Two years ago, regional airlines warned that new regulations, higher costs of school, and lower salaries had led to a shortage of pilots for the companies that typically handle the smaller, regional routes for larger airlines. Now, one short-haul carrier says that lack of pilots is the reason it’s filed for bankruptcy.
Labor disputes and the loss of up to 40 pilots a month during contract negotiations led Republic Airways — which provides flights for American Airlines, Delta Air Lines, and United Continental — to file for bankruptcy Thursday, Forbes reports.
The Indianapolis-based airline, which operates a fleet of 240 small planes, was able to negotiate a new labor contract with employees in October, but that simply wasn’t enough.
“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 Bamford, CEO for Republic, said in a statement.
Bloomberg reports that the airline flew just 41 of its 45-seat jets at the end of 2015, parking as many as 80 of its other planes.
In 2015, Republic accounted for 16% of the 3,400 daily regional flights for American Airlines, while its Shuttle America service few about 15% of all Delta Connections.
“We filed with a strong core business and the liquidity resources necessary to carry out our restructuring plan,” Bedford said. “We believe this action will allow us to restore our airline and take it to new heights,” Bamford said in the statement.
Republic says it will continue flight operations during its bankruptcy and restricting plan.
The airline hopes to become “a single fleet, a single operating certificate carrier and one airline with a bright future,” Bamford says.