A US Bankruptcy court in New York state has approved a settlement reached between Republic Airlines (Indianapolis International) and Delta Air Lines (DL, Atlanta Hartsfield Jackson) as part of the former's ongoing Chapter 11 bankruptcy proceedings.
Delta sued Republic and its Shuttle America (Fort Wayne International) subsidiary for breach of contract concerning their Delta Connection commitments late last year. However, in March this year, the two sides managed to reach a settlement which was subsequently approved by Judge Sean Lane this week.
The deal will see Republic's 50-seater E145 fleet being phased out from Delta's service in favour of the higher capacity E170s and E175s. In tandem with this, Delta has agreed to increase reimbursement rates as per its Dual Class Agreement (EJET) and to provide compensation for certain slot lease agreements. Delta will also support Republic's restructuring programme through a USD75 million Debtor-In-Possession financing facility.
The sides have also agreed to modify their ground handling agreement and to settle all outstanding legal proceedings.
Judicial approval will become effective May 6.
