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Old 03-14-2005, 05:53 PM   #1  
Frisky Pilot
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Default Republic/Chautauqua New Deal With US Airways for E-170 and E-190

Republic Airways Holdings Announces Agreement with US Airways for the Commitment to Affirm Chautauqua Airlines Jet Service Agreement

INDIANAPOLIS--(BUSINESS WIRE)--March 14, 2005--

Deal Includes Potential New Jet Service Agreement for the Operation of Embraer 170 and 190 Aircraft, a Conditional Equity Commitment for $125

Million and up to $110 Million in Asset Related Financing
Republic Airways Holdings Inc. (NASDAQ/NM:RJET), announced today that along with its majority shareholder Wexford Capital LLC, it has reached agreement with US Airways Group, Inc. on an omnibus agreement which includes provisions for the affirmation of an amended Chautauqua Airlines Jet Service Agreement (JSA); a potential new jet service agreement with a Republic subsidiary for the operation of Embraer 170 and 190 aircraft; a conditional $125 million dollar equity commitment and up to $110 million in asset related financing.

Terms of the agreement are being filed by US Airways Group, Inc. with the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria, and US Airways will seek the court's approval at the next monthly omnibus hearing scheduled for its case, which is set for Thursday, March 31 at 9:30 a.m.

The omnibus agreement contains several provisions including:

-- The amendment of the existing Chautauqua JSA, including: a
reduction in compensation of approximately 3% on the existing
35 ERJ-145 fleet effective upon court approval of the
agreement; a one-time option for US Airways to remove 5
ERJ-145 aircraft from the existing Chautauqua JSA; under
certain specific conditions, a one time right to remove an
additional 10 ERJ-145 aircraft from the existing Chautauqua
JSA; and a term extension of one year, from March 2012 to
March 2013.

-- Prior to the effective date of US Airways' plan of
reorganization, but no later than December 31, 2005, US
Airways may exercise its option to obtain approximately $110
million through the sale and financing of certain assets
including ten EMB-170 aircraft currently owned by US Airways
and three EMB-170 aircraft currently committed for delivery to
US Airways, other EMB-170 related assets and a sale/leaseback
financing of 113 commuter slots at Washington Reagan National
Airport and 24 commuter slots at New York LaGuardia Airport.
In addition US Airways will assign to Republic the leases for
an additional 15 EMB-170 aircraft. Republic would also work
with US Airways to locate an Embraer heavy maintenance
facility at an agreed upon location within the US Airways
network. Republic would enter into a regional jet service
agreement that would continue the operation of the EMB-170
aircraft as US Airways Express. At any time during the term of
the slot sale/leaseback agreement, US Airways will have the
right to repurchase the LaGuardia and Washington slots at a
predetermined price after US Airways emerges from Chapter 11
bankruptcy protection.

-- A conditional commitment from Republic Airways Holdings and/or
Wexford Capital LLC to invest $125 million in new equity upon
US Airways' emergence from Chapter 11. The proposed $125
million equity investment is subject to a number of
conditions, including US Airways securing at least $350
million in new cash investment (including the $125 million
from Republic/Wexford and the $125 million previously secured
from Eastshore Aviation, LLC) and Republic's right to approve
US Airways' business plan.

-- After the effective date of US Airways' Chapter 11 plan of
reorganization, in the event that US Airways has not exercised
the slots sale/leaseback option, Republic will have an option
to purchase/assume leases of all 28 EMB-170 aircraft and to
fly them as US Airways Express.

-- In the event that US Airways draws down the equity commitment,
Republic, at the request of US Airways, may purchase, finance
and operate as US Airways Express an additional 22 Embraer 170
and 190 aircraft.

"Republic and our majority shareholder Wexford Capital are pleased to support US Airways in their restructuring efforts. The affirmation of our amended Chautauqua Airlines jet service agreement along with the potential development of a new jet service agreement to operate Embraer 170 and 190 aircraft under the US Airways Express brand is a very positive development for our employees and shareholders," said Bryan Bedford, chairman president and CEO of Republic Airways Holdings.

"We are very pleased to have secured the support of a second, well-regarded investor and airline partner to help us build and finance our plan of reorganization," said Bruce R. Lakefield, US Airways president and chief executive officer. "The Republic management team has a proven track record and we look forward to an expanded relationship."

Republic Airways Holdings, based in Indianapolis, Indiana is an airline holding company that operates Chautauqua Airlines, Inc. and Republic Airlines Inc. Its principal operating subsidiary, Chautauqua Airlines offers scheduled passenger service on more than 700 flights daily to 76 cities in 32 states, Canada and the Bahamas through code sharing agreements with four major U.S. airlines. All of its flights are operated under its major airline partner brand, such as AmericanConnection, Delta Connection, United Express and US Airways Express. The airline employs more than 2,600 aviation professionals.