Contents 
Highlights . .. ........... . ....... .. ................ . . . 
About Republ ic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
Report to stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 
Financial review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 
Traffic growth and performance . . . . . . . . . . . . . . . . . . . . . . . 6 
Fleet development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 
New facilities and services . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 
Social and environmental programs ........... . .... . .. 1 O 
Jet fuel outlook . . ................... . .............. 11 
Communications .. . ................. . ....... . ... . .. 12 
Route development .... . .......... . ................. 14 
The future .............. . .............. . .. . .. . ... . . 15 
Route map ............. . ......... . ........ . ......... 16 
Financial statements ........... . .. . ..... . ............. 18 
Auditors' report ............ . . .. ...................... 21 
Supplemental stockholder information . ........... . ...... 27 
Five-year summary .. . ......................... . ...... 30 
Board of Directors and Officers ........... . ....... . .... . 32 
 Highlights 
OPERATING REVENUES 
O PERATING PROF IT 
NET EARNINGS .. . ....... . 
NET EARNINGS PER SHARE - P rimary 
WORKING CAPITAL FROM OPERATIONS . 
RETAINED EARNINGS ..... 
STOCKHOLDERS' EQUITY 
PASSENGERS ................... . 
PASSENGER MILES ............. . 
CARGO TON MILES 
About Republic 
Re public Airlines, the nation's newest 
major carrier, was formed by the merger 
of North Central Air lines and Southern 
Airways on July 1, 1979. The company 's 
principal function is to provide safe , 
dependable air transportation . 
Each of the merged carriers had more 
than 30 years of airline experience . 
North Centra l, originally called 
Wisconsin Central , inaugurated service 
on February 24, 1948. Southern began 
scheduled flights on June 10, 1949. The 
two companies grew steadily and 
assumed positions of leadership among 
the regional carriers . Together, they 
have earned $77 million in the last 
five years . 
Republic serves more cities- 158 
- than any other airline in the country. 
It flies to most of the nation's major 
metropolitan areas and many intermediate - 
sized cities in the Upper Midwest and 
Southeast. The airline's 38,400-mil e route 
system extends from New Eng land 
1979 
$ 609 ,230 ,000 
$ 28 ,053 ,000 
$ 
...................... $ 
...................... $ 
13,061 ,000 
$.70 
41 ,717 ,000 
93 ,634,000 
$ 145,514 ,000 
12,156,000 
3 ,846 ,805 ,000 
32 ,324 ,000 
to California, and from Canada to the 
Cayman Islands in the Caribbean . 
(See center pages.) 
The airline ranks among the top ten U.S. 
carriers in passenger traffic and operates 
one of the largest commercial jet fleets 
in the world . Republic carried 12.2 million 
passenge rs and flew 3.8 billion passenger 
miles in 1979 . The company's 107 jet- 
powered aircraft- Boeing 727s , Doug las 
DC -9s and Convair 580s- make over 
1,100 departures daily. 
Republic's 9,000 dedicated employees 
offer the traveling public the finest type of 
scheduled airline service . 
1978 Ch ange 
$ 487 ,565 ,000 25% 
$ 42 ,809 ,000 (34) 
$ 24 ,571 ,000 (47) 
$1 .42 (51) 
$ 57 ,806 ,000 (28) 
$ 83 ,050 ,000 13 
$ 113 ,288 ,000 28 
11 ,143 ,000 9 
3,364 ,094 ,000 14 
28 ,062 ,000 15 
ANNUAL MEETING 
//ednesda; I~ ril 9 1980 
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To our stockholders, employees and friends: 
We are pleased to report many 
achievements for Republic Airlines 
in 1979. Most notable is the formation 
of the company by the merger of 
North Central Airlines and Southern 
Airways. Here are other highlights: 
 Revenues reached a record 
$609,230,000, a 25 percent increase. 
 Earnings totaled $13,061 ,000 , 
in a year of escalating fuel costs 
and substantial one-time 
merger charges. 
 Passenger miles were up 14 
percent to 3.8 billion . Passengers 
carried were 12.2 million, a gain 
of nine percent. 
 The system has grown to 38,400 
route miles, with service to 158 cities. 
 13 DC-9 jets were added to the fleet. 
 $370 million was committed to 
acquire 32 jet aircraft in a 30-month 
period through 1981 . 
Republic became the nation's newest 
major carrier on July 1, 1979, when the 
merger took place. It serves more 
cities- 158-than any other airline in 
the country and flies to 28 states, 
the District of Columbia, Canada, and 
the Cayman Islands in the Caribbean. 
The complex program for the inte- 
gration of the operations of the two 
carriers is progressing well ahead 
of schedule and will be completed by 
the third quarter of this year. 
In recognition of its accomplishments 
in 1979, Republic was named 
"Airline of the Year" by Air Transport 
World magazine, a leading industry 
publication. The company's 
management and personnel were 
cited "for their ability to construct this 
new carrier to meet the challenges 
of the '80s, while continuing to 
fulfill their service obligation" to the 
many communities on the system . 
Previous recipients of the award 
are Swissair, Delta Air Lines, Air France, 
British Airways, Pan American World 
Airways, and United Air Lines. 
In 1979, Republic carried 12,155,644 
passengers. Some 3.8 billion 
passenger miles and 32.3 million cargo 
ton miles were flown. The company 
set a monthly record in August by serving 
1,183,202 passengers, and a daily 
mark on July 9 with 44,149 passengers. 
To handle this traffic growth, 13 
additional DC-9 jets were acquired 
during 1979. 
The $13.1-million profit was realized 
although expenses included 
substantial nonrecurring charges 
related to the merger and an extensive 
DC-9 inspection required by the 
Federal government. Earnings 
per share were $.70 primary, or $.68 
fully diluted. The 1979 profit pushed 
earnings for the last five years to $77 
million. 
Based on the company's strong 
financial condition, the Board of 
Directors declared a cash dividend 
of $.20 per share payable March 
17, 1980 to stockholders of record 
March 3. Annual cash dividends have 
been paid for the past eight years. 
The airline added nonstop flights in 
several important markets during 1979: 
Chicago-Houston, Detroit-Memphis, 
Atlanta-Washington , D.C. , 
Minneapolis/ St. Paul-Washington, 
D. C., and Twin Cities-Atlanta. 
Already in 1980, Republic has 
inaugurated Twin Cities-Las Vegas, 
Chicago-Nashville, Birmingham- 
Tampa/ St. Petersburg / Clearwater, 
and Omaha-Kansas City-Memphis 
service. On April 1, Milwaukee- 
St. Louis flights begin. Minneapolis/ 
St. Paul-San Diego and Detroit- 
New York routes are being introduced 
April 27. 
To undertake this expansion, Republic 
embarked on a $370-million fleet 
development program that calls for 
120 jet-powered aircraft-one of 
the ten largest fleets in the world-by 
 the end of 1981 . This will include 90 
DC-9s, seven Boeing 727-200s, 
and 23 Convair 580s. 
The first of the new Boeing 164- 
passenger jets was received on 
February 28, 1980. Two 727s enter 
scheduled service on April 1, 
bringing the company's fleet to 107 
jet-powered aircraft. 
Plans for future growth emphasize 
additional "bridge routes" between 
cities presently served by Republic. 
Passengers from major hubs, and cities 
beyond, can then reach their 
destinations on direct flights or with 
same-carrier connections. This 
approach greatly improves passenger 
convenience while increasing the 
airline's share of the travel market. 
Many opportunities lie ahead . The 
company has the financial strength, 
efficient aircraft, and skilled 
personnel so vital to its progress. 
Republic is confident that 1980- its 
first ful l year of operation- will be a 
solid beginning to a profitable decade. 
Sincerely, 
Hal N. Carr 
Chairman of the Board 
~~ 
Bernard Sweet 
President and 
Chief Executive Officer 
March 7, 1980 
Republic was named "Akline of the Year" 
by Air Transport World magazine, a leading 
industry publication. 
3 
 4 
Financial review 
Republic Airlines earned $13,061,000 
in 1979, and revenues reached a record 
$609,230,000. The company, formed 
by the merger of North Central Airlines 
and Southern Airways on July 1, has 
had earnings of $77 million over the last 
five years. 
Excellent results were achieved through 
the third quarter of 1979. Heavy demand 
for special fares , a strike against another 
carrier, and strong business activity 
had stimulated travel . In September, traffic 
began to drop as escalating fuel prices 
forced up fares and some segments 
of the economy experienced a slowdown . 
Republic's $609 million in revenues 
showed a 25 percent increase, compared 
to the $487,565,000 for the combined 
companies in 1978. Operating expenses, 
including depreciation and amortization, 
rose 31 percent to $581 ,177,000 from 
$444,756,000. 
At the time of the merger, Republic 
recognized the extended life expectancy 
of the DC-9 jet aircraft and revised the 
estimated depreciation, which reduced 
expenses. However, substantial non- 
recurring charges related to the merger 
and an extensive DC-9 inspection 
required by the Federal government added 
to expenses. The operating profit was 
$28,053,000, down 34 percent from the 
$42,809,000 the previous year. 
The acquisition of jet aircraft in 1979 
generated considerable investment tax 
credits. These offset current Federal 
and State income taxes and some 
previously deferred taxes, resulting in 
MAJOR FACTORS OF CHANGE IN REVENUES AND EXPENSES 
The table below summarizes major 
changes in revenues and expenses 
which have occurred in Republic's 
operation over the past two years. 
Under operating revenues , traffic 
gains combined with higher fares 
generated a $119 .6-million increase 
in passenger revenues . The 
introduction of new nonstop routes , 
promotional fares , and additional 
DC-9 jets contributed to the 21 percent 
increase in scheduled passenger 
miles. The average yield per 
scheduled revenue passenger mile 
increased 7 percent as a result of 
fare increases . 
Public service revenues rose $9 .8 
million under a revised formula 
which compensates the company for 
providing service to small communities . 
MAJOR FACTORS OF CHANGE 
Operating revenues 
Of this amount , $3 .1 million was 
retroactive to 1978. (See note I of 
Notes to Financial Statements.) 
Charter activities were greatly 
curtailed in 1979 because these aircraft 
were needed for the expansion of 
scheduled service . While charter 
revenue declined $9 .7 million , freight 
and mail revenue increased 
$7.4 million due to increases in rates 
and aircraft capacity. Other revenues 
declined $5 .4 million . 
Operating expenses were up $136.4 
million . Labor and employee benefits 
which rose $53 .9 million accounted 
for 40 percent of the increase. Besides 
salary and benefit increases in 1979, 
some 1,300 employees were added. 
The $52 .4 million of additional jet fuel 
costs represented 38 percent of the 
Net Changes 
1979-1978 1978-1977 
Passenger miles .......... . $ 86,600,000 $98,700,000 
Passenger fares .. ..... . ........ . 33,000,000 (7,900,000) 
Public service revenues ..... . 9,800,000 (1,800,000) 
Cargo and other revenues (7,700,000) 9,900,000 
Net revenue changes 121 ,700,000 98,900,000 
Operating expenses 
Labor and employee benefits .. ... . 53,900,000 34,800,000 
Cost of jet fue l .............. . . ... . 52,400,000 13,900,000 
Other operating expenses . . .. . 30,100,000 35,200,000 
Net expense changes ...... .. . 136,400,000 83,900,000 
Changes in operating profit .. . (14,700,000) 15,000,000 
Other expenses (income) ......... . 4,000,000 10,900,000 
Income taxes ................... . (7,200,000) 2,600,000 
Changes in net earnings ..... . $(11 ,500,000) $ 1,500,000 
increase . Route expansion and 
higher aircraft utilization increased 
jet fuel consumption by 22 .6 million 
gallons , and the price of jet fuel 
nearly doubled to $. 76 per gallon 
by the end of 1979. 
Maintenance parts , supplies and 
service expense rose $8.2 million due 
to increased aircraft maintenance , 
including an extensive DC-9 inspection 
required by the Federal government. 
Rent and landing fees rose $4.1 million 
and outside service expense, $4.9 
million . Passenger commission 
expense was up $6 .1 million, reflecting 
the industry trend of increased 
travel agency sales. Many other 
operating costs reflected the expanding 
operating levels and inflationary 
pressures . 
Included in other expenses (income) 
is the increase in interest expense 
of $7.8 million from 1978 to 1979. This 
relates to the additional borrowing to 
finance aircraft and the increase in 
prime interest rates . This was partially 
offset by a $4 .4-million increase in 
capitalized interest on predelivery 
deposits for new aircraft. (See notes 
B and E of Notes to Financial 
Statements.) 
Substantial investment tax credits 
generated in 1979 from the 
acquisition of jet aircraft offset both 
current and previously deferred income 
taxes , resulting in a tax credit of 
$1 . 75 million in 1979 and a reduction 
of income tax expense of $7.2 million . 
The combined effect of these changes 
was a reduction in net earnings of 
$11 .5 million for 1979. 
 an income tax credit of $1 ,750,000 
for 1979. The net earnings of $13,061 ,000 
were equal to $.70 per share primary 
or $.68 on a fully-diluted basis. A year 
earlier, the company had income 
tax expense of $5,464,000 and earned 
$24,571 ,000 or $1.42 per share primary, 
and $1 .31 fu lly diluted. 
Stockholders' equity was up 28 percent 
to a record $145,514,000. Based on 
20,620,000 shares of common stock 
outstanding, book value was S7.06 per 
share and $6.93 per share in 1978. 
Republic now has retained earnings 
of $93,634,000-more than any other 
regional airline. The availabi lity of these 
funds to the company has contributed 
greatly to the airline's rapid growth. 
Expanded operations and inflation 
pushed up operating expenses 31 percent. 
Wages, fringe benefits and payroll 
taxes rose 28 percent to $249,535 000. 
Interest expense was $26,497,000, as 
the prime rate reached a record high 
and the company increased borrowing 
to finance new aircraft. Jet fuel , which 
nearly doubled in price accounted for 
$132 385,000 of expenses. 
The company's five-year traffic and 
financial data is summarized on Page 31 . 
Supplemental stockholder information, 
including Quarterly Statements, begins 
on Page 27. 
After concluding an extremely significant 
year with reasonable earnings, RepufJlic 
looks ahead to the challenges of the 
future . With anticipated revenue growth 
and stringent cost control, the company 
expects continued profitability in 1980. 
5 
 Traffic growth and performance 
In 1979, Republic Airl ines carried 
12,155,644 passengers over 3.8 bi llion 
passenger miles , and flew 32 .3 million 
cargo ton mi les in 1979. Passenger 
boardings were up nine percent ; 
passenger miles, 14 percent ; and cargo 
ton mi les, 15 percent. 
These increases are attributable to 
the benefits derived from merg ing the 
northern and southern route systems , 
introduction of new service , increased 
capacity from new DC-9-50 jets , 
and the high demand for special fares . 
The 1,183,202 passengers carried 
in August 1979 set a monthly record . 
On July 9, a daily high was ach ieved 
when the airli ne boarded 44 ,149 
passengers . 
In addition to scheduled service , 
Republic flew 124,924 passengers on 
charter trips during 1979. These 
operated to 31 states , plus such 
diverse points as Montego Bay and 
Nassau in the Caribbean, and Ottawa 
and Yellowknife in Canada . During 
peak travel periods , 312 extra sections 
of scheduled flights carried 79 ,479 
travelers . 
Passenger gains were substantial for 
the first eight months of 1979. By 
September, constantly rising fuel costs 
brought on fare increases which 
adversely affected leisure travel . 
Business traffic also slipped as some 
industries felt the effects of inflation 
and the slugg ish national economy. 
Cargo sustained its upward trend 
in 1979. The 32 ,324 ,000 cargo ton 
mi les flown - including freight , express 
and mai l-were 15 percent ahead 
of 1978. Freight and express ton miles 
rose 10 percent , while mail ton miles 
were up 28 percent. 
Popularity of the airline's VIP small 
package service grew as volume 
climbed 27 percent over 1978. The 
expedited handling afforded by VIP, 
which can include pickup and delivery, 
has proven valuable for shippers of 
medical supplies, documents, news 
films , electronic data processing 
equipment , and machine parts. More 
than 170,000 VIP parcels were 
shipped in 1979. 
Republic has established high goals 
for flight completion and on-time 
performance . During 1979, the airline 
flew 79 ,305 ,000 of its 82 ,656 ,000 
scheduled miles for a completion 
factor of 96 percent. This is somewhat 
below the operating records 
established in previous years due 
primarily to a special government- 
directed inspection affecting DC-9 
aircraft , together with unusually 
severe weather in the early part 
of the year. 
The performance record reflects the 
work of everyone involved with 
day-to-day operations , and Republic 
is determined to maintain its position 
as an industry leader in providing 
dependable scheduled air service. 
The company has new facilities at the Sarasota I Bradenton terminal which opened in December 1979. 
Passenger Service Agents Mary Jansen and Ron Bishop check in passengers at the counter. 
REPUBLIC  
 The first Boeing 727-200 jets in 
Republic colors enter scheduled 
service on April 1. The 164-passenger 
727s are part of the company's 
fleet development program involving 
the acquisition of 32 jet aircraft 
in a 30-month period. 
Fleet development 
At the time of the merger on July 1, 
1979, Republic's fleet consisted of 68 
DC-9s 23 Convair 580s and eight 
Swearingen Metro I ls-a total of 99 
aircraft . The company then embarked 
on an extensive fleet development 
program which involved the acquisition 
of 32 additional jets within a 30- 
month period . 
The airli ne is purchasing the Boeing 
727 for the first time, and seven have 
been ordered . The other 25 aircraft 
are Douglas DC-9 jets . Republic 
has comm itted $370 million to this 
aircraft program. 
Fifteen of the DC-9 jets are already 
delivered , and two wi ll arrive later in 
1980. The first 727 was delivered 
in February 1980, and another is 
coming in March . Both of the new 164- 
passenger tri-jets enter scheduled 
service on April 1, 1980. Two more 727s 
are due by September. 
In 1981 , Republic wi ll be introducing 
the DC-9-80, the quietest and most 
fuel-efficient jet on the market today. 
Eight are on order, and all are to be 
delivered next year. Also , three 
Boeing 727s arrive in March 1981 . 
Republ ic's fleet wh ich already ranks 
as one of the ten largest in the world , 
is projected to include 120 aircraft 
by the end of 1981-seven 727s. 
90 DC-9s and 23 Convair 580s . 
The new aircraft have greatly improved 
existing service and also enabled 
the company to add new routes . 
Because the 727s use the same basic 
Pratt & Whitney jet engine as the 
DC-9s , no major changes have been 
required for maintenance purposes . 
The progressive modular maintenance 
system developed by the company 
has been studied and adopted by 
many airlines around the world. 
Republic does virtually all of its own 
maintenance work , thereby reducing 
dependence on vendors to meet quality 
standards . To assure operating 
reliability and performance , the 
company employs over 1 200 licensed 
and highly trained mechanics and 
technicians . 
The program to install wide-body 
interiors on earlier DC-9 jets is we ll 
underway. ::nclosed overhead luggage 
compartments and improved lighting 
provide passenger benefits . Bright 
side panels and a new decor give the 
aircraft a more spacious look. The 
changeover is to be completed in 1980. 
Supplemental fuel tanks have been 
installed in some DC-9-30s , giving 
them longer-range capabi lity, wh ich is 
also useful for charters . Several new 
DC-9-50s are equipped with auxiliary 
fuel tanks . Because the 727s have 
three engines , they can travel farther 
and perform well at high-altitude airports. 
Th is comprehensive fleet development 
program assures that Republic will have 
dependable , versati le, and efficient 
equ ipment to serve the public, while 
earn ing a reasonable profit for 
the company. 
7 
 8 
New facilities and services 
Republic Airlines takes pride in 
ca~rying on a tradition of high service 
st8ndards. Working in cooperation 
with civic leaders, the airline made 
numerous improvements In facilities 
throughout its system in 1979. 
New terminal buildings were completed 
at International Falls, Rh inelander/ 
Land O'Lakes , Hibbi ng /Chisholm , 
Sarasota Bradenton , and Huron . 
Construction was begun on an addition 
to the terminal at Minneapolis/St. Paul . 
Republic wi ll transfer its operation 
to the new Green Concourse and 
occupy ten gates . The Concourse , 
which was extended 800 feet , is 
scheduled for occupancy April 1. At 
Hartsfield Atlanta International 
Airpor , a completely new terminal is 
being built , a third main runway 
added , and a modern people-moving 
system installed . Republic will move 
into A1rside D on September 1. 
Terminals were remodeled at Bismarck/ 
Mandan , Devils Lake , Kalamazoo/ 
Battle Creek , and Memph is . 
ew enlarged space was secured for 
passenger service at airport facilities 
In Chattanooga, Meridian and 
New York La Guardia . At Madison, 
Republic Is the first airline to provide 
a gate area passenger lounge . The 
company has new information centers 
at Chicago O'Hare and Memphis, 
and has added a new passenger service 
counter and station facilities in the 
Tucson terminal. Baggage facilities 
were improved at Iron Mountain/ 
Kingsford , Memphis , Eglin AFB , 
Jackson (MS) and Chicago. 
Cargo operations , a substantial 
revenue-producer for Republic , also 
required expanded quarters. Construction 
has begun on a new cargo building 
In Birmingham . At Huntsville/Decatur, 
Republic has acquired a larger 
cargo area . New cargo facilities are 
planned for St. LOUIS, Memphis 
and Tallahassee . 
Several changes were made to 
accommodate new or additional jet 
service All gates at Detroit now 
have Jet bridges. and new jetways were 
installed at Eglin AFB , Fargo 
Moorhead . International Falls and 
H1bb1ng Chisholm . 
Improved passenger security and 
convenient screening resulted from 
he ins al la I0n of x-ray uni s for 
carry-on luggage inspection at 
l<alamazoo/ Battle Creek, Traverse City 
and Wausau/ Stevens Point . New 
walk-t hro ugh metal detectors were 
added in Greenville (SC) / Spartanburg , 
Minneapolis/ St. Paul, Milwaukee , 
Green Bay/ Cl intonville, and 
New Orleans . 
The company 's three Re servations 
Centers - Minneapolis , Atlanta and 
Detroit - were substantially expanded . 
The airline hired over 100 reservatio ns 
agents, bringing total personnel in thi s 
department to nearly 900 . By year-end, 
the reservations staff was answering 
more than 275,000 calls a week . 
ESCORT, the company's com puterized 
reservations system , automatically 
prints and prices a greater variety of 
tickets and iti neraries . Improved 
computer processing of booking s from 
other airlines resulted in 180,000 fewer 
messages to be entered manually - 
freeing agents to answe r more 
telephone ca ll s. 
Two new IBM Central Processing Units 
were acquired in 1979 to handle the 
company's volume of passenger 
reservations. One is the prime ESCORT 
The Green Concourse at 
the Minneapolis-St. Paul 
International Airport has been 
substantially expanded. 
Republic will occupy 10 gates, 
with new areas for passenger 
service and ground operations. 
computer, and the other is the "backup" 
computer usable for ESCORT and 
SCEPTRE, Republic's maintenance and 
corporate data system . This represents 
$6 million of equipment. The 
SCE PTRE program includes on-line 
tracking of all major aircraft parts 
for maintenance and repair. Several 
other airlines have pu rchased this 
program . Revenues received from the 
sal e of computer time and software 
programs totaled $750,000 in 1979. 
Customer Service Representatives are 
now ass igned to Republic's Flight 
Control Center. When weather and 
other factors cause irregular operations , 
these representatives provide flight 
superintendents with inform ation relating 
to passenger service . They determine 
the number of connecting passengers , 
the passenger inconvenience involved 
wi th special stops or overflights , and the 
need for extra sections . They also 
arrange for alternate forms of transpor- 
tation and estimate loss of passengers 
due to flight delays . Flight control 
decisions are first based on safety. 
Then passenger convenience is 
considered , and finally economic impact. 
The increased needs of the expanded 
airline required many changes in 
administration facilities . At the company's 
Minneapolis/ St. Paul headquarters , the 
lower level was transformed from storage 
space into offices and classrooms . The 
Flight Crew Training Department was 
moved to Atlanta to make full use of the 
excellent facilities there and the area's 
more moderate climate . Various 
functions , such as baggage claim service 
and cargo accounting , have been 
consolidated at one location . 
The company is continually evaluating 
its facilities so improvements and 
add itions can be made on a timely basis 
to meet the airline's changing needs . 
The Flight Crew Training Center is located in Atlanta where the climate is moderate 
and the company has excellent facilities. Instructor William McCarty exp/ams 
OC-9 hydraulic systems to First Officer Elwyn Gaissert and other pilots. 
9 
 10 
The company's employment practices 
follow Affirmative Action guidelines 
approved by the Federal Aviation 
Administration. Republic hired 
over 1,300 new employees in 1979. 
Many are among the nearly 900 
people who handle 275,000 calls a 
week at Reservations Centers in 
Detroit (right), Atlanta and Minneapolis / 
St. Paul. (Shown are Elizabeth 
Hockney and William Plumb.) 
Social and environmental programs 
Republic Airlines is firmly committed 
to fulfilling its obligations as a 
responsible corporate citizen . Through 
fuel conservation , noise abatement, 
safety, educational assistance 
and extensive employee programs , 
the company is directly involved with 
the diversified needs of a complex 
society. 
Employees are the airline 's greatest 
resource . Republic has 9,000 people , 
most of them with proven technical 
skil ls and many years of experience 
in the airline industry. About 1,300 
new employees were selected in 1979 
from over 100,000 applicants . 
Affirmative action guidelines , reviewed 
and approved by the Federal Aviation 
Adm inistration (FAA) , are followed in 
the hi ring process . 
Republic provides many outstanding 
benefit programs for its employees , 
including group life insurance , medical 
coverage , and pensions. Specialized 
programs are offered , such as the 
Idea Dollars suggestion system , 
management training , care for 
chemical dependency, and educational 
assistance . 
Safety, always a prime concern 
to the company, was emphasized by 
each division . Corporate safety 
committees coordinate programs and 
respond to Federal regulations by 
developing new plans . For example , 
the airline s hazardous materials 
training was expanded , after approval 
by the FAA . Fl ight crews , flight 
superintendents , stock clerks . 
passenger service agents and station 
agents received this specialized 
trai ning . 
Environmental matters are also of 
great importance to the airline's 
operation . Republic 's extensive route 
system covers 28 states , the District 
of Columbia , two Canadian provinces 
and the Cayman Islands in the 
Caribbean . 
The company has been very active 
in programs to reduce aircraft noise 
and its effect on comm unities the 
airline serves . Substantial effort 
is being devoted to noise studies and 
environmental impact statements. 
Frequent meetings are held with local 
airport noise and environmental 
groups to advise them of Republic's 
operational policies and to keep 
informed on the communities ' views. 
The Flight Operations Division , which 
coordinates this activity, also works 
with FAA air traffic controllers to divert 
aircraft noise to less-populated 
areas-by designating certain runways 
for takeoff and special flight paths for 
landing aircraft. Repub lic was a leader 
in the development of the new noise- 
abatement takeoff and landing 
procedures adopted by the FAA as 
the standard for all airlines . 
Over the next several years , the 
company will be replacing many of 
the smaller DC-9 jets with the much 
quieter DC-9-80s . 
The airline 's weather reporting system 
was enlarged in 1979 to provide 
weather data for 1,500 cities. Flight 
crews , flight superintendents , station 
agents , and passenger service agents 
now have access to this additional 
information and other improvements 
which upgrade the flexibility and 
reliability of weather data processing . 
Fuel conservation measures also 
apply to ground facilities . In the 
company 's headquarters , for 
example , equipment which reclaims 
heat generated by computer 
equipment was installed during a 
recent remodeling program . The entire 
cost of the system will be realized in 
about three years with energy savings 
at 1979 prices . 
Republic believes that prudent use of 
resources and concern for the 
environment are vital to the 
company 's progress . 
 Jet fuel outlook 
Of critical concern to Republic is the 
jet fuel supply situation and escalating 
costs . During 1979, the company had 
to intensify fuel conservation 
measures and locate new sources 
of supply. Although prices rose 
significantly throughout the year, 
related fare increases lagged several 
months beh ind . 
As the supply of crude oil and imported 
products decreased , less jet fuel 
was available, and contract suppliers cut 
their allocations to the airlines. Republic 
then had to buy some of its jet fue l in 
the retail " spot market" where a 
minimum purchase is usually a million 
gallons , and the price is considerably 
higher than contract fuel . About 13 
percent is now acquired in this manner. 
The average price per gallon in 
December 1979 was 76 cents, nearly 
double the 40 cents in December 1978. 
To fly the present 20.5 million seat miles 
a day, Republic jets requ ire 650,800 
gallons of fuel , or 31 .5 seat miles per 
gal lon . To meet that need , Republic 
purchases contract jet fuel at 79 
locations throughout the system under 
95 individual allocations from many 
different vendors . At one city, fuel 
is supplied by five companies. 
Republic and other carrie rs in the 
industry have continued to make 
significant progress in fue l 
conservation . These concerted efforts 
began in 1973 du ring the initial fuel 
crisis . According to the Air Transport 
Association, airline traffic has increased 
nearly 50 percent in th is period , 
but fue l use is up only five percent. 
Flight Attendants June Haugen 
(right) and Kathy Co!!ias serve 
passengers in flight. Since 1973, 
U.S. airline passenger traffic has 
increased nearly 50 percent, but 
fuel consumption is up only 
five percent. Republic and other 
airlines are continuing to make 
more efficient use of jet fuel. 
To reduce its fu el cons umptio n and 
increase operating efficiency, Republic 
made furth er re fin ements in aircraft 
ope rating proced ures and routings . 
In add ition , lighter-weight seats are 
being used, and passenger capacity 
has bee n increased on some DC-9s . 
The airli ne is also benefiting from the 
latest tec hnological developments 
as new DC-9-50 and Boeing 727 jet 
aircraft are delivered . 
Republic keeps accurate detailed 
information on fu el in its com puterized 
Fuel Inventory Management System 
(FIMS). Th is provides data for long- 
range planning and the day-to-day 
operation. Recent im provements 
pe rmit even greater flexibility in 
re porting . 
The company also has com puterized 
information allowing Flight Control 
to calculate fuel requ irements 
by flight segments . This is 'tailored " 
to the aircraft 's ty pe of engine, fuel 
capacity and seating configuration . 
Knowing th e fuel needed an d the 
inventory at refueling stations , 
planners can better utilize the supply. 
To insure jet fuel availability in the 
future, the com pany is pursuing 
several courses . Direct purchases are 
being made from a greater number 
of indepe ndent refineries , which 
usually limit delivery to nearby locations. 
Th e com pany is considering purchase 
of prod ucing oil wells, financing of 
indepe nde nt oil exploration, or 
acquiring an interest in a refinery- 
thro ugh partial ownership or by 
underwriting conversion costs to 
produce jet fuel . 
 Communications 
A highly effective communications 
program was carried out in 1979. Public 
a areness of Republic Airlin es was 
assured through well-researched 
mar eting and advertising activiti es , 
and emplo ees ere kept informed of 
compan y developments . 
The advertising campaign introducing 
Republic was launched on June 28 , 
1979. Ads ran in 172 newspapers and 
25 magazines , and on 124 radio 
stations and 109 television stations 
across the nation . 
The approach-emphasizing the merger 
of two establ ished carriers-was 
chosen. Research had indicated that 
the publi c placed confidence in a large 
airline with experience. For authenticity, 
visual ads featured Repub li c 
emp loyees . One of the coun try's top 
commercial musicians wrote original 
music for radio and TV spots . 
The "Americana" style was selected 
to represent the transcon ti nental scope 
of Repub lic. 
A nationally-known testing service 
reported that Republic's TV commercials 
demonstrated "outstanding performance 
in attracting viewer attention." Another 
research firm learned that 93 percent 
of the people surveyed knew of 
Repub lic Airlin es . They concluded that 
"Awareness of advertising , on an 
unaided basis , placed Republic and 
one other airline at the top of 
the industry." 
Public relat ions activities were 
coord in ated with the advertising effort. 
About 2,000 press kits containing news 
items, feature material and photographs 
we re distributed to national and 
reg ional pub li ca ti ons. Te levi sion and 
radio stations also received taped 
presentations on th e new company. 
The visual aspects of the change to 
Repub lic started on Ju ly 1 and were 
completed in a few days. Temporary 
signs were put on equipment and 
fac ili ties until overall design standards 
cou ld be implem ented . To reduce 
expenses , major changes at some 
places were delayed to coincide with 
planned remodeling or re location . 
Corporate design standards apply to 
aircraft, ground support equ ipment, 
bu ildings , billboards, printed materials, 
uniforms and all other items viewed 
by the publi c. 
To support the advertising and publicity 
activiti es , the sal es staff made over 
48,000 calls on travel agencies and key 
industrial accounts . Unique mai lings 
also kept them informed of merger 
developments and ottered special 
information and ass istance . Officers , 
station managers and other emp loyees 
participated in 1,450 civic events. 
More than 7,000 visitors received 
guided tours of Republic's headquarters 
in Minneapolis/ St. Paul . Anothe r 
10,700 guests attended public functions 
held in the emp loyee cafeteria. 
The airlin e's in/li ght magazine was 
expanded and renamed Republic 
Scene . Each issu e of th e monthly 
publicati on carries one story about 
th e co mpany, along with numerous 
other articles of general interest. 
Presentati ons for employees were made 
at major cities, prior to the July 1 merger, 
with corpo rate officers available to 
answer questions . Telety pe messages, 
letters, special mailin gs and a toll-free 
telephone line kept communications open. 
A mon hly newspape r for emp loyees , 
Republic People, was introduced after 
th e merg er, and also a weekly 
newsletter ent itled Extra Section . A 
feedback program , " Direct Approach ," 
perm its employees to phone or write 
directly to the general office with 
any comments or questions . 
Through the successfu l communications 
efforts of the company, emp loyees 
and the public are we ll aware of th e 
identity and progress of Republic Airlines. 
Employees were featured in advertising announcing he formation of Republic 
Ajrfines. A comprehensive program emphasized that the name was new, 
but the company was a combination of two experienced airlines. 
3 
 14 
Route development 
Primary factors affecting the 
company's route development in 1979 
were the merger which formed 
Republic and the Airli ne Deregulation 
Act of 1978. 
With the merger on July 1, 1979, a 
unique aviation network resulted . 
Virtually every major city in the Upper 
Midwest was linked with simi lar 
metropolitan commun ities in the 
Southeast, so travelers could move 
between the two areas without 
chang ing ai rli nes . Therefore, the 
company's route development program 
in 1979 focused on securing nonstop 
" bridge routes " connecting the two 
geog raph ic reg ions . 
On October 28, Republic began to 
integrate flight schedules between the 
northern and southern route systems. 
This provided more single-plane 
service , better connections , and 
additional capacity. Also , nonstop 
service was inaugurated between 
Minneapolis/ St. Paul and Atlanta. 
These changes benefited southern 
passengers traveling to hubs such as 
Minneapolis/ St. Paul , Detroit and 
Toronto, while people in the northern 
states had improved service to Atlanta, 
Memphis and New Orleans. 
In subsequent months, more refinements 
were made to schedules . On March 1, 
Las Vegas is the most recent addition to Republic's system. Convenient nonstop 
flights connect the famous vacation area with Minneapolis and St. Paul. 
1980, new service was introduced : 
Chicago-Nashville , Omaha-Kansas 
City-Memphis, and Birmingham- 
Tampa/ St. Petersburg/ Clearwater. 
On April 1, Milwaukee-St. Louis service 
begins. As demand grows and 
markets develop, more bridge routes 
will be added. 
By improving connections from 
intermediate-sized cities to major hub 
areas, Republic makes travel more 
convenient for passengers and carries 
them farther. This approach increases 
revenues, while reducing passenger- 
handling costs .  
As a result of the Airline Deregulation 
Act, significant expansion occurred . 
Early in 1979, service was inaugurated 
on the Chicago-Houston, Detroit- 
Memphis, and Atlanta-Washington, 
D.C. routes. Later in the year, the Civil 
Aeronautics Board began granting 
route authority to any "willing and able" 
applicant. Republic used this expedited 
procedure to connect Minneapolis/ 
St. Paul with Washington, D.C. 
Two long-standing route applications 
were favorably concluded in recent 
months. The first authorized Twin Cities- 
Las Vegas nonstops, and flights 
began January 15, 1980. The other 
application involves Minneapolis/ 
St. Pau l-San Diego service, and this is 
scheduled to start April 27. Local 
environmental studies delayed entry 
into San Diego. 
Additional changes on April 27 primarily 
affect the Michigan area. Republic 
is scheduling Detroit-New York City 
nonstops and increased service 
connecting Grand Rapids , Lansing and 
Saginaw/ Bay City/ Midland with Detroit 
and Chicago . The airline has served 
these cities for nearly 20 years . 
By actively participating in CAB route 
cases , Republic has been awarded a 
great number of routes in the United 
States and also authority to overseas 
points. With this potential and 
Republic's strong financial resources , 
new markets will be carefu lly selected 
to assure improved passenger service 
and productive, stable growth . 
 New Chicago-Nashville nonstop 
flights began March 1, 1980. 
Republic Skycap Stanley Seals 
offers "curbside" baggage check- in 
at Nashville. 
The future 
The full impact of deregulation in the 
airline industry is still unclear, and fuel 
continues to be a major concern . 
However, Republic is expecting 
continued growth in the months ahead . 
The company will concentrate on 
developing markets within its system . 
This approach is the most economical 
way to accomplish expansion because 
facilities and staffing are established . 
Nonstop service between cities 
Republlc is already serving will be 
vigorously promoted . When new 
destinations are added , they will be 
lucrative , long-haul routes. 
As the nation 's economy regains 
momentum , business and leisure travel 
should stabilize and gradually 
increase . Demand for seats and cargo 
space will push 1980 revenues close 
to a bi llion dollars , while cost control 
programs hold down expenses . 
The airline has virtually unlimited 
potential in the decade of the '80s , 
and " the people " of Republic are 
confident the company will be a strong , 
profitable carrier. 
15 
 WINNIPEG 
LAS VEGAS 
SAN DIEGO 
TUCSON 
GRAND CAYMAN 
 Balance sheets 
18 
ASSETS 
CURRENT ASSETS 
Cash and short-term investments (note C) ... . ... . .............. . 
Accounts receivable , less allowances .. . .... . . . .......... . . ... .. . 
Flight equipment parts and supplies (notes A and C) . .. ....... ... . 
Prepaid expenses and other (note A) . . . . .. . ... .. .. .. . . . ... ..... . 
PROPERTY AND EQUIPMENT-at cost (notes A, C, D, E and I) 
Flight equipment . . ... .. ... .... . .. . . . .. . . ...... . . . ............. . 
Ground property and equipment ....... . .. . .. .. .. . .. . ... . . ... . .. . 
Less accumulated depreciation and amortization .. .... . .. . ...... . 
Advance payments on equipment ... . .. . .. . ... . .. . .. . ... . . . . .. . . . 
DEFERRED CHARGES AND OTHER ASSETS . .. .. . . . ..... . . . .. . . . 
LIABILITIES AND STOCKHOLDERS' EQUITY 
CURRENT LIABILITIES 
Current maturities of long-term debt (note C) . . ... ......... ... ... . 
Accounts and notes payable (note C) . . .. . ...... ... .... . .. . .. . . . . 
Interline payables and tickets outstanding (note A) .. . . ... . . .. .... . 
Accrued compensation and other expenses . . ... . .. . .... .. . .. . .. . 
Income taxes (notes A and F) . . .... . . . .. . ............ .... . ..... . 
LONG-TERM OBLIGATIONS 
Long-term debt - less current maturities (note C) 
Deferred income taxes and other (notes A and F) 
COMMITMENTS (notes D and E) 
STOCKHOLDERS' EQUITY (notes C, G and H) 
Common stock - authorized 30,000,000 shares of $.20 par value .. 
Add ition al paid-in capital . ..... . . ..... . . ...... . .... .. . .... .. . ... . 
Retained earnings ............ . ........ . .... ,. .................. . 
Treasury stock- at cost .... . . .. ... .. ....... . ....... .. ... .. . ... . . 
The accomp anying notes are an integral part of these statements. 
REPUBLIC 
December 31 
1979 
$ 13,178,000 
84,820,000 
30,771 ,000 
15,922,000 
144,691 ,000 
436,734,000 
74,177,000 
510,911 ,000 
146,554,000 
364,357,000 
35,275,000 
399,632,000 
5,058,000 
$549,381 ,000 
$ 18,219,000 
40,183,000 
37,918,000 
39,390,000 
520,000 
136,230,000 
263,035,000 
4,602,000 
267,637,000 
4,151 ,000 
48,109,000 
93,634,000 
(380,000) 
145,514,000 
$549,381 ,000 
1978 
$ 33,399,000 
46,232,000 
16,223,000 
11 ,910,000 
107,764,000 
344,184,000 
63,296,000 
407,480,000 
125,450,000 
282,030,000 
32,024,000 
314,054,000 
6,606,000 
$428,424,000 
$ 24,157,000 
25,731 ,000 
27,797,000 
29,925,000 
3,061 ,000 
110,671 ,000 
196,637,000 
7,828,000 
204,465,000 
3,297,000 
27,321 ,000 
83,050,000 
(380,000) 
113,288,000 
$428,424,000 
r,1 
AIRLINES, INC. 
Statements of earnings 
Year ended December 31 
1979 1978 
OPERATING REVENUES 
Passenger (note A) . .. . ... . ... . . . ... ............ .... . . . . ..... . . . $527,792,000 $408,243,000 
Freight and mail ... . . . . . . . . .. .. . . . ... . . .. .. . . . . ... . ... . . . .. . .. . . 41 ,510,000 34,062,000 
Public service revenues (note I) .. . . . ........... . ..... . . . .... .. . . 26,362,000 16,523,000 
Non-scheduled service and other . . ... .... . . . . .. ...... . .. .. . . ... . 13,566,000 28,737,000 
609,230,000 487,565,000 
OPERATING EXPENSES 
Flying operations ... . . . . . . ... . . . .... . ....... . .... ... . . ... . .. . .. . 211 ,260,000 144,106,000 
Maintenance .. . . .. . . . ....... . . . . . . . ... . ... . . .. . .. ............ . . 70,436,000 54,774,000 
Aircraft and traffic servicing ..... . .......... . .. . . ... . ... . . . . . .. . . 128,059,000 103,789,000 
Passenger service . . . . ......... . . .......... . .. . . . ......... . ... . . 43,782,000 30,467,000 
Reservations , advertising and sales . ......... .. .............. . . . 66,300,000 46,093,000 
General and administrative . ...... . ........ . ....... . .... . ... . .. . . 28,054,000 24,468,000 
Other transport-related expenses . .. . ..... . .. ... .. .. . . . . . . .. . ... . 3,846,000 11 ,806,000 
Depreciation and amortization (notes A and I) 29,440,000 29,253,000 
581 ,177,000 444,756,000 
Operating profit .. . ............ . .... . .......... . . . . . . .. .. . 28,053,000 42,809,000 
OTHER EXPENSES (INCOME) 
Interest expense .................................... . .... .. ... . 26,497,000 18,688,000 
Less interest capitalized (notes A and B) ... . ....... . . .. .. . . . .... . 6,375,000 2,015,000 
20,122,000 16,673,000 
Interest income and other - net ....... . ... . . . . . ................. . (1,378,000) (2,593,000) 
Gain on disposition of equipment . .. .. .. ... ... ...... . ... . . . ..... . (2,002,000) (1,306,000) 
16,742,000 12,774,000 
Earnings before income taxes . ... ... ... . ... . . .. .. . . . . .... . 11 ,311 ,000 30,035,000 
INCOME TAXES (notes A and F) 
Current ... . ............ .. ......... . ..... . . . . . ...... . ..... . .... . 706,000 2,724,000 
Deferred ........ . .. .. .. . . . ... .. .. . .. . ..... . . .. .. . . . .. . .. .. .... . (2,456,000) 2,740,000 
1,750,000) 5,464,000 
NET EARNINGS . . . . .. .. . . . . ......... . .................. . $ 13,061 ,000 $ 24,571 ,000 
NET EARNINGS PER SHARE (note K) 
Primary ......... . ... ...... .. ...... . . . .. .... . .. . .... . .. . $ .70 $1.42 
Fully diluted .......... .. . . .. . ........ . ................. . $ .68 $1 .31 
The accompanying notes are an integral part of these statements. 
19 
 20 
Statements of changes in financial position 
SOURCES AND APPLICATIONS OF WORKING CAPITAL 
SOURCES 
From operations 
Net earnings ... . .. . ........ . . . .......... . ...... . .. . .. .. . . ..... . 
Charges (credits) to earnings not using (providing) working capital 
Depreciation and amortization .... ... ... .. ... . . .. ..... . .... . 
Deferred income taxes . . ... . .. .. . . ... .. .. .. . . .... . .. .. .... . 
Other .... . . ........ . .. .. ... . .. . .. . ..... . .. ... . .. ...... . . . . 
Working capital provided from operations .. . ............ . 
Net book value of equipment dispositions ...... .. .. . ............. . . 
Increase in long-term debt . . . .... .. . . .. .. . . .. . ... . ... .. .... . . .. . . . 
Conversion of debentures to common stock ..... .. . . . . .. .. .. . ..... . 
Options and warrants exercised ... . . .. ......... . .. . .. . .......... . . 
Other ... . . .. . . . . .. . . .... . . .... ........... . .. . .. . .............. . . 
APPLICATIONS 
Additions to property and equipment .. . .............. .. . .. ........ . 
Reduction of long-term debt .. .. .... . .... . .. .. . .. ..... . . . .. . .. . .. . . 
Conversion of debentures to common stock .. . . .. . .. .... . . .... .. .. . 
Payment of cash dividend ......... . . . ..... . .. .... .. . ...... . .. . ... . 
Additions to deferred charges and other assets . . .... . ... . . . . . ..... . 
INCREASE IN WORKING CAPITAL ... . .......... . . . ... . 
Working capital (deficit) at beginning of year ..................... .. . . . 
Working capital (deficit) at end of year ... . .. . ..... .. . ... . ....... ... . . 
NET CHANGE IN WORKING CAPITAL ELEMENTS 
Increase (decrease) in current assets 
Cash and short-term investments ...... . . . .. .... . ....... .... .... . 
Accounts receivable ...... . ...... . ........ . . .. . . .... . .. . .. . .... . 
Flight equipment parts and supplies .......... . . .... ......... ... . 
Prepaid expenses and other . ... ... . .... . . . . . . . .. .. . . . . . ...... . . 
Net change in current assets .. .. . . .. .. ...... ... ....... . . . . . . 
Increase (decrease) in current liabilities 
Current maturities of long-term debt . ...... . .. . .... . . .. ...... . . . . 
Accounts and notes payable ......... . .. . .......... . ....... . . .. . 
Interline payables and tickets outstanding .......... . ..... .. . . ... . 
Accrued compensation and other expenses ...... .. ....... . .... . . 
Income taxes ... . .. . . .. . ...... .. . ....... . .. ... .. . ... .. ....... . . 
Net change in current liabilities ..... . ... . ..... . . . . .. ...... .. . 
INCREASE IN WORKING CAPITAL ...... . .. . ...... ... . . 
The accompanying notes are an integral part of these statements. 
Year ended December 31 
1979 1978 
$ 13,061 ,000 $ 24,571,000 
29,440,000 29,253,000 
(2,220,000) 2,714,000 
1,436,000 1,268,000 
41 ,717,000 57,806,000 
2,159,000 7,018,000 
187,797,000 105,998,000 
7,864,000 1,031,000 
13,490,000 462,000 
328,000 429,000 
253,355,000 172,744,000 
116,857,000 114,207,000 
113,449,000 50,958,000 
7,864,000 1,031 ,000 
2,477,000 2,014,000 
1,340,000 2,896,000 
241 ,987,000 171 ,106,000 
11 ,368,000 1,638,000 
(2,907,000) (4,545,000) 
$ 8,461 ,000 $ (2,907,000) 
===== 
$ (20,221 ,000) $ 10,151 ,000 
38,588,000 3,875,000 
14,548,000 3,231 ,000 
4,012,000 1,419,000 
36,927,000 18,676,000 
(5,938,000) (5,868,000) 
14,452,000 9,073,000 
10,121 ,000 6,128,000 
9,465,000 7,039,000 
(2,541 ,000) 666,000 
25,559,000 17,038,000 
$ 11,368,000 $ 1,638,000 
 Statements of changes in stockholders' equity 
Years ended December 31, 1979 and 1978 
Common Stock Treasury Stock 
Additional 
Shares Paid-In Retained Shares 
Issued Amount Capital Earnings Held 
Balance at January 1, 1978 . . . .. . . 16,117,191 $3,223,000 $25,902,000 $60,493,000 134,594 
Cash dividend (note G) ... . . .. (2,014,000) 
Exercise of stock options 
(note G) .. . .. .. .. . .. .. .... . 38,798 8,000 104,000 
Exercise of warrants (note G) . 113,748 23,000 327,000 
Conversion of debentures 
(note C) .. .. . .. . .. . . . . .. ... 213,093 43,000 988,000 
Net earnings for 1978 . . . . . ... 24,571 ,000 
Balance at December 31 , 1978 . . . . 16,482,830 3,297,000 27,321 ,000 83,050,000 134,594 
Cash dividend (note G) . . . . ... (2,477,000) 
Exercise of stock options 
(note G) . .... .. ..... .. . ... . 89,150 18,000 218,000 
Exercise of warrants (note G) . 2,561 ,323 512,000 13,030,000 
Conversion of debentures 
(note C) ... . .. . ... . . . . . . .. . 1,621 ,013 324,000 7,540,000 
Net earn ings for 1979 . . . ..... 13,061 ,000 
Balance at December 31 , 1979 . . . . 20,754,316 $4,151 ,000 $48,109,000 $93,634,000 134,594 
The accompanying notes are an integral part of these statements. 
Auditors' report 
Alexander Grant 
& COMPANY 
CERTI FIED PU BLI C ACCOUNTANTS 
Stockholders and Board of Di rectors 
Republ ic Airlines, Inc. 
INTERNATIONAL FIRM 
ALE XAND ER GRANT TANSLEY WITT 
We have examined the balance sheets of Republic Airlines, Inc. (a Wisconsin cor- 
poration) as of December 31 , 1979 and 1978, and the related statements of earnings 
changes in si ockholders' equity and changes in financial position for the years then 
ended. Our examinations were made in accordance with generally accepted auditing 
standards and accordingly included such tests of the accounting records and such 
other auditing procedures as we considered necessary in the circumstances. 
In ou r opinion, the financial statements referred to above present fairly the finan- 
cial position of Republic Airlines , Inc., at December 31 , 1979 and 1978, and the results 
of its operations and changes in its financial position for the years then ended , in con- 
form ity with generally accepted accounting pri nciples applied on a consistent basis 
except for the change, with which we concu r, in the method of capitalizing interest as 
discussed in note B to the financial statements. 
Minneapolis, Minnesota 
February 25, 1980 
Amount 
$380,000 
380,000 
$380,000 
2 1 
 22 
Notes to financial statements 
December 31 , 1979 and 1978 
Note A-Summary of Significant Accounting Policies- 
The company, as a regional airline providing scheduled serv- 
ice for passengers , mail and property, is regulated by the Civil 
Aeronautics Board (CAB) and uses the Uniform System of 
Accounts and Reports for Certificated Air Carriers as re- 
quired by the CAB . The significant policies followed by the 
company are : 
Flight Equipment Parts and Supplies: These are priced at 
average cost . An allowance for obsolescence ($2 ,970,000 in 
1979 and $2 ,464,000 in 1978) is provided for repairable parts 
by allocating their cost over the life of the related aircraft. 
Prepaid Expenses-Engine Overhaul: The company re- 
classifies to a current prepaid expense the estimated portion 
of the purchase price of flight equipment attributable to its 
overhaul expected to be consumed within the next twelve 
months ($10 ,303 ,000 in 1979 and $8 ,515,000 in 1978) . Actual 
overhaul costs are charged to expense as incurred. 
Capitalized Interest: To properly reflect their total cost, 
major additions to flight equipment and ground facilities in- 
clude capitalized interest based on the interest rate of the 
related debt outstanding . The capitalized interest is amor- 
tized over the useful lives of the related assets for financial 
reporting purposes. For income tax reporting purposes, 
interest is expensed as incurred (note B) . 
Property, Equipment and Depreciation: Owned property 
and equipment are stated at cost . Property and equipment 
acquired under capital leases are stated at the lower of the 
present value of minimum lease payments or fair market 
value at the inception of the lease . Depreciation and amorti- 
zation of property and equipment are provided on a straight- 
line basis over estimated useful lives of 7-18 years for flight 
equipment and 7-10 years for other property and equipment. 
Deferred Charges: Significant costs , such as major com- 
puter software development, traffic promotion related to the 
inauguration of service over major new routes , and personnel 
training relating to the introduction of new types of aircraft are 
deferred and amortized over periods of up to five years . 
Passenger Revenues: Passenger revenue is recognized 
when the transportation service is provided . Unused ticket 
sales are included as a current liability. 
Pension Costs: The company has pension plans for sub- 
stantial ly all of its employees , and funds its current expense 
of normal costs . Prior service costs are amortized over 40 
years . Pension funding is determined under the unit credit 
and aggregate frozen liability methods (note J) . 
Income Taxes: The company uses the flow-through method 
of accounting for investment tax credit which reduces income 
tax expense when the related liability is reduced. Investment 
credits not applied currently are offset against deferred in- 
come taxes to the extent they are applicable to previously 
deferred taxes becoming payable in the carry-over periods . 
The company recognizes deferred income taxes resulting from 
differences in financial and income tax reporting (note F). 
Note B-Change in Accounting Method-In the fourth quar- 
ter of 1979, the company changed its method of computing 
capitalized interest to conform with the requirements of Fi- 
nancial Accounting Standards Board Statement Ne. 34 . The 
company previously capitalized interest based on the 
weighted average interest rate of debt outstanding . The ef- 
fect of the change was to increase capitalized interest recog- 
nized in 1979 by $895,000 and increase net income by 
$806,000 ($ .04 per share primary and fully diluted). The 
impact on the unaudited quarterly results of operations for 
the three prior quarters in 1979 was immaterial and therefore 
the quarterly financial information has not been restated. 
Note C-Long-term Debt-Long-term debt at December 31 
consists of the following: 
1979 
Revolving credit agreement (a) . .. .. $103,382,000 
Quarterly installment notes 
due in 1984 (a) ..... . ... . .... . . . 
Notes payable to banks under 
a Credit agreement (a) ... . .. ... . 
Quarterly installment notes 
due in 1987 (b) . . . . . . . . . . . . . . . . . 35,279,000 
Equipment Trust Certificates (c) . . . . 43,500,000 
Capital lease obligations (d) . . . . . . . 84,291,000 
Convertible subordinated 
debentures (e) . ... . .. . ... . . . .. . 
5% due December 1, 1981 ... . . 
6% due November 1, 1983 . .. . . 
Sundry (f) . . . . . . . . . . . . . . . . . . . . . . . . 14,802,000 
Total long-term debt (g) . . . . . . . . 281,254,000 
Less current maturities (h) . . . 18,219,000 
$263,035,000 
$ 
1978 
73,335,000 
16,807,000 
46,284,000 
45,000,000 
18,117,000 
3,016,000 
5,047,000 
13,188,000 
220,794,000 
24,157,000 
$196,637,000 
(a) On October 1, 1979, the company refinanced quarterly 
installment notes due in 1984 and notes payable to banks 
under a credit agreement into a Revolving credit agreement. 
Under this agreement, the company may borrow up to a 
maximum of $150 ,000,000 until December 1980, when it will 
be converted into a term loan. Proceeds from this agreement 
were used to refinance a portion of existing debt and will be 
used to finance a portion of the purchase price of four new 
B-727-200 aircraft scheduled for delivery in 1980. The loan 
will be payable in twenty-eight quarterly installments of ap- 
 proximately $5,357,000 beginning November 1981 through 
August 1988. Interest is to be paid at each of the participating 
banks' prime rate plus percentages ranging from %to % 
over prime . Effective rates at December 31 , 1979 were 15% to 
15%. 
(b) Consists of various installment notes with due dates from 
1986 through 1987 at interest rates ranging from 8% (for 
notes 90% guaranteed by the Federal Aviation Administra- 
tion) to% over the lending bank's prime rate. Effective rate 
at December 31 , 1979 was 15%. The aggregate quarterly 
installment payments are approximately $1 ,734,000 includ- 
ing interest. 
(c) The Equipment Trust Certificates require semi-annual 
sinking fund payments of $750,000 in 1980, $2,250,000 in 
1981 and 1982, $1,575,000 from 1983 through 1992 and 
$1,500 ,000 at maturity in May 1993, plus interest at 9% . The 
company may make semi-annual optional sinking fund pay- 
ments beginning in May 1983 up to $1 ,575,000 and may pay 
off the remaining balance in full on or after May 1, 1988 at a 
premium . 
(d) In the first half of 1979, the company took delivery of three 
DC-9-50 aircraft under a capital lease agreement. The debt 
obligation relating to the capitalization of this lease was 
$25 ,000 ,000 at Decembe.r31, 1979. The obligation is payable 
in semi-annual installments of $1 ,354,000 through January 
1997, including interest at 8 Va% . During the fourth quarter of 
1979, the company took delivery of four additional DC-9-50 
aircraft under a capital lease agreement. The debt obligation 
relating to the capitalization of this lease was $39 ,446,000 at 
December 31 , 1979. The obligation is payable in quarterly 
installments of $1 ,030 ,000 through April 1998, including 
interest at 83 
/a% (note D). 
In December 1979, the company took delivery of two used 
DC-9-10 aircraft under a capital lease agreement. The debt 
obligation relating to the capitalization of this lease was 
$4 ,298,000 at December 31 , 1979. The obligation is payable 
in quarterly installments of approximately $233,000 through 
December 1986, including interest at 12%. 
(e) All 5% and 6% debentures were converted or re- 
deemed during 1979. 
(f) Includes $5,717 ,000 of promissory notes with interest at 
1.25 times prime . Effective rate at Decer:nber 31_, 1979 was 
approximately 19%. These notes were issued in place ?f 
deposits and are due at delivery of four DC-9-50 aircraft in 
1980 (note E) . 
(g) Substantially al l the flight equ ipment and spare parts 
owned and leased by the company are pledged as col lateral 
against the above debt. Among the loan covenants are re- 
quirements for the maintenance of tangible net worth and 
coverage of fixed charges . At December 31 , 1979 the com- 
pany was in compliance with those restrictive covenants . 
The company is requ ired to maintain average compensating 
balances ranging from 5% to 15% of the quarterly average 
loan outstanding or commitment and is requ ired to pay inter- 
est rang ing from % to % over prime on any average 
compensating balance shortfall. During 1979 the company 
was required to maintain average compensating balances of 
$8,916 ,000. At December 31 , 1979, the required compensat- 
ing balances (adjusted for float) were approx imate ly 
$6,764 ,000 . 
(h) Current maturities of all long-term debt obligations due in 
each of the next five years fol lowing December 31 , 1979 are 
as follows : 
1980 .. ... . .. . 
1981 
1982 ..... . . . . . 
1983 
1984 
. $18,219 ,000 
30,135,000 
. . . . . . . . . . 29 ,029 ,000 
. . . 28,704 ,000 
29,261 ,000 
At December 31 , 1979 and 1978, $500,000 and $4,000 ,000, 
respectively was outstanding under short-term lines of cred it 
with several banks at principally their prime lending rate . 
Effective rate at December 31 , 1979 was 15%. At December 
31 , 1979 an additional $11 ,500 ,000 was available at the 
banks' prime rate . In 1979 the maximum borrowing at the end 
of any calendar month was $5 ,000 ,000 and the approximate 
average loan balance and weighted average interest rate 
computed using the days outstanding method was 
$3 ,208 ,000 and 12%, respectively. 
Note D-Leases-The company has lease comm itments for 
various airport facilities based upon usage and landings , 
subject to adjustment depending upon the needs of the air- 
port operating authority. The annual lease comm itments are 
not determinable due to the usage and adjustment factors. 
The company also leases fl ight equipment, its main operating 
facilities , its maintenance and training faci lities , and other 
property and equipment. 
The following is a summary of property under capita l leases 
included in ,property and equipment at December 31 : 
1979 1978 
Flight equipment . . . .. . . . . . . . . . . . . S84 , 185,000 $21 ,11 6,000 
Ground property and equipment 8.786 ,000 8,936,000 
92 ,971 ,000 30,052 ,000 
Less accumulated amortization 12,760,000 13,943,000 
$80,21 1,000 $1 6,109,000 
23 
 Notes to financial statements 
December 31 , 1979 and 1978 (continued) 
At December 31 , 1979, future minimum rental payments 
under capital leases and non-cancellable operating leases 
with initial or remaining terms of more than one year are as 
follows: 
Period 
1980 . . ........... . ............. . 
1981 .................. . . 
1982 ................... . 
1983 . . . ... ............ . .. . 
1984 ................... . 
1985-2007 ..... . ........... . 
Total minimum lease payments . ... 
Less amounts representing 
interest ........ . . . ...... . 
Present value of future minimum 
lease payments ... . . . 
Operating 
Leases 
$ 10,237,000 
8,724,000 
7,692 ,000 
7,137,000 
7,104,000 
98 ,045,000 
$138 ,939 ,000 
Capital 
Leases 
$ 11 ,446 ,000 
11,084,000 
10,955,000 
10,573 ,000 
9,382 ,000 
97 ,674 ,000 
151 ,114,000 
66 ,823 ,000 
$ 84,291 ,000 
Total rent expense , including landing fees , was $29,890 ,000 
in 1979 and $25 ,800,000 in 1978. 
Note E-Commitments-The company has purchase com- 
mitments on six new DC-9-50 aircraft to be delivered in 1980 
on wh ich it has advanced $18 ,466 ,000 and capitalized inter- 
est of $3 ,003 ,000. The company has arranged capital lease 
financing of approximately $43 ,000 ,000 for four of these air- 
craft and will be refunded approximately $13 ,591,000 by the 
lessor for advanced deposits. The company will expend an 
additional $14 ,614 ,000 on the remaining two aircraft. 
The company has advanced $18,470 ,000 and capitalized 
interest of $1 ,255 ,000 on purchase commitments for seven 
Boeing 727-200 aircraft, four to be delivered in 1980 and 
three in 1981 . The total purchase price will be approximately 
$104,075 ,000 . 
The company has advanced $5,911 ,000 and capitalized inter- 
est of $304,000 on a purchase commitment for four DC-9-80 
aircraft for delivery in 1981 . In addition , the company has 
advanced $400 ,000 and capitalized interest of $57,000 on 
options for four additional DC-9-80 aircraft to be delivered 
in 1981 . If all eight aircraft are purchased , an additional 
$99 ,389 ,000 will be expended prior to delivery. 
The company has a commitment under a capital lease for a 
used DC-9-1 O aircraft to be delivered in January 1980. The 
capitalized present value of the aircraft will be approximately 
$2,142,000 with the lease term running through January 1987. 
In October 1979, the company signed a letter of intent to 
purchase four new DC-9-80 aircraft. The letter includes pro- 
visions for cancellation of the order. The company has ad- 
vanced $400 ,000 and capitalized interest of $15 ,000 and , if 
the order is not canceled , will expend an additional estimated 
$56 ,800 ,000 through delivery in 1982. 
24 
Note F-lncome Taxes-Income tax expense for the years 
ended December 31 is as follows : 
1979 1978 
Current income taxes 
Federal ............ . ... ...... . $ 2,471 ,000 $13,521 ,000 
Investment tax credit . ..... .. . . . (2,090,000) (12,322 ,000) 
381,000 1 I 
199,000 
State and local ............... . 325,000 1,525,000 
706,000 2,724,000 
Deferred income taxes 
Federal .... . .......... . . . 3,153,000 884,000 
Investment tax credit .. (6,005,000) 1,795,000 
(2,852,000) 2,679,000 
State and local ........ ... .... . 396,000 61 ,000 
(2,456,000) 2,740,000 
$ (1 ,750 ,000) $ 5,464,000 
Differences between income tax expense and amounts de- 
rived by applying the statutory federal income tax rates of 
46% in 1979 and 48% in 1978 to income before income taxes 
are as follows: 
Income tax expense computed 
at statutory federal income 
tax rates . . . . . . . . . ... .... . 
Investment tax credit utilized .... . 
Employee Stock Ownership Plan . 
State and local taxes net of 
federal income tax benefit ... . . . . 
Other ... . ....... . ... . ........ . 
1979 1978 
$ 5,203 ,000 $14,417 ,000 
(8,095 ,000) (10,527,000) 
715,000 552,000 
389,000 766 ,000 
38,000 256,000 
$ (1,750,000) $ 5,464,000 
Deferred income taxes arise from timing differences between 
financial and tax reporting. The tax effects of these differ- 
ences are as follows : 
Capitalized interest ....... . 
Investment tax credit .............. . 
Group insurance .... . . . .......... . . 
Capitalized leases . ... . .. .. . 
Training and development .. 
Depreciation .. . . . 
Other ..................... . 
1979 1978 
$ 2,953 ,000 
(6 ,005,000) 
(290,000) 
(472,000) 
498,000 
754,000 
106,000 
$ (2,456 ,000) 
$ 821 ,000 
1,795,000 
(460 ,000) 
186,000 
365,000 
186,000 
(153,000) 
$ 2,740,000 
For federal income tax reporting purposes , investment tax 
credits of $10 ,400 ,000 are available to offset future income 
taxes payable through 1986. Of this amount, $6 ,937,000 has 
been recognized for financial reporting purposes as an offset 
to deferred income taxes payable through December 31 , 
1979. 
 During the fourth quarter of 1979, the company adjusted the 
estimated effective income tax rate for the year to take into 
effect the reduction of earn in gs due to the industry- 
wide softening of traffic. As a result, income tax expense was 
reduced by $4,910 ,000 during the fourth quarter. 
Under the Revenue Act of 1978 and existing law, a special 
provision allows the company to offset its federal tax liability 
by the following approximate percentages (subject to the 
availability of sufficient investment tax credits) : 1978- 100%; 
1979-90%; 1980 and 1981 - 80%; 1982 (and later years) 
- 90%. 
The Internal Revenue Service has examined and cleared the 
company's federal tax returns through December 31 , 1976. 
Note G-Common Stock, Options and Warrants - At De- 
cember 31 , 1979, 109,500 shares of unissued common stock 
are reserved for officers and key employees under a plan 
adopted in 1975 of wh ich 73 ,400 shares (at $2 .50 per share) 
expire in 1980 and 36,100 shares (at $3 .87 per share) expire 
in 1981 . 
When options are exercised, the excess of the option price 
over par value of the shares is credited to additional paid-in 
cap ital . Options are exercisable at not less than 100% of the 
fair market value of the stock on the date of the grant . The 
company makes no charges to income in connection with 
shares issued under the stock option plan . 
Option transactions during the two years ended December 
'31 , 1979 are summarized as follows : 
Outstanding 
January 1, 1978 . 
Exercised .. . 
Expired or cancelled 
Outstanding 
December 31 , 1978 ... . 
Exercised .... . 
Expired .... . 
Outstanding 
December 31 , 1979 .. . . 
Number of 
Shares 
241 ,650 
(38,798) 
(2,802) 
200 ,050 
(89,150) 
( 1,400) 
109,500 
Option Price 
Per Share Total 
$1.40-$4.25 
1 .40- 4.25 
1.40- 2. 77 
1 .40- 4.25 
1 .40- 3.38 
1.40 
2.50 - 3.87 
$680,000 
(112,000) 
(7 ,000) 
561 ,000 
(236,000) 
( 2,000) 
$323 ,000 
All outstanding options at December 31 , 1979 were exercis- 
able . 
At December 31 , 1979 and 1978, there were outstanding 
warrants to purchase 541 ,057 and 3,495 ,494 shares of com- 
mon stock, respectively. The warrants outstanding at De- 
cember 31 , 1979 enable the holder to purchase common 
stock at $2 .86 per share and expire in 1981 . 
In February 1980, the Board of Directors declared a $.20 per 
share dividend payable March 17, 1980 to shareholders of 
record on March 3, 1980. The company paid cash dividends 
of $.20 and $.16 per share to its stockholders during the first 
quarter of 1979 and 1978, respectively. 
Note H- Merger- On July 1, 1979, Southern Airways , Inc. 
was merged into North Central Airlines , Inc., which changed 
its name to Republic Airlines , Inc. As a result of the merger, 
Southern stockholders received 2.1 shares of Repub lic 
common stock for each share of Southern common stock 
held by them . The terms of the merger were arrived at as a 
result of arms-length negotiations between management of 
Southern and North Central . The combination was ac- 
counted for as a pooling of interests and accordingly, all prior 
financial statements have been restated to include both 
companies , and reclassified to conform to the 1979 presenta- 
tion . 
The results of operations of the separate companies for the 
periods prior to the combination are summarized as fol lows : 
Six months ended June 30, 1979 
(unaudited) 
Operating 
Revenues 
Net 
Earnings 
North Central ... . 
Southern ......... . 
.... $182 ,957 ,000 
105,602,000 
$ 8,231 ,000 
2,025,000 
$288,559,000 $10,256 ,000 
Year ended December 31 , 1978 
North Central . $299 ,053,000 $22, 164,000 
Southern . . 188,512,000 2,407 ,000 
$487 ,565,000 $24 ,571 ,000 
Note I-Significant Transactions Affecting Operating 
Results - As a regional carrier, the company receives public 
service revenues for serving small and intermediate-size 
communities which do not generate sufficient traffic to fully 
support profitable air service . The amount of such payments 
is determined by the CAB on the basis of its evaluation of the 
amount of revenue needed to meet operating expenses and 
provide a reasonable return on investment with respect to 
eligible routes . On October 9, 1979, Class Rate IX became 
effective for the period beginning July 1, 1978. As a result, 
during 1979, revenue of $3 ,096 ,000 ($2 ,786 ,000 after in- 
come taxes - $.15 per share primary and $.14 per share fully 
diluted) relating to public service revenues was recognized 
applicable to the period July-December 1978. 
During the fourth quarter of 1979, the company revised the 
estimate of the remaining service lives of certain of its flight 
equipment effective January 1 and July 1, 1979. As a result, 
depreciation expense decreased by $4,154,000 ($3 ,739 ,000 
after income taxes - $.20 primary and $.19 fully diluted fo r the 
year and $.19 per share primary and fully diluted for the fourth 
quarter) . 
25 
 Notes to financial statements 
December 31 , 1979 and 1978 (continued) 
Note J-Pension Costs-Pension expense was $14,978,000 
in 1979 and $11 ,872 ,000 in 1978. At January 1, 1979, the latest 
actuarial valuation date, the actuarially computed value of 
vested benefits exceeded the total value of fund assets by 
$7,513,000 for all plans. 
Note K-Net Earnings Per Share-Primary earnings per 
share for 1979 and 1978 are based on the weighted average 
number of common and common equivalent shares outstand- 
ing (18,561 ,082 in 1979 and 17,332,195 in 1978). Common 
equivalent shares result from the assumed exercise of stock 
options and warrants using the " treasury stock" method . 
If the debentures converted into common stock during 1979 
were assumed converted at the beginning of the period, 
primary earnings per common and common equivalent share 
would have been $.67 or a decrease of $.03 per share. 
Fully diluted earnings per share for 1979 and 1978 are based 
on the assumed issuance of additional common shares 
(932 ,131 in 1979 and 1,829,244 in 1978) relating to the con- 
version of the 5% and 6% debentures, and related inter- 
est (net of income tax effect) was added to income for pur- 
poses of the calculation . 
Note L-Selected Financial Data (unaudited)-The unau- 
dited quarterly results of operations for each of the four quar- 
ters ended in 1979 and 1978 and the unaudited effects of 
changing prices information are presented on pages 27 to 29 
of this annual report and are incorporated by reference into 
this note. 
Letters 10 feet high identify Republic's maintenance base in Atlanta. The company also has major 
maintenance facilities at Minneapolis I St. Paul, Chicago and Detroit. 
26 
 Supplemental stockholder information 
STOCKHOLDER 'S DISCLOSURE OF OWNERSHIP 
The Civil Aeronautics Board requires that any person who 
owns as of December 31 of any year or who subsequently 
acquires ownersh ip, either beneficially or as trustee , of more 
than 5% , in th e aggregate , of the Company's common stock 
shall file with the Board , with in the time limits prescribed , a 
re port containing the information requ ired by Section 245 .13 
of Economic Regu lations of the Civi l Ae ronautics Board , 
unless such person has previously filed such a report. Any 
shareholder who bel ieves that he may be required to fil e such 
a report may obtain further information by writi ng to the Direc- 
tor, Bureau of Pricing and Domestic Aviation , Civil Aeronau- 
tics Board , Wash ington , D.C. 20428 . 
LABOR AGREEMENTS 
Among the agreements the airline has with six labor un ions, 
three are am endable in 1980, one in 1981 , one in 1982, and 
one is currently being negotiated . The company expects to 
reach E;)qu itable agreements with these unions . 
QUARTERLY STATEMENTS OF EARNINGS 
(unaudite d-in thousands of dollars except per share amounts) 
1979 
Three Months Ended 
OPERATI G REVENUES 
Passenger ..... . 
Public service revenues 
Other ... 
OPERATING EXPENSES 
Flying operations and maintenance 
Other operating expenses ........ . 
Depreciation and amortization .... . 
OPERATING PROFIT (LOSS) ........ . 
OTHER EXPENSES (INCOME)- NET .. . 
EARNINGS (LOSS) BEFORE 
INCOME TAXES. 
Income taxes 
NET EARNINGS (LOSS) ..... 
NET EAR INGS (LOSS) PER SHARE' 
Primary ................ . 
Fully diluted .............. . 
DIVIDE DS PER SHARE ...... . 
December 31 
$137,781 
5,668 
12,520 
155,969 
80 ,666 
74 ,007 
5,420 
160,093 
(4,124) 
3,532 
(7,656) 
~ ) 
S (2,746) 
'Quarterly earnings per share do not total 
annual earnings per share because the 
computation for certain quarters did not 
include common stock equivalents which 
were included on an annual basis. 
September30 
$142 ,689 
9,309 
12,704 
164,702 
75 ,177 
71 ,882 
7,381 
154 ,440 
10,262 
4,104 
6,158 
607 
S 5,551 
S.29 
S.29 
June 30 
$137 ,014 
7,896 
~ 
159,000 
66 ,335 
66 ,362 
8,404 
~ 
17,899 
4,611 
13,288 
2,880 
S 10,408 
S.60 
S.55 
FORM 10-K REPORT 
For the Form 10-K report to the Securities and Exchange 
Comm issi on , write to Mr. John P. Dow, Vice President and 
Secretary, Repub lic Airlin es, Inc., 7500 Airli ne Drive , Minn e- 
apolis , MN 55450 . 
STOCK MARKET QUOTATIONS 
The following tabu lation sets forth the price range for the 
company's common stock wh ich is traded on the New York 
Stock Exchange and the Midwest Stock Exchange . 
1979 1978 
High Low High 
1st Quarter ................ . 8 57/a 57/a 
2nd Quarter ............... . 73 
/a 6 77/a 
3rd Quarter . . . . . . . . . . . 95/a 6 11 7 
/a 
4th Quarter ................ 85/a 53 
/s 10 
1978 
Three Months Ended 
March 31 
$110 ,308 
3,489 
~ 
129,559 
59 ,518 
57,790 
8,235 
125,543 
4,016 
4,495 
(479) 
~ ) 
~ ) 
S(. 01 ) 
S(.01 ) 
S .20 
December 31 
$105 ,476 
3,305 
~ 
124,818 
51 ,100 
53 ,573 
~ 
112,682 
12,136 
3,108 
9,028 
2,612 
S 6,416 
S.36 
S.34 
September30 June 30 
$115 ,098 
3,769 
~ 
133,860 
50 ,911 
58 ,316 
~ 
116,634 
17 ,226 
3,518 
13,708 
2,726 
S 10,982 
S.62 
S.56 
$105 ,298 
4,750 
15,263 
125 ,311 
48,731 
57 ,303 
~ 
113,035 
12,276 
2,896 
9,380 
1,375 
S 8,005 
S.48 
S.43 
Low 
45/a 
53/a 
6 
6 
March 31 
$ 82 ,371 
4,699 
~ 
103 ,576 
48 ,138 
47 ,431 
~ 
102,405 
1,171 
~ 
(2,081 ) 
~ ) 
~ ) 
S.(05) 
S.(05) 
$ . 16 
27 
 Supplemental stockholder information 
(continued) 
EFFECTS OF CHANGING PRICES (unaudited) 
Basis of preparation of 1979 supplemental data 
As required by Financial Accounting Standards Board (FASB) 
Statement No. 33 , " Financial Reporting and Changing Prices," 
the company has prov ided supplemental information 
concern ing the effects of changing prices on its financial 
statements . The disclosures are intended to address two 
different aspects of an inflationary environment: (1) the effect 
of a rise in the general price level on the exchange value or 
purchasing power of the dollar (called " general inflation" ) 
and (2) the specific price changes in the individual resources 
used by the company. 
28 
The supplemental information on changing prices does not 
reflect a comprehensive application of either type of inflation 
account ing. During the experimental period , the FASB 
decided to focus on those items most affected by changing 
prices , that is: (1) the effect of both general inflation and 
specific price changes on inventories and property and 
equipment and the related impact on earnings , and (2) the 
effect of general inflation on monetary assets and liabilities. 
Earnings from continuing operations 
Net earnings as reported in the primary statements repre- 
sent amounts reported on the historical cost basis of 
accounting . Net earnings adjusted for general inflation repre- 
sent the historical amounts of revenues and expenses 
stated in dollars of the same (constant) general purchasing 
power, as measured by the average level of the Consumer 
Price Index (CPI) for 1979. Under this measurement method , 
historical amounts of depreciation expense , gain on equip- 
ment dispositions, and spare parts inventory are adjusted to 
reflect the change in the level of the CPI since the date the 
properties were acquired . 
Current cost accounting attempts to deal with a different 
issue than earnings adjusted for general inflation. The spe- 
cific prices of the company's goods and services have risen 
at a different rate than the general inflation rate as mea- 
sured by the CPI . Net earnings adjusted for changes in 
specific prices (current cost) measure spare parts inven- 
tory, property and equipment , and gain from disposition of 
equipment at current cost (rather than historical cost) at 
the balance sheet date . 
Income taxes 
The provision for income taxes included in the supplemental 
statement of income from continuing operations is the same 
as reported in the primary financial statements . Present tax 
laws do not allow deductions for higher depreciation adjust- 
ments for the effects of inflation . Thus , taxes are levied on the 
company at rates wh ich , in real terms , exceed established 
statutory rates . During periods of persistent inflation and 
rapidly increasing prices , such a tax policy effectively results 
in a tax on shareho lders' investment in the company. 
Purchasing power gain from holding net monetary 
liabi)ities during the year 
When prices are increasing , the holding of monetary assets 
(e.g., cash and receivables) results in a loss of general pur- 
chasing power. Similarly, liabilities are associated with a gain 
of general purchasing power because the amount of money 
required to settle the liabilities represents dollars of 
diminished purchasing power. The net gain in purchasing 
power is shown separately in the accompanying supplemen- 
tal data. The amount has been calculated based on the com- 
pany's average net monetary liabilities for the year multiplied 
by the change in the CPI for the year. Such amount does not 
represent funds avai lable for distribution to shareholders . 
Increases in current cost of spare parts inventory and 
property and equipment 
Under current cost accounting , increases in specific prices 
(current cost) of spare parts inventory and property and 
equ ipment held during the year are not included in earnings 
from continuing operations but are presented separately. The 
current cost increase is reduced by the effect of general 
inflation measured by applying the annual rate of change in 
the CPI to the average current cost balance of spare parts 
inventory and property and equ ipment . 
Current cost measurements 
Current cost calculations involve a substantial number of 
judgments as well as use of various estimating techniques 
that have been employed to limit the cost of accumulating the 
data. The data reported should not be thought of as precise 
measurements of the assets and expenses involved , but 
instead represent reasonable approximations of the price 
changes that have occurred in the business environment in 
which the company operates . 
Current cost asset amounts were derived principally through 
a reference guide to current selling prices supplied by an air- 
line industry organization . Current cost depreciation is based 
on the average current cost of property and equipment during 
the year. Depreciation expense was computed by applying 
the ratio of historical depreciation expense to average histor- 
ical asset cost to the average current cost of these assets. 
The result should be approximately the same as would be 
calculated using the depreciation methods used in preparing 
the primary financial statements . 
Current cost does not purport to represent the amount at 
which the assets could be sold . 
Five-year comparison of selected financial data 
As described above , the determination of net assets reflects 
a partial application of the two inflation accounting methods . 
Other assets , consisting primarily of deferred charges , have 
not been adjusted for general inflation , nor specific price 
changes . In addition , noncurrent payables have not been 
converted to reflect specific price changes (i.e. , changes in 
interest rates) . 
 STATEMENT OF EARNINGS FROM CONTINUING OPERATIONS 
-ADJUSTED FOR CHANGING PR ICES 
Year ended December 31 , 1979 (unaudited) 
Tota l operating revenues 
Depreciation and amortization expense . . . . .. ............. . 
Other operating expenses .................... .. ........... . 
Other expenses-net . . . . . . . . . . . . . . . . . . . .......... . . . 
Gain on disposition of equipment . . . . . . . . . . . . . . ............... . 
Provision for income taxes . . . . . . . . . . . . . . . . . . . . ....... . ..... . . . 
Earnings (loss) from continuing operations ... ... ........... . 
Gain from decline in purchasing power of net amounts owed 
Increase in specific prices (current cost) of inventory and 
property and equipment held during the yearn .... . . . 
Ettect of increase of general price level . . . . . . . . . . .... . .. . . . 
Excess of increase in specific prices over increase in the 
general price level . . . . ............................... . 
As Reported 
in the 
Pr ima ry State ments 
$609,230,000 
29,440,000 
551 ,737,000 
18,744,000 
(2,002,000) 
(1,750,000) 
596,169,000 
S 13,061 ,000 
(*) At December 31 , 1979, current cost of inventory was $34 ,040,000 , and the 
current cost of property and equipmen t, net of accumulated depreciation , 
was $548,258 ,000 . 
FIVE-YEAR COMPARISON OF SELECTED SUPPLEMENTARY FINANCIAL DATA 
- ADJUSTED FOR EFFECTS OF CHANGING PRICES 
(In average 1979 constant dollars-unaudited) 
Ad justed for 
Genera l 
Inflat ion 
$609,230,000 
39,960,000 
553,555,000 
18,744,000 
(1,107,000) 
(1,750,000) 
609,402,000 
S (172,000) 
$ 33,461 ,Q00 
Year ended December 31 
Ad jus ted fo r Changes 
In Spec ific Pri ces 
(Cu rrent Cos t) 
$609,230,000 
46,167,000 
553,555,000 
18,744,000 
(1,345,000) 
(1,750,000) 
615,371 ,000 
$ (6,141 ,000) 
$ 33,461 ,000 
$ 43,565,000 
25,345,000 
$ 18,220,000 
1979 1978 1977 1976 1975 
Total operating revenues-at historical costs ... . 
Total operating revenues-in average 1979 dollars 
Historical cost information- adjusted for general in flation 
Loss from continuing operations 
Loss from continuing operations per common share ..... . 
Equity in net assets at year-end ........... . 
Current cost information 
Loss from continuing operations . . . . . ................ . 
Loss from continuing operations per common share ..... . 
Excess of increase in specific prices over increase 
in the general price level ........... . 
Equ ity in net assets at year-end . ..................... . 
Gain from decline in purchasing power of 
net amounts owed . . . . . . ................. . 
Cash dividends declared per common share-historica l .. . 
Cash dividends declared per common share-in average 
1979 dol lars ................................... . 
Market price per common share a year-end-h istorical ..... 
Market price per common share at year-end- in average 
1979 dollars . . . . . . . . . . . . . . . . . . . . . . . . . ............ . 
Average consumer price index .............. . 
$609,230,000 $487,565,000 $388,634,000 $331 ,315,000 S281 ,574,000 
$609,230,000 $542,460,000 S465,504,000 $422,451 ,000 $379,741 ,000 
$ (172,000) 
S(.01 ) 
$210,226,000 
S (6,141 ,000) 
S(.30) 
S 18,220,000 
S314,040,000 
S 33,461 ,000 
S.20 
S.20 
S6.00 
S6.00 
217.4 
S 16 
S.18 
S7.12 
S7.93 
195.4 
S.12 S.10 S.10 
S.14 S.13 S.13 
S5.00 S3.88 S2.38 
S5.99 S4.94 S3.20 
181 .5 170. 5 161.2 
NOTE: Certain data for years prior to 1979 ha,1e been omi ted as permitted by FASB 0 . 33. 
29 
 Five-year summary 
PASSENGERS 
(MILLIONS) 
12.0 - - - - - - - - 
11.0 - - - - - - 
10.0------ 
9.0 - - - - 
8.0 - - 
7.0 - 
SEAT MILES 
(BILLIONS) 
6.0 - - - - - - - 
1975 76 '77 '78 '79 
7 . 4 - - - - - - - - 
6.8 - - - - - - - - 
6.2 - - - - - - - - 
5.6 - - - - - - 
5.0 - - - - 
4.4-- 
38 -19_7_5 - . 
-76--7-7 _7_8_ '79 
30 
PASSENGER MILES 
(BILLIONS) 
3.8 -----------' 
3 . 4 - - - - - - - 
3.0 - - - - - - 
2.6 - - - - - - 
2.2 - - 
1.8- 
1 . 4 - - - - - - - 
1975 '76 '17 '78 '79 
CARGO TON MILES 
(MILLIONS) 
32.5 - - - - - - - - 
30.0 - - - - - - - - 
27.5 - - - - - - 
25.0 - - - - - - 
22.5 - - - - 
20.0 - - 
17.5 ----------,-- 
1975 76 77 78 79 
 EARNINGS 
OPERATING REVENUES 1979 1978 1977 1976 1975 
Passenge r ................. ... . ....... . .... $527,792,000 $408,243,000 $317,469,000 $272,365,000 $231 ,330,000 
Public service . . .......... . .. ... ............ 26,362,000 16,523,000 18,299,000 19,019,000 18,186,000 
Other ... ......... ........... . ' 
........ . 55,076,000 62,799,000 52,866,000 39,931 ,000 32,058,000 
609,230,000 487,565,000 388,634,000 331 ,315,000 281 ,574,000 
OPERATING EXPENSES 
Flying operations and mainten ance ... ' 
..... 281 ,696,000 198,880,000 169,187,000 146,529,000 126,892,000 
Other operating expenses ....... . . . . . . . . . . . 270,041 ,000 216,623,000 166,392,000 144,051 ,000 120,773,000 
Depreciation and amortization . . . . . . . . . . . . . . 29,440,000 29,253,000 25,260,000 21,444,000 18,418,000 
581 ,177,000 444,756,000 360,839,000 31 2,024,000 266,083,000 
OPERATING PROFIT .... . ................... 28,053,000 42,809,000 27,795,000 19,291 ,000 15,491,000 
OTHER EXPENSES (INCOME) 
Interest expense ....... . . . . . . . . . 
. . . . 26,497,000 18,688,000 12,424,000 10,190,000 8,839,000 
Less interest capitalized ............... 6,375,000 2,015,000 948,000 843,000 757,000 
20,122,000 16,673,000 11 ,476,000 9,347,000 8,082,000 
Interest income and other- net . . ..... . .. (1,378,000) (2,593,000) (700,000) (924,000) (1,296,000) 
Gain on disposition of equipment . . (2,002,000) (1,306,000) (8,904,000) (280,000) (17,000) 
16,742,000 12,774,000 1,872,000 8,143,000 6,769,000 
EAR NINGS BEFORE INCOME TAXES .. .. ... 11 ,311 ,000 30,035,000 25,923,000 11 ,148,000 8,722,000 
Income taxes ....... . '. 
. .. . ........... (1,750,000) 5,464,000 2,885,000 3,144,000 657,000 
NET EARNIN GS .... .. .. .. ' 
......... . . . . $ 13,061 ,000 $ 24,571,000 $ 23,038,000 $ 8,004,000 $ 8,065,000 
NET EARNIN GS PER SHAR E 
Primary .................. ' 
........ . ...... $ .70 $1.42 $1 .38 $.48 $.48 
Fully di luted ...... . .... . ......... . . . . . . . . . . $ .68 $1 .31 $1 .23 $.43 $.43 
BALANCE SHEET ITEMS 
Cu rrent assets ............. . . . . . . . . . . . . . . . . . . $144,691 ,000 $107,764,000 $ 89,088,000 $ 71,362,000 $ 66,329,000 
Working capital provided from operations . . ... . $ 41 ,717,000 $ 57,806,000 $ 48,639,000 $ 31 , 1 77,000 $ 26,188,000 
Property and equipment- net ...... . 
. . . . . . . . . . $399,632,000 $314,054,000 $235,671 ,000 $195,807,000 $158,277,000 
Total long-term debt ..... . . . . . . . . . . . . . . . . . . . . $263,035,000 $196,637,000 $142,648,000 $129,51 2,000 $102,173,000 
Retained earnings ..... . ... . . . . '' ..... ' 
..... $ 93,634,000 $ 83,050,000 $ 60,493,000 $ 39,052,000 $ 32,305,000 
Stockholders' equity ....... ... ... . ...... . ... ' 
$145,514,000 $11 3,288,000 $ 89,266,000 $ 67,247,000 $ 60,281 ,000 
Shares outstandi ng . . . . . . . ..... ' 
.. . . . ........ 20,620,000 16,348,000 15,982,000 15,832,000 15,752,000 
Book valu e per share ... .. .. . . . . . . . . . . . . . . . . . . $7.06 $6.93 $5.59 $4.25 $3.83 
STATISTICS 
Passengers ... ' 
................. . ... ' . ' 
. . .... 12,156,000 11 ,143,000 9,180,000 8,397,000 7,685,000 
Passenger miles (000) . ................ .. ..... 3,847,000 3,364,000 2,584,000 2,304,000 2,054,000 
Available seat miles (000) ....... . ... .. ...... . . 7,479,000 6,010,000 5,152,000 4,617,000 4,141 ,000 
Passenger load factor .. ' 
... . .. . . . . ........... 51.4% 56.0% 50.2% 50.0% 49.6% 
Cargo ton miles .. ' 
. . ... .. .. . . ...... ....... ' 
.. 32,324,000 28,062,000 23,346,000 21,537,000 19,047,000 
Revenue plane miles . . ... ' 
.... ' 
... . . . . 80,915,000 70,850,000 61 ,981 ,000 58,456,000 55,282,000 
Nu mber of employees .. . .......... ' 
....... . .. 8,982 7,676 6,772 6,366 5,929 
31 
 Board of Directors 
Hal N. Carr* 
Chairman of the Board 
Republic Airlines 
Frank W. Hulse* 
Vice Chairman of the Board 
Republic Airlines 
Cecil A. Beasley, Jr. 
Partner- Ballard, Beasley and 
Ne lson (attorneys) 
Eric Bramley 
Retired Edi tor 
Aviation Daily 
(aviation industry news service) 
G. F. DeCoursin 
Chairman of the Board 
Media Graphics 
(commercial graphic arts) 
Chan Gurney 
Retired Member 
Civil Aeronautics Board 
F. Barton Harvey, Jr. 
Partner-Alex. Brown & Sons 
(investment bankers) 
David H. Hughes 
President 
Hughes Supply 
(electrical and plumbing supplies) 
Officers 
Hal N. Carr 
Chairman of the Board 
Frank W. Hulse 
Vice Chairman of the Board 
Bernard Sweet 
President and Chief Executive 
Officer 
Robert L. Gren 
Senior Vice President- 
Maintenance and Engineering 
Graydon Hall 
Senior Vice President-Marketing 
Kenneth L. Hubertus 
Senior Vice President-Ground 
Operations 
George J. Karnas 
Senior Vice President-lnflight 
Service 
Dan iel F. May 
Senior Vice Preside nt-Fin ance 
G. F. Wallis 
Senior Vice President-Flight 
Operations 
J C Constantz 
Vice President-Federa l Affairs 
J. Kenneth Courtenay 
32 
Vice President- Route 
Development 
Alton F. Irby, Jr. 
Chairman of the Board 
Fred S. James & Company of Georgia 
(insurance agents , counselors) 
G. Gunby Jordan 
Chairman of the Board 
The Jordan Company 
(construction) 
John M. Lawrence Ill 
Partner-Lawrence , Thornton , 
Payne & Watson (attorneys) 
Samuel H. Maslon * 
Partner- Mas/on , Kaplan , Edelman , 
Borman , Brand & McNulty (attorneys) 
Theodore R. Miles 
President 
Stange Co. 
(foo d products) 
Jay Ph illips 
Director 
Ed. Phillips & Sons Co . 
(wholesale beverages) 
Morton B. Phillips 
Chairman of the Board 
Westland Capital Corporation 
(busin ess investments) 
John P. Dow 
Vice President and Secretary 
A. L. Maxson 
Vice President and Treasurer 
Michael D. Meyer 
Vice President and Controller 
Gowan J. Miller 
Vice President-Industrial Relations 
David E. Moran 
Vice President-Sales and 
Customer Service 
J. F. Nixon 
Vice President- Financial Planning 
V. C. Pruitt 
Vice President-Atlanta Base 
Maintenance 
T. M. Shanahan 
Vice President-Flying 
A. E. Warner 
Vice President-Maintenance 
Charlotte G. Westberg 
Staff Vice President 
Dorman W. Atwood 
Assistant Vice President- 
Regulatory Compliance 
G. Frank Purvis , Jr. 
Chairma n of the Board 
Pan American Life Insurance Co. 
Joseph E. Rapkin 
Partner- Foley & Lardner 
(attorneys) 
Henry M. Ross 
President 
Ross Industries 
(machinery manufacturer) 
Bernard Sweet* 
President 
Rep ublic Airlines 
Richard A. Trippeer, Jr. 
President 
Union Planters National Bank 
Wm . Bew White , Jr.* 
Partner-Bradley, Arant, 
Rose & White (attorneys) 
Kenneth B. Willett* 
Chairman of the Board 
First Financial Savings and 
Loan Association 
Frank M. Young Ill 
Partner- North Haskell Slaughte r 
Young & Lewis (attorneys) 
 Executive Committee 
Joseph W. Ettel 
Assis tant Vice President-Labor 
Relations and Assistant Secreta ry 
Robert P. Johnson 
Assistant Vice President-Flight 
Operations 
Katherine M. Leddick 
Assistant Vice President-lnflight 
Service 
William E. Oakes 
Assistant Vice President- 
Economic Research 
Charles B. Vesper 
Assistant Vice President- 
Schedules and Tariffs 
Ray W. Burden 
Assistant Treasurer 
W. H. Mackinnon 
Assistant Treasurer 
Walter E. Nielsen 
Assistant Treasurer 
Mary C. Hayes 
Assistant Secretary 
Raymond J. Rasenberger 
Assistant Secretary 
Ralph Strangis 
Assistant Secretary 
 ~ 
REPUBLIC 
a AIRLINES 
serving more cities 
than any other U.S. airline 
 REPUBL I C AIRL I NES , I NC . 
MIN E APO L IS . MINNESOTA S54S0