Posted on: 24 March 2016 by Mark Howells
Republic Airways Holdings has reached agreement with Delta Air Lines to restructure holistically the parties’ codeshare relationship.
A motion was filed in the United States Bankruptcy Court for the Southern District of New York was described as “a significant first step towards achieving the goals established at the outset of this case, and upon approval by the court, will deliver immediate improvements in profitability and cash flow for Republic”.
“Today’s announcement is a key milestone in restoring an important relationship for both Republic and Delta. The comprehensive deal we have reached today secures Delta as a long-term strategic partner, provides significant benefits to our airline, and will preserve schedule integrity and a high quality of service for Delta’s customers,” explained Bryan Bedford, chairmen, president and CEO of Republic.
“This enhanced partnership agreement with Republic means together we’ll be better positioned to offer Delta customers with the reliable, consistent product they expect,” added Erik Snell, Delta’s vice-president—Delta Connection.
The motion will be heard before the Honorable Sean H. Lane on 14 April 2016. The amended agreements provide substantial and interrelated operational and economic benefits, including a consensual wind-down of the Single Class Agreement (50 seat aircraft), the full settlement of the litigation between Delta and Republic, the return of full flying of all thirty (30) Embraer 170s and 175s subject to, and an increase in reimbursement rates under, its Dual Class Agreement (EJET), compensation for certain slot lease agreements, and modifications to the parties’ Ground Handling Agreement.
Additionally, Delta has agreed to enter into a Debtor-In-Possession (DIP) Credit Agreement that will provide $75 million in liquidity to Republic in support of its restructuring plan. The new agreements will become effective upon issuance of the approval order by the court.