Republic flies boldly into branded-carrier business

After 36 years of flying smaller planes painted in the colors of the major airlines for which it flies under contract,
Republic Airways Holdings in 2009 became a branded airline operator of its own.

This summer, the parent of Chautauqua
Airlines acquired Milwaukee-based Midwest Airlines from a private group—and the better-known Frontier Airlines, a Denver
carrier that had been in Chapter 11.

Republic snapped up Frontier for $108 million and assumed its debt—besting
an offer from Southwest Airlines, which perhaps not coincidentally is ferociously expanding its service in Denver and Milwaukee.

Formidable Southwest may yet have the last laugh.

Republic’s entrance into the branded market was
audacious. Will major carriers for whom it flies feel threatened by Republic, with which they now compete?

the so-called regional airline industry where Republic cut its teeth is under pressure. Rising fuel prices made it hard to
spread the costs over a 50- or 75-seat airplane. All the while, major carriers have pressured contract carriers for lower
rates amid relentless pressure to keep fares competitive.

Republic CEO Bryan Bedford has sought to downplay the
idea that Republic is now a threat to carriers for whom it flies. Rather, he’s said Republic wants to diversify its
revenue sources.

He’s also looking to gain from efficiencies. Republic is pressing some of its Embraer jets
into Frontier’s and Midwest’s routes; Midwest’s Boeing 717s are being taken out of service, as well as many
of its pilots. And, Frontier’s larger Airbus jets may see service on Midwest routes.

This month, Republic
said it will move up to 300 of Frontier’s dispatchers, engineers and other employees to its corporate headquarters near
West 86th Street and Michigan Road.

City officials had hoped Republic would move 800 maintenance jobs to Indianapolis
also, but the airline chose Milwaukee.

Republic started out in 1973 in Jamestown, N.Y., as Chautauqua Airlines,
flying to Buffalo and Pittsburgh for U.S. Airways’ predecessor, Allegheny Airlines.

It moved its propeller-driven
fleet to Indianapolis in 1994. The airline in 1998 was acquired by Connecticut–based Wexford Capital. In 2004, Republic
held an initial public stock offering.•

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