Delta Air Lines said it will settle a breach of contract lawsuit filed against Republic Airways.
Republic reduced the number of flights it operated for Delta and other big US carriers due to a pilot shortage which ultimately led to it filing for Chapter 11 bankruptcy last month.
Under the terms of the settlement, Delta will continue to contract Republic for regional flights and give the regional airline credit of $75 million.
This will ensure ‘immediate improvements in profitability and cash flow,’ for Republic, a statement said.
Delta also agreed to phase out the use of inefficient 50-seat regional aircraft.
When filing the complaint last year, Delta said it had lost ‘millions’ in revenue due to Republic Airways downsizing its operations.
Indianapolis-based Republic said it had about $3 billion in liabilities when it filed for bankruptcy protection.
The settlement is still subject to court approval.
