Quarterly Report (10-q)

Large accelerated filer

Accelerated Filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 0-23224

GREAT LAKES AVIATION, LTD.

(Exact name of registrant as specified in its charter)


Iowa		42-1135319
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1022 Airport Parkway, Cheyenne, WY		82001
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (307) 432-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of May 15, 2015, 8,974,990 shares of Common Stock of the registrant were issued and outstanding.

GREAT LAKES AVIATION, LTD.

FORM 10-Q

For the Quarterly Period Ended March 31, 2015

INDEX


PART I - FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS	2
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19
Item 4.	CONTROLS AND PROCEDURES	19

PART II - OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	19
Item 1A.	RISK FACTORS	20
Item 6.	EXHIBITS	20

SIGNATURES		21

EXHIBIT INDEX		E-1

Item 1.

FINANCIAL STATEMENTS

GREAT LAKES AVIATION, LTD.

Balance Sheets

(unaudited)


	March 31,			December 31,
	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	1,918,186		$	2,202,273
Accounts receivable and other receivables		4,738,257			5,337,193
Inventories		7,016,140			6,578,419
Prepaid expenses and other current assets		1,974,190			1,785,433
Deferred income taxes		1,249,365			1,249,365

Total current assets		16,896,138			17,152,683


Property and equipment:
Flight equipment		126,191,712			126,252,883
Other property and equipment		10,726,211			10,692,328
Less accumulated depreciation and amortization		(94,569,061	)		(93,119,738	)

Total property and equipment		42,348,862			43,825,473

Other assets		2,917,630			3,283,360

Total assets	$	62,162,630		$	64,261,516


Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,859,362		$	2,177,376
Accrued interest, unearned revenue and other liabilities		2,569,155			2,131,928

Total current liabilities		4,428,517			4,309,304

Long-term debt		25,000,000			25,000,000
Deferred income taxes		2,903,674			3,705,007

Total liabilities		32,332,191			33,014,311

Commitments and contingencies
Preferred stock; $0.01 par value; Authorized: 25,000,000 shares. No shares issued or outstanding		—			—
Common stock; $0.01 par value; Authorized: 50,000,000 shares. 8,974,990 shares issued and outstanding		89,750			89,750
Paid-in capital		31,494,609			31,494,609
Accumulated deficit		(1,753,920	)		(337,154	)

Total stockholders’ equity		29,830,439			31,247,205

Total liabilities and stockholders’ equity	$	62,162,630		$	64,261,516

See accompanying notes to the financial statements.

GREAT LAKES AVIATION, LTD.

Statements of Operations

(Unaudited)


	For the Three Months
	Ended March 31,
	2015			2014
Operating revenues:
Passenger	$	4,405,789		$	6,925,030
Public service		8,033,918			6,158,220
Freight, charter, and other		53,512			46,458

Total operating revenues		12,493,219			13,129,708

Operating expenses:
Salaries, wages, and benefits		4,909,873			6,023,562
Aircraft fuel		2,238,729			4,369,246
Aircraft maintenance, materials, and repairs		1,224,864			1,850,609
Depreciation and amortization		1,519,578			1,615,310
Other rentals and landing fees		1,220,566			1,401,518
Other operating expenses		2,531,262			3,634,690

Total operating expenses		13,644,872			18,894,935

Operating loss		(1,151,653	)		(5,765,227	)
Other expense:
Interest expense, net of interest income of $181 and $160, respectively		(1,066,209	)		(986,869	)

Loss before income taxes		(2,217,862	)		(6,752,096	)

Income tax benefit		801,096			2,461,403

Net loss	$	(1,416,766	)	$	(4,290,693	)

Net loss per share:
Basic	$	(0.16	)	$	(0.48	)
Diluted	$	(0.16	)	$	(0.48	)

Weighted average shares outstanding:
Basic		8,974,990			8,974,990
Diluted		8,974,990			8,974,990

See accompanying notes to the financial statements.

GREAT LAKES AVIATION, LTD.

Statements of Cash Flows

(Unaudited)


	For the Three Months Ended March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,416,766	)	$	(4,290,693	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		1,519,578			1,615,310
Loss on property and equipment		46,354			56,384
Amortization of debt issuance costs		135,205			160,335
Deferred tax benefit		(801,333	)		(2,461,653	)
Change in current operating items:
Accounts receivable and other receivables		598,936			3,057,856
Inventories		(437,721	)		821,875
Prepaid expenses and other current assets		(188,757	)		422,836
Other assets		230,524			191,535
Accounts payable		(318,014	)		(824,176	)
Accrued interest, unearned revenue and other liabilities		437,227			(388,303	)

Net cash used in operating activities		(194,767	)		(1,638,694	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of flight equipment and other property and equipment		(89,320	)		(635,606	)

Net cash flows used in investing activities		(89,320	)		(635,606	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable and long-term debt		—			(1,000,000	)

Net cash used in financing activities		—			(1,000,000	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(284,087	)		(3,274,300	)

Cash and Cash Equivalents:
Beginning of period		2,202,273			6,597,927

End of period	$	1,918,186		$	3,323,627

Supplementary disclosures of cash flow information:
Cash paid during the period for interest	$	685,536		$	847,232
Cash paid during the period for income taxes	$	—		$	—

See accompanying notes to the financial statements.

GREAT LAKES AVIATION, LTD.

Statements of Stockholders’ Equity

Three Months Ended March 31, 2015

(unaudited)


	Common stock						Accumulated
	Shares		Amount		Paid-in capital		deficit			Total
Balance at January 1, 2015		8,974,990	$	89,750	$	31,494,609	$	(337,154	)	$	31,247,205
Net loss		—		—		—		(1,416,766	)		(1,416,766	)

Balance at March 31, 2015		8,974,990	$	89,750	$	31,494,609	$	(1,753,920	)	$	29,830,439

See accompanying notes to financial statements.

Great Lakes Aviation, Ltd.

Notes to Financial Statements

March 31, 2014

(unaudited)

1.	Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial statements for the respective periods. Interim results are not necessarily indicative of results for a full year. The financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2014.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; the salvage value of fixed assets; the valuation allowance for deferred tax assets, inventory allowances; and allowances for other contingencies.

Business

Passenger Revenue

Great Lakes Aviation, Ltd. (Great Lakes, the Company, we or us) is a regional airline operating as an independent carrier and as a code share partner with United Air Lines, Inc. (United or United Airlines). Our code share agreement allows our mutual customers to purchase connecting flights through our code share partner and to share other benefits such as baggage transfer and frequent flyer benefits (in certain instances). The Company maintains its own branding on its planes and ticket counters and its own designator code on all its flights. In addition to our code share agreement and independent branding, the Company has developed electronic ticketing (e-ticket) interline agreements with American Airlines, Delta Airlines, United Airlines and U.S. Airways.

The Company estimates that approximately 51% of Great Lakes’ passenger traffic utilized the United code share product line in the three months ending March 31, 2015.

Public Service Revenue

Approximately 64% and 47% of the Company’s total revenue during each of the three months ended March 31, 2015 and 2014, respectively, were generated by services provided under the Essential Air Service (EAS) program administered by the United States Department of Transportation (DOT). The FAA Modernization and Reform Act of 2012 was enacted into law on February 14, 2012. This legislation provides for the authorization of the Essential Air Service program through September 30, 2015, at which time, we expect it will be renewed.

As of May 15, 2015, the Company served 26 airports, of which 19 locations receive EAS subsidy, in nine states with a fleet of six Embraer EMB-120 Brasilia and 28 Beechcraft 1900D regional airliners. The Company currently operates hubs in Denver, CO, Los Angeles, CA, Minneapolis, MN and Phoenix, AZ.

Liquidity

On December 22, 2014, we entered into a Loan Agreement (the “Loan Agreement”) with Callidus Capital Corporation (the “Lender”). The Lender agreed to make available to the Company: (i) a $25,000,000 single advance term loan facility, (ii) a revolving loan facility with availability of up to $6,000,000 and (iii) a second revolving loan facility with availability of up to $3,000,000. The $25,000,000 term loan was disbursed at closing, and substantially all of its proceeds were used to pay all outstanding borrowings, fees and expenses under the Credit Agreement dated November 6, 2011 as amended between the Company and Crystal Financial LLC and other lenders (the “Refinanced Credit Agreement”). The revolving loan facilities may be used for our working capital needs. At March 31, 2015, the entire undrawn balance of $6 million and $3 million was available to us under the first and second revolving loan facilities.

In connection with the Loan Agreement described above, we repaid obligations totaling $24.9 million, which constituted all outstanding borrowings, fees and expenses under previous loan facilities. In connection with the repayment, our previous lenders terminated their security agreements and released all of their security interests in the Company’s aircraft and other assets.

The term loan and revolving credit facilities mature on December 22, 2017 at which time any outstanding balances will be due and payable. At that time, in order to pay the principal amount, the Company would need to raise cash by obtaining new debt financing, raising additional equity financing or selling owned aircraft or a combination thereof. We are not required to make any principal payments under the Loan Agreement until December 22, 2017, absent an event of default.

We have experienced a shortage of qualified pilots which has caused us to curtail operations and reduce capacity. The pilot shortage and its effect on operations are expected to continue until we can hire and train enough pilots to reestablish operations in those markets in which we were forced to suspend service or expand into new markets. As a result of refinancing all of the Company’s debt on terms that will not require any scheduled principal payments until December 22, 2017, the Company has improved its working capital capabilities to support its efforts in reestablishing curtailed operations.

2.	Earnings per share

The following table shows the computation of basic and diluted earnings per common share:


	Three months ended
	March 31,
	2015			2014
Numerator:
Net Loss	$	(1,416,766	)	$	(4,290,693	)
Denominator:
Weighted average shares outstanding, basic and diluted		8,974,990			8,974,990

Net loss per share, basic	$	(0.16	)	$	(0.48	)
Net loss per share, diluted	$	(0.16	)	$	(0.48	)

For the three month periods ended March 31, 2015 and March 31, 2014 there were no options or other potentially dilutive securities outstanding.

3.	Accrued Liabilities

Accrued liabilities consisted of the following balances at March 31, 2015 and December 31, 2014:


	March 31,		December 31,
	2015		2014
Unearned revenue		796,002		645,320
Accrued property taxes		139,249		68,140
Accrued interest		308,163		89,491
Accrued payroll		1,272,319		1,290,555
Other		53,422		38,422

Total accrued liabilities	$	2,569,155	$	2,131,928

4.	Long-Term Debt

The following table sets forth, as of March 31, 2015 and December 31, 2014, the carrying amount of the Company’s long-term debt. No scheduled principal payments are required until the December 2017 maturity date, therefore, there are no current maturities of long term debt.


	March 31,		December 31,
	2015		2014
Long-term debt:
Term Loan	$	25,000,000	$	25,000,000
Revolving Loans		—		—

Total long-term debt		25,000,000		25,000,000

On December 22, 2014, the Company entered into a Loan Agreement (the “Loan Agreement”) with Callidus Capital Corporation (the “Lender”). Pursuant to the Loan Agreement, the Lender agreed to make available to the Company: (i) a $25,000,000 single advance term loan facility, (ii) a revolving loan facility with availability of up to $6,000,000 and (iii) a second revolving loan facility with availability of up to $3,000,000. The $25,000,000 term loan was disbursed at closing, and substantially all of its proceeds were used to pay all outstanding borrowings, fees and expenses under the Credit Agreement with our previous lenders. The revolving loan facilities may be used for the Company’s working capital needs. At March 31, 2015, the entire undrawn balance of $6 million and $3 million was available to us under the first and second revolving loan facilities.

The loans under the Loan Agreement mature on December 22, 2017 at which time all outstanding principal balances will be due and payable. No scheduled principal payments will be required until the maturity date unless there is a devaluation in the collateral supporting the term loan. Outstanding principal under the term loan and revolving loans will bear interest at a fixed rate of 14% per year. In addition, the Company paid a 1% facility fee at closing and will be required to pay a 1.25% facility fee on the maturity date or in an event of default. The Company will also be assessed a maintenance and monitoring fee of $3,000 per month and a 1% unused line fee. The 1% facility fee paid at closing was recorded to other assets and is being amortized as interest expense using the effective interest rate method. The 1.25% facility fee due at maturity is being accrued as an increase to other accrued liabilities and interest expense each period using the effective interest rate method. The maintenance and monitoring fee and the unused line fee are also recorded as interest expense as incurred.

In connection with the Loan Agreement, the Company granted first-ranking security interests to the Lender covering substantially all of the assets of the business. The Loan Agreement contains certain affirmative and negative covenants which are usual and customary with asset based loans. The Company agreed to maintain a fixed charge coverage ratio beginning with the period ended March 31, 2015. In an event of default, the Lender may terminate its obligation to make further loans and may declare all obligations under the Loan Agreement to be immediately due and payable. The Company was in compliance with all convents as of March 31, 2015.

At March 31, 2015 the Company has no aircraft lease obligations.

5.	Related Parties

The Company rents two six-passenger aircraft and a vehicle from Iowa Great Lakes Flyers, Inc., a corporation solely owned by Douglas G. Voss, the Company’s Chairman and major stockholder. Total payments for these leases were $7,125 for each of the three months ending March 31, 2015 and 2014, respectively. As of March 31, 2015, Mr. Voss controlled 4,160,247 shares of common stock of the Company, representing approximately 46.4% of the Company’s outstanding common stock.

6.	Income Taxes

The Company’s annual effective income tax rate is estimated to be 36.0% for 2015. The Company’s effective tax rate includes non-deductible permanent tax differences. Prior to 2004, the Company reported significant cumulative losses and generated substantial net operating loss carryforwards. From 2007 through 2013, the Company utilized a portion of these carryforwards to offset taxable income. The losses recorded in 2014 are also expected to result in additional net operating loss carryforward when the Company files its income tax return for the 2014 tax year.

In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management considers the projected reversal of deferred tax liabilities and tax planning strategies in making this assessment. Based upon this assessment, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of any valuation allowances for state net operating loss carryforwards that are expected to expire unused. Federal net operating loss carryforwards begin to expire in year 2021.

7.	Fair Value Measurements

A fair value hierarchy that prioritizes the inputs used to measure fair value has been established by ASC 820, Fair Value Measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:


Level 1		Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2		Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and other inputs that are observable or can be corroborated by observable market data.

Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the Financial Accounting Standards Board (the “FASB”).

Our financial instruments consist of cash and cash equivalents, accounts receivable and other receivables, accounts payable, accrued liabilities and long-term debt. The carrying values of cash and cash equivalents, accounts receivable and other receivables, accounts payable, and accrued liabilities approximate their fair values. These are

considered Level 1 measurements. The fair value of our long term debt approximates the carrying value of $25.0 million at March 31, 2015 and December 31, 2014, respectively because the rate on this debt was recently negotiated and we believe is similar to the rate that we could negotiate at each period-end. For additional information, see Note 4 Long-Term Debt.

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company

We were incorporated on October 25, 1979 as an Iowa corporation and became a publicly traded company in January 1994. We commenced scheduled air service operations on October 12, 1981. Great Lakes Airlines currently operates hubs at Denver, CO, Los Angeles, CA, Minneapolis, MN, and Phoenix, AZ.

We are a regional airline operating as an independent carrier and as a code share partner with United Air Lines. Our code share agreement allows our mutual customers to purchase connecting flights through our code share partner and to share other benefits such as baggage transfer and frequent flyer benefits (in certain instances), while the Company maintains its own branding on our planes and ticket counters and our own designator code on all our flights. In addition to our code share agreement and independent branding, the Company has developed electronic ticketing (e-ticket) interline agreements with American Airlines, Delta Airlines, United Airlines and U.S. Airways.

As of May 15, 2015, we served 26 airports in nine states with a fleet of six Embraer EMB-120 Brasilias and 28 Beechcraft 1900D regional airliners.

Essential Air Service (“EAS”) Program

We derived approximately 64% of our total revenue from the EAS program for the quarter ended March 31, 2015, which is administered by the United States Department of Transportation (DOT). The EAS program was instituted under the Airline Deregulation Act of 1978 (the “Deregulation Act”), which allowed airlines greater freedom to introduce, increase, and generally reduce or eliminate service to existing markets. Under the EAS program, certain communities are guaranteed specified levels of “essential air service.” In order to promote the provision of essential air services, the DOT may authorize the payment of federal subsidies to compensate an air carrier that is providing essential air services in otherwise unprofitable or minimally profitable markets.

The FAA Modernization and Reform Act of 2012 was enacted into law on February 14, 2012. This legislation provides for the authorization of the EAS program for federal fiscal years 2011 through 2015. Federal fiscal year 2015 ends on September 30, 2015. The FAA Modernization and Reform Act of 2012 reaffirmed the Congressional commitment to the continuance of the Essential Air Service program. The EAS program obtains a portion of the funding through annual Congressional appropriations.

An airline serving a community that qualifies for essential air services is required to give the DOT advance notice before the airline may discontinue, suspend, or reduce service. Depending on the circumstances, the DOT may require the continuation of existing service until a replacement carrier is found. EAS rates are normally set for two-year periods for each city. Significant fluctuations in passenger traffic, fares and associated revenues, as well as fluctuations in fuel and other costs, may cause EAS routes to become unprofitable during these two-year terms. Near the end of the two year term for EAS service to a particular city, the DOT will request service proposals from the Company and competitive proposals from other airlines. Proposals, when requested, are evaluated on, among other things, the level of service provided, the amount of subsidy requested, the fitness of the applicant, and comments from the communities served.

As of May 15, 2015, we served 18 EAS communities on a subsidized basis.

Pilot Shortage

Federal Aviation Administration (“FAA”), pilot qualification rules imposed as part of the Airline Safety and Federal Aviation Administration Extension Act of 2010 in combination with revised FAR Part 117 Flight Crewmember Flight and Duty Limitations and Rest Requirements, (“FAR Part 117”), have created an industry-wide shortage of qualified pilots and negatively affected our operations and financial condition.

These new rules resulted in a greatly accelerated demand for qualified pilots as air carriers proceeded to increase pilot staffing requirements to compensate for the loss of crew efficiency due to the new rules. As a result, Great Lakes lost a large portion of its pool of qualified pilots with Airline Transport Pilot (“ATP”) certification to airlines operating aircraft with more seat availability and hence greater pilot earnings potential.

The Airline Safety and Federal Aviation Administration Extension Act of 2010 was enacted in August 2010. Among many other pilot training directives, the legislation mandated that first officers (co-pilots) obtain an Airline Transport Pilot certification (“ATP”) prior to being qualified to perform crewmember duties in scheduled airline passenger service under FAR Part 121 regulatory requirements. A key factor to enable a pilot to receive an ATP certificate is the accumulation of 1,500 flight hours.

Furthermore, the legislation directed the FAA Administrator to conduct a rule making proceeding, to identify specific academic training courses that would provide for exemptions to the 1,500 hour requirement. The FAA published the final rule in the Federal Register on July 15, 2013. These rules became effective August 1, 2013. As a result of the rule making process, first officers may be eligible to receive a “restricted privileges” ATP with a minimum of 750 hours if they were a military pilot, 1,000 hours if they have received a bachelor’s degree from an accredited educational institution with an aviation major and 1,250 hours if they have received an associate’s degree from an accredited educational institution with an aviation major. It should be noted that accredited educational institutions provide very limited actual flight experience and that graduates from these institutions typically will have received between 250 to 350 hours of actual flight time.

These new pilot qualification rules have severed the historical path in which pilots have had the opportunity to build enough hours so they could advance their careers. Great Lakes has historically provided this career path for more than 32 years. Prior to this new rule, regulatory requirements provided for pilots to become eligible as first officers for a FAR Part 121 air carrier with a minimum of 250 hours of experience. The new rules also mandate that a first officer must have 1,000 hours as a FAR Part 121 first officer in an air carrier operation prior to being eligible to serve as a captain in a FAR Part 121 airline. As an alternative, the rule provides for captain eligibility under FAR Part 121 for pilots who accumulate 1,000 hours of pilot in command time in a FAR Part 135 operation.

The current supply of pilot candidates who qualify under the new regulations is severely limited. It is difficult for Great Lakes, which operates Beech 1900D turboprop aircraft, to compete for qualified pilots with other airlines operating 50 seat regional jets and larger equipment.

As a result, we have had to reduce scheduled departures by suspending service to multiple communities eligible for Essential Air Service, and other non-EAS markets. These actions resulted in a reduction of revenue and operating expenses. The rate of expense reduction will inherently lag the revenue drop-off as the Company aggressively adjusts its operating expenditures to match the new level of operations.

In April of 2013, Great Lakes submitted a written proposal to the FAA seeking authority to operate Beech 1900D aircraft in a nine seat passenger configuration utilizing FAR Part 135 pilot hiring requirements, while maintaining and complying with all other FAR Part 121 operational and maintenance standards.

On March 18, 2014, the Company received from the FAA new operations specifications allowing the Company to hire pilots under FAR Part 135 regulatory requirements. This will allow us to restore first officer staffing levels while maintaining FAR Part 121 hiring, training and employment standards as we have always done as a Part 121 carrier. From February 2014 through March 2015 we have hired 90 new pilots. Of the 90 new hire pilots, 58 have completed training and 40 are operating in revenue generating scheduled air service.

The Company’s pilots are represented by the Sheet Metal, Air, Rail Transportation Union (“SMART”). The Company entered into a new agreement with the pilots on September 16, 2014. This agreement will continue in full force and effect for four years and thereafter is subject to amendment, which would reopen collective bargaining.

EAS Program Activity Subsequent to January 1, 2015

On January 4, 2015 the Company transitioned Essential Air Service in Silver City, NM to another carrier.

On February 9, 2015 the Company transitioned Essential Air Service in Visalia, CA to another carrier.

On April 30, 2015, Kingman, AZ became ineligible for Essential Air Service subsidy.

Financial Highlights

We had operating revenue of $12.5 million for the three-month period ending March 31, 2015, a 4.9% decrease compared to operating revenue of $13.1 million for the three-month period ending March 31, 2014. We realized a $2.5 million decrease in passenger revenue and a $1.9 million increase in public service revenue compared to the prior year period. The $2.5 million period-over-period decrease in passenger revenues was attributable to a 9% reduction in the number of departures in the first quarter of 2015 compared to the first quarter of 2014 in combination with operating the Beechcraft 1900D in a nine seat versus 19 seat configuration. These contributing factors are directly related to a nationwide shortage of qualified pilots. The $1.9 million increase in public service revenue is mostly attributable to earning higher subsidy per departure rates as we renewed Essential Air Service that required higher subsidy amounts as a result of operating the Beechcraft 1900D in a nine seat versus 19 seat configuration. Fewer seats available to generate passenger revenue requires a higher proportional amount of public service revenue to operate the same flight.

We had an operating loss of $1.2 million for the three-month period ending March 31, 2015, compared to an operating loss of $5.8 million for the three-month period ending March 31, 2014. The $4.6 million decrease in operating loss is attributable to a $5.3 million decrease in operating expenses, partially offset by a $0.6 million decrease in operating revenue. We realized a net loss of $1.4 million for the three-month period ending March 31, 2015, compared to net loss of $4.3 million for the three-month period ending March 31, 2014. The decrease in net loss is primarily a result of the decrease in operating loss discussed above, partially offset by $1.7 million decrease in income tax benefit due to a lower loss before income taxes, and a $0.1 million increase in interest expense.

Results of Operations for the Three Months Ended March 31, 2015 and 2014

The following table sets forth certain financial information regarding our results of operations for the three months ended March 31, 2015 and 2014.

Statement of Loss Data

(dollars in thousands)

(unaudited)


	For the Three Months Ended March 31,
	2015									2014
							Year over Year
				Cents			Revenue/Cost						Cents
	Amount			per			Increase (Decrease)			Amount			per
	(in thousands)			ASM			Percentage			(in thousands)			ASM
Operating revenues:
Passenger	$	4,406			20.9	¢		(36.4	)%	$	6,925			17.4	¢
Public service		8,034			38.1			30.5			6,158			15.5
Freight, charter and other		53			0.3			12.8			47			0.1

Total operating revenues		12,493			59.3			(4.9	)		13,130			33.1

Operating expenses:
Salaries, wages, and benefits		4,910			23.3			(18.5	)		6,024			15.2
Aircraft fuel		2,239			10.6			(48.8	)		4,369			11.1
Aircraft maintenance, materials and repairs		1,225			5.8			(33.8	)		1,851			4.7
Depreciation and amortization		1,520			7.2			(5.9	)		1,615			4.1
Other rentals and landing fees		1,220			5.8			(12.9	)		1,401			3.5
Other operating expenses		2,531			12.0			(30.4	)		3,635			9.2

Total operating expenses		13,645			64.7			(27.8	)		18,895			47.6

Operating loss		(1,152	)		(5.4	)		(80.0	)		(5,765	)		(14.5	)
Interest expense, net		(1,066	)		(5.1	)		8.0			(987	)		(2.5	)

Loss before income taxes		(2,218	)		(10.5	)¢		(67.2	)%		(6,752	)		(17.0	)¢
Income tax benefit		801			3.8			(67.5	)		2,461			6.2

Net Loss	$	(1,417	)		(6.7	)¢		(67.0	)%	$	(4,291	)		(10.8	)¢

Selected Operating Data

The following table sets forth certain selected operating data regarding our operations for the three months ended March 31, 2015 and 2014.


	March 31, 2015			Increase (Decrease) from 2014			March 31, 2014
Selected Operating Data:
Available seat miles (in thousands) (1)		21,089			-46.9	%		39,722
Revenue passenger miles (in thousands) (2)		7,465			-54.5	%		16,405
Revenue passengers carried		26,573			-53.4	%		57,031
Departures flown		7,048			-9.4	%		7,780
Passenger load factor (3)		35.4	%		-14.3	%		41.3	%
Average yield per revenue passenger mile (4)		59.0	¢		39.8	%		42.2	¢
Revenue per available seat miles (5)		59.2	¢		78.9	%		33.1	¢
Cost per available seat mile (6)		64.7	¢		35.9	%		47.6	¢
Average passenger fare (7)	$	165.80			36.5	%	$	121.43
Average passenger trip length (miles) (8)		281			-2.4	%		288
Average cost per gallon of fuel	$	2.22			-40.8	%	$	3.75

(1)

“Available seat miles” or “ASMs” represent the number of seats available for passengers in scheduled flights multiplied by the number of scheduled miles those seats are flown. For comparative purposes, the change in period over period ASMs was not only affected by fewer departures in 2015 versus 2014, but as the Company was forced to transition to operating Beech 1900s in a nine seat configuration to mitigate the effect of new pilot qualification rules; operating a flight with nine seats versus 19 seats had a significant effect on period over period ASMs. The standalone effect of operating nine seat Beech 1900s versus 19 seat Beech 1900s resulted in a decrease of 14,416,000 ASMs in the three month period ended March 31, 2015.

(2)	“Revenue passenger miles” or “RPMs” represent the number of miles flown by revenue passengers.

(3)	“Passenger load factor” represents the percentage of seats filled by revenue passengers and is calculated by dividing revenue passenger miles by available seat miles.

(4)	“Average yield per revenue passenger mile” represents the average passenger revenue received for each mile a revenue passenger is carried.

(5)

“Revenue per available seat mile” represents the average total operating revenue received for each available seat mile. For prior year comparative purposes, considering the standalone effect of operating a portion of the Beech 1900 fleet in a nine seat configuration versus a 19 seat configuration; revenue per ASM would have decreased to 35.2 cents per ASM from the 59.2 cents per ASM (as illustrated above) for the three month period ended March 31, 2015.

(6)

“Cost per available seat mile” represents operating expenses divided by available seat miles. For prior year comparative purposes, considering the standalone effect of operating a portion of the Beech 1900 fleet in a nine seat configuration versus a 19 seat configuration; cost per ASM would have decreased to 38.4 cents per ASM from the 64.7 cents per ASM (as illustrated above) for the three month period ended March 31, 2015.

(7)	“Average passenger fare” represents passenger revenue divided by the number of revenue passengers carried.

(8)	“Average passenger trip length” represents revenue passenger miles divided by the number of revenue passengers carried.

Comparison of First Quarter 2015 to First Quarter 2014

Passenger Revenues. Passenger revenues were $4.4 million in the first quarter of 2015, a decrease of 36.4% from $6.9 million in the first quarter of 2014. The $2.5 million quarter-over-quarter decrease in passenger revenues was attributable to the curtailment of operations as a result of operating a large portion of our Beechcraft 1900D fleet in a nine seat configuration due to a severe shortage of available qualified pilots.

Public Service Revenues. Public service revenues collected through the EAS Program increased 30.5% to $8.0 million during the first quarter of 2015, as compared to $6.2 million during the first quarter of 2014. The increase in public service revenue can be attributed to higher subsidy rates per departure as a result of operating the Beechcraft 1900D in a nine seat configuration. Fewer seats available to generate passenger revenue requires a higher proportional amount of public service revenue to operate the same flight. As we renewed EAS contracts utilizing nine seat configured aircraft, we increased our subsidy per departure rates. At March 31, 2015 and March 31, 2014, we served 18 and 22 communities, respectively, on a subsidized basis under the EAS Program.

Other Revenues. Other revenues during the first quarter of 2015 was consistent with the first quarter of 2014.

Operating Expenses. Total operating expenses were $13.6 million, or 64.7 cents per ASM, in the first quarter of 2015, as compared to $18.9 million, or 47.6 cents per ASM in the first quarter of 2014.

Salaries, Wages, and Benefits. Salaries, wages, and benefits were $4.9 million in the first quarter of 2015, a decrease of 18.5% from $6.0 million in the first quarter of 2014. The decrease in salaries, wages, and benefits was mostly attributable to the decreased number of employees as a result of the decreased operations due to the industry-wide shortage of qualified pilots.

Aircraft Fuel Expense. Aircraft fuel and into-plane expense was $2.2 million, or 10.6 cents per ASM, in the first quarter of 2015. In comparison, our aircraft fuel and into-plane expense for the first quarter of 2014 was $4.4 million, or 11.1 cents per ASM. The average cost of fuel decreased from $3.75 per gallon in the first quarter of 2014 to $2.22 per gallon in the first quarter of 2015. We estimate that of the $2.2 million decrease in year-over-year fuel cost that $1.5 million is attributable to fuel price decreases and $0.7 million is attributable to the reduction in operations. At first quarter 2015 rates of consumption, a one-cent increase or decrease in the price per gallon of fuel will increase or decrease our fuel expense by approximately $40,000 annually.

Aircraft Maintenance, Materials, and Component Repairs. Aircraft maintenance, materials, and component repairs expense was $1.2 million during the first quarter of 2015, which was a 33.8% decrease from $1.9 million during the first quarter of 2014. The decrease was primarily attributable to the reduction of component repairs and the timing of engine overhaul expenses resulting from the reduced operations.

Depreciation and amortization. Depreciation and amortization expense was $1.5 million during the first quarter of 2015 which was consistent with $1.6 million in the first quarter of 2014.

Other Rentals and Landing Fees Expense. Other rentals and landing fees expense was $1.2 million during the first quarter of 2015, which was a decrease of $0.2 million from the first quarter of 2014. The decrease was mainly attributable to decreased landing fees resulting from the 9.4% reduction in departures along with reduced hub rental expense.

Other Operating Expenses. Other operating expenses were $2.5 million, or 12.0 cents per ASM during the first quarter of 2015, which was a decrease from $3.6 million, or 9.2 cents per ASM during the first quarter of 2014. The decrease was mainly attributable to decreases in passenger related expenses of $487,000, security $302,000, station equipment and expenses $191,000, legal and professional fees of $70,000 and deicing and other expenses of $76,000. These were partially offset by increased pilot related expenses of $23,000.

Interest Expense. We incurred interest expense of $1.1 million in the first quarter of 2015 which was consistent with $1.0 million in the first quarter of 2014.

Income Tax Expense. For the three months ended March 31, 2015, we recorded an income tax benefit of $0.8 million and for the three months ended March 31, 2014, we recorded an income tax benefit of $2.5 million. Our estimated effective federal and state income tax rate is 36.0% for the three months ended March 31, 2015.

Seasonality

Seasonal factors, related to weather conditions and changes in passenger demand, generally affect our monthly passenger enplanements. We have historically shown a higher level of passenger enplanements in the May through October period as compared with the November through April period for many of the cities served. These seasonal factors have generally resulted in reduced revenues, lower operating income, and reduced cash flow for us during the November through April period. As a result of such factors, our revenues and earnings have shown a corresponding increase during the May through October period. EAS revenues are generated under subsidy per departure rates established by the DOT and we realize revenue as departures are performed. Inherently, most of our EAS revenues, other than winter weather related cancellations, are not affected by seasonality, but certain EAS markets do receive summer season increased departures which are eligible for subsidy revenue

Liquidity, Financing and Capital Resources

In connection with the Loan Agreement described above, we repaid obligations totaling $24.9 million, which constituted all outstanding borrowings, fees and expenses under prior borrowing facilities. In connection with the repayment, our previous lenders terminated their security agreements and released all of their security interests in the Company’s aircraft and other assets.

For the three months ending March 31, 2015, we invested $0.1 million of cash in aircraft, engines, rotable parts and other equipment, mostly represented by rotable parts acquisitions. We do not expect to acquire additional aircraft or engines in the foreseeable future.

At March 31, 2015 the Company has no aircraft lease obligations.

Sources and Uses of Cash. As of March 31, 2015, our cash balance was $1.9 million.

Cash Provided by Operating Activities. During the three months ended March 31, 2015, our cash used by operating activities was $0.2 million compared to cash used in the three month period ending March 31, 2014 of $1.6 million. During the three months ended March 31, 2015 we generated a net loss of $1.4 million compared to a net loss of $4.3 million for the three months ended March 31, 2014. We recorded non-cash depreciation and amortization of $1.6 million and $0.8 million of deferred tax benefit in the first quarter of 2015. The timing of other working capital items generated $0.5 million of cash in the first quarter of 2015.

Cash Flows from Investing Activities. For the three month period ending March 31, 2015, we invested $0.1 million for the purchase of replacement aircraft rotable components and other property and equipment, which was a decrease as compared to the $0.6 million of purchases in the period ended March 31, 2014.

Cash Flows from Financing Activities. For the three month period ending March 31, 2015, there were no incremental borrowings under our working capital lines of credit nor were we required to make any principal payments on our long-term debt. In the period ended March 31, 2014, we made a $1 million principal payment on our debt.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Great Lakes Aviation, Ltd. (Great Lakes, we, our, its, it or the Company) notes that certain statements in this Form 10-Q and elsewhere are forward-looking and provide other than historical information. Our management may also make oral, forward-looking statements from time to time. These forward-looking statements include, among others, statements concerning our general business strategies, financing decisions, and expectations for funding expenditures and operations in the future. The words “may”, “will”, “believe,” “plan,” “continue,” “could”, “should”, “hope,” “estimate,” “project,” “intend,” “expect,” “anticipate” and similar expressions reflected in such forward-looking statements are based on reasonable assumptions, and none of the forward-looking statements contained in this Form 10-Q or elsewhere should be relied on as predictions of future events. Such statements are necessarily dependent on assumptions, data, or methods that may be incorrect or imprecise, and may be incapable of being realized. The risks and uncertainties that are inherent in these forward-looking statements could cause actual results to differ materially from those expressed in or implied by these statements.

Factors that could cause results to differ materially from the expectations reflected in any forward-looking statements include:

1)	our ability to hire and retain sufficient pilots to service existing routes and expand into other profitable routes;

2)	our ability to comply with our current debt obligations and covenants;

3)	the continuation of Essential Air Service and our ability to capitalize on it;

4)	the level of regulatory and environmental costs;

5)	airline industry and broader economic conditions;

6)	the continued connection capacity at our hubs and activities of our code share partners;

7)	our ability to monetize our net operating loss carry forwards;

8)	the incidence of domestic or international terrorism and military actions;

9)	competition from other airlines and ground transportation companies;

10)	the volatility of fuel costs;

11)	the incidence of labor disruptions or strikes;

12)	our ability to retain key personnel;

13)	the incidence of aircraft accidents;

14)	the incidence of technological failures or attacks;

15)	maintenance costs related to aging aircraft;

16)	the limited market for our securities;

17)	the volatility of the market price of our common stock;

18)	our concentration of stock ownership and control of the company by our Chairman and President;

19)	our ability to timely remediate any deficiencies in our internal controls;

20)	no expectation of dividend;

21)	anti-takeover provisions and other restrictions in our credit agreements.

Readers are cautioned not to attribute undue certainty on the forward-looking statements contained herein, which speak only as of the date hereof. Changes may occur after that date, and we do not undertake to update any forward-looking statements except as required by law in the normal course of our public disclosure practices.

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risks

We are susceptible to certain risks related to changes in the cost of aircraft fuel and changes in interest rates. As of March 31, 2015, we did not have any derivative financial instruments.

Aircraft Fuel

Due to the airline industry’s dependency on aircraft fuel for operations, airline operators including Great Lakes are impacted by changes in aircraft fuel prices. Aircraft fuel represented approximately 16.4% of our operating expenses in the three-month period ending March 31, 2015. At rates of consumption for the first three months of 2015, a one cent increase or decrease in the per gallon price of fuel will increase or decrease our fuel expense by approximately $40,000 annually.

Interest Rates

Our operations are capital intensive because the vast majority of our assets consist of flight equipment, which is financed primarily with long-term debt. At March 31, 2015, we had approximately $25 million of fixed rate debt.

Item 4.

CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures that is designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 31, 2015, our disclosure controls and procedures were effective.

During the Company’s most recent fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

We are a party to ongoing legal claims and assertions arising in the ordinary course of business. Management believes that the resolution of these matters will not have a material adverse effect on our financial position, results of operations, or cash flows.

During the period covered by this Quarterly Report on Form 10-Q, there were no material developments in any legal proceedings previously reported in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 1A.

RISK FACTORS

There has been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission on March 30, 2015.

Item 6.

EXHIBITS

See “Exhibit Index.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	GREAT LAKES AVIATION, LTD.

Dated: May 14, 2015	By:	/s/ Charles R. Howell IV
		Charles R. Howell IV
		Chief Executive Officer

	By:	/s/ Michael O. Matthews
		Michael O. Matthews
		Vice President and Chief Financial Officer

EXHIBIT INDEX


3.1		Amended and Restated Articles of Incorporation. (1)

3.2		Amended and Restated Bylaws. (1)

4.1		Specimen Common Stock Certificate. (2)

31.1		Certification pursuant to Rule 13a-14(a) of Chief Executive Officer.

31.2		Certification pursuant to Rule 13a-14(a) of Chief Financial Officer.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Chief Executive Officer.

32.2		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Chief Financial Officer.

101		Financial Statements in XBRL format.

(1)	Incorporated by reference to the Company’s Registration Statement on Form S-1/A, Registration No. 333-159256, as filed September 3, 2009.

(2)	Incorporated by reference to the Company’s Registration Statement on Form S-1, Registration No. 033-71180.

E-1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)

I, Charles R. Howell IV, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for Great Lakes Aviation, Ltd. for the quarterly period ended on March 31, 2015;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: May 14, 2015	By:	/s/ Charles R. Howell IV
		Charles R. Howell IV
		Chief Executive Officer
		(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)

I, Michael O. Matthews, certify that:

1.	I have reviewed this quarterly report on Form 10-Q for Great Lakes Aviation, Ltd. for the quarterly period ended on March 31, 2015;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: May 14, 2015	By:	/s/ Michael O. Matthews
		Michael O. Matthews
		Vice President and Chief Financial Officer
		(Principal Accounting and Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Great Lakes Aviation, Ltd. (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles R. Howell IV, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.


Dated: May 14, 2015	By:	/s/ Charles R. Howell IV
		Charles R. Howell IV
		Chief Executive Officer
		(Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Great Lakes Aviation, Ltd. (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael O. Matthews, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: May 14, 2015	By:	/s/ Michael O. Matthews
		Michael O. Matthews
		Vice President and Chief Financial Officer
		(Principal Accounting and Financial Officer)