Indianapolis-based Republic Airways Holdings Inc. says it expects to emerge from bankruptcy during the first quarter of 2017.
Republic, which filed for Chapter 11 bankruptcy protection in February, announced Wednesday that it has filed its plan of reorganization with “full support” from its creditors committee.
Republic, which has about 5,200 employees, is a regional air carrier that operates about 850 daily flights for American, Delta and United.
A national pilot shortage, plus a long-standing dispute with its pilots over a new contract, meant Republic had to cut its schedules and could not fulfill its obligations to the larger airlines. Republic and the pilots reached a deal late last year, but the pilot shortage continues.
Its plan of reorganization—a required part of the Chapter 11 bankruptcy process—outlines what the company has achieved to date and how it will operate going forward.
Since February, Republic has renegotiated new agreements with American, Delta and United. The airline has also restructured its fleet of aircraft and the debt agreements on that fleet.
“Collectively, the accomplishments achieved in Chapter 11 will significantly streamline the company’s operations, enhance its competitiveness, allow for new E175 [aircraft] deliveries for United beginning in April of 2017, and insure the company has access to adequate liquidity to support its long range business plan,” Republic said in a news release filed late Wednesday.
The plan of reorganization, filed with U.S. Bankruptcy Court for the Southern District of New York, also outlines some changes yet to come:
Post-reorganization, the company plans to issue new common stock. The plan calls for the creation of 50 million shares, of which about 20 million will be issued. The fair market value of these shares, which will not be listed on any exchange, has not yet been set.
The airline is working to streamline its operations under a single air carrier certificate. Currently, Republic and one of its subsidiaries, Shuttle America Corp., each operates under a separate certificate.
Republic is seeking approval to surrender its Shuttle certificate and operate its entire fleet under the Republic Airline Inc. name. A court hearing on this motion is set for Nov. 28, and Republic hopes to complete the consolidation by Jan. 31.
The reorganized company will be governed by a board of directors consisting of Republic Chairman, President and CEO Bryan Bedford plus six independent directors to be selected by the creditors committee. Bedford must serve on the reorganized board for at least a year, the plan stipulates.
Before Republic’s plan of reorganization goes into effect, creditors must vote to accept it. A court hearing on the plan is scheduled for Dec. 21.