
Republic Airways flies E175s like this one for American Eagle and Delta Connection. (Image: American Airlines)
With the major U.S. carriers hauling in record profits, you’d think that the industry would be well past the bad old days of several years ago when everyone was filing Chapter 11 bankruptcy. But you’d be wrong.
Republic Airways, the holding company for two regional carriers that fly under the banners of United Express, Delta Connection and American Eagle, filed for Chapter 11 Thursday. But the company said on its website that travelers shouldn’t be concerned: “Our airline operations will continue in the ordinary course throughout this court-supervised process,” Republic said, promising that from the passenger’s standpoint, it will be business as usual.
Based in Indianapolis, Republic’s operating subsidiaries are Republic Airlines and Shuttle America. Together, they operate 1,000 flights a day to 105 cities in 38 states, Canada and the Caribbean. Their fleet includes Embraer E145s, E170s and E175s as well as Bombardier Q400 turboprops. In 2009, Republic Airways Holdings acquired Frontier Airlines, but it sold that carrier to new investors in 2013.
“The company has sufficient assets and liquidity to meet its working capital and operating expenses during the restructuring process,” Republic said in a press release.
What went wrong? “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 solution,” the company said.
According to Bloomberg News, Republic and its pilots settled on a new three-year contract in 2015, but it still was forced to ground a number of its planes while it tried to negotiate better deals with United, Delta and American, and at the same time tried to renegotiate its aircraft lease terms.
And Republic isn’t alone: Earlier this month, a small Oregon-based turboprop carrier called SeaPort Airlines also filed for Chapter 11 protection. The airline – which also cited a pilot shortage as part of its problems –had been eliminating routes in recent months in a bid to shore up its finances. Like Republic, SeaPort said it continues to operate its regular schedule during the reorganization process. It has only a few routes in the Northwest and in Arkansas, Tennessee and Texas.
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