Republic Closer to Bankruptcy as Teamsters Ground Proposed Pilot Deal
Source: The Street
By Lou Whiteman
NEW YORK (The Deal) -- Republic Airways (RJET - Get Report) moved one step closer to a potential bankruptcy filing late Tuesday after national Teamsters officials backed a decision by local leaders not to send a proposed labor deal out to pilots for a vote.
Indianapolis-based Republic, which flies small jets for partners Delta Air Lines (DAL), United Continental (UAL) and American Airlines (AAL), in late August made what it called its "last, best and final offer" to try to resolve a long-running standoff with its pilots. Republic management, in a letter to pilots posted on the Internet, warned that the alternative to accepting the deal would be far worse.
"The other path is a non-consensual restructuring in which we no longer control our destiny," Republic wrote. "It is a difficult and unwelcome choice, but it is better than remaining stuck at this frustrating crossroads."
Local union officials, however, chose not to send the offer to members, despite its promise of higher wages and contained healthcare costs, in part because of language that would have handcuffed future union communications with its pilots. The group also complained that Republic failed to provide data to support its wage proposals and modified contract language that had previously been agreed to.
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