Republic Airways Holdings (Indianapolis) today issued the following statement concerning its subsidiary Chautauqua Airlines (Indianapolis):

Republic Airways Holdings Inc. today (October 31) announced it has reached agreements with several key stakeholders which, combined with other initiatives taken, including placing idled aircraft back into revenue service, will mitigate future negative cash flows at its Chautauqua Airlines subsidiary on average by approximately $45 million annually over the next five years.

“This is an important milestone in our Chautauqua restructuring effort,” said Bryan Bedford, chairman, president and CEO of Republic Airways. “These agreements take us about three-quarters of the way to our stated need of $60 million in average annual cash flow improvements at Chautauqua in order to stabilize and secure its future. We still have approximately two-thirds of our small jet fleet of 70 aircraft operating under capacity purchase agreements (CPAs) with less than two years remaining, so we are focused on ensuring both our labor productivity and long-term maintenance costs of these aircraft remain competitive.”

The Company also announced it has amended its CPA between Chautauqua Airlines and Delta Air Lines to provide for the operation of an additional seven Embraer ERJ 145 aircraft for a period of one year for each aircraft. All seven aircraft are expected to be placed into service with Delta before the end of 2012. Prior to the amendment, Chautauqua operated a total of twenty-four Embraer ERJ 145 aircraft under a CPA which continues through May 2016.

“The deployment of these seven aircraft, combined with our other recent CPA activity, means we will have placed all remaining idle 50-seat regional jet aircraft back into revenue service by the end of 2012. Ensuring our 50-seat aircraft remain active under agreements with our major airline partners is an important component of our Chautauqua restructuring effort,” said Bedford.

Meanwhile the Teamsters Local 357 issued this statement:

Pilots who fly for one of the nation’s largest regional airline companies say it’s not a lack of qualified pilots, but rather a lack of pay and respect that’s grounding airplanes and could cause a ripple effect in the nation’s air transportation system.

This week, Republic Airways Holdings announced that it would operate 27 fewer airplanes and expects to hire almost half the number of pilots  anticipated in 2014 due a lack of candidates who meet new FAA rules mandating 1,500 hours of  experience.  However, the issues are more complex according to International Brotherhood of Teamsters Local No. 357 which represents the 3000+ pilots who fly for the Indianapolis-based airline.

“Regional carriers as a whole need to offer better pay and work rules to attract new pilots,”  said Local 357 President Craig Moffatt.  “The lack of a competitive contract here at Republic contributes to poor quality of life with sub-standard pay to boot. This, in turn, leads qualified pilots to look elsewhere.”

The current collective bargaining agreement (CBA) or contract was ratified in 2003 and became amendable in October of 2007. Pilots are covered by the Railway Labor Act, so the contract does not expire. Negotiations began in April 2007 and entered mediation in 2011.  Local 357 pilots have been without a contractual raise or an adjustment of work rules to reflect industry and economic changes for over six years—and counting.

Regional carriers are a key link in the nation’s air-transportation system. Approximately half of the nation’s domestic flights are outsourced to regional airlines rather than flown by a larger carrier.  Republic Airways Holdings owns and operates Chautauqua Airlines, Republic Airlines and Shuttle America Airlines which in turn fly for American, United, Delta and US Airways.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Embraer ERJ 145LR (EMB-145LR) N272SK (msn 145306) arrives at Baltimore/Washington.

Delta Connection/Chautauqua Airlines: