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Republic Pilots Union Expects New Contract to Survive Bankruptcy

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Republic Airways Holdings Inc. doesn’t plan to cut aviators’ jobs or seek to throw out their four-month-old contract in bankruptcy court, according to the pilots union.

A potential bankruptcy filing had been part of monthly discussions between leaders of Republic’s pilots union and airline executives, the International Brotherhood of Teamsters Local 357 executive board told members in a message on its website Friday. The posting came a day after Republic, which provides regional flights for American, Delta and United airlines, sought protection from creditors.

“While this news is disappointing, it is not at all surprising,” the union said. Republic has about 2,100 pilots. The airline didn’t immediately return requests for comment.

There is no plan to reduce the number of pilots, even as the airline seeks to drop Q400 turboprops and Embraer E145 aircraft from its fleet, the union’s posting said. A shortage of pilots that helped push Republic into bankruptcy court will ensure that natural attrition will protect workers from furlough, it said. Before the contract was approved last year, Republic was losing about 40 pilots a month while hiring 30, according to Evercore ISI.

Bankruptcy often is used to restructure union contracts to lower operating costs, yet Local 357 said it doesn’t expect major changes to the contract its members approved in October. The agreement, negotiated over eight years, provides for an average $50 million a year in improved compensation over its three-year term, including a ratification bonus.

’Final Arbiter’

While the company has “no plans to abrogate” the contract or make material changes to benefits, “it is important to note that the company is no longer the final arbiter when it comes to these decisions,” the union said. “A bankruptcy judge will ultimately make many of these determinations.”

The airline’s inability to secure contract adjustments with American, Delta and United to help cover the cost of the pilots’ accord was a factor leading to bankruptcy, Republic said in its court filing.

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