Airlines and Republic Airways and Transportation, Distribution & Logistics

Republic aims for American's regional flights

September 6, 2012

Regional airline Republic Airways hopes to take advantage of American Airline's bankruptcy and pick up some flying on behalf of the carrier.

Tuesday night, a federal bankruptcy judge terminated the union contract of pilots working for AMR Corp., the parent company of American, and its regional airline American Eagle.

"We think last night's ruling is a beneficial one for us," Timothy Dooley, chief financial officer of Republic Airways Holdings Inc. said at a Dahlman Rose & Co. transportation conference Wednesday.

Indianapolis-based Republic currently operates 15 airplanes (44-seaters) for American out of Chicago. It also operates express flights for United Continental Holdings Inc., US Airways Group Inc. and Delta Air Lines.

Republic is assuming that American will either spin off, liquidate or shrink American Eagle as part of its restructuring.

Dooley said American could be looking for as many as 250 planes with 76 to 80 seats, configured in two classes. He said it will take more than one regional airline to fill that need and he hopes Republic will be one of those providers.

Republic also owns Frontier Airlines. Dooley reiterated the company's plans to divest Frontier, "most likely in the first half of 2013." He said Republic could spin Frontier off through an initial public offering, sell it to another airline, sell it to a private equity firm or go with some combination of those options.

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