Republic Airways files Chapter 11 after a pilot shortage grounds its fleet

Republic Airways, an Indianapolis regional carrier feeding American Airlines, Delta and United, filed for Chapter 11 on February 25, 2016, in the Southern District of New York, listing $3.6 billion of assets and $3.0 billion of liabilities.

Chairman Bryan Bedford blamed the filing on 'loss of revenue during the past several quarters associated with grounding aircraft due to a lack of pilot resources.' A shortage of qualified pilots had forced the carrier to park planes it could not crew.

Republic said it had enough cash to keep flying and paying employees during the case, and that the process would let it restructure its finances and its contracts with the major airlines. It was the first U.S. airline Chapter 11 since American Airlines filed in 2011.

Republic listed $3.6 billion in assets and $3.0 billion in liabilities; grounded aircraft cut revenue, the first U.S. airline Chapter 11 since American in 2011.

A pilot shortage forced Republic to ground aircraft it could not crew.

Several quarters of lost revenue eroded cash flow and pushed it toward insolvency.

The bankruptcy was used to renegotiate contracts with the airlines it feeds.

A business that depends on a scarce talent pool needs a plan for when it dries up: Republic priced regional flights on stable pilot supply, and when the shortage hit, planes sat idle.

Republic emerged from Chapter 11 on April 30, 2017, as a privately held company after 14 months in bankruptcy, having restructured around a single operating certificate and a uniform Embraer jet fleet. The carrier kept flying throughout, and its 2016 case became a reference point for workforce shortages driving capital-structure decisions.