GREAT LAKES AVIATION REPORTS SECOND QUARTER OPERATING RESULTS
Cheyenne, Wyoming � August 15, 2001 � Great Lakes Aviation, Ltd. (NASDAQ:GLUX) today announced that it had generated revenues of $26.9 million in the second quarter of 2001, down 20.8% from the second quarter of 2000. As a result, the Company incurred a net loss of $5.1 million in the 2001 quarter as compared to net income of $1.8 million in the 2000 quarter.
The revenues were restrained by the 14.8% reduction in available seat miles, as a result of planned schedule reductions to more closely align capacity with current passenger demand and fare structures. As a result, the load factor for the second quarter of 2001 was 52.5%, up from 49.8% in the second quarter of 2000. The average passenger ticket, however, was $91.39 in the 2001 quarter, down from $104.87 in the 2000 quarter.
�We were very disappointed by the second quarter results,� said Douglas G. Voss, Great Lakes President and Chief Executive Officer. �The decline in ticket prices is primarily the result of the significant downturn in the economy and resulting decisions by companies to reduce costs by cutting back on business travel and using cheaper fares whenever possible. In addition, the airline industry and its computerized yield management systems have expanded the availability of discounted seats.
The Great Lakes yield problem has been further compounded by our customers� use of travel vouchers issued by United during last year�s schedule disruptions. Most of the travel vouchers carried a one-year redemption period, and we anticipate the dilution of yield caused by use of these vouchers will be minimal after Labor Day.
The Company believes it will begin to realize the benefits of its new code sharing agreements in the third and fourth quarters. The improved flexibility in the new code sharing agreements allows Great Lakes greater ability to increase its average passenger ticket prices. We also continue to be focused on decreasing costs in order to regain profitability in 2002 at a reduced operating level,� Voss added.
Separately, Great Lakes announced that the Special Committee of its Board of Directors had received a letter from Tennenbaum & Co. LLC stating that Great Lakes� financial circumstances precludes their making an offer to the Company�s shareholders. On February 13 of this year, subject to due diligence and regulatory approvals, Tennenbaum made an offer to purchase all of the outstanding shares of common stock of Great Lakes at a price of $4.00 per share.
In their letter, Tennenbaum stated �However, we continue to believe that a consolidation of businesses like yours, with appropriate arrangements with aircraft manufacturers, major airline, and governmental agencies, would be a business that is attractive to us. We are prepared to initiate such a dialogue.�
Certain matters discussed within this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Great lakes believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that cause actual results to differ materially from the Company�s expectations include general industry conditions, changes in local or national economic conditions, changes in public susidy rates for the Essential Air Services Program, and other risks detailed from time to time in the Company�s SEC reports, including the Company�s From 10-K for the fiscal year ended December 31, 2000.
Great Lakes Aviation, Ltd. provides scheduled passenger and freight service to 58 destinations in sixteen states, with hubs located at Chicago O�Hare, Denver and Minneapolis/St. Paul, as of August 10, 2001. The Company trades on the NASDAQ/SmallCap Market under the symbol GLUX. The financial and statistical data for the quarters ended June 30, 2001 and 2000 are as follows: (in thousands, except per share and selected operating data)
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