Republic Airways Clears Reorganization Hurdle

The agreement still needs bankruptcy court approval.

A settlement between Indianapolis-based Republic Airways Holdings Inc. and Delta Air Lines Inc. (NYSE: DAL) has been approved by a U.S. bankruptcy court. The ruling involves a "consensual wind-down" of a contract involving 50-seat aircraft flown by Republic for Delta and $75 million in funding to help with Republic’s Chapter 11 reorganization, which was first announced in February.

The United States Bankruptcy Court for the Southern District of New York ruling also involves Republic returning to flying 30 E170 and E175 aircraft for Delta and other changes to reimbursement, compensation and ground handling agreements between the two airlines.

In a statement in March detailing provisions of a Delta agreement, Republic said the deal would "deliver immediate improvements in profitability and cash flow."

The approval is expected to fully take affect Friday.