Now that his company has joined the ranks of the major airlines with its takeover of Frontier and Midwest Airlines, an admission by Republic Airways CEO Bryan Bedford of a “jaundiced view” of the small regional jet market might not come as a surprise.
Republic Airways today said it will acquire 10 Embraer 190ARs from US Airways. The airline will apply the full balance of a $35 million loan from US Airways toward the purchase of the aircraft and assume the remaining debt on the aircraft. Republic expects four of the 99-seat jets to enter service in November and December in the company’s new Midwest Airlines system, where they would replace Boeing 717s.
Republic Airways, on July 31, completed its acquisition of Midwest Airlines, then won a bid last month for Frontier Airlines after Southwest Airlines withdrew when talks between the airlines’ pilots for a new labor deal stalled. Republic paid $6 million in cash and has issued a $25 million five-year note convertible to Republic stock at $10 a share for Midwest. It bid $108.75 million for Frontier.
Republic Airways stands to become the 11th largest airline in the U.S. if its plans to acquire Milwaukee-based Midwest Airlines and sponsor Frontier Airlines’ emergence from Chapter 11 bankruptcy meet with regulators’ approval. Republic, which now consists of Republic Airlines, Chautauqua Airlines and Shuttle America, already ranks as one of the regional airline industry’s largest groups, flying 212 regional jets for six mainline partners.
Republic Airlines injected another $2.5 million into its partnership with Hawaii’s Mokulele Airlines on May 1 and this month plans to send a fourth Embraer E170 to the islands as it stages a more serious effort to raise its profile in the market. This past March Republic demoted former Mokulele CEO Bill Boyer to head of sales and marketing and installed its own vice president for strategic alliances, Scott Durgin, as interim CEO.
Midwest Airlines will replace all but nine of its Boeing 717s with 12 Embraer E170s flown by Indianapolis-based Republic Airways as part of an effort to restructure its fleet and fend off bankruptcy. As part of the deal, Midwest announced that Republic flight crew would fly the 12 E170s as Midwest Connect, temporarily replacing Midwest Airlines Boeing 717 crew until they receive training on the Brazilian equipment.
Midwest Airlines will replace all but nine of its Boeing 717s with 12 Embraer 170s flown by Indianapolis-based Republic Airways as part of an effort to restructure its fleet and fend off bankruptcy. As part of the deal, Midwest announced that Republic flight crew would fly the 12 E170s as Midwest Connect, temporarily replacing Midwest Airlines Boeing 717 crew until they receive training on the Brazilian equipment.
Republic Airways CEO Bryan Bedford’s characterization of the Chautauqua Airlines pilots’ vote in favor of US Airways’ “Jets for Jobs” arrangement as “a day late and a dollar short” prompted Teamsters Local 747 representatives to mail strike ballots to the 700-strong pilot group. The union planned to count the ballots on June 20.
Embraer is here at Farnborough exhibiting a Legacy 600 demonstrator and mock-ups of its new Phenom 300 and Lineage 1000 business jets. While the 10- to
16-seat Legacy 600 is currently its only executive jet in service, the Brazilian manufacturer is preparing to have a family of six business aircraft by 2013. Income from this market is projected to increase from the current 16 percent of the group’s revenues to 25 percent in 2010.
US Airways’ decision to file for Chapter 11 bankruptcy last month officially placed the courts at the center of a restructuring exercise in which the development of the airline’s regional network has emerged as perhaps the most crucial component.