Bankruptcy Judge Sean Lane approved a deal between bankrupt Republic Airways Holdings Inc. and Delta Air Lines Inc. that will increase the regional carrier’s rates for ferrying Delta passengers and provide it with $75 million in financing, Bloomberg News reported yesterday. Judge Lane cleared the deal, which becomes effective on May 6, Republic said in a statement Tuesday. Delta had sued last year, accusing Republic of failing to complete some scheduled flights for regional unit Delta Connection. Republic, which ferries passengers from smaller cities to hub airports for Delta, American Airlines Group Inc., and United Continental Holdings Inc., filed for bankruptcy protection in February after struggling with a shortage of pilots. The carrier had agreed to a new contract with the workers late last year but was unable to negotiate new deals with the three bigger airlines to help cover the costs of higher pay, leading to the filing. The agreement announced Tuesday will allow Republic to stop flying 50-seat aircraft, which have fallen out of favor in the industry, and move exclusively to more profitable 70- to 88-seat aircraft. Delta will provide Republic with $75 million in debtor-in-possession financing, according to the statement.
