form10_q.htm

	Part I - Financial Information
Item 1.	Financial Statements:	3

	Condensed Consolidated Balance Sheets as of September 30, 2008 (Unaudited) and December 31, 2007	3

	Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2008 and 2007	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2008 and 2007	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12

Item 4.	Controls and Procedures	12

	Part II - Other Information
Item 1A.	Risk Factors	13

Item 6.	Exhibits	13

	Signatures	14

Exhibit 10.1	Airline Services Agreement, among Midwest Airlines, Inc., Republic Airline Inc., Midwest Air Group, Inc. (in a limited capacity) and Republic Airways Holdings Inc. (in a limited capacity), dated September 3, 2008.

Exhibit 10.2	Airline Services Agreement, by and between Shuttle America Corporation and Mokulele Flight Service, Inc., dated as of October 8, 2008.

Exhibit 10.3	Credit Agreement, by and between US Airways, Inc. and Republic Airways Holdings Inc., dated as of October 20, 2008.

Exhibit 10.4(d)	Amendment to the Amended and Restated Air Services Agreement, by and between AMR Corporation and Chautauqua Airlines, Inc., dated as of October 23, 2008.

Exhibit 10.39(v)	Amendment No. 22 to Purchase Agreement DCT-014/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airways Holdings Inc., dated as of September 5, 2008.

Exhibit 10.40(o)	Amendment No. 15 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airways Holdings Inc., dated as of September 5, 2008.

Exhibit 31.1	Certification by Chief Executive Officer

Exhibit 31.2	Certification by Chief Financial Officer

Exhibit 32.1	Certification by Chief Executive Officer

Exhibit 32.2	Certification by Chief Financial Officer

PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
	September 30,			December 31,
	2008			2007
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	134,184		$	164,004
Receivables—net of allowance for doubtful accounts of $2,090 and $897, respectively		31,151			27,585
Notes receivable		27,798			—
Inventories—net		50,696			43,424
Prepaid expenses and other current assets		12,146			9,928
Assets held for sale		110,263			—
Restricted cash		4,744			1,226
Deferred income taxes		6,849			7,510

Total current assets		377,831			253,677
Aircraft and other equipment—net		2,525,739			2,308,726
Intangible and other assets		185,330			197,340
Goodwill		13,335			13,335

Total	$	3,102,235		$	2,773,078

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	207,519		$	131,700
Accounts payable		24,750			35,201
Accrued liabilities		143,301			109,792

Total current liabilities		375,570			276,693
Long-term debt—less current portion		1,955,338			1,781,880
Deferred credits and other non current liabilities		91,795			104,115
Deferred income taxes		223,379			184,304

Total liabilities		2,646,082			2,346,992
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding
Common stock, $.001 par value; one vote per share; 150,000,000 shares authorized; 43,489,616 and 43,474,466 shares issued and 34,169,683 and 36,407,572 shares outstanding, respectively		43			43
Additional paid-in capital		296,521			293,127
Treasury stock, 9,319,933 and 7,066,894, respectively, at cost		(181,646	)		(142,411	)
Accumulated other comprehensive loss		(2,697	)		(3,009	)
Accumulated earnings		343,932			278,336

Total stockholders' equity		456,153			426,086

Total	$	3,102,235		$	2,773,078

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
OPERATING REVENUES:
Regional airline services	$	381,121		$	325,974		$	1,127,681		$	926,861
Charter revenue and ground handling		1,486			905			3,676			5,025
Other		2,641			3,203			9,147			8,952

Total operating revenues		385,248			330,082			1,140,504			940,838

OPERATING EXPENSES:
Wages and benefits		61,898			58,187			190,627			163,685
Aircraft fuel		97,613			71,682			279,974			216,815
Landing fees		15,340			14,140			45,085			39,376
Aircraft and engine rent		33,422			33,706			101,319			91,037
Maintenance and repair		45,630			36,115			124,723			95,601
Insurance and taxes		6,255			5,567			18,295			14,216
Depreciation and amortization		35,666			27,061			99,149			77,729
Other		29,220			26,197			89,553			75,577

Total operating expenses		325,044			272,655			948,725			774,036

OPERATING INCOME		60,204			57,427			191,779			166,802

OTHER INCOME (EXPENSE):
Interest expense		(33,762	)		(26,903	)		(96,572	)		(78,435	)
Other income		1,280			3,108			11,167			9,030

Total other income (expense)		(32,482	)		(23,795	)		(85,405	)		(69,405	)

INCOME BEFORE INCOME TAXES		27,722			33,632			106,374			97,397

INCOME TAX EXPENSE		10,715			13,462			40,786			38,906

NET INCOME	$	17,007		$	20,170		$	65,588		$	58,491

BASIC NET INCOME PER COMMON SHARE	$	0.50		$	0.50		$	1.87		$	1.41

DILUTED NET INCOME PER COMMON SHARE	$	0.50		$	0.49		$	1.86		$	1.38

REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

	Nine Months Ended
	September 30,
	2008			2007
NET CASH FROM OPERATING ACTIVITIES	$	190,310		$	200,539

INVESTING ACTIVITIES:
Purchase of aircraft and other equipment		(85,551	)		(58,411	)
Proceeds from sale of spare aircraft and other equipment		19,011			11,756
Aircraft deposits and other		(20,883	)		(33,182	)
Aircraft deposits returned		49,866			39,903
Change in restricted cash		(3,518	)		(3,526	)
Notes receivable		(27,798	)		—

NET CASH FROM INVESTING ACTIVITIES		(68,873	)		(43,460	)

FINANCING ACTIVITIES:
Payments on short/long-term debt		(114,721	)		(66,985	)
Proceeds from exercise of stock options		161			8,000
Payments of debt issue costs		(3,248	)		(5,185	)
Proceeds on settlement of interest rate swaps		5,785			—
Purchase of treasury stock		(39,234	)		(105,318	)

NET CASH FROM FINANCING ACTIVITIES		(151,257	)		(169,488	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		(29,820	)		(12,409	)

CASH AND CASH EQUIVALENTS—Beginning of period		164,004			195,528
CASH AND CASH EQUIVALENTS—End of period	$	134,184		$	183,119

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST AND INCOME TAXES:
Interest paid	$	91,707		$	76,160
Income taxes paid		221			1,349

NON-CASH INVESTING & FINANCING TRANSACTIONS:
Aircraft, inventories, and other equipment purchased through financing arrangements from manufacturer		363,997			284,323
Parts, training and lease credits from aircraft manufacturer		(10,260	)		(7,980	)
Fair value of warrants surrendered by Delta Air Lines		—			49,103
Engine received and other spare parts to be financed or paid		—			4,961

The unaudited condensed consolidated financial statements of Republic Airways Holdings Inc. and its subsidiaries (the “Company”) as of September 30, 2008 and December 31, 2007 and for the three and nine months ended September 30, 2008 and 2007 included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The subsidiaries include Chautauqua Airlines, Inc. (“Chautauqua Airlines”), Republic Airline Inc. (“Republic Airline”) and Shuttle America Corporation (“Shuttle America”). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. The results of operations for the three and nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on February 21, 2008.

Under the Company’s code-share agreements, the Company is reimbursed an amount per aircraft designed to compensate the Company for certain aircraft ownership costs. In accordance with Emerging Issues Task Force No. 01-08, Determining Whether an Arrangement Contains a Lease, the Company has concluded that a component of its revenue under the agreement discussed above is rental income, inasmuch as the agreement identifies the “right of use” of a specific type and number of aircraft over a stated period of time. The amounts deemed to be rental income during the three and nine months ended September 30, 2008 and 2007 were $87,273 and $79,650, and $265,776 and $189,670 respectively, and have been included in regional airline services revenue in the Company’s condensed consolidated statements of income.

In March 2008, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 also requires entities to disclose additional information about the amounts and location of derivatives located within the financial statements, how the provisions of SFAS 133 has been applied, and the impact that hedges have on an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not believe the adoption of SFAS 161 will have a material impact to its financial position, results of operations, and cash flows, however, additional disclosures may be required to the footnotes.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“EITF 03-6-1”). EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation under the two-class method of calculating earnings per share. EITF 03-6-1, which is applied retrospectively, is effective for the Company beginning January 1, 2009. The Company is currently evaluating the potential impact of EITF 03-6-1 on its consolidated financial statements.

In April 2008, Frontier Airlines Holdings, Inc. ("Frontier") and its subsidiaries Frontier Airlines, Inc. and Lynx Aviation, Inc. (collectively, the "Debtors") filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of New York (the "Court"). The Debtors continue to operate their business as "debtors-in possession" under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. The Company operated 12 E170 aircraft under a code-share agreement with Frontier. The agreement covered a total of 17 E170 aircraft through December 2019. The Company and Frontier negotiated an agreement that resulted in the orderly wind-down of the 12 E170 aircraft during the three months ended June 30, 2008. The Company intends to file a damage claim arising out of Frontier’s rejection of the code-share agreement. The ultimate amount of the Company’s claim will be determined in the future by the Court. At this time the Company cannot estimate the recovery value, if any, of the ultimate allowable claim. As of September 30, 2008, the Company fully reserved all pre-petition amounts due from Frontier, which total $676. As of September 30, 2008, the Company had removed all 12 E170 aircraft from service with Frontier. These 12 E170 aircraft will transition to the Company’s Midwest Airlines, Inc. (“Midwest”) code-share agreement, which was signed on September 3, 2008.

Midwest Airlines Agreement

On September 3, 2008, the Company entered into a fixed fee code-share agreement with Midwest. The key commercial terms of the Company’s agreement include (i) Midwest will purchase all capacity at predetermined rates and will directly pay or reimburse the Company for industry standard pass-through costs; (ii) the first aircraft will be placed into service on October 1, 2008 and the last aircraft on November 15, 2008; (iii) the agreement has a term of ten years. However, at Midwest’s option, and at any time prior to June 1, 2010, Midwest can elect to convert the agreement into a long-term aircraft lease. The 12 E170 aircraft would be leased from the Company for the remaining duration of the agreement and operated on the Midwest operating certificate; (iv) all fuel will be purchased directly by Midwest and will not be charged back to the Company; (v) on September 3, 2008, the Company funded a one-year term loan to Midwest in the amount of $15,000, with interest at 10.25% which is payable monthly. On October 29, 2008, the Company funded an additional loan of $10,000, based on Midwest’s achievement of certain milestones as determined by the Company; the loans are collateralized by certain assets of Midwest and the loans are generally senior to the other lender’s security position

United Air Lines, Inc.

On July 28, 2008, the Company entered into a letter agreement with Delta Air Lines, Inc. (“Delta”) to remove the final 11 E135 aircraft from the Delta Connection program effective September 30, 2008. The aircraft were originally scheduled to be removed between November 2008 and April 2009. All 11 E135 and an additional spare E135 aircraft are under agreement to be sold between October 2008 and April 2009 at a specified price, and the Company has classified these aircraft as held for sale at their current estimated sales price less costs to sell.

In March 2008, in anticipation of financing the purchase of regional jet aircraft on firm order with the manufacturer, the Company entered into twenty-one interest rate swap agreements with notional amounts totaling $420,000 and a weighted average interest rate of 4.3%. The swap agreements were forecasted to terminate at each respective settlement date, which approximated the anticipated delivery date of the respective aircraft through February 2009. Management accounted for the interest rate swaps as investments in derivative instruments, as defined in SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (SFAS 133). These contracts were not designated as either a cash flow or fair value hedge under SFAS 133 guidelines. As of and for the three months ended March 31, 2008, the Company had an unrealized loss of ($3,924) that was recorded to Other—net in the statement of income. In April 2008, the Company terminated the interest rate swap agreements early, which resulted in a net gain for the six months ended June 30, 2008 and proceeds of $5,785. Accordingly, the Company recorded a gain on settlement of $9,709 included in Other—net in its statement of income for the three months ended June 30, 2008.

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2008		2007	2008		2007

Weighted-average common shares outstanding for basic net income available for common shareholders per share		34,169,104	40,582,516		35,083,855	41,501,934

Effect of dilutive employee stock options, restricted stock and warrants		0	285,896		112,561	813,020

Adjusted weighted-average common shares outstanding and assumed conversions for diluted net income available for common shareholders per share		34,169,104	40,868,412		35,196,416	42,314,954

In December 2007, the Company’s Board of Directors authorized the purchase of up to $100,000 of the Company’s common stock. The shares will be purchased on the open market or through privately-negotiated transactions from time-to-time during the twelve month period following the authorization. Under the authorization, the timing and amount of purchase would be based upon market conditions, securities law limitations and other factors. The stock buy-back program does not obligate the Company to acquire any specific number of shares in any period, and may be modified, suspended, extended or discontinued at any time without prior notice. During the nine month period ended September 30, 2008, pursuant to this authorization, the Company purchased 2,253,039 shares on the open market at a weighted average stock price of $17.41 for total consideration of $39,234. At September 30, 2008, the amount remaining under this authorization was $59,353.

The Company’s revolving credit agreement with a bank expires March 31, 2009. The Company’s revolving credit agreement contains restrictive covenants that require, among other things, that the Company maintain a certain fixed charge coverage ratio, a debt to earnings leverage ratio, a liquidity covenant and the company must maintain unrestricted cash and cash equivalents of not less than $100,000. The Company was in compliance with the covenants at September 30, 2008. As of September 30, 2008 and December 31, 2007, the Company had no outstanding borrowings under this agreement with the bank.

6. Commitments and Contingencies

As of September 30, 2008, the Company has 11 E175 regional jets on firm order. The current total list price for these 11 regional jets is $385,770 which are scheduled for delivery between October 2008 and February 2009. The Company has a commitment to obtain financing for all but three of these aircraft and believes it will be able to obtain financing on the remaining aircraft; The Company also has a commitment to acquire 9 spare aircraft engines with a current list price totaling approximately $40,500. These commitments are subject to customary closing conditions.

During the nine months ended September 30, 2008, the Company made aircraft deposits in accordance with the aircraft commitments of $20,883. The aircraft deposits are included in other assets. All payments were made from cash generated from operations.

In September 2006, FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about the use of fair value measurements in accordance with generally accepted accounting principles. The Company adopted the provisions of SFAS effective January 1, 2008. Although the adoption of SFAS 157 did not materially affect the consolidated financial statements, the Company is now required to provide additional disclosures as part of its financial statements.

SFAS 157 establishes a three-tier fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1), inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (Level 2), and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

During the three and nine month periods ended September 30, 2008, the Company held certain assets that were required to be measured at fair value on a recurring basis. These included the Company’s investment in derivative instruments (interest rate swaps) and certain other investments. As discussed in Note 2, the Company settled these agreements for proceeds of $5,785 in April 2008. As of September 30, 2008, the Company did not hold any assets required to be measured at fair value on a recurring basis.

In assessing the recoverability of goodwill and other intangible assets, the Company makes a determination of the fair value of its business. Fair value is determined using a combination of an income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their present value, and a market approach, which estimates fair value using market multiples of various financial measures compared to a set of comparable public companies in the regional airline industry. An impairment loss will generally be recognized when the carrying amount of the net assets of the business exceeds its estimated fair value.

The valuation methodology and underlying financial information included in the Company’s determination of fair value require significant judgments to be made by management. These judgments include, but are not limited to, long term projections of future financial performance and the selection of appropriate discount rates used to determine the present value of future cash flows. Changes in such estimates or the application of alternative assumptions could produce significantly different results.

During the quarter ended September 30, 2008, due primarily to the disparity between the Company’s market capitalization and the carrying value of its stockholders’ equity and Frontier’s bankruptcy (as discussed in Note 1), the Company performed an interim assessment of the recoverability of its goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. Based on the results of this analysis, the Company concluded that its goodwill was not considered impaired as of September 30, 2008.

In addition to assessing the recoverability of its goodwill, the Company determined it was necessary to evaluate whether any long-lived assets (primarily aircraft and related spare engines and spare parts) were impaired as of September 30, 2008. The Company’s analysis of its long-lived assets was performed in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. For purposes of testing the long-lived assets for impairment as of September 30, 2008, the Company determined whether the carrying amount of its long-lived assets was recoverable by comparing the carrying amounts to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. If the carrying value of the assets exceeded the expected cash flows, the Company would estimate the fair value of these assets to determine whether an impairment existed. The estimated undiscounted cash flows were dependent on a number of critical management assumptions including estimates of future aircraft utilization, estimated sublease rates and other relevant assumptions, changes in such estimates or the application of alternative assumptions could produce significantly different results. Based on the results of this analysis, the Company concluded none of the assets were impaired as of September 30, 2008.

On October 10, 2008, the Company entered into an airline services agreement with Mokulele Flight Service, Inc. (“Mokulele”). Pursuant to the agreement, the Company will operate 4 E170 aircraft. Mokulele will purchase all capacity for these aircraft at predetermined rates and will directly pre-pay or reimburse the Company for industry standard pass-through costs, including fuel. The first two aircraft are expected to be placed into service on November 19, 2008, with an additional two aircraft planned to enter revenue service during the spring of 2009. The agreement has a term of ten years from the date of the first aircraft delivery. The Company will provide an $8,000 line of credit to Mokulele at 10% interest, which can be converted, at the Company’s option, to up to 45% of the common stock of Mokulele.

On October 20, 2008, the Company entered into a loan agreement with US Airways to provide up to $35,000 in two tranches. The first tranche of $10,000 was funded on October 20, 2008. At US Airways’ option, and subject to certain other conditions, the second tranche of $25,000 may be funded in the first quarter 2009. Interest on the loan is at the three-month LIBOR rate plus a margin and is to be paid quarterly, with the principal amounts to be repaid between October 2009 and October 2011.

On October 23, 2008, the Company reached an agreement with AMR Corporation (“American”), to amend its airline services agreement. Key commercial terms of the amendment include: (i) the reduction of aircraft operating under the agreement, as of June 2009, from 15 to 13 E140 regional jets. The two aircraft removed will continue to be reimbursed by American as spare aircraft unless Chautauqua otherwise sells, subleases or places the aircraft. (ii) a reduction of approximately 3% of the reimbursement rates received by Chautauqua for its services performed under the agreement, effective April 1, 2009; and (iii) an extension of the date on which American may early terminate the agreement by three years, from March 2009 to March 2012.

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements. The Company may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass the Company’s beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to the Company as of such date. The Company assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Annual Report on Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this Quarterly Report on Form 10-Q by reference. As used herein, "unit cost" means operating cost per Available Seat Mile (ASM).

Republic Airways Holdings Inc., (“the Company”) is a Delaware holding company organized in 1996 that owns Chautauqua Airlines, Inc., (“Chautauqua Airlines”), Republic Airline Inc. (“Republic Airline”) and Shuttle America Corporation (“Shuttle America”). As of September 30, 2008, we offered scheduled passenger service on approximately 1,190 flights daily to 115 cities in 34 states, Canada, Mexico and Jamaica pursuant to code-share agreements with AMR Corp., the parent of American Airlines, Inc. (“American”), US Airways, Inc. (“US Airways”), Delta Air Lines, Inc. (“Delta”), United Air Lines, Inc. (“United”), and Continental Airlines, Inc. (“Continental”). As of September 30, 20008, we provide our five partners with regional jet service, operating as AmericanConnection, Continental Express, Delta Connection, US Airways Express, or United Express including service out of their hubs and focus cities in Atlanta, Boston, Denver, Chicago, Cincinnati, Cleveland, Columbus, Houston, Indianapolis, New York, Philadelphia, Pittsburgh, St. Louis and Washington, D.C. (Dulles and National).

We have long-term, fixed-fee regional jet code-share agreements with each of our partners that are subject to our maintaining specified performance levels. Pursuant to these fixed-fee agreements, which provide for minimum aircraft utilization at fixed rates, we are authorized to use our partners' two-character flight designation codes to identify our flights and fares in our partners' computer reservation systems, to paint our aircraft in the style of our partners, to use their service marks and to market ourselves as a carrier for our partners. In addition, in connection with a marketing agreement among Delta, Continental and Northwest Airlines, certain of the routes that we fly using Delta's and Continental’s flight designator codes are also flown under Northwest's designator code. Our fixed-fee agreements eliminate our exposure to fluctuations in fuel prices, fare competition and passenger volumes. Our development of relationships with multiple major airlines has enabled us to reduce our dependence on any single airline, allocate our overhead more efficiently among our partners and reduce the cost of our services to our partners.

	Three Months Ended September 30,						Nine Months Ended September 30,
	Increase/(Decrease)						Increase/(Decrease)
	2008		2008-2007		2007		2008		2008-2007		2007

Regional airline services revenue, excluding fuel (000)	283,508		11.5	%	254,292		847,707		19.4	%	710,046
Passengers carried	4,884,439		10.1	%	4,435,108		14,418,453		22.0	%	11,820,385
Revenue passenger miles (000) (1)	2,456,925		4.8	%	2,343,771		7,394,022		18.3	%	6,248,072
Available seat miles (000) (2)	3,290,132		8.2	%	3,039,510		9,957,376		20.1	%	8,293,452
Passenger load factor (3)	74.7	%	(2.4	pp)	77.1	%	74.3	%	(1.0	pp)	75.3	%
Cost per available seat mile, including interest expense (cents)(4)	10.91		10.6	%	9.86		10.50		2.2	%	10.27
Fuel cost per available seat mile (cents)	2.97		25.8	%	2.36		2.81		7.7	%	2.61
Cost per available seat mile, excluding fuel expense (cents)	7.94		5.9	%	7.50		7.69		0.4	%	7.66
Operating aircraft at period end:
37-50 seat regional jets	114		(3.4	%)	118		114		(3.4	%)	118
70+ seat regional jets	119		28.0	%	93		119		28.0	%	93
Block hours (5)	183,293		3.8	%	176,623		565,208		14.8	%	492,241
Departures	107,072		6.9	%	100,168		321,268		16.2	%	276,532
Average daily utilization of each aircraft (hours)(6)	10.0		(2.9	%)	10.3		10.2		(1.0	%)	10.3
Average aircraft stage length (miles)	496		(5.2	%)	523		508		(2.7	%)	522

(1)	Revenue passenger miles are the number of scheduled miles flown by revenue passengers.
(2)	Available seat miles are the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.
(3)	Revenue passenger miles divided by available seat miles.
(4)	Total operating and interest expenses divided by available seat miles.
(5)	Hours from takeoff to landing, including taxi time.
(6)	Average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival).

-9-

Operating revenue increased by 16.7%, or $55.2 million, to $385.2 million in 2008 compared to $330.1 million in 2007. The increase was due mainly to a $25.9 million increase in the cost of fuel, a direct reimbursement under the fixed fee agreement with our partners, from the prior year’s third quarter. Also, during the quarter, the Company recognized approximately $7.9 million of deferred revenue related to the removal of the E135 fleet from Delta. The remaining increase in revenue is due to an 8.2% increase in ASMs and a 3.8% increase in block hours.

Total operating and interest expenses increased by 19.8% or $59.2 million, to $358.8 million in 2008 compared to $299.6 million in 2007 due to a $25.9 million increase in the cost of fuel, a charge of approximately $7.4 million of expense to value the E135 assets as available for sale and to accrue an estimate of future return costs for the aircraft, and the increase in flight operations. The unit cost on total operating and interest expenses, excluding fuel charges, increased from 7.5¢ in 2007 to 7.9¢ in 2008. Factors relating to the change in operating expenses are discussed below.

	Operating Expenses per ASM in cents
	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007

Wages and benefits		1.88		1.91		1.91		1.97
Aircraft fuel		2.97		2.36		2.81		2.61
Landing fees		0.47		0.47		0.45		0.47
Aircraft and engine rent		1.02		1.11		1.02		1.10
Maintenance and repair		1.39		1.19		1.25		1.15
Insurance and taxes		0.19		0.18		0.18		0.17
Depreciation and amortization		1.08		0.89		1.00		0.94
Other		0.89		0.86		0.90		0.91
Total operating expenses		9.88		8.97		9.53		9.32

Interest expense		1.03		0.89		0.97		0.95

Total operating expenses and interest expense		10.91		9.86		10.50		10.27

Total operating expenses and interest expense less fuel		7.94		7.50		7.69		7.66

Wages and benefits increased by 6.4%, or $3.7 million, to $61.9 million for 2008 compared to $58.2 million for 2007. The increase was due mainly to a $2.9 million increase in flight crew and maintenance operations wage expense to support the increase in regional jet operations and a $0.3 million increase in related employee benefit costs resulting from increased costs for employee welfare programs. We recorded stock based compensation expense of $0.9 million in 2008 compared to $0.7 million in 2007. The cost per available seat mile remained unchanged at 1.9¢.

Aircraft fuel expense increased 36.2%, or $25.9 million, to $97.6 million for 2008 compared to $71.7 million for 2007 due to a 60% increase in the average price per gallon from $2.47 in 2007 to $3.94 in 2008, partially offset by a 15% decrease in the amount of gallons consumed. Beginning in 2007, we did not record fuel expense and the related revenue for an increasing portion of the United operations, due to United paying for fuel directly at certain airports. We also do not pay for or record fuel expense and the related revenue for Continental, Frontier, or US Airways operations. The unit cost increased from 2.4¢ in 2007 to 3.0¢ in 2008.

Maintenance and repair expenses increased 26.3%, or $9.5 million, to $45.6 million in 2008 compared to $36.1 million for 2007. During the quarter $3.3 million of expense was incurred for the replacement of life limited parts on engines. This was the first quarter in which this expense has been incurred. The increase in block hours on the EJets (70-86 seats) of 17% led to a $2.4 million increase in 70-seat long-term maintenance contract expenses. Additionally, heavy maintenance, or c-check expenses increased by $0.9 million and repair expenses on parts not under warranty or included under long term contracts increased $1.3 million. The unit cost increased from 1.2¢ in 2007 to 1.4¢ in 2008.

Depreciation and amortization increased 31.8%, or $8.6 million, to $35.7 million in 2008 compared to $27.1 million in 2007 due mainly to $6.5 million of additional depreciation on 26 EJet aircraft purchased since September 30, 2007. Additionally, $1.8 million of accelerated depreciation was recorded during the third quarter of 2008 on 12 E135 aircraft to adjust the residual values of the assets prior to classifying them as held for sale. The unit cost increased from 0.9¢ in 2007 to 1.1¢ in 2008.

Wages and benefits increased by 16.5%, or $26.9 million, to $190.6 million for 2008 compared to $163.7 million for 2007. The increase was due mainly to an $18.5 million increase in flight crew and maintenance operations wage expense to support the increase in regional jet operations and a $4.9 million increase in related employee benefit costs resulting from the additional wage expense and increased costs for employee welfare programs. We recorded stock based compensation expense of $3.2 million in 2008 compared to $1.9 million in 2007. The cost per available seat mile decreased from 2.0¢ in 2007 to 1.9¢ in 2008.

Aircraft fuel expense increased 29.1%, or $63.2 million, to $280.0 million for 2008 compared to $216.8 million for 2007 due to a 53% increase in the average price per gallon from $2.30 in 2007 to $3.52 in 2008. This increase was partially offset by a 16% decrease in the amount of gallons consumed. Beginning in January 2007, we did not record fuel expense and the related revenue for an increasing portion of the United operations, due to United paying for fuel directly at certain airports. We also do not pay for or record fuel expense and the related revenue for Continental, Frontier, or US Airways operations. The unit cost increased from 2.6¢ in 2007 to 2.8¢ in 2008.

Maintenance and repair expenses increased by 30.5%, or $29.1 million, to $124.7 million in 2008 compared to $95.6 million for 2007. The increase is due mainly to the increased level of operations which produced a $5.0 million increase in 50-seat aircraft in long-term maintenance agreement expenses and a $9.9 million increase in 70-seat long-term maintenance agreement expenses. Additionally, repair expenses on parts not under warranty or included under long term contracts increased $3.9 million. Also, in 2008, $3.3 million of expense was incurred for the replacement of life limited parts on engines. The unit cost increased from 1.2¢ in 2007 to 1.3¢ in 2008.

Depreciation and amortization increased 27.6%, or $21.4 million, to $99.1 million in 2008 compared to $77.7 million in 2007 due mainly to $18.1 million of additional depreciation on 26 regional jet aircraft purchased since September 30, 2007. Additionally $1.8 million of accelerted depreciation was recorded during the third quarter of 2008 on 12 E135 aircraft to adjust the residual values of the assets prior to classifying them as held for sale. The unit cost increased from 0.9¢ in 2007 to 1.0¢ in 2008.

As of September 30, 2008, the Company had $134.2 million in cash and cash equivalents and a working capital surplus of $2.3 million. During the nine months ended September 30, 2008, the Company obtained 18 aircraft that were debt-financed. The total debt incurred for the eighteen purchased aircraft was $364.0 million.

Net cash provided by operating activities was $190.3 million for the nine months ended September 30, 2008 a decrease of ($10.2) million over the same period in the prior year. During the nine months ended September 30, 2007 the Company’s receipt of the Delta pre-petition claim of $44.6 million was included in its cash provided by operating activities.

Net cash used by investing activities was $(68.9) million for the nine months ended September 30, 2008. The net cash used by investing activities consists of the down payments made to purchase 18 regional jet aircraft and the purchase of aircraft related equipment, offset by deposits returned for delivered aircraft, proceeds from sale of equipment totaling ($41.1). In addition, the Company also funded loans of ($15.0) million and ($12.8) million, to Midwest and Frontier, respectively.

Net cash used by financing activities was $(151.2) million for the nine months ended September 30, 2008. The net cash used by financing activities included the Company’s purchase of its common stock, scheduled debt payments and debt issuance costs payments offset by proceeds from the exercise of employee stock options and from treasury locks.

The Company currently anticipates that its available cash resources, cash generated from operations and anticipated third-party financing arrangements will be sufficient to meet its anticipated working capital and capital expenditure requirements for at least the next 12 months.

Aircraft Leases and Other Off-Balance Sheet Arrangements

The Company has significant obligations for aircraft that are classified as operating leases, and are not reflected as liabilities on its balance sheet. These leases expire beginning November 2008 through June 2023. As of September 30, 2008, the Company’s total mandatory payments under operating leases aggregated approximately $1 billion and total minimum annual aircraft rental payments for the next 12 months under all non-cancelable operating leases is approximately $123 million.

-11-

As of September 30, 2008, the Company has a commitment to purchase 11 additional ERJ-170/175 regional jets. The current total list price of the 11 regional jets is approximately $386 million. During the nine months ended September 30, 2008, the Company made aircraft deposits in accordance with the aircraft commitments of $20.9 million. The Company also has a commitment to acquire 9 spare aircraft engines with a current list price of approximately $41 million. These commitments are subject to customary closing conditions.

In addition to assessing the recoverability of its goodwill, the Company determined it was necessary to evaluate whether any long-lived assets (primarily aircraft and related spare engines and spare parts) were impaired as of September 30, 2008. The Company’s analysis of its long-lived assets was performed in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. For purposes of testing the long-lived assets for impairment as of September 30, 2008, the Company determined whether the carrying amount of its long-lived assets was recoverable by comparing the carrying amounts to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets. If the carrying value of the assets exceeded the expected cash flows, the Company would estimate the fair value of these assets to determine whether impairment existed. The estimated undiscounted cash flows were dependent on a number of critical management assumptions including estimates of future aircraft utilization, estimated sublease rates and other relevant assumptions, changes in such estimates or the application of alternative assumptions could produce significantly different results. Based on the results of this analysis, the Company concluded none of the assets were impaired as of September 30, 2008.

Due to the volatility of our common stock in conjunction with the price of fuel, tight credit markets, continued capacity reductions by mainline carriers, the uncertain economic environment, as well as other uncertainties, the Company can provide no assurance that a material impairment charge will not occur in a future period. The Company will continue to monitor circumstances and events in future periods to determine whether additional asset impairment testing is warranted.

The Company’s earnings are affected by changes in interest rates due to amount of cash and securities held. At September 30, 2008 and December 31, 2007, all of the Company’s long-term debt was fixed rate debt. We anticipate that additional debt will be at fixed rates. The Company is exposed to the impact of interest rate changes related to its future aircraft purchase commitments. In March 2008, in anticipation of financing the purchase of regional jet aircraft on firm order with the manufacturer, the Company entered into twenty-one interest rate swap agreements with notional amounts totaling $420.0 million and a weighted average interest rate of 4.3%. The swap agreements will be settled at each respective settlement date, which approximates the anticipated delivery date of the respective aircraft through February 2009. Management accounted for the interest rate swaps as investments in derivative instruments, as defined in SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (SFAS 133). As of and for the three months ended March 31, 2008, the Company had an unrealized loss of ($3,924) that was recorded to Other—net in the statement of income. In April 2008, the Company terminated the interest rate swap agreements early, which resulted in a net gain for the nine months ended September 30, 2008 and proceeds of $5,785.

The Company maintains “disclosure controls and procedures”, as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, the Company’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and the Company’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective and were reasonably designed to ensure that material information is made known to them by others within the Company during the period in which this report was being prepared.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007 (the “10-K”) and Part II, "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (the "10-Q"), which could materially affect our business, financial condition or future results. The risks described in our 10-K and 10-Q are not the only risks we face. 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/or operating results.

	(a)	Exhibits

	Exhibit 10.1	Airline Services Agreement, among Midwest Airlines, Inc., Republic Airline Inc., Midwest Air Group, Inc. (in a limited capacity) and Republic Airways Holdings Inc. (in a limited capacity), dated September 3, 2008.

	Exhibit 10.2	Airline Services Agreement, by and between Shuttle America Corporation and Mokulele Flight Service, Inc., dated as of October 8, 2008.

	Exhibit 10.3	Credit Agreement, by and between US Airways, Inc. and Republic Airways Holdings Inc., dated as of October 20, 2008.

	Exhibit 10.4(d)	Amendment to the Amended and Restated Air Services Agreement, by and between AMR Corporation and Chautauqua Airlines, Inc., dated as of October 23, 2008.

	Exhibit 10.39(v)	Amendment No. 22 to Purchase Agreement DCT-014/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airways Holdings Inc., dated as of September 5, 2008.

	Exhibit 10.40(o)	Amendment No. 15 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airways Holdings Inc., dated as of September 5, 2008.

	31.1	Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

	31.2	Certification by Robert H. Cooper, Executive Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

	32.1	Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

	32.2	Certification by Robert H. Cooper, Executive Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

DELAWARE	06-1449146
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)

	REPUBLIC AIRWAYS HOLDINGS INC.
	(Registrant)




Dated: November 4, 2008	By: /s/ Bryan K. Bedford
	Name: Bryan K. Bedford
	Title: Chairman of the Board, Chief Executive Officer and President
	(principal executive officer)



Dated: November 4, 2008	By: /s/ Robert H. Cooper
	Name: Robert H. Cooper
	Title: Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934