What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-01 · 237 added, 100 removed, 237 unchanged (59% of the section changed)

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Certain of the statements contained in this Report should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance.

These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on Republic’s business, financial condition and results of operations, the timing of scheduled aircraft deliveries, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for Republic in upcoming periods, expected production levels in future periods, pilot attrition trends, Republic’s coordination with American Airlines, Inc., Delta Air Lines, Inc., and United Airlines, Inc.

These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, contractual relationships, and our anticipated financial performance.

These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on Republic’s business, financial condition and results of operations, integration progress related to the merger with Mesa Air Group, Inc., the timing of scheduled aircraft deliveries, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for Republic in upcoming periods, expected production levels in future periods, pilot attrition trends, mechanic attrition trends, Republic’s coordination with American Airlines, Inc., Delta Air Lines, Inc., and United Airlines, Inc.

(each, a “Partner Airline” and together, “Partner Airlines”) regarding the delivery of aircraft under previously announced agreements and timing of placing new aircraft deliveries into service, the expected terms, timing and benefits related to Republic’s leasing, strategic arrangements, strategic agreements and equity investments in third parties, scheduled flight service to smaller communities, increasing the utilization and efficiency of all fleet types as well as Republic’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts.

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potential staffing shortages affecting pilots, air traffic controllers, or maintenance technicians;

uncertainty regarding potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major Partner Airlines in general and the financial condition and operating results of Republic in particular;

uncertainty regarding potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our Partner Airlines in general and the financial condition and operating results of Republic, in particular;

the prospects of entering into agreements with existing or other carriers to fly new aircraft;

uncertainty regarding timing and performance of key third-party service providers;

ongoing negotiations between Republic and its major Partner Airlines regarding their contractual obligations;

ongoing negotiations between Republic and its Partner Airlines regarding their contractual obligations;

uncertainties regarding operation of new aircraft;

the ability to attract and retain qualified pilots, mechanics and other personnel in operations;

the ability to attract and retain qualified pilots, mechanics and other personnel;

the impact of regulatory issues such as pilot rest rules and qualification requirements;

the ability to obtain aircraft financing;

the financial stability of the Partner Airlines and any potential impact of their financial condition on the operations of Republic;

fluctuations in flight schedules, which are determined by the major Partner Airlines for whom Republic conducts flight operations;

the financial stability of Republic's Partner Airlines and any potential impact of their financial condition on the operations of Republic;

fluctuations in flight schedules, which are determined by the Partner Airlines for whom Republic conducts flight operations;

variations in market and economic conditions;

significant aircraft debt commitments;

estimated useful life of long-lived assets, residual aircraft values and related asset impairments;

estimated useful lives of long-lived assets, residual values of aircraft and related asset impairments;

labor relations and costs;

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aircraft deliveries;

uncertainty regarding ongoing international hostilities, including conflicts in the Middle East and between Russia and Ukraine, and the related impacts on macroeconomic conditions and on the international operations of any of our major Partner Airlines as a result of such conflicts;

uncertainty regarding ongoing international hostilities, including conflicts in the Middle East, between Russia and Ukraine, and involving the United States and Iran, and the related impacts on macroeconomic conditions and on the international operations of any of our Partner Airlines as a result of such conflicts;

the availability of parts used in connection with maintenance and repairs of the aircraft;

the availability of suitable replacement aircraft for aging aircraft;

the impact of enacted and proposed U.S.

tariffs on global economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of

the United States;

the impact of enacted, proposed, and rescinded U.S.

tariffs on global economic conditions and the financial markets, passenger demand,

the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of the United States;

the impact of potential future U.S.

government shutdowns on flight cancellations and other unanticipated factors.

There may be other factors that may affect matters discussed in forward-looking statements set forth in this Report, which factors may also cause actual results to differ materially from those discussed.

government shutdowns on air traffic controller staffing and flight cancellations;

and other unanticipated factors.

There may be other factors that could affect matters discussed in forward-looking statements set forth in this Report, which factors may also cause actual results to differ materially from those discussed.

We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by applicable law.

Website and Social Media Disclosure

Republic’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports are available free of charge on Republic’s website at investor.rjet.com, as soon as reasonably practicable after Republic electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”).

The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Republic uses its investor relations website as a means of disclosing material non-public information and for complying with Republic’s disclosure obligations under Regulation Fair Disclosure.

Investors should monitor Republic’s website, in addition to following Republic’s press releases, SEC filings and public conference calls and webcasts.

Information relating to Republic’s corporate governance is also included on Republic’s investor relations website.

The information in or accessible through the SEC's and Republic’s websites are not incorporated into, and are not considered part of, this filing.

Further, Republic’s references to the URLs for these websites are intended to be inactive textual references only.

We are the second largest independent regional airline in the United States based on total fleet and daily departures.

As of March 31, 2026, we had an operational fleet of 275 regional jet aircraft that regularly provides scheduled passenger service on approximately 1,300 daily flights, to approximately 125 in the United States, Canada, Mexico, and the Caribbean.

As of June 30, 2026, we had an operational fleet of 275 regional jet aircraft that regularly provides scheduled passenger service on approximately 1,300 daily flights, to approximately 125 cities in the United States, Canada, Mexico, and the Caribbean.

On November 25, 2025, the Company and Mesa Air Group, Inc.

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and its wholly-owned subsidiaries.

See Note 3, Merger with Mesa Air Group, Inc., in the notes to the unaudited condensed consolidated financial statements included in this Report.

See Note 3, Merger with Mesa Air Group, Inc., in the notes to the unaudited condensed consolidated financial statements.

Substantially all of our flights are operated under multi-year fixed-fee capacity purchase agreements (“CPA,” or collectively, our “CPAs”) with our three Partner Airlines:

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We exclusively operate the dual class Embraer E170/175 family of aircraft and are one of the world’s largest operators of that aircraft type.

Under the CPAs, we provide substantially all of our flight capacity to our Partner Airlines.

Under our CPAs, we provide substantially all of our flight capacity to our Partner Airlines.

Our compensation is not materially or directly affected by variations in fares or passenger load factors, nor by variations in the price of fuel, the cost of which is paid directly by our Partner Airlines, effectively providing us with contractual monthly revenues, while reducing our exposure to fluctuations in fuel prices, fare competition, and passenger loads.

During the three months ended March 31, 2026 and 2025 , we carried passengers on approximately 107,000 and 85,000 flights, generating revenue s of $527.4 million and $394.8 million and pre- tax income of $37.6 million and $36.6 million, respectively.

During the three months ended June 30, 2026 and 2025, we carried passengers on approximately 120,000 and 90,000 flights, generating revenues of $571.1 million and $405.6 million and pre-tax income of $43.4 million and $50.7 million, respectively.

For the six months ended June 30, 2026 and 2025, we carried passengers on approximately 226,000 and 176,000 flights, generating revenues of $1,098.5 million and $800.4 million and pre-tax income of $81.0 million and $87.3 million, respectively.

We market under our Partner Airlines’ two-letter flight designation codes, paint our aircraft in the style of our Partner Airlines’ brand requirements, and use our Partner Airlines’ service marks to market ourselves as a carrier for our Partner Airlines.

Our Partner Airlines control route selection, fare pricing, seat inventories, marketing and scheduling, and provide us with ground support services, airport take-off and landing slots, and gate access, allowing us to focus on operational excellence, positioning ourselves as the regional airline of choice for our Partner Airlines and passengers through the delivery of safe, clean, reliable, and efficient regional service.

For the three months ended March 31, 2026, American Airlines, Delta Air Lines, and United Airlines accounted for 37%, 21%, and 42% of our departures, respectively.

For the three and six months ended June 30, 2026, American Airlines, Delta Air Lines, and United Airlines accounted for 35%, 19%, and 45% and 35%, 19%, and 44% of our revenues, respectively.

Recent Developments

Effective June 15, 2026, the Company’s Board of Directors, upon the recommendation of its Corporate Governance Committee, promoted Matthew J.

Koscal to the position of President and Chief Executive Officer.

Concurrently with Mr.

Koscal's appointment, David Grizzle, serving in the role of Chairman and Chief Executive Officer vacated the position of Chief Executive Officer and resumed the role of non-executive Chairman of the Board of Directors, a position previously held by Mr.

Grizzle for the Legacy Republic Board of Directors since 2017, until assuming the Chief Executive Officer role prior to the Merger.

In February 2026, following the United States Supreme Court's decision to invalidate certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), the Company became eligible to receive refunds on previously imposed import duties.

During the three and six months ended June 30, 2026, the Company received cash payments of $ 20.1 million in refunded duties and related interest income.

The Company recorded refunded amounts as a reduction to property and equipment, net in the condensed consolidated balance sheets using a loss recovery methodology as set forth in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 410, Asset Retirement and Environmental Obligations .

During the three and six months ended June 30, 2026 , certain of the Company’s maintenance technicians voted in favor of representation by the International Brotherhood of Teamsters (“IBT”) under a National Labor Relations Board election.

As of June 30, 2026, the represented class includes more than 700 associates, which includes maintenance technicians, among other related associates, under representation by IBT, Local 135.

The Company and IBT, Local 135 have not yet reached agreement on the related collective bargaining agreement.

As a result, the Company cannot reasonably estimate the impact, if any, that the outcome of these negotiations may have on its condensed consolidated financial statements .

Key Components of Republic’s Results of Operations

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These fixed-fee rates are contractually subject to periodic economic adjustment.

We also receive reimbursement from our Partner Airlines for direct expenses incurred such as qualifying maintenance activities, property taxes, and miscellaneous operating expenses.

We also receive reimbursement from our Partner Airlines for direct expenses incurred, such as qualifying maintenance activities, property taxes, and miscellaneous

operating expenses.

The Company refers to Partner reimbursements as “pass-through charges.” Certain charges such as fuel, landing fees, and certain ownership costs are generally paid directly by the Partner Airlines, although the charges were incurred by the Company in ongoing operations.

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These estimates are derived under accounting guidance related to variable consideration constraints and based on amounts expected to be collected.

We have concluded that allocating the variability directly to the individual flights results in an overall allocation meeting the objectives in Financial Accounting Standards Board (“FASB”) ASC 606, Revenue Recognition .

We have concluded that allocating the variability directly to the individual flights results in an overall allocation meeting the objectives in FASB ASC 606, Revenue Recognition .

This results in a pattern of revenue recognition that generally follows the variable amounts billed from us to our Partner Airlines.

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This expense includes salaries and wages earned by our pilots, flight attendants, dispatchers, and other associates, as well as expenses associated with various employee benefit plans, stock-based compensation, employee incentives, and payroll taxes.

These expenses fluctuate primarily based on our level of operations, changes in wage rates for contract and non-contract employees, and changes in costs of our benefit plans.

These expenses fluctuate primarily based on our level of operations, changes in wage rates for our associates, and changes in costs of our benefit plans.

Aircraft and Engine Rent

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Executive separation and Merger-related items primarily consist of non‑recurring transaction and integration‑related costs incurred in connection with the Merger.

These costs include legal, audit, and advisory fees supporting Merger due diligence, securities registration and Securities and Exchange Commission filings, Merger planning, and integration activities.

These costs include legal, audit, and advisory fees supporting Merger due diligence, securities registration and SEC filings, Merger planning, and integration activities.

Integration costs include the elimination of duplicate overheads and abandonment of certain operating agreements, including fleet-specific training and facilities.

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Other Expense, net

Other expense, net is comprised of interest expense on secured and unsecured debt obligations, realized and unrealized gains and losses on fair value adjustments to marketable securities and non-current investments, warrants, and put options held with EVE Holdings, Inc.

Other expense, net is comprised of interest expense on secured and unsecured debt and finance lease obligations, realized and unrealized gains and losses on fair value adjustments to marketable securities and non-current investments, warrants, and put options held with EVE Holdings, Inc.

(“EVE”), and our minority interest in Cape Air and our proportionate share of income or losses of Cape Air.

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Results of Operations

Three months ended March 31, 2026 compared to the three months ended March 31, 2025

The following table sets forth information regarding our operating results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Three months ended June 30, 2026 compared to the three months ended June 30, 2025

The following table sets forth information regarding our operating results for the three months ended June 30, 2026 compared to the three months ended June 30, 2025:

Three Months Ended

(in millions) March 31, 2026 March 31, 2025 $ Variance % Variance

(in millions) June 30, 2026 June 30, 2025 $ Variance % Variance

Revenues $ 571.1 $ 405.6 $ 165.5 40.8 %

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Depreciation and amortization 35.2 30.9 4.3 13.9

Executive separation and Merger-related items 9.5 4.4 5.1 115.9

Executive separation and Merger-related items 13.6 2.4 11.2 NM

Other operating expense 85.8 59.2 26.6 44.9

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Operating income 58.7 54.4 4.3 7.9

Total other expense (16.6) (16.3) (0.3) 1.8

Total other expense (15.3) (3.7) (11.6) NM

Income before income taxes 43.4 50.7 (7.3) (14.4)

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(2) Adjusted EBITDA represents net income before executive separation and Merger-related items, interest expense, investment income and other, net, income taxes, and depreciation and amortization expense.

Adjusted EBITDAR represents net income before executive separation and Merger-related items, interest expense, investment income, and other, net, income taxes, depreciation and amortization expense, and aircraft and engine rent.

Adjusted EBITDAR represents net income before executive separation and Merger-related items, interest expense, investment income and other, net, income taxes, depreciation and amortization expense, and aircraft and engine rent expense.

Adjusted EBITDA % and Adjusted EBITDAR % are non-GAAP measures that represent Adjusted EBITDA and Adjusted EBITDAR, respectively, expressed as a percentage of revenues.

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Three Months Ended

(in millions) March 31, 2026 March 31, 2025

(in millions) June 30, 2026 June 30, 2025

Net income $ 31.2 $ 37.4

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Interest expense 16.8 14.8

Investment (income) loss and other, net (0.2) 2.0

Investment income and other, net (1.5) (11.1)

Income tax expense 12.2 13.3

Adjusted EBITDA 107.5 87.7

Aircraft and engine rent 1.9 —

Aircraft and engine rent expense 2.1 —

Adjusted EBITDAR $ 109.6 $ 87.7

The following table summarizes certain operating data that we believe are useful indicators of our operating performance for the three months ended March 31, 2026 and 2025.

We believe block hours, departures, and average daily utilization of each aircraft are our primary measures in evaluating aircraft production, incurrences of revenues and operating expenses, and efficiency of the Airline.

The following table summarizes certain operating data that we believe are useful indicators of our operating performance for the three months ended June 30, 2026 and 2025.

Three Months Ended

Operating Highlights

March 31, 2026 March 31, 2025 % Variance

June 30, 2026 June 30, 2025 % Variance

Aircraft under operation for the Partner Airlines at period end (1)(2)

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10.0 9.6 4.2 %

Average length of aircraft haul (miles)

546 500 9.2 %

(1) Excludes eight and one spare aircraft as of March 31, 2026 and 2025.

(2) Excludes 31 aircraft that have been leased under customary leasing arrangements to American Airlines as of March 31, 2026 and 2025.

Completion factor (5)

98.21 % 97.35 % 0.86 pts

Controllable completion factor (6)

99.99 99.99 — pts

(1) Excludes eight and two spare aircraft as of June 30, 2026 and 2025, respectively.

(2) Excludes 31 aircraft that have been leased under customary leasing arrangements to American Airlines as of June 30, 2026 and 2025.

(3) Reflects hours of aircraft movement from gate to gate (including taxi time before takeoff and after landing) until the aircraft comes to rest at the next point of landing.

(4) Reflects average daily utilization in block hours (aircraft movement from gate to gate, including taxi time) for the greater of actual in-service aircraft or minimum contracted scheduled aircraft, if applicable.

Revenues increased $132.6 million , or 33.6% , to $527.4 million for the three months ended March 31, 2026 compared to $394.8 million for the three months ended March 31, 2025, due to 30.4% increase in block hour production and a 24.4% increase in departures due to increased daily utilization and contribution of additional flying under the new CPA with United Airlines as a result of the Merger, beginning November 25, 2025.

(5) “Completion factor” means the percentage of scheduled flights that are completed.

(6) “Controllable completion factor” means the percentage of completed scheduled flights over which we had control, excluding cancelled flights due to uncontrollable factors such as weather, air traffic control, and partner requested cancellations.

Revenues increased $165.5 million , or 40.8% , to $571.1 million for the three months ended June 30, 2026 compared to $405.6 million for the three months ended June 30, 2025, due to 35.9% increase in block hour production and a 32.6% increase in departures due to increased daily utilization and contribution of additional flying under the new CPA with United Airlines as a result of the Merger, beginning November 25, 2025.

Operating expenses

Wages and benefits expense increased $56.8 million, or 32.6%, to $231.2 million for the three months ended March 31, 2026 from $174.4 million for the three months ended March 31, 2025.

The increase was primarily attributable to a $48.2 million increase in salaries and wages due largely to the 30.4% increase in block hour production coupled with a $8.0 million increase in employee benefits expense due to increased headcount from the Merger.

Maintenance and repair expense increased $37.1 million, or 48.6%, to $113.4 million for the three months ended March 31, 2026 from $76.3 million for the three months ended March 31, 2025.

The increase was primarily due to the increase of the operating fleet by 60 aircraft related to the Merger, increasing shop level maintenance expenses by $26.0 million.

Depreciation and amortization expense increased $3.9 million, or 12.7%, to $34.5 million for the three months ended March 31, 2026 from $30.6 million for the three months ended March 31, 2025.

The increase was due to the addition of 14 new E175 aircraft, excluding the 60 E175 aircraft related to the Merger delivered since March 31, 2025.

Other operating expense increased $26.5 million, or 47.2%, to $82.7 million for the three months ended March 31, 2026 from $56.2 million for the three months ended March 31, 2025, primarily due to a $13.9 million increase in expenses relating to increasing the operational fleet from the Merger.

Additionally, other operating expense increased $9.0 million due to $6.0 million associated with an increase in crew hotel and other travel expense caused by increased flying and an increase in professional fees, software costs, and freight of $3.0 million.

Wages and benefits expense increased $56.8 million, or 30.8%, to $241.4 million for the three months ended June 30, 2026 from $184.6 million for the three months ended June 30, 2025.

The increase was primarily attributable to a $51.2 million increase in salaries and wages due largely to the 35.9% increase in block hour production coupled with a $5.6 million increase in employee benefits expense due to an increase in associate headcount from the Merger.

Maintenance and repair expense increased $60.2 million, or 81.2%, to $134.3 million for the three months ended June 30, 2026 from $74.1 million for the three months ended June 30, 2025.

The increase was primarily due to the increase of the operating fleet by 60 aircraft related to the Merger, increasing shop level maintenance expenses by $48.9 million , reimbursable as pass-through revenues, as well as a $10.4 million increase due to the increase in block hour production.

Depreciation and amortization expense increased $4.3 million, or 13.9%, to $35.2 million for the three months ended June 30, 2026 from $30.9 million for the three months ended June 30, 2025.

The increase was due to the addition of 9 new E175 aircraft, excluding the 60 E175 aircraft owned by United Airlines related to the Merger delivered since June 30, 2025.

Executive separation and Merger-related items increased $11.2 million to $13.6 million for the three months ended June 30, 2026 from $2.4 million for the three months ended June 30, 2025, due to $7.0 million of cash severance and share-based compensation expense recognized in connection with Mr.

Grizzle ’ s separation and transition to non-executive Chairman.

In addition, the Company incurred additional integration related costs.

Other operating expense increased $26.6 million, or 44.9%, to $85.8 million for the three months ended June 30, 2026 from $59.2 million for the three months ended June 30, 2025, primarily due to a $15.2 million increase in expenses relating to increasing the operational fleet from the Merger.

Additionally, other operating expense increased $11.4 million , due to increases in crew travel expense caused by increased flying, as well as increases in professional fees and other miscellaneous expenses.

Other expense, net

Other expense, net increased $0.3 million, or 1.8%, to $16.6 million for the three months ended March 31, 2026 from $16.3 million for the three months ended March 31, 2025.

Other expense, net increased $11.6 million to $15.3 million for the three months ended June 30, 2026 from $3.7 million for the three months ended June 30, 2025.

The table below presents the (increase) decrease related to the changes in other expense, net:

(in millions)

Unrealized loss from marketable securities $ (0.7)

Interest expense (2.5)

Additional income from marketable securities $ 0.2

Additional interest expense (2.0)

Reduction in income from EVE investments (8.1)

Other, net (1.7)

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Income tax expense

We recorded income tax expense of $10.7 million for the three months ended March 31, 2026, compared to income tax expense of $9.5 million for the three months ended March 31, 2025 at an effective tax rate of 28.5% and 26.0%, respectively.

We recorded income tax expense of $12.2 million for the three months ended June 30, 2026, compared to income tax expense of $13.3 million for the three months ended June 30, 2025 at an effective tax rate of 28.1% an d 26.2% , respectively.

Our effective tax rates differ from the federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses.

Six months ended June 30, 2026 compared to the six months ended June 30, 2025

The following table sets forth information regarding our operating results for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:

Six Months Ended

(in millions) June 30, 2026 June 30, 2025 $ Variance % Variance

Revenues $ 1,098.5 $ 800.4 $ 298.1 37.2 %

Operating expenses:

Wages and benefits 472.6 359.0 113.6 31.6

Aircraft and engine rent 4.0 — 4.0 NM

Maintenance and repair 247.7 150.4 97.3 64.7

Depreciation and amortization 69.7 61.5 8.2 13.3

Executive separation and Merger-related items 23.1 6.8 16.3 NM

Other operating expense 168.5 115.4 53.1 46.0

Total operating expenses 985.6 693.1 292.5 42.2

Operating income 112.9 107.3 5.6 5.2

Total other expense (31.9) (20.0) (11.9) 59.5

Income before income taxes 81.0 87.3 (6.3) (7.2)

Income tax expense 22.9 22.8 0.1 0.4

Net income $ 58.1 $ 64.5 $ (6.4) (9.9) %

Net income % (1)

5.3 % 8.1 % NM (2.8) pts

Adjusted EBITDA (2)

$ 205.7 $ 175.6 30.1 17.1 %

Adjusted EBITDA % (2)

18.7 % 21.9 % NM (3.2) pts

Adjusted EBITDAR (2)

$ 209.7 $ 175.6 34.1 19.4 %

Adjusted EBITDAR % (2)

19.1 % 21.9 % NM (2.8) pts

(1) Net income % is net income expressed as a percentage of revenues.

Adjusted EBITDA % and Adjusted EBITDAR % are non-GAAP measures that represent Adjusted EBITDA and Adjusted EBITDAR, respectively, expressed as a percentage of revenues.

Republic’s management uses these metrics, and it believes these metrics are also useful to investors to understand Republic’s financial performance.

Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % are included as supplemental disclosure because Republic’s management believes that they are well recognized valuation metrics in the airline industry that are frequently used by companies, investors, securities analysts, and other interested parties in comparing companies in Republic’s industry.

Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools.

Some of the limitations applicable to these measures include:

(i) Adjusted EBITDA and Adjusted EBITDAR do not reflect the impact of certain cash charges resulting from matters Republic considers not to be indicative of its ongoing operations;

(ii) Adjusted EBITDA and Adjusted EBITDAR do not reflect Republic’s cash expenditures for capital expenditures or contractual commitments;

(iii) Adjusted EBITDA and Adjusted EBITDAR do not reflect changes in, or cash requirements for, Republic’s working capital needs;

(iv) Adjusted EBITDA and Adjusted EBITDAR do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on its debts;

(v) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA and Adjusted EBITDAR do not reflect any cash requirements for such replacements;

and (vi) other companies in Republic’s industry may calculate Adjusted EBITDA and Adjusted EBITDAR differently than Republic does, limiting their usefulness as comparative measures.

Because of these limitations, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.

In addition, Adjusted EBITDAR should not be viewed as a measure of overall performance because it excludes aircraft and engine rent, which is a normal, recurring cash operating expense that is necessary to operate Republic’s business.

For the foregoing reasons, each of Adjusted EBITDA, Adjusted EBITDA %, Adjusted EBITDAR, and Adjusted EBITDAR % has significant limitations which affect its use as an indicator of Republic’s profitability.

Accordingly, readers are cautioned not to place undue reliance on this information.

The following table presents the reconciliation of net income to Adjusted EBITDA and Adjusted EBITDAR for the periods presented below:

Six Months Ended

(in millions) June 30, 2026 June 30, 2025

Net income $ 58.1 $ 64.5

Depreciation and amortization 69.7 61.5

Executive separation and Merger-related items 23.1 6.8

Interest expense 33.6 29.1

Investment (income) loss and other, net (1.7) (9.1)

Income tax expense 22.9 22.8

Adjusted EBITDA 205.7 175.6

Aircraft and engine rent expense 4.0 —

Adjusted EBITDAR $ 209.7 $ 175.6

The following table summarizes certain operating data that we believe are useful indicators of our operating performance for the six months ended June 30, 2026 and 2025.

Six Months Ended

Operating Highlights

June 30, 2026 June 30, 2025 % Variance

Aircraft under operation for the Partner Airlines at period end (1)(2)

275 212 29.7 %

Block hours (3)

439,293 329,835 33.2 %

226,431 176,100 28.6 %

Average daily utilization of each aircraft (hours) (4)

9.8 9.6 2.1 %

Completion factor (5)

96.11 % 97.22 % (1.11) pts

Controllable completion factor (6)

99.98 99.99 (0.01) pts

(1) Excludes eight and two spare aircraft as of June 30, 2026 and 2025.

(2) Excludes 31 aircraft that have been leased under customary leasing arrangements to American Airlines as of June 30, 2026 and 2025.

(3) Reflects hours of aircraft movement from gate to gate (including taxi time before takeoff and after landing) until the aircraft comes to rest at the next point of landing.

(5) “Completion factor” means the percentage of scheduled flights that are completed.

Revenues increased $298.1 million, or 37.2%, to $1,098.5 million for the six months ended June 30, 2026 compared to $800.4 million for the six months ended June 30, 2025, due to 33.2% increase in block hour production and a 28.6% increase in departures due to increased daily utilization and contribution of additional flying under the new CPA with United Airlines as a result of the Merger, beginning November 25, 2025.

Operating expenses

Wages and benefits expense increased $113.6 million, or 31.6%, to $472.6 million for the six months ended June 30, 2026 from $359.0 million for the six months ended June 30, 2025.

The increase was primarily attributable to a $100.0 million increase in salaries and wages due largely to the 33.2% increase in block hour production coupled with a $13.6 million increase in employee benefits expense due to an increase in associate headcount from the Merger.

Maintenance and repair expense increased $97.3 million, or 64.7%, to $247.7 million for the six months ended June 30, 2026 from $150.4 million for the six months ended June 30, 2025.

The increase was primarily due to the increase of the operating fleet by 60 aircraft related to the Merger, increasing shop level maintenance expenses by $83.1 million, reimbursable as pass-through revenues, as well as a $13.5 million increase due to the increase in block hour production .

Depreciation and amortization expense increased $8.2 million, or 13.3%, to $69.7 million for the six months ended June 30, 2026 from $61.5 million for the six months ended June 30, 2025.

The increase was due to the addition of 9 new E175 aircraft, excluding the 60 E175 aircraft owned by United related to the Merger delivered since June 30, 2025.

Executive separation and Merger-related items increased $16.3 million to $23.1 million for the six months ended June 30, 2026 from $6.8 million for the six months ended June 30, 2025, due to $ 7.0 million of cash severance and share-based compensation expense recognized in connection with Mr.

Grizzle ’ s separation and transition to non-executive Chairman.

In addition, the Company incurred additional integration related costs.

Other operating expense increased $53.1 million, or 46.0%, to $168.5 million for the six months ended June 30, 2026 from $115.4 million for the six months ended June 30, 2025, primarily due to a $29.1 million increase in expenses relating to increasing the operational fleet from the Merger.

Additionally, other operating expense increased $24.0 million due to an $8.1 million increase in crew hotel and other travel expense caused by increased flying, as well as increases in professional fees and other miscellaneous expenses.

Other expense, net

Other expense, net increased $11.9 million, or 59.5%, to $31.9 million for the six months ended June 30, 2026 from $20.0 million for the six months ended June 30, 2025.

The table below presents the (increase) decrease related to the changes in other expense, net:

(in millions)

Reduction in income from marketable securities $ (0.6)

Additional interest expense (4.5)

Reduction in income from EVE investments (6.8)

Total $ (11.9)

Income tax expense

We recorded income tax expense of $22.9 million for the six months ended June 30, 2026, compared to income tax expense of $22.8 million for the six months ended June 30, 2025 at an effective tax rate of 28.3% and 26.1%, respectively.

Our effective tax rates differ from the federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses.

Liquidity and Capital Resources

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We believe that cash flow from operating activities coupled with existing cash, cash equivalents, and marketable secu rities will be adequate to fund our operating and capital needs through at least the next 12 months .

As of March 31, 2026 , we had a working capital deficit of $33.7 million .

As of June 30, 2026 , we had working capital of $14.7 million .

The airline industry is highly capital intensive due to the nature and financing methods for its fleet assets used to generate operating cash flows.

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There can be no assurance that such equity transactions or borrowings will be available or, if available, will be at terms, rates, or prices acceptable to us.

The following table summarizes our total cash and marketable securities as of March 31, 2026 and December 31, 2025 as well as our operating, investing, and financing cash flow activities for the three months ended March 31, 2026 and 2025 :

(in millions) March 31, 2026 December 31, 2025 $ Variance % Variance

The following table summarizes our total cash and marketable securities positions as of June 30, 2026 and December 31, 2025 as well as our operating, investing, and financing cash flow activities for the six months ended June 30, 2026 and 2025 :

(in millions) June 30, 2026 December 31, 2025 $ Variance % Variance

Cash, cash equivalents, and restricted cash

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$ 299.8 $ 319.9 $ (20.1) (6.3) %

Three Months Ended

(in millions) March 31, 2026 March 31, 2025 $ Variance % Variance

Six Months Ended

(in millions) June 30, 2026 June 30, 2025 $ Variance % Variance

Net cash provided by operating activities

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(90.2) (199.8) 109.6 (54.9)

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

(36.7) 42.7 (79.4) NM

During the three months ended March 31, 2026 , total cash, cash equivalents, restricted cash, and marketable security positions decreased $24.3 million, or 7.6%, to $295.6 million as of March 31, 2026 from $319.9 million as of December 31, 2025.

Net cash provided by operating activities increased $4.0 million, or 7.4%, to $57.8 million during the three months ended March 31, 2026 from $53.8 million during the three months ended March 31, 2025.

The increase was attributable to the increase in earnings excluding non-cash expenses, coupled with changes in working capital accounts from the timing of collection of receivables and settlement of liabilities when compared to the three months ended March 31, 2025.

Net cash used in investing activities increased $50.4 million to $92.0 million net cash used during the three months ended March 31, 2026 from $41.6 million net cash used during the three months ended March 31, 2025.

We acquired three E175 regional aircraft during the three months ended March 31, 2026, compared to the acquisition of one E175 regional aircraft during the three months ended March 31, 2025, which increased overall capital expenditures by $53.8 million.

Additionally, we purchased $38.7 million and redeemed $40.0 million in marketable securities and investments during the three months ended March 31, 2026, compared to purchases of $38.4 million and redemptions of $45.0 million in marketable securities and investments during the three months ended March 31, 2025.

Net cash provided by (used in) financing activities changed $45.9 million to $10.0 million net cash provided for the three months ended March 31, 2026 compared to $35.9 million net cash used for the three months ended March 31, 2025.

During the three months ended March 31, 2026, we obtained secured borrowings resulting in cash inflows of $64.4 million, compared to obtaining secured borrowings resulting in cash inflows of $22.4 million during the three months ended March 31, 2025.

During the six months ended June 30, 2026 , total cash, cash equivalents, restricted cash, and marketable securities positions decreased $20.1 million, or 6.3%, to $299.8 million as of June 30, 2026 from $319.9 million as of December 31, 2025.

Net cash provided by operating activities decreased $34.9 million, or 24.6%, to $107.1 million during the six months ended June 30, 2026 from $142.0 million during the six months ended June 30, 2025.

The decrease was attributable to the decrease in working capital accounts from the timing of collection of receivables and settlement of liabilities when compared to the six months ended June 30, 2025.

Net cash used in investing activities decreased $109.6 million, or 54.9% to $90.2 million net cash used during the six months ended June 30, 2026 from $199.8 million net cash used during the six months ended June 30, 2025.

We acquired four E175 regional aircraft and made capital investments in the Company's aviation campus and corporate headquarters in Carmel, Indiana (the “Aviation Campus”) during the six months ended June 30, 2026, compared to the acquisition of five E175 regional aircraft and six training aircraft during the six months ended June 30, 2025, which increased overall capital expenditures by $73.1 million.

Additionally, we purchased $77.3 million and redeemed $80.0 million in marketable securities and investments during the six months ended June 30, 2026, compared to purchases of $94.2 million and redemptions of $92.5 million in marketable securities and investments during the six months ended June 30, 2025.

Lastly, we received proceeds from tariff refunds of $20.1 million during the six months ended June 30, 2026.

Net cash provided by (used in) financing activities changed $79.4 million to $36.7 million net cash used for the six months ended June 30, 2026 compared to $42.7 million net cash provided for the six months ended June 30, 2025.

During the six months ended June 30, 2026, we obtained secured borrowings resulting in cash inflows of $64.4 million, compared to obtaining secured borrowings resulting in cash inflows of $164.3 million during the six months ended June 30, 2025.

Our credit agreements require that we comply with customary affirmative and negative covenants.

We believe we are in compliance with all of our financial covenants as of March 31, 2026 and December 31, 2025 .

We are in compliance with all of our financial covenants as of June 30, 2026 and December 31, 2025 .

Letters of Credit

As we enter new markets, increase leased real estate, or add leased aircraft, we are often required to provide airport authorities and lessors with letters of credit.

We also provide letters of credit for our workers’ compensation insurance, construction activities, and student loans.

As of March 31, 2026 and December 31, 2025 , we had cash collateralized letters of credit totaling $20.0 million and $22.8 million, respectively .

We also provide letters of credit for our workers’ compensation

insurance, construction activities, and student loans.

As of June 30, 2026 and December 31, 2025 , we had cash collateralized letters of credit totaling $20.0 million and $22.8 million, respectively .

Cash collateralized against our letters of credit is recorded to restricted cash on our condensed consolidated balance sheets.

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Provisions for residual value guarantees are not material.

See Note 7 , Leases , in the notes to the unaudited condensed consolidated financial statements included in this Report.

Components of operating and finance lease costs for the three months ended March 31, 2026 and 2025, are as follows:

Three Months Ended

See Note 7 , Leases , in the notes to the unaudited condensed consolidated financial statements.

Components of operating and finance lease costs for the three and six months ended June 30, 2026 and 2025, are as follows:

Three Months Ended Six Months Ended

(in millions)

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Operating lease cost

$ 6.4 $ 5.2 $ 12.8 $ 10.5

Finance lease cost (1)

2.3 3.0 4.7 6.0

Variable and short-term lease cost

1.9 0.8 6.4 1.6

Total lease cost

(1) Finance lease costs include depreciation and amortization costs and interest costs recorded during the three months ended March 31, 2026 and 2025 in the condensed consolidated statements of operations.

Off-Balance Sheet Arrangements

We have guaranteed certain obligations of LIFT Academy and certain third parties related to LIFT Academy.

Expected losses from guaranteed obligations are derived from total commitments outstanding to third parties coupled with the probability of repayment.

Total guaranteed obligations as of March 31, 2026 were $20.8 million.

Losses expected to be incurred from guaranteed obligations were $7.0 million as of March 31, 2026.

$ 10.6 $ 9.0 $ 23.9 $ 18.1

(1) Finance lease costs include depreciation and amortization costs and interest costs recorded during the three and six months ended June 30, 2026 and 2025 in the condensed consolidated statements of operations.

Commitments and Obligations

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Interest costs associated with PDPs are capitalized as a portion of the overall historical cost of the related aircraft or engine and are depreciated over the estimated useful life of the asset.

The following table sets forth our future contractual obligations as of March 31, 2026 :

The following table sets forth our future contractual obligations as of June 30, 2026 :

(in millions)

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165.2 25.6 46.9 43.3 49.4

Finance lease obligations

70.2 9.5 19.0 38.4 3.3

Aircraft and spare engines under purchase obligations

804.1 — 612.7 191.4 —

Aviation Campus purchase commitment

Aircraft and other purchase obligations

819.2 32.1 382.4 404.7 —

$ 2,318.1 $ 305.3 $ 824.5 $ 740.7 $ 447.6

(1) Interest calculated for fixed rate debt and estimated for variable rate debt based on current interest rates as of March 31, 2026.

(1) Interest calculated for fixed rate debt and estimated for variable rate debt based on current interest rates as of June 30, 2026.

Approximately 84% of Republic’s debt is fixed rate debt.

We have an order for 26 Embraer regional jets (E175) with expected deliveries beginning in 2028 through 2030.

During the year ended December 31, 2025, we executed an amendment to an existing financing arrangement to finance some additional scheduled aircraft deliveries during the year ending December 31, 2026, which provides funding for a portion of the total aircraft cost, is secured by the related aircraft, and is funded upon each delivery.

Additionally, we entered into a new credit facility secured by spare engines.

As of March 31, 2026, the remaining maximum borrowings allowable under the agreements is approximately $51 million.

In each of the three months ended March 31, 2026 and 2025, the Company completed certain milestones in the construction of a new flight aviation campus and corporate headquarters in Carmel, Indiana (the “Aviation Campus”).

We have an order for 26 Embraer E175 regional jets with expected deliveries beginning in 2028 through 2030.

In each of the six months ended June 30, 2026 and 2025, the Company completed certain milestones in the construction of the Aviation Campus.

The Aviation Campus houses a training center that, once fully integrated with pre-Merger Mesa Airlines operations, will be used to perform substantially all of the Company’s training activities for pilots, flight attendants, maintenance technicians, and dispatchers and houses eight full motion simulators along with flat panel simulators, cabin trainers, and classrooms.

Additionally, the Aviation Campus includes overnight accommodations used exclusively by the Company’s associates in training, our corporate headquarters (completed January 2026), and a parking garage.

Additionally, the Aviation Campus includes overnight accommodations used exclusively by the Company’s associates in training, our corporate headquarters, and a parking garage.

Additionally, the Company began construction on additional overnight accommodations, which is expected to be completed in 2026.

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We have long-term agreements relating to our maintenance costs associated with engines, auxiliary power units (“APU”), avionics, and other aircraft equipment.

The following agreements comprise our long-term maintenance agreements for various airframe and engine components as of March 31, 2026 :

The following agreements comprise our long-term maintenance agreements for various airframe and engine components as of June 30, 2026 :

Maintenance Agreement Termination

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Certain fixed agreements include a guaranteed minimum payment amount based on flight hours, departures, or other measures.

Aggregate payments under long-term maintenance agreements were $43.6 million and $36.7 million for the three months ended March 31, 2026 and 2025 , respectively.

We recorded income tax expense o f $10.7 million and $9.5 million, during the three months ended March 31, 2026 and 2025, respectively, at an effective tax rate of 28.5% and 26.0%, respectively.

Aggregate payments under long-term maintenance agreements were $90.4 million and $74.4 million for the six months ended June 30, 2026 and 2025 , respectively.

Off-Balance Sheet Arrangements

We have guaranteed certain obligations of LIFT Academy and certain third parties related to LIFT Academy.

Expected losses from guaranteed obligations are derived from total commitments outstanding to third parties coupled with the probability of repayment.

Total guaranteed obligations as of June 30, 2026 were $21.2 million.

Losses expected to be incurred from guaranteed obligations were $7.0 million as of June 30, 2026.

We recorded income tax expense o f $12.2 million and $13.3 million, during the three months ended June 30, 2026 and 2025, respectively, at an effective tax rate of 28.1% and 26.2%, respectively.

During the six months ended June 30, 2026 and 2025, we recorded income tax expense of $22.9 and $22.8 million, respectively, at an effective tax rate of 28.3% and 26.1% , respectively.

We utilize Federal NOLs against our current period taxable income.

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Critical Accounting Policies and Estimates

Our Management ’s Discussion and Analysis of Financial Condition and Results of Operations ( “MD&A”) is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S.

Generally Accepted Accounting Principles.

The preparation of financial statements in conformity with those accounting principles requires us to make judgments and estimates that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

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Actual results could differ from those estimates.

Our critical accounting estimates, which are described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, are frequently evaluated as our judgment and estimates are based upon historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

During the first three months of fiscal year 2026, there were no material changes to our critical accounting estimates as described in the MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2025.

reasonable under the circumstances.

During the first six months of fiscal year 2026, the Company made a $12.5 million adjustment to the carrying value of goodwill related to revisions of our provisional estimates of fair values assigned to the Mesa balance sheet at closing of the Merger on November 25, 2025, as further discussed in Note 3, Merger with Mesa Air Group, Inc.

in the accompanying condensed consolidated financial statements.

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis