Republic Airways Holdings Inc. (RJET) Rises on New Contract With Pilots
Shares of Indianapolis, Indiana, based Republic Airways Holdings Inc. (RJET) rose on Tuesday, against the backrop of a mixed day in stocks overall. Republic's stock was up 12.85%, rising 68 cents per share, to close at $5.97 on volume of 15,848,222 shares. The company announced that it reached a tentative agreement with its pilots union, reducing investor fears that the company may be heading into bankruptcy.
Founded in 1996, Republic Airways Holdings, Inc. operates as an airline holding company.
The agreement with the pilots union, the International Brotherhood of Teamsters Local 357, represents the contract with the company's 2,100 pilots covering the next three years. Investors responded positively to the news, since it was widely expected that the company might file for bankruptcy prior to reaching the agreement. The agreement seems likely to reduce that that chance, at least for now.
Republic is still dealing with a pilot shortage, and may have to negotiate for additional concessions with its business partner airlines. Meanwhile specific details of the agreement have yet to be released. The Pilot's union plans to hold a series of road shows and other forums to give its members a chance to review the tentative agreement and to ask questions. Ratification voting is scheduled to conclude in late October.
“This is a positive outcome,” said Matt Koscal, Republic vice president of human resources. “This consensual agreement respects the role our pilots play in our airline’s success and it puts them at the forefront of our industry. We are pleased that we could reach a consensual agreement with the leadership of Local 357 that allows us to make a significant investment in our Pilots and our future.”
In other news, Republic's stock was upgraded by Deutsche Bank to "buy" from "hold", and the firm boosted the company's price target to $8 from $5.
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