Republic Negotiating Contract Compromises With Delta
Aviation Daily
10/27/2006, page 04
Lori Ranson
Republic Airways Holdings (RAH) has offered Delta some concessions on its existing contract structure as the Atlanta-based major carrier wades through bids for its regional flying.
Delta is asking carriers to bid on existing and incremental flying covering about 143 RJs, and should issue a decision next month. Comair has warned it is bidding rates that put it at a cost disadvantage after failing to win concessionary deals with its pilots.
RAH CEO Bryan Bedford told analysts yesterday the company "didn't bid on any of the replacement CRJ flying, whether it was Comair flying or another regional." But concessions on the cost structure of its current contract were included in RAH's bid, along with bids on Delta's "growth shells." Delta has included 50 new 76-seat planes in its request for proposal.
Comair has reached a tentative deal with its flight attendants and an agreement with mechanics but hasn't made progress with pilots. Bedford noted the wait by Delta for Comair to determine its cost would probably affect the speed of RAH reaching a deal with Delta this year.
As RAH awaits details of its future relationship with Delta, it is also preparing to start flights for Continental in January. RAH reached a deal with Continental earlier this year for its Chautauqua subsidiary to fly 44 - to 50-seat jets for the airline. Twenty of the planes are exiting RAH's US Airways network as part of an agreement for RAH to fly 30 86-seat Embraer 175s as US Airways Express.
RAH struck lease deals for 12 former Independence Air CRJ-200s and has a letter of intent for another 12 -200s as part of a "portfolio of aircraft available to us," Bedford said.
Houston is the top priority for the 44 planes, Bedford said, followed by Cleveland. He noted it was unclear if any of the planes would be based in Newark. The aircraft should overnight at RAH's maintenance bases of Indianapolis, Columbus, Louisville and St. Louis, Bedford explained. "The resources are in place," he noted. RAH plans to centralize the CRJ maintenance in one of the existing hangars.
RAH took delivery of four Embraer 170s during the quarter, one being the 16th plane to fulfill its original deal with Delta. Three of the planes are unallocated, flying for RAH's existing customers on short-term assignments. Bedford said RAH hasn't committed those planes to a long-term deal, but he noted "it remains clear" the company would have to place them with one partner or another "in the not too distant future."
Profits at RAH during the third quarter grew 57% to $21 million from $14 million for the same time period in 2005. Operating income grew 51% to $56 million, while operating revenues rose 33% to $306 million. Cash balances fell from $204 million at the end of the second quarter to $170 million in the third quarter. Part of the reason for the dip is $40 million in pre-delivery deposits RAH paid to secure delivery positions of the 30 Embraer 175s slated for service with US Airways. -LR
Aviation Daily
10/27/2006, page 04
Lori Ranson
Republic Airways Holdings (RAH) has offered Delta some concessions on its existing contract structure as the Atlanta-based major carrier wades through bids for its regional flying.
Delta is asking carriers to bid on existing and incremental flying covering about 143 RJs, and should issue a decision next month. Comair has warned it is bidding rates that put it at a cost disadvantage after failing to win concessionary deals with its pilots.
RAH CEO Bryan Bedford told analysts yesterday the company "didn't bid on any of the replacement CRJ flying, whether it was Comair flying or another regional." But concessions on the cost structure of its current contract were included in RAH's bid, along with bids on Delta's "growth shells." Delta has included 50 new 76-seat planes in its request for proposal.
Comair has reached a tentative deal with its flight attendants and an agreement with mechanics but hasn't made progress with pilots. Bedford noted the wait by Delta for Comair to determine its cost would probably affect the speed of RAH reaching a deal with Delta this year.
As RAH awaits details of its future relationship with Delta, it is also preparing to start flights for Continental in January. RAH reached a deal with Continental earlier this year for its Chautauqua subsidiary to fly 44 - to 50-seat jets for the airline. Twenty of the planes are exiting RAH's US Airways network as part of an agreement for RAH to fly 30 86-seat Embraer 175s as US Airways Express.
RAH struck lease deals for 12 former Independence Air CRJ-200s and has a letter of intent for another 12 -200s as part of a "portfolio of aircraft available to us," Bedford said.
Houston is the top priority for the 44 planes, Bedford said, followed by Cleveland. He noted it was unclear if any of the planes would be based in Newark. The aircraft should overnight at RAH's maintenance bases of Indianapolis, Columbus, Louisville and St. Louis, Bedford explained. "The resources are in place," he noted. RAH plans to centralize the CRJ maintenance in one of the existing hangars.
RAH took delivery of four Embraer 170s during the quarter, one being the 16th plane to fulfill its original deal with Delta. Three of the planes are unallocated, flying for RAH's existing customers on short-term assignments. Bedford said RAH hasn't committed those planes to a long-term deal, but he noted "it remains clear" the company would have to place them with one partner or another "in the not too distant future."
Profits at RAH during the third quarter grew 57% to $21 million from $14 million for the same time period in 2005. Operating income grew 51% to $56 million, while operating revenues rose 33% to $306 million. Cash balances fell from $204 million at the end of the second quarter to $170 million in the third quarter. Part of the reason for the dip is $40 million in pre-delivery deposits RAH paid to secure delivery positions of the 30 Embraer 175s slated for service with US Airways. -LR
