Thursday, February 25, 2016

Republic Airways files for bankruptcy protection

Republic Airways Embraer 190AR (ERJ-190-100IGW) (c/n 19000481) N177HQ rolls for takeoff on Rwy 30 at Long Beach Airport (LGB/KLGB) on May 12, 2014.
(Photo by Michael Carter)

Regional carrier Republic Airways filed for Chapter 11 bankruptcy protection Thursday, saying its income has plunged amid a shortage in pilots.

Republic operates feeder flights on small and mid-size narrow-body aircraft for “mainline” partners American, Delta and United. Republic pledged that it and its subsidiary airlines would “continue normal business operations” while the company attempts to restructure under bankruptcy protection.

“We worked hard to avoid this step,” Republic CEO Bryan Bedford said in a statement. “Over the last several months, we’ve attempted to restructure the obligations on our out-of-favor aircraft – made so by a nationwide pilot shortage – and to increase our revenues.”

“Our filing today is a result of our loss of revenue during the past several quarters associated with grounding aircraft due to a lack of pilot resources, combined with the reality that our negotiating effort with key stakeholders shows no apparent prospect of a near term resolution,” Bedford added in a statement.

Indeed, Republic’s bankruptcy – “the first large U.S. airline bankruptcy since American Airlines filed in 2011,” according to Bloomberg News – comes while most of the USA’s big “mainline” carriers are entering their second consecutive year of record profits.

Republic has struggled to retain enough pilots to run its full operation. A change in Federal Aviation Administration rules that increased the amount of flight time needed to become a commercial pilot is something Bedford has previously citied as a cause for the shortage.

However, some pilot backers have pinned the problem on poor pay. Whatever the cause, pilot staffing has become a significant problem for Republic and several of the nation’s other region outfits.

Indianapolis-based Republic includes subsidiaries Chautauqua Airlines, Republic Airlines and Shuttle America. Those regional carriers have a combined fleet of more than 250 aircraft and offer scheduled passenger service on more than 1,000 flights daily to more than 105 cities in the USA, Canada and the Caribbean and Bahamas.

Republic's carriers are paid per flight to operate American Eagle, Delta Connection and United Express flights, respectively, for partners American, Delta and United. Republic has about 6,000 employees.

(Ben Mutzabaugh - Today in the Sky / USA Today)

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