Government and Economic Development

City to land more aircraft mechanics: Lease calls for Republic to add 186 jobs

June 13, 2005

Republic Airways Holdings plans to add nearly 200 aircraft maintenance jobs at Indianapolis International Airport, based on employment projections in a lease the carrier recently signed for a new hangar.

The Indianapolis-based regional carrier that employs 114 mechanics here "agrees to use commercially reasonable efforts to achieve average employment of 300 full-time Indiana resident employees at the facility ... at an average salary of $18 per hour during the first year," states a lease signed April 15 with the Indianapolis Airport Authority, obtained by IBJ.

However, the commitment isn't ironclad; the lease with Republic subsidiary Chautauqua Airlines adds that the company "shall have no liability for failing to achieve the foregoing employment and wage targets."

In return for the employment goal, the Airport Authority agreed to invest more than $2.6 million to remove old docking bays and make other improvements to the former United Airlines maintenance center that will house the Republic employees, according to the lease.

Among the improvements is construction of a 200-space parking lot adjacent to the hangar on the southwest corner of the center.

Republic will pay annual rent of $982,352 for the 110,000-square-foot hangar.

Republic employs 875 people in Indianapolis. Its 114 mechanics and new hires will be spread between a 27,500-squarefoot hangar near the airport terminal and the newly leased space.

Oddly, neither airport nor Republic executives made a public announcement about the maintenance expansion plan since signing the lease two months ago. Republic's move into the former United base is a milestone if only because it fills the last hangar available for lease at the once-bustling complex.

Moreover, the additional jobs would go a long way toward restoring it to the employment levels before United pulled out about three years ago, idling 1,500 mechanics.

Last year, Chicago-based AAR Corp. signed a lease to occupy the other hangars of the base, with plans to employ at least 800 people by 2010.

Repeated phone calls to Republic's government relations executive, Warren Wilkinson, were not returned.

Despite the apparent good news for Indianapolis, Wilkinson and other top Republic executives may have reason to avoid the maintenance jobs issue; recently, they've been busy announcing expansions at the company's other maintenance operations in surrounding states.

Just last month, Wilkinson-along with city officials in Columbus, Ohio-announced a $17 million expansion of Republic's maintenance facility there, along with the addition of at least 98 jobs to the facility that already employs 277 people.

The new jobs in Columbus are expected to add $3.6 million to the payroll in that city, which is providing a combination of tax breaks reportedly worth more than $545,000 over seven years.

"I want to personally thank Mayor [Michael] Coleman, the Columbus City Council and the state of Ohio for putting together a very compelling development package," Republic's Wilkinson beamed last month in a press release.

In March, Republic announced it would open an $8.5 million aircraft maintenance and crew base at Louisville International Airport and add about 130 jobs, bringing its total employment in Louisville to 300.

As a practical matter, it makes sense to spread maintenance operations to airports where Republic has major operations, according to the company. For example, its subsidiary airlines will begin flying regional aircraft for Delta Air Lines out of Columbus this summer. It already flies for United Airlines and US Airways out of Columbus.

Republic hasn't always had the best relationship with Indianapolis officials.

Republic CEO Bryan Bedford in mid-2001, while confirming that he was entertaining an offer to move headquarters to Columbus, complained that Indianapolis leaders were lukewarm to the carrier's need to expand here.

"Either they don't take it seriously or they don't care. We just don't get any interest," he complained.

Airport and city leaders responded with incredulity, saying they had numerous discussions with Republic and had even proposed a site for a new headquarters on the northeast corner of the airport. A top airport leader rebuked Bedford for "negotiating in public."

When Republic recently opened new headquarters, it was not at the airport but at 8909 Purdue Road, on the northwest side of the city.

Whatever the past, the prospect of Republic's adding more maintenance jobs in Indianapolis shouldn't be overlooked, said Melina Kennedy, the city's director of economic development. "The important thing to us is they have committed to 300 jobs over a period of time."

Much of Republic's expansion is being fueled by a drive by the big legacy carriers to move passengers more economically. Republic's fleet of 135 Brazilian-made Embraer jets carries fewer than half the passengers of a Boeing 737, making them more attractive on some shorter and more thinly traveled routes. Republic pilots also earn less than what the big airlines pay.

Republic flies under agreements for American, Delta, United and US Airways.

The carrier could add more than 60 aircraft over the next several years, under proposed deals with its airline customers. In March, Republic announced it was pumping more than $125 million into US Airways in an attempt to help keep alive its bankrupt No. 1 customer.

The deal also calls for Republic to "work with US Airways to locate an Embraer heavy maintenance facility" within the US Airways network. Neither carrier will say where that might be.
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