UPDATE 1-Republic Airways says lack of pilots to cut 2014 profit

Tue Feb 11, 2014 11:59am EST

Feb 11 (Reuters) - Republic Airways Holdings Inc, which provides regional flights for bigger airlines, said on Tuesday that pretax income would be reduced this year because a lack of qualified pilots forced it to pull planes from service.

Its stock dropped 8.4 percent.

The company, which owns regional carriers Chautauqua Airlines and Republic Airlines, said in a federal filing "the company is no longer seeking extensions for 27 of 41 Embraer planes." It cited a "significant reduction" in pilots who meet U.S. experience rules.

Republic added that it expected to take the 27 planes out of service this year, a move that will reduce pretax income between $18 million and $22 million. It did not give more financial details in the filing. Airline officials were not immediately available for comment.

The company also said it would create 750 fewer jobs because of the change.

U.S. Federal Aviation Administration rules that took effect last year require U.S. pilots to have 1,500 hours of flight time to operate commercial jets or cargo planes, up from 250 hours previously required for co-pilots.

Airlines also must comply with separate U.S. rules that took effect this year, requiring more rest for pilots. Industry observers said the rules were putting a strain on the supply of U.S. pilots as airlines expand to meet rising demand for travel.

Robert Mann, an aviation consultant in Port Washington, New York, said the beefed-up qualifications put regional carriers at a disadvantage versus the bigger airlines in attracting workers.

"There are a limited number of qualified applicants under the present limitation of 1,500 hours and those applicants will generally gravitate toward jobs at major carriers including cargo carriers as opposed to regionals," said Mann.

Because of the new rules, the shortage is especially acute for regionals, "where the pay is so poor by comparison," he added.

Republic stock was down 83 cents to $9.02. Other airlines shares also fell, with United Continental Holdings Inc down 2.4 percent to $44.04 and industry leader American Airlines Group Inc off 1.7 percent to $34.99.

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (4)
cessna wrote:
This is one of the most ridiculous claims I’ve ever heard from a publically traded company. Less than three years ago, Republic Airlines “acquired” two major carriers, Frontier and Midwest. Midwest at the time, was the based in Milwaukee and had hundreds of pilots with Major airline experience, well in excess of the commuter pilots currently employed by Republic. Instead of integrating these seasoned pilots, Republic drove them all off. Far less than 10% remain with the current company. Mr. Bedford, shame on you for allowing these lies into the public domain. Your shareholders should hold you accountable!

Feb 11, 2014 11:02pm EST  --  Report as abuse
cessna wrote:
This is one of the most ridiculous claims I’ve ever heard from a publically traded company. Less than three years ago, Republic Airlines “acquired” two major carriers, Frontier and Midwest. Midwest at the time, was the based in Milwaukee and had hundreds of pilots with Major airline experience, well in excess of the commuter pilots currently employed by Republic. Instead of integrating these seasoned pilots, Republic drove them all off. Far less than 10% remain with the current company. Mr. Bedford, shame on you for allowing these lies into the public domain. Your shareholders should hold you accountable!

Feb 11, 2014 11:02pm EST  --  Report as abuse
cessna wrote:
This is one of the most ridiculous claims I’ve ever heard from a publically traded company. Less than three years ago, Republic Airlines “acquired” two major carriers, Frontier and Midwest. Midwest at the time, was the based in Milwaukee and had hundreds of pilots with Major airline experience, well in excess of the commuter pilots currently employed by Republic. Instead of integrating these seasoned pilots, Republic drove them all off. Far less than 10% remain with the current company. Mr. Bedford, shame on you for allowing these lies into the public domain. Your shareholders should hold you accountable!

Feb 11, 2014 11:02pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.