Republic Airways Holdings Inc fka RJETQ

[Cncyr726]

Right, I understand that. My point was that Bedford laid down the goals of the restructuring in his 70-page declaration to the bankruptcy court. The only time in that document that the Bombardier order was mentioned just acknowledges the fact that the order exists. That order is neither mentioned when he spells out the reasons that the company chose to pursue bankruptcy protection, nor when he explains what Republic hopes to accomplish with the restructuring. I've seen a lot written about the Bombardier order and how the company might want to get rid of it, but the record doesn't back that up. This is why I speculated that there might already be an agreement in place with Frontier to lease those jets from Republic, since Frontier was originally slated to use those jets.

The main issue in this bankruptcy seems to be renegotiating the code share agreements with the majors. The agreements that are in place are all fixed-fee agreements that were negotiated in a world where regional pilots didn't need as many hours to be licensed, and consequently weren't paid as much as the labor market now bears. With Republic's new pilot collective bargaining agreement, they just can't make money under those code share agreements.

In Bedford's bankruptcy declaration, he also spells out how American, Delta, and United have all demonstrated willingness to renegotiating the code sharing agreements to reflect the higher costs. However, each airline's willingness to do so was predicated on renegotiating all such agreements with code share partners and with other key stakeholders. In other words, they wouldn't be able to come to any new agreement until they worked through ALL the agreements. Delta was causing some trouble in this regard, but it seems to have been worked out. Bedford says in the declaration, "Republic believes that the protections afforded to debtors by chapter 11 will...afford Republic the necessary time to reach agreements with its key stakeholders."

Declaration of Bryan K. Bedford

I highly recommend reading this document if you're thinking about holding RJET shares through bankruptcy. I personally think this should be a relatively easy bankruptcy, and that buying shares at current prices and holding through the restructuring could be very lucrative and worth the risk.