The reason for the lawsuit were the “millions” of dollars in losses, which Delta suffered due to failed connection flights. A settlement has been agreed upon. The news came as a press release on Thursday, March 24, 2016. In it, Republic Airways Holdings, Inc. announced that the major American airline agreed to settle the lawsuit that accused Republic of breaching a contract to operate flights for Delta.
As part of the settlement, Delta will continue to contract flights to Republic, and also entered into a credit agreement, according to which the regional carrier will receive $75 million. It also gradually relieves it of the obligation to fly 50-seat jets, which are considered uneconomical by airlines.
“Immediate improvements in profitability and cash flow” will come as a result from this agreement, said from Republic. This happens at a moment when the regional carrier has just filed for bankruptcy restructuring. Let us just remind that their actions last month were not dictated by poor planning or failure in management but because the whole US air transportation segment, in which Republic operates, is slowly eroding.
The reached agreement with Delta Air Lines, Inc. is subject to court approval. The hearing will take place on April 14 in Bankruptcy Court, New York.