Republic Airways Holdings

Republic Airways Holdings, Inc. (NASDAQ|RJET) is an aviation holding corporation based in Indianapolis, Indiana, which owns three regional airlines operating in the United States: Chautauqua Airlines, Republic Airlines and Shuttle America.

Overview

Chautauqua operates regional jet (RJ) aircraft with up to 50 seats, Shuttle America operates Embraer 170 airliners with 70 seats, and Republic Airlines operates Embraer 170 and 175 aircraft with 76-86 seats.

The separation of the three airlines is due to "scope clauses" between mainline pilots and each major carrier Republic feeds. These clauses regulate the size of regional jet aircraft that affiliate carriers may operate; the intent behind such clauses is to protect mainline pilots from being replaced by lower-paid regional pilots. In 2005, Republic paid a $6.6 million settlement to the Allied Pilots Association after placing Embraer 170s in service with Chautauqua Airlines as United Express, because such aircraft violated the scope clause in the pilots' contract at American Airlines, which also contracts with Chautauqua for regional service as American Connection. To avoid further liability, Republic moved all of its Embraer 170 aircraft to Shuttle America, an airline that previously only operated Saab 340 turboprops.

In September 2005, Republic purchased 113 slots at Ronald Reagan Washington National Airport, 24 at LaGuardia Airport, and 10 Embraer 170 aircraft from US Airways with an agreement to lease those assets back to US Airways. The deal was necessary for US Airways to emerge from bankruptcy protection.

The airlines currently employ approximately 5,000 aviation professionals and operate 226 regional jet aircraft including 34 Embraer 175 aircraft, 76 Embraer 170 aircraft, 60 Embraer 145 aircraft, 15 Embraer 140 aircraft, 17 Embraer 135 aircraft and 24 Bombardier CRJ200 aircraft.

On April 23, 2008, Republic announced the termination of its service agreement with Frontier Airlines, which entered Chapter 11 bankruptcy earlier in April. Republic will draw down its Embraer 170-series aircraft serving Frontier, with the last planes leaving service on June 23, 2008. Due to Republic's need for this aircraft type with its other operations (see fleet overview below) and the high demand for this type in the market, it is likely that these aircraft will be repurposed for other RJET subsidiaries or sold. Republic intends to file a damage claim for approximately $260 million arising out of Frontier Airline's rejection of the ASA. The ultimate amount of the Company's claim will be determined in the future by the Bankruptcy Court. The ultimate recovery value of the claim is unknown at this time. [http://phx.corporate-ir.net/phoenix.zhtml?c=131107&p=irol-newsArticle&ID=1133796&highlight=]

On August 4th, it was announced Republic Airways Holdings along with various other financial institutions, will provide (DIP) debtor in possession financing for Frontier Airlines Holdings [http://biz.yahoo.com/prnews/080804/lam528.html?.v=16] the parent company of Frontier Airlines.

Fleet Overview

Further reading

* Sandra Arnoult, "Three Heads are better than One," "Air Transport World" January 2006, p. 60.

External links

* [http://www.rjet.com/ Republic Airways Holdings]

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