Indianapolis-based Republic Airways Holdings Inc. has announced a settlement with Delta Air Lines Inc. (NYSE: DAL). Delta had taken Republic, one of its regional flight contractors, to court over accusations that it wasn’t delivering on its agreed-upon connecting flight schedule. Republic filed for Chapter 11 bankruptcy restructuring last month.
Republic says the deal with Delta "will deliver immediate improvements in profitability and cash flow." The Indianapolis-based company’s profits have plummeted over the course of several quarters and leaders have pointed toward a pilot shortage as a main reason. In a news release, Republic says the amended agreement with Delta includes the wind-down of services involving 50-seat aircraft, return of full flying of larger-capacity E170s and E175s, modification of ground handling agreements and $75 million for Republic for its restructuring.
Republic Chief Executive Officer Bryan Bedford says "today’s announcement is a key milestone in restoring an important relationship for both Republic and Delta. The comprehensive deal we have reached today secures Delta as a long-term strategic partner, provides significant benefits to our airline, and will preserve schedule integrity and a high quality of service for Delta’s customers."
A hearing on the agreement between Republic and Delta is set to go April 14 before Southern District of New York Judge Sean Lane.
Republic Airways Holdings operates Republic Airline and Shuttle America Corp. aircraft and has codesharing agreements with larger airline partners under the American Eagle, Delta Connection and United Express brands.