group

Authors' Class Standing

Tavaris Jackson Owens, Senior Karim Guirguis, Senior

Lead Presenter's Name

Tavaris Jackson Owens

Faculty Mentor Name

Dr. Jayendra Gokhale

Abstract

This research will review the financial perspective of the company to determine how it arrived at its current position, and to determine what steps the airline should take next, so that in the near future it can deliver on its promise of restoring its financial position in the long run. As some background information, Republic Airways (RJET) is a regional airline. It operates through contracts under major carriers such as United, Delta and American Airlines. The Indianapolis based airline reached an agreement with its pilot union that was eight years in the making. The agreement’s purpose was to influence and encourage young pilots to work for Republic Airways in order to move up in ranks to the legacy airliners. Unfortunately, with the Federal Government increasing the number of flight hours from 250 to 1500 for incoming first officers, the company is still 300 pilots short of its hiring goal, leaving several jets unused creating more substantial losses for the company. Unable to follow its contractual obligations while making profits through the years, the company filed for Chapter 11 Bankruptcy on February 25, 2016. Republic Airways cited that pilot shortage and plunging revenues due to its aircraft groundings was the main causes of the bankruptcy. Republic hopes that it can renegotiate its contracts with major carriers and improve its financial position. While the company’s filling was surprising to most, it was not expected.

Did this research project receive funding support (Spark or Ignite Grants) from the Office of Undergraduate Research?

No

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What Factors contributed to Republic Airways filing for Bankruptcy?

This research will review the financial perspective of the company to determine how it arrived at its current position, and to determine what steps the airline should take next, so that in the near future it can deliver on its promise of restoring its financial position in the long run. As some background information, Republic Airways (RJET) is a regional airline. It operates through contracts under major carriers such as United, Delta and American Airlines. The Indianapolis based airline reached an agreement with its pilot union that was eight years in the making. The agreement’s purpose was to influence and encourage young pilots to work for Republic Airways in order to move up in ranks to the legacy airliners. Unfortunately, with the Federal Government increasing the number of flight hours from 250 to 1500 for incoming first officers, the company is still 300 pilots short of its hiring goal, leaving several jets unused creating more substantial losses for the company. Unable to follow its contractual obligations while making profits through the years, the company filed for Chapter 11 Bankruptcy on February 25, 2016. Republic Airways cited that pilot shortage and plunging revenues due to its aircraft groundings was the main causes of the bankruptcy. Republic hopes that it can renegotiate its contracts with major carriers and improve its financial position. While the company’s filling was surprising to most, it was not expected.

 

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