Taking off! It's little known, but Republic Airways is one of Indiana's newest public companies, and is flying high in a troubled industry.

• Author: Kaelble, Steve
• Position: Republic Airways Holdings

Bankruptcies. Consolidation. Idled hubs. Hundreds of jets mothballed in desert parking lots.

Think the airline industry is one bad-news story after another? Then you haven't been following the story line of an Indiana rising star in the airline business, Republic Airways Holdings. Republic's tale is dramatically, diametrically different from what one is accustomed to hearing about the aviation business. It's a story about rapid growth, perpetual profits, new jobs--positive change.

But if you have missed hearing about the Republic story until now, don't feel too bad. The Indianapolis-based airline operates quietly by design. It has no widely recognized brand name, operating almost anonymously on purpose.

That's because Republic operates regional air service, and its customers are the major "network" air carriers, which contract with Republic to serve smaller routes and feed passengers into major hubs from smaller cities. Its "regional jets" are emblazoned with the logos of its major-airline partners--American Airlines' AmericanConnection, US Airways' US Airways Express, Delta Air Lines' Delta Connection and United Airlines' United Express--rather than its operating subsidiaries, Chautauqua Airlines and Republic Airline.

Passengers booking a flight handled by a Republic subsidiary may spot the name in small print on the Web travel site, and flight attendants mention it in passing as they delve into the preflight safety litany, but it's likely that many customers traveling on one of Republic's planes miss the clues and remain unaware of who's actually flying the plane.

Republic began making more of a recognizable name for itself this spring, as it flew onto the Nasdaq with an initial public offering in May, making it Indiana's second publicly owned airline, joining the more recognizable ATA. The offering of 5 million shares was intended to raise roughly $60 million--earmarked for paying off debt owed to majority stockholder WexAir LLC as well as other "general corporate purposes," including aircraft acquisition.

In its first several days the stock gained about 10 percent, a respectable performance given the turbulent state of the airline business and the generally lukewarm market tot IPOs. Investors no doubt were impressed by Republic's stats--$421.1 million in revenues last year, up 33.5 percent over 2002 and 76.5 percent over 2001, with net income of $34.0 million, almost exactly double the profit recorded in 2002 and 4.6 times the company's net income in 2001.

CEO Bryan Bedford expects significant growth to continue. Republic Airways employs about 2,100 currently, but could hire as many as 900 more by the end of next year as it adds flights and aircraft. Republic now tallies more than 540 daily departures from 67 cities in 27 states plus Canada and the Bahamas. The airline's available seat miles--passenger seats available multiplied by miles flown--have grown at a compounded annual rate of 69 percent since 1999, and will continue to climb as Republic adds planes and flights.

Up until now, all of Republic Airways' business has been handled by the Chautauqua subsidiary, which uses only regional jets from the Embraer 145 family, with between 37 and 50 seats. The new Republic Airline subsidiary launches this summer flying only jets from the Embraer 170 family of jets with 70-plus seats. This spring Republic was flying 83 jets from the Embraer 145 family Its commitments to network-carrier customers call for it to fly 105 Embraer 145s and 10 Embraer 170s by the end of this year, with those commitments growing to 113 and 16 by the end of 2005.

The company has, since Bedford and his management team arrived in...