Dallas, Texas 07/28/2015 (Financialstrend) – Pilot’s shortage could create more flights disruptions according to Republic Airways Holdings Inc. (NASDAQ:RJET). The news has not gone well with the street seen by the stock shedding more than half its value having already withdrawn its financial guidance.
Republic Airways Holdings Inc. (NASDAQ:RJET) has already cut its flying capacity by 4% as it continues with talks with American, United and Delta Airways about the possibility of reducing its flying more. The proposed changes could go through the first half of next year. American Airlines has already confirmed that it is trying to initiate minor schedule adjustments that would reduce the effects of the ongoing standoff on passengers.
Regional carriers like Republic Airways Holdings Inc. (NASDAQ:RJET) operate almost half of the nation’s domestic flights and are normally used to link small and mid-sized airports with hubs run by the big players. Republic Airways is finding it hard to staff flights as contract negotiations with the Teamsters continues to stall. Last year, pilots rejected a proposed pay package a problem that has since been exacerbated by ‘unreasonable’ union’s demand according to the airline.
Attrition Rates Increase
The uncertainty has seen the stock lose more than 50% in market value representing the biggest one-day drop since the company went public. Republic Airways Holdings Inc. (NASDAQ:RJET) problems have been compounded by the U.S Federal Aviation Administration boosting the required flight experience for first officers by six-fold to 1,500 hours. The airline is facing the highest rate of attrition level as it struggles to come up with a new labor contract that can provide competitive pay rates.
Republic Airways Holdings Inc. (NASDAQ:RJET) has in the recent months been forced to offer pilots extra pay for working on their days off as well as giving them bonuses as it tries to keep its planes flying. However without a pilot deal in place, employee’s unrest is expected to increase which could significantly affect the reliability of its services.
