Republic Airways lands $110,000 in federal penalties

September 3, 2010

Indianapolis-based Republic Airways Holdings has been assessed $110,000 in civil penalties for delays in filing financial data with the U.S. Department of Transportation.

The penalties, the second sizeable sanction against Republic proposed by regulators this year, are outlined in a consent agreement tied to “reporting delinquencies” involving subsidiaries Chautauqua Airlines, Republic Airline and Shuttle America.

The three regional airlines fly on contract for Delta Air Lines, American, Continental, US Airways and United Airlines.

In an order issued Sept. 1, the DOT said Republic “on a number of occasions” failed to file on time required financial information the agency uses to monitor such things as air carrier fitness and ownership and to analyze the effect of air transportation industry policy initiatives.

Republic, according to the order, attributed the late filings to its conversion to a new accounting software system and the integration and consolidation of multiple accounting systems.

It wasn’t clear if that is related to broader integration issues involving Frontier Airlines and Midwest Airlines, which Republic acquired last year.

Republic told regulators it has established a new, full-time position and a computerized compliance calendar to ensure reports for subsidiaries are prepared and submitted on time, among other measures.

“The Office of Aviation Enforcement and Proceedings has carefully considered the information provided … but continues to believe that enforcement action is warranted,” the DOT said.

Republic officials declined to elaborate Friday morning.

Republic will pay the government $55,000 initially. The remaining amount can be waived, however, if the company is in compliance after one year.

The fines are financially immaterial for a company that posted more than $1.6 billion in revenue last year, but it’s the second major run-in with transportation regulators in 2010.

In April, the Federal Aviation Administration blasted the carrier for problems with the management of its maintenance program. The FAA proposed a $348,000 civil penalty against Chautauqua for allegedly operating some of its regional jets without performing inspections required under so-called FAA air worthiness directives.

Last year Chautauqua operated a Canadair regional jet for 231 flights without inspecting a section of lower wings for cracks, and flew another CRJ for 61 hours without a required inspection of electrical relays, the FAA said.

Another regional jet was flown more than 17,600 flights between 2007 and 2009 without mandatory inspections of its General Electric engines, the agency said, citing several other instances of inspection lapses.

FAA officials could not be immediately reached Friday to provide information on the outcome of the maintenance case against the company.


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