Regional Carrier Republic Airways Seeks Bankruptcy Protection

by San Antonio Attorney

Considered as one of the biggest regional carriers, Republic Airways Holdings recently filed for bankruptcy.  It will carry out its restructuring plan while maintaining operations.

The airline has been facing challenges such as pilot shortages and large network airline shifting to the usage of larger planes.  Based in Indianapolis, the airline flies in behalf of commuter brand of carriers such as American Airlines and Delta Airlines.

Regional airlines have faced an imminent crisis of employing regular pilots due to low starting salaries.  New aviators are also required by United States regulators to have additional training prior to employment.  Republic airways have been affected by these circumstances since an outdated pilot contract is less enticing than other airline’s offer for aviators.

The airline already received a warning last year that it might face bankruptcy protection.

Last month, Republic Airways have expressed optimism as the pilots have agreed to a negotiated contract.

Amid low fuel prices and increased traffic growth, the major U.S. airline companies have generated profits.  However, their regional partners have struggled immensely as the big carriers attempt to cut costs by resorting to larger planes, causing small airline companies to find a place to accommodate smaller jets.

Major airlines are contracting almost 50 percent of their domestic flights to SkyWest Inc., Republic and other operators.  The company is mostly using smaller turboprops and regional jets that are being replaced with bigger jets.

Moreover, the pilot shortage in Republic Airways forced it stop operating some of its jets.  This move caused Delta Airlines to sue the company for the damages it suffered due to loss of service.

Republic Airways has a total debt of $2.98 billion and total assets of $3.56 billion during the time of bankruptcy filing.  The airline will operate under normal flight schedules and employee’s salaries and benefits will not be subjected to change.

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