Great Lakes Aviation Reports Improved Second Quarter And Year to Date Operating Results

CHEYENNE, Wyo., Aug. 15  -- Great Lakes Aviation, Ltd. (OTC Bulletin Board: GLUX), today announced that it had achieved essentially break even results before a one time $1.4 million insurance gain. As a result, the Company incurred net income of $1.5 million in the 2002 quarter as compared to a net loss of $5.1 million in the 2001 quarter.

"Our earning improvements continue to be mitigated by industry factors outside of our control", said Douglas G. Voss, Great Lakes President and Chief Executive officer. "With industry dynamics being what they are, the Company has made significant progress in transitioning from its former United Express business model to a more independent carrier with greater control over its destiny."

As a result of its restructured marketing programs passenger revenues are now more diversified.

     Sources of Passenger Revenue
                                       2002            2001        Change
     United Code Share Agreement        43%             92%      (49) pts.
     Great Lakes Branded Product        37%              1%       36 pts.
     Frontier Code Share Agreement       9%              2%        7 pts.
     Other Interline Partners           11%              6%        5 pts.


 

Following the events of September 11th, 2001 the Company significantly reduced its operations and corresponding capacities at a greater rate than the majority of the industry. The losses generated by the Company prior to the capacity reduction were primarily the by product of declining yields influenced by aggressive industry pricing policies in an over capacity market place and inadequate Department of Transportation (DOT) Essential Air Service (EAS) subsidy rates. The Company increased its focus on the DOT subsidized EAS markets and adjusted capacity as necessary to eliminate cash burn in its non-subsidized markets. Earning improvements have occurred due to increases in subsidy rates, improved average passenger fares and cost reductions in areas where the Company could affect change.

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 subsidy 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 Form 10-K for the fiscal year ended December 31, 2001.

The financial and statistical data for the quarters ended June 30, 2002 and 2001 are as follows: (in thousands, except per share and selected operating data)

                                              QUARTER ENDED JUNE 30
     FINANCIAL SUMMARY                2002            2001          Change

     Passenger revenue              $13,535         $21,680         (37.6)%
     Public service revenue           8,753           3,905         124.1
     Other revenue                      852           1,298         (34.4)
     Total operating revenue         23,140          26,883         (13.9)
     Salaries, wages and benefits     6,107           8,508         (28.2)
     Other operating expenses        15,248          21,136         (27.9)
     Total operating expenses        21,355          29,644         (28.0)
     Operating income (loss)          1,785          (2,761)       (164.7)
     Interest expense                (1,721)         (2,336)         26.3
     Net income before
      extraordinary item                 64          (5,097)       101.26
     Gain on insurance recovery       1,413              --
     Net income                       1,477          (5,097)

     NET INCOME PER SHARE:
       Basic                          $0.17          $(0.59)
       Diluted                        $0.17          $(0.59)

     WEIGHTED SHARES OUTSTANDING:
       Basic                      8,680,186       8,657,651
       Diluted                    8,680,186       8,657,651


                                            SIX MONTHS ENDED JUNE 30
     FINANCIAL SUMMARY                2002            2001          Change

     Passenger revenue              $25,526         $44,811         (43.0)%
     Public service revenue          15,941           7,267         119.4
     Freight, charter and
      other revenue                   1,746           2,735         (36.2)
     Total operating revenue         43,213          54,813         (21.2)
     Salaries, wages and benefits    12,505          17,579         (28.9)
     Other operating expenses        29,432          45,967         (36.0)
     Total operating expenses        41,937          63,546         (34.0)
     Operating income                 1,276          (8,733)       (114.6)
     Interest expense                (3,594)         (4,993)         28.0
     Net income before
      extraordinary item             (2,318)        (13,726)        83.11
     Gain on insurance recovery       1,413              --
     Net income                        (905)        (13,726)

     NET INCOME PER SHARE:
       Basic                         $(0.10)         $(1.59)
       Diluted                       $(0.10)         $(1.59)

     WEIGHTED SHARES OUTSTANDING:
       Basic                      8,680,186       8,657,651
       Diluted                    8,680,186       8,657,651


                                             QUARTER ENDED JUNE 30
     OPERATING STATISTICS             2002           2001           Change

     Available seat miles (000)      88,665         112,364        (21.1)%
     Revenue passengers carried     129,785         237,210        (45.3)%
     Revenue passenger miles (000)   34,722          58,999        (41.1)%
     Passenger load factor            39.2%           52.5%        (13.3)pts.
     Yield per RPM                   $0.389          $0.368          5.7%
     Average passenger fare         $104.29          $91.40         14.1%


                                           SIX MONTHS ENDED JUNE 30
     OPERATING STATISTICS             2002           2001           Change

     Available seat miles (000)     175,181         230,490        (24.0)%
     Revenue passengers carried     249,084         459,980        (45.8)%
     Revenue passenger miles         65,657         111,709        (41.2)%
     Passenger load factor            37.5%           48.5%        (11.0)pts.
     Yield per RPM                   $0.389          $0.401         (3.0)%
     Average passenger fare         $102.49          $97.42          5.2%


 

Great Lakes Aviation, Ltd. provides scheduled passenger and freight service to 50 destinations in 16 states, with hubs located at Chicago O'Hare, Denver, Minneapolis/St. Paul and Phoenix, as of August 15, 2002.