Q4 2022 GAAP diluted EPS of $0.12 and operating margin of 6.7%Q4 2022 Adjusted diluted EPS of $0.13(1) and adjusted operating margin of 7.0%(1)FY 2022 GAAP diluted EPS of $0.29 and operating margin of 6.2%FY 2022 Adjusted diluted EPS of $0.42(1) and adjusted operating margin of 6.5%(1)
Notable Highlights
Announced 15 new nonstop routes from Minneapolis-St. Paul International Airport (MSP) beginning in the summer of 2023. Twelve new destinations such as Colorado Springs, CO, Columbus, OH and Kansas City, MO are featured as the airline continues to expand its network.
Began providing service to Eau Claire, Wisconsin in December under an Essential Air Service agreement awarded by the Department of Transportation.
Increased flying for Caesars Entertainment in October under the existing charter agreement to utilize a third aircraft.
As of the end of January 2023, the previously announced $25 million Accelerated Share Repurchase (ASR) program had been completed. The Company repurchased approximately 1.4 million shares at an average price of $18.23. The Company still has $25 million authorized by the board of directors available for share repurchases.
Welcomed Jennifer Vogel to the Board of Directors in October. She brings over 30 years of governance and legal experience including key executive roles at Continental Airlines.
Welcomed Gail Peterson to the Board of Directors in January. She currently serves as executive vice president of Global Marketing & Communications for Ecolab Inc.
Capacity
System block hours flown during the fourth quarter of 2022 grew by 9.7% year over year, while scheduled service ASMs increased 13.6%. Cargo block hours declined 1.8% year over year due to a shorter average stage length versus the previous year.
Fourth quarter charter block hours grew 15.5% year over year driven by the continued growth in flying under long-term contracts, which comprised 61% of total charter flying versus 35% in the fourth quarter of 2021. Charter flying not under long term contract (ad hoc charters) continued to grow throughout the year as pilot constraints eased, but still remain 30% below year over year levels. Full year 2022 ad hoc charter block hours were 60% lower than 2019, but we expect them to grow back towards 2019 levels as pilot staffing normalizes.
Revenue
For the fourth quarter of 2022, the Company reported total revenue of $227.2 million, which was 31.6% more than the fourth quarter of 2021. The Company’s scheduled service TRASM(3) of 11.8 cents in the fourth quarter of 2022 increased 27.3% year over year while scheduled service ASMs increased 13.6%. The fourth quarter 2022 total fare of $177 exceeded fourth quarter 2021 by 14% while scheduled load factor increased 7.8 percentage points to 84.4%.
Charter service revenue is primarily generated through service provided to collegiate and professional sports teams, the U.S. Department of Defense, casinos, and other customers. In the fourth quarter of 2022, the Company’s charter service revenue was $43.1 million, an increase of 11.0% year over year.
Cargo revenue consists of revenue earned from flying cargo aircraft under the Air Transportation Services Agreement (“ATSA”) with Amazon. In the fourth quarter of 2022, cargo revenue was $24.4 million, a 4.6% increase versus the fourth quarter of 2021.
Cost
For the fourth quarter of 2022, total GAAP Operating Expenses increased 30.6% year over year, primarily due to a 9.7% increase in flown block hours and a 61.2% increase in Aircraft Fuel expense in the quarter. This resulted in an increase in CASM of 14.9%. Adjusted CASM(1) in the fourth quarter increased 7.1% versus the fourth quarter 2021 mostly driven by the new pilot agreement that was signed at the end of 2021.
