Republic Soars Most Ever as Pilot Deal Eases Bankruptcy Riskby
Accord now goes to ratification vote to union members
Analyst still sees need for concessions from airline partners
Republic Airways Holdings Inc. soared 82 percent, the most ever, after reaching a tentative agreement with its pilots union that eases concerns of a possible bankruptcy filing.
Terms of the three-year contract weren’t immediately disclosed in Monday’s statement from the airline and the International Brotherhood of Teamsters. The accord now goes to a ratification vote by Republic’s 2,100 pilots.
Republic said in August that it might be forced into court-supervised restructuring because the lack of a contract was contributing to a pilot shortage. The carrier has had to negotiate reductions in its flying for American, United and Delta airlines because of the labor dispute, which sent the stock plunging 80 percent this year through Friday.
“Bankruptcy is clearly off the table,” Helane Becker, a Cowen & Co. analyst, said Monday in a note to clients. “It is still unclear what the company will look like post a new pilot agreement as they probably still need concessions” from its airline partners.
Republic climbed to $5.29 at the close in New York, the biggest intraday increase since the company’s initial public offering in May 2004. Becker raised her rating on the shares to market perform from underperform.
“This consensual agreement respects the role our pilots play in our airline’s success and it puts them at the forefront of our industry,” Matt Koscal, Republic’s vice president of human resources, said in the statement.
Jim Clark, president of the Teamsters local, said the union’s executive board recommended that members approve the tentative contract.