Republic Airways Holdings, Inc. (NASDAQ: RJET) is an aviation holding corporation based in Indianapolis, Indiana,[1] which owns six airlines operating in the United States: Chautauqua Airlines, Midwest Airlines, Republic Airlines, Shuttle America, Frontier Airlines, and Lynx Aviation, the latter two as of August 13, 2009 when Republic Airways won the bankruptcy auction for Frontier Airlines. The win makes both Frontier Airlines and its subsidiary Lynx fully owned subsidiaries of Republic Airways Holdings. Republic Airways Holdings also retains a 89% ownership stake in Mokulele Airlines.
Overview
Chautauqua operates regional jet (RJ) aircraft with up to 50 seats, Shuttle America operates Embraer 170 and 175 aircraft airliners with 70-76 seats, and Republic Airlines operates Embraer 170 and 175 aircraft with 76-86 seats.
The separation of the four airlines is due to "scope clauses" between mainline pilots and each major carrier Republic feeds. These clauses regulate the size of regional jet aircraft that affiliate carriers may operate; the intent behind such clauses is to protect mainline pilots from being replaced by lower-paid regional pilots. In 2005, Republic paid a $6.6 million settlement to the Allied Pilots Association after placing Embraer 170s in service with Chautauqua Airlines as United Express, because such aircraft violated the scope clause in the pilots' contract at American Airlines, which also contracts with Chautauqua for regional service as American Connection. To avoid further liability, Republic moved all of its Embraer 170 aircraft to Shuttle America, an airline that previously only operated Saab 340 turboprops.
In September 2005, Republic purchased 113 slots at Ronald Reagan Washington National Airport, 24 at LaGuardia Airport, and 10 Embraer 170 aircraft from US Airways with an agreement to lease those assets back to US Airways. The deal was necessary for US Airways to emerge from bankruptcy protection.
The airlines currently employ approximately 5,000 aviation professionals and operate 226 regional jet aircraft including 34 Embraer 175 aircraft, 76 Embraer 170 aircraft, 60 Embraer 145 aircraft, 15 Embraer 140 aircraft, 17 Embraer 135 aircraft and 24 Bombardier CRJ200 aircraft.
On April 23, 2008, Republic announced the termination of its service agreement with Frontier Airlines, which entered Chapter 11 bankruptcy earlier in April. Republic will draw down its Embraer 170-series aircraft serving Frontier, with the last planes leaving service on June 23, 2008. Due to Republic's need for this aircraft type with its other operations (see fleet overview below) and the high demand for this type in the market, it is likely that these aircraft will be repurposed for other RJET subsidiaries or sold. Republic intends to file a damage claim for approximately $260 million arising out of Frontier Airline's rejection of the ASA. The ultimate amount of the Company's claim will be determined in the future by the Bankruptcy Court. The ultimate recovery value of the claim is unknown at this time. [1]
On August 4, it was announced Republic Airways Holdings along with various other financial institutions, will provide debtor-in-possession financing for Frontier Airlines Holdings[2] the parent company of Frontier Airlines.
On May 22, 2009, Republic Airways announced that they will begin flying the Embraer 190 for their Midwest Code-Share partnership during the Summer of 2009. The aircraft will be configured for 100 seats and will be flown out of MKE and MCI under the Midwest Connect livery. Thus making Republic Airlines the first regional airline to fly the Embraer 190, an aircraft typically used for medium-haul routes at mainline carriers.
On June 22, 2009, Frontier Airlines announced that pending bankruptcy court approval, Republic Airways Holdings would acquire all assets of Frontier Airlines for the amount of 108 million dollars. Thus, Frontier Airlines would become a wholly owned subsidiary of Republic Airways Holdings.[2] It was further announced on June 23, Republic Air Holdings would acquire Midwest Air Group's last remaining certificated airline which is currently known as Midwest Airlines.
On July 30, 2009, Southwest Airlines announced a competing bid to acquire Frontier Airlines. An auction was held and on August 13, 2009, Republic Airways won the bid, thus acquiring Frontier Airlines and Lynx Aviation as wholly owned subsidiaries. [3]
Fleet Overview
Current fleet
As of November 2009[update], Midwest Airlines operates no aircraft, the final flight operated with a Boeing 717 and staffed with Midwest Airlines flight crews landed in Milwaukee on November 2, 2009.[5] Effective November 3, 2009, Midwest Airlines ceased to exist as an actual operating airline (allowing its DOT air carrier operator certificate to lapse). However, the airline's parent Republic Airways Holdings plans to operate flights by its other subsidiary airlines under the Midwest Airlines brand.
Through outsourcing other airlines operating under the Midwest Connect branding Midwest can advertise and maintain a route system similar to what existed prior to Midwest Air Groups takeover by the TPG - Texas Pacific Group:[6] The Boeing 717 aircraft were replaced by 5 Airbus A319 flown by Frontier Airlines and 10 Embraer 190 aircraft purchased from US Airways in addition to the 5 Embraer 190s, as of November 2009 flown for Midwest Airlines by Republic Airlines
Retired fleet
"Grizwald" the Grizzly Bear (N801FR) Airbus A318
As of January 2009, the Frontier Airlines fleet consists of the following aircraft: [7]
As of August 2009, Frontier's average fleet age was 5.0 years.[8]
Frontier Airlines Acquisition
As of July 13, 2009 Republic Airways has submitted a bid for Frontier Airlines reported at $108.75 Million . On July 30, 2009 Southwest Airlines submitted their own bid for Frontier valued at $113.6 Million. Preliminary bids were due by August 3, 2009 and Southwest raised it's final bid to $170 million on August 10, 2009.
On August 13, 2009 Republic Airways won the bankruptcy auction for Frontier Airlines after pilots unions at Frontier and the only other bidder, Southwest Airlines reached an impasse over seniority lists. Southwest's concession will make both Frontier Airlines and its subsidiary Lynx fully owned subsidiaries of Republic Airways Holdings.
Further reading
- Sandra Arnoult, "Three Heads are better than One," Air Transport World January 2006, p. 60.
References
Republic Airways to buy Midwest Airlines
External links
