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Is Republic Airways A Buy With The Pilot Contract Approved?

Republic pilots after 8 years of waiting have finally got a new contract.

Wages are up 74% from the previous contract.

Company still faces a lot of hurdles ahead and the prospect of bankruptcy.

You probably have never seen a Republic Airways (NASDAQ:RJET) aircraft like the one pictured above flying around. Chances are high however that you have traveled on one of their aircraft. The company flies smaller aircraft for American Airlines (NASDAQ:AAL), Delta (NYSE:DAL) and United (NYSE:UAL) under contracted service. Yesterday the airlines pilots voted 76.4% for and 23.6% against a new pilot contract, with 90% of the company's 2100 pilots voting. The new contract has been in the works for 8 years and has caused the airline many problems as many pilots left and new ones could not be hired due to the airlines old contract providing pay levels significantly less than competitors. The pilot shortage has caused the airline to have to cancel many of its flights and caused Delta to recently sue Republic for breach of contract from the mass cancellations. With the new pilot contract signed are the company's labor woes and problems now behind it?

Restructuring

The company remains in a state of restructuring and the pilot contract is just one step of this. With the pilot contract however, Republic now has the best pay rates in the regional industry, 33% higher than its competitor Skywest, and should have less problems attracting and retaining new pilots. Over time however the pilot shortage the industry has faced as a whole is only expected to worsen. With major airlines...


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