Republic severs ties with Frontier, shares fall

April 23, 2008

Shares of Republic Airways Holdings Inc. were down 10.7 percent this morning on news the locally based airline had severed ties with bankrupt Frontier Airlines. Shares were at $16.03 as of 11 a.m.

Republic this morning said it would begin breaking away from Frontier due to the Denver-based airline's recent decision to file for Chapter 11 reorganization.

Republic has service agreements to offer passenger service with six airlines, including Frontier Airlines.

Republic plans to file a claim for about $260 million with the court handling Frontier's bankruptcy.

In addition, Republic operates 12 E170 aircraft under its agreement with Frontier. A staggered wind-down of removing those aircraft from service will begin May 1 and continue to June 23. Another five aircraft it had planned to place with Frontier will be placed with another partner.

Republic said revenue from its agreement with Frontier was $6 million a month.

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