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Republic stock plunges on possible flight disruptions

Republic Airways warned that its operation of regional flights for the nation’s biggest airlines could be disrupted by a pilot shortage and labor standoff. The company’s shares fell by half.

Republic disclosed late Friday that it is talking with American Airlines, United, Delta and US Airways about reducing its flying for those airlines through the first half of next year.

In midday trading Monday, shares of Republic Airways Holdings Inc. fell $4.40, or 51.8 percent, to $4.10.

Republic expects continued disruptions of flights because of a pilot shortage that it blames on federal rules raising training requirements for new pilots and increasing crew-rest hours.

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The company’s negotiations with the Teamsters, which represents its pilots, are at standoff despite the use of a federal mediator. Republic said the Teamsters demands are unreasonable, making it impossible for the company to predict when it might settle the dispute.

The Teamsters did not immediately return a call for comment.

The Indianapolis carrier rescinded all of its previous financial forecasts and hired Seabury Group advisers as it considers its strategic options.

The company operates Republic Airlines and Shuttle America, which operate regional flights using smaller aircraft for American Eagle, United Express, Delta Connection and US Airways Express. The big airlines also hire other regionals for the same work, including company-owned subsidiaries at American.

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Regional carriers operate about half the nation’s domestic flights, linking many small and mid-sized airports with the hubs run by the big airlines.

Several regional carriers have complained about a pilot shortage since the Federal Aviation Administration raised training requirements for new hires. Pilot unions say the regional airlines could end the shortage by increasing pay, which starts at less than $25,000 at some carriers.

In recent months, Republic has offered pilots extra pay for flying on their days off and extended bonuses for new hires. The Teamsters sued this month, charging that the company’s move to boost pay outside of the negotiations process violated federal law.


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