A large U.S. regional carrier has recently filed for bankruptcy protection, citing its pilot shortage as a major pressure to its reason for doing so. Not to mention, large network airlines have shifted to using larger planes.
Indianapolis-based Republic Airways Holdings announced on Thursday that they are planning to undergo a restructuring in its operations. Despite this, the airlines announced that they plan to maintain their operations.
CNBC has reported that one of the biggest issues regional carriers, like Republic, continue to face is the struggle of finding enough pilots. This is because of a relatively low starting salary and the new rules imposed by U.S. regulators for new pilots to have additional training. Because of these things, Republic has been hit pretty hard of an outdated pilot contract; which has made it a less attractive option to new pilots. Republic's decision of filing bankruptcy protection has been warned since last year.
The other major airlines in the country have been able to earn record profits despite the robust traffic growth and falling fuel prices. Unfortunately, their regional partners are under a state of flux as they try to look for new homes for the tinier jets left behind by bigger carriers. Republic Airways flies in part with commuter brands, such as Delta Air Lines Inc. and American Airlines Group Inc.
Wall Street Journal published that because of its pilot shortage problem, Republic had no choice but to ground some of its planes. This has led Delta to file a lawsuit against the carrier for damages due to their loss of service.
Its released statement on Thursday, published by Reuters, shows that the company cited they "worked hard to avoid this step." Unfortunately, the carrier's "negotiating effort with key stakeholders show no apparent prospect of a near-term resolution." An executive was not available for an interview.
Meanwhile, the carrier says that its salaries, benefits and normal flight schedules are unchanged.
At the time of its filing, Republic had a fleet of 242 aircraft operating over 1000 flights daily for American, Delta, and United Continental Holdings Inc; all of which affirm that they will continue to work with Republic.
