Republic Airways Holdings and subsidiaries file for chapter 11 reorganisation
Republic Airways Holdings and certain of its subsidiaries filed (25-Feb-2016) voluntary petitions for relief under chapter 11 of the US bankruptcy code, after its board of directors "unanimously" determined a chapter 11 reorganisation is in its best interest. Republic said the process allows it to "continue normal business operations while restructuring the company's finances and contractual relationships." Associate pay and benefits are unchanged, and Republic will continue to:
- Deliver a safe, clean and reliable product for its customers;
- Provide wages, healthcare and other benefits to its associates without interruption;
- Fund its 401(k) contributions on schedule;
- Honour and retain its collective bargaining agreements with its unions;
- Pay suppliers and vendors for the goods and services its receive in the ordinary course of business throughout the restructuring process.
The company has sufficient assets and liquidity to meet its working capital and operating expenses during the restructuring process. Republic has also appointed Lars Arnell as SVP and chief restructuring officer. In his new position, Mr Arnell will be responsible for all restructuring activities during the pendency of the chapter 11 proceeding. [more - original PR - I] [more - original PR - II]
Republic Airways Holdings: "We worked hard to avoid this step. Over the last several months, we've attempted to restructure the obligations on our out-of-favor aircraft - made so by a nationwide pilot shortage - and to increase our revenues. It's become clear that this process has reached an impasse and that any further delay would unnecessarily waste valuable resources of the enterprise. Our filing today is a result of our loss of revenue during the past several quarters associated with grounding aircraft due to a lack of pilot resources, combined with the reality that our negotiating effort with key stakeholders shows no apparent prospect of a near term resolution." Bryan Bedford, chairman, president and CEO. Source: Company statement, 25-Feb-2016.