchJune 31,30, 2025, primarily due to a $13.9$7.0 million increaseof cash severance and share-based compensation expense recognized in expensesconnection relatingwith Mr. Grizzle’s separation and transition to increasingnon-executive Chairman. In addition, the operationalCompany fleetincurred fromadditional theintegration Merger.related Additionally, other operating expense increased $9.0 million due to $6.0 million associated with an increase in crew hotel and other travel expense caused by increased flying and an increase in professional fees, software costs, and freight of $3.0 million.costs.
Other operating expense increased $26.6 million, or 44.9%, to $85.8 million for the three months ended June 30, 2026 from $59.2 million for the three months ended June 30, 2025, primarily due to a $15.2 million increase in expenses relating to increasing the operational fleet from the Merger. Additionally, other operating expense increased $11.4 million, due to increases in crew travel expense caused by increased flying, as well as increases in professional fees and other miscellaneous expenses.
Other expense, net increased $0.3$11.6 million, or 1.8%,million to $16.6$15.3 million for the three months ended MarchJune 31,30, 2026 from $16.3$3.7 million for the three months ended MarchJune 31,30, 2025. The table below presents the (increase) decrease related to the changes in other expense, net:
We recorded income tax expense of $10.7$12.2 million for the three months ended MarchJune 31,30, 2026, compared to income tax expense of $9.5$13.3 million for the three months ended MarchJune 31,30, 2025 at an effective tax rate of 28.5%28.1% and 26.0%,26.2%, respectively. Our effective tax rates differ from the federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
The following table sets forth information regarding our operating results for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:
(1)Net income % is net income expressed as a percentage of revenues.
(2)Adjusted EBITDA represents net income before executive separation and Merger-related items, interest expense, investment income and other, net, income taxes, and depreciation and amortization expense. Adjusted EBITDAR represents net income before executive separation and Merger-related items, interest expense, investment income and other, net, income taxes, depreciation and amortization expense, and aircraft and engine rent expense. Adjusted EBITDA % and Adjusted EBITDAR % are non-GAAP measures that represent Adjusted EBITDA and Adjusted EBITDAR, respectively, expressed as a percentage of revenues. Republic’s management uses these metrics, and it believes these metrics are also useful to investors to understand Republic’s financial performance. Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % are included as supplemental disclosure because Republic’s management believes that they are well recognized valuation metrics in the airline industry that are frequently used by companies, investors, securities analysts, and other interested parties in comparing companies in Republic’s industry. Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools. Some of the limitations applicable to these measures include: (i) Adjusted EBITDA and Adjusted EBITDAR do not reflect the impact of certain cash charges resulting from matters Republic considers not to be indicative of its ongoing operations; (ii) Adjusted EBITDA and Adjusted EBITDAR do not reflect Republic’s cash expenditures for capital expenditures or contractual commitments; (iii) Adjusted EBITDA and Adjusted EBITDAR do not reflect changes in, or cash requirements for, Republic’s working capital needs; (iv) Adjusted EBITDA and Adjusted EBITDAR do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on its debts; (v) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA and Adjusted EBITDAR do not reflect any cash requirements for such replacements; and (vi) other companies in Republic’s industry may calculate Adjusted EBITDA and Adjusted EBITDAR differently than Republic does, limiting their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, Adjusted EBITDAR should not be viewed as a measure of overall performance because it excludes aircraft and engine rent, which is a normal, recurring cash operating expense that is necessary to operate Republic’s business. For the foregoing reasons, each of Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % has significant limitations which affect its use as an indicator of Republic’s profitability. Accordingly, readers are cautioned not to place undue reliance on this information.
The following table presents the reconciliation of net income to Adjusted EBITDA and Adjusted EBITDAR for the periods presented below:
The following table summarizes certain operating data that we believe are useful indicators of our operating performance for the six months ended June 30, 2026 and 2025. We believe block hours, departures, and average daily utilization of each aircraft are our primary measures in evaluating aircraft production, incurrences of revenues and operating expenses, and efficiency of our airline operations.
(1)Excludes eight and two spare aircraft as of June 30, 2026 and 2025.
(2)Excludes 31 aircraft that have been leased under customary leasing arrangements to American Airlines as of June 30, 2026 and 2025.
(3)Reflects hours of aircraft movement from gate to gate (including taxi time before takeoff and after landing) until the aircraft comes to rest at the next point of landing.
(4)Reflects average daily utilization in block hours (aircraft movement from gate to gate, including taxi time) for the greater of actual in-service aircraft or minimum contracted scheduled aircraft, if applicable.
(5)“Completion factor” means the percentage of scheduled flights that are completed.
(6)“Controllable completion factor” means the percentage of completed scheduled flights over which we had control, excluding cancelled flights due to uncontrollable factors such as weather, air traffic control, and partner requested cancellations.
Revenues
Revenues increased $298.1 million, or 37.2%, to $1,098.5 million for the six months ended June 30, 2026 compared to $800.4 million for the six months ended June 30, 2025, due to 33.2% increase in block hour production and a 28.6% increase in departures due to increased daily utilization and contribution of additional flying under the new CPA with United Airlines as a result of the Merger, beginning November 25, 2025.
Operating expenses
Wages and benefits expense increased $113.6 million, or 31.6%, to $472.6 million for the six months ended June 30, 2026 from $359.0 million for the six months ended June 30, 2025. The increase was primarily attributable to a $100.0 million increase in salaries and wages due largely to the 33.2% increase in block hour production coupled with a $13.6 million increase in employee benefits expense due to an increase in associate headcount from the Merger.
Maintenance and repair expense increased $97.3 million, or 64.7%, to $247.7 million for the six months ended June 30, 2026 from $150.4 million for the six months ended June 30, 2025. The increase was primarily due to the increase of the operating fleet by 60 aircraft related to the Merger, increasing shop level maintenance expenses by $83.1 million, reimbursable as pass-through revenues, as well as a $13.5 million increase due to the increase in block hour production.
Depreciation and amortization expense increased $8.2 million, or 13.3%, to $69.7 million for the six months ended June 30, 2026 from $61.5 million for the six months ended June 30, 2025. The increase was due to the addition of 9 new E175 aircraft, excluding the 60 E175 aircraft owned by United related to the Merger delivered since June 30, 2025.
Executive separation and Merger-related items increased $16.3 million to $23.1 million for the six months ended June 30, 2026 from $6.8 million for the six months ended June 30, 2025, due to $7.0 million of cash severance and share-based compensation expense recognized in connection with Mr. Grizzle’s separation and transition to non-executive Chairman. In addition, the Company incurred additional integration related costs.
Other operating expense increased $53.1 million, or 46.0%, to $168.5 million for the six months ended June 30, 2026 from $115.4 million for the six months ended June 30, 2025, primarily due to a $29.1 million increase in expenses relating to increasing the operational fleet from the Merger. Additionally, other operating expense increased $24.0 million due to an $8.1 million increase in crew hotel and other travel expense caused by increased flying, as well as increases in professional fees and other miscellaneous expenses.
Other expense, net
Other expense, net increased $11.9 million, or 59.5%, to $31.9 million for the six months ended June 30, 2026 from $20.0 million for the six months ended June 30, 2025. The table below presents the (increase) decrease related to the changes in other expense, net:
Income tax expense
We recorded income tax expense of $22.9 million for the six months ended June 30, 2026, compared to income tax expense of $22.8 million for the six months ended June 30, 2025 at an effective tax rate of 28.3% and 26.1%, respectively. Our effective tax rates differ from the federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses.
As of MarchJune 31,30, 2026, we had a working capital deficit of $33.7$14.7 million. The airline industry is highly capital intensive due to the nature and financing methods for its fleet assets used to generate operating cash flows. If we fail to generate sufficient funds from operations to repay such obligations, we may need to raise capital through the issuance of equity or obtain or refinance borrowings to meet our existing obligations. There can be no assurance that such equity transactions or borrowings will be available or, if available, will be at terms, rates, or prices acceptable to us.
The following table summarizes our total cash and marketable securities positions as of MarchJune 31,30, 2026 and December 31, 2025 as well as our operating, investing, and financing cash flow activities for the threesix months ended MarchJune 31,30, 2026 and 2025:
RJET insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-17 | Hornback Scott |
Shares withheld for tax | 2,371 | $20.22 | $47.9K |
| 2026-08-17 | Koscal Matthew |
Shares withheld for tax | 11,695 | $20.22 | $236.5K |
| 2026-08-17 | Pulley Chad M. |
Shares withheld for tax | 5,913 | $20.22 | $119.6K |
| 2026-08-17 | Allman Joseph |
Shares withheld for tax | 5,458 | $20.22 | $110.4K |
| 2026-08-17 | Kinstedt Paul |
Shares withheld for tax | 5,345 | $20.22 | $108.1K |
| 2026-06-15 | Grizzle J David |
Shares withheld for tax | 57,955 | $18.25 | $1.1M |
| 2026-06-15 | Grizzle J David |
Grant/award | 128,505 | — | — |
| 2026-06-15 | Grizzle J David |
Shares withheld for tax | 80,976 | $18.25 | $1.5M |
| 2026-05-29 | Allman Joseph |
Shares withheld for tax | 5,458 | $20.35 | $111.1K |
| 2026-05-29 | Pulley Chad M. |
Shares withheld for tax | 5,913 | $20.35 | $120.3K |
| 2026-05-29 | Hornback Scott |
Shares withheld for tax | 2,371 | $20.35 | $48.2K |
| 2026-05-29 | Kinstedt Paul |
Shares withheld for tax | 5,345 | $20.35 | $108.8K |
| 2026-05-29 | Grizzle J David |
Shares withheld for tax | 5,753 | $20.35 | $117.1K |
| 2026-05-29 | Koscal Matthew |
Shares withheld for tax | 11,696 | $20.35 | $238.0K |
| 2026-05-21 | Johnson Glenn S |
Grant/award | 7,261 | — | — |
| 2026-05-21 | Ridings Barry W |
Grant/award | 7,261 | — | — |
| 2026-05-21 | Sweetnam James E |
Grant/award | 7,261 | — | — |
| 2026-05-21 | Lenz Michael C. |
Grant/award | 7,261 | — | — |
| 2026-05-21 | Okediji Ruth L. |
Grant/award | 7,261 | — | — |
| 2026-05-21 | Artist Ellen N. |
Grant/award | 7,261 | — | — |
Well-known investors holding RJET (13F)
None of the 59 investors we track reported a position in their latest 13F.