Republic Airlines (Indianapolis International) parent firm Republic Airways Holdings' (RAH) has announced that as of April 30 it has exited Chapter 11 bankruptcy proceedings. The Indianapolis-based regional airline holding was forced to seek court protection in early 2016 after a pilot shortage left it unable to carry out its contractual obligations to partners United Airlines, Delta Air Lines, and American Airlines.
Prior to entering Chapter 11, Republic's debt included USD91.8 million in secured credit, almost USD3.5billion in aircraft and equipment financing, and USD15.3 million in the loan of industrial revenue bonds in connection with the construction of MRO facilities at Milwaukee General Mitchell airport.
Under its plan of reorganisation, Republic's aims were four-fold: to update its agreements with its mainline partners to secure more realistic financial terms; to withdraw from leases of unsuitable aircraft, namely its fleet of Dash 8-400 and E145s; streamline its fleet to one unified type and AOC, namely E170/E175; and restructure its debt and secure additional liquidity.
On the first point, Republic revised its Capacity Purchase Agreements (CPA) with each of American, United, and Delta. The airlines have also taken equity stakes in the new holding company, reorganised RAH.
On the latter point regarding AOC consolidation, its Shuttle America (Fort Wayne International) unit was formally merged into Republic Airlines in February. Regarding the withdrawal of its ERJ-145 fleet, an objection was filed by lessor Wells Fargo and ALF VI (known jointly as Residco), but as previously reported that objection was rejected. Another objection was filed after the plan was officially approved and has presumably been dismissed.
Under its new structure, Republic has transitioned from a public company, with its shares now distributed amongst its major creditors: 25% by American, 17.35% by Delta, and 19.16% by United. Other claimants, including Embraer and GE Capital, will take a more than 5% stake.
In a press release, CEO Bryan Bedford said the airline is starting a 'new chapter'.
"We have streamlined the airline around a single fleet of E-Jets and a single operating certificate. These operational simplifications, along with restructured commercial agreements with each of our core business partners, has positioned Republic to deliver on its mission," Bedford said.
