Aviation Republic Airways and Delta settle lawsuit By Robert Silk / March 25, 2016 Share 1 -- Republic Airways, the second-largest regional airline in the U.S., has reached a settlement agreement with Delta, both carriers have confirmed.The deal, related to an October lawsuit in which Delta accused Republic of not operating all of its contractually committed Delta Connection flights, comes one month after Republic filed for Chapter 11 bankruptcy restructuring.“The comprehensive deal we have reached today secures Delta as a long-term strategic partner, provides significant benefits to our airline, and will preserve schedule integrity and a high quality of service for Delta’s customers,” Republic CEO Bryan Bedford said in a statement. He also said that the deal is a significant step in achieving Republic’s restructuring goals. It must still be approved by Judge Sean Lane of the U.S. Bankruptcy Court of the Southern District of New York, who is scheduled to hear the settlement motion on April 14.In filing for bankruptcy last month, Republic cited a pilot shortage, driven by an eight-year labor dispute that ended in October and the overarching dearth of pilots coming through the U.S. training pipeline, as a major cause. The shortage forced Republic to reduce capacity by 11% during 2015 and was the driver of its inability to fly all of its routes. Suffering from pilot attrition, the airline reported that during the second quarter last year it idled 16 out of 41 50-seat Embraer 145 jets even though Delta extended its contract with Republic for 50-seat service last April.The settlement would amend Republic’s agreement with Delta to allow for a wind down in the regional carrier’s 50-seat service Delta Connection service, a move that should alleviate the pilot problem while improving Republic’s operating economics. It would also increase Delta’s reimbursement rates to Republic. Republic would continue to operate 30 two-class jets for Delta. Those jets have between 69 and 76 seats, according to SeatGuru.Additionally, Delta would provide Republic with $75 million in liquid financing to support the restructuring plan.This enhanced partnership agreement with Republic means together we’ll be better positioned to offer Delta customers with the reliable, consistent product they expect,” said Erik Snell, Delta’s vice president overseeing the Delta Connection brand.Republic also provides regional service for United Express and American Eagle.