Delta, Republic Agree Lawsuit Settlement

Delta Air Lines has agreed to settle a lawsuit that accused Republic Airways of breaching a contract to operate flights for Delta, Republic said in a news release.

As part of the agreement, Delta will continue to contract flights to Republic while entering into a credit agreement that gives the regional carrier USD$75 million and gradually relieves it of obligations to fly 50-seat aircraft, seen by airlines as uneconomical, according to the release.

Republic, which filed for bankruptcy restructuring last month, said the agreement will provide "immediate improvements in profitability and cash flow."

The agreement is subject to court approval, with a hearing in Bankruptcy Court in New York scheduled for April 14.