Republic Airways Holdings has announced that it has agreed with United Air Lines Inc., one of its code-share partners, on a revised schedule for Republic to begin operating ERJ-170 aircraft for United. Under the terms of the recently concluded agreement, Republic expects to commence flying the first of a planned fleet of up to 23 ERJ-170s for United in October 2004. The 23 70-seat aircraft that Republic expects to operate is an increase from the 16 ERJ-170 aircraft originally contemplated to be operated for United. Of the 23 aircraft, 3 are options that Republic can place into service with United provided the aircraft can be delivered by June 30, 2005. The increase in the number of ERJ-170s will not result in an increase in the number of aircraft being flown for United. Bryan K. Bedford, Republic’s Chairman, Chief Executive Officer and President, commented: “We are changing the mix of aircraft that we operate for United from 50 to 70 seat aircraft.” Assuming Republic exercises the 3 ERJ-170 options, the increase in 70 seat aircraft will offset exactly a planned reduction of the ERJ-145 fleet from 16 to 9 aircraft.

Bedford continued, “We originally planned to begin flying these ERJ-170 aircraft for United as early as August through Republic Airline, our new operating subsidiary. This timetable was based on Republic Airline receiving its certification on a timely basis. The airline certification process, however, is lengthy and unpredictable and it is taking longer than anticipated. Therefore, to meet the needs of United as quickly as possible, we’ve decided to operate these aircraft initially through Chautauqua Airlines and we expect Chautauqua to receive the required aircraft certification in October.” Mr. Bedford added that Republic is pressing ahead with the certification process for Republic Airline and, when certificated, the ERJ-170s will be operated through this subsidiary.

In addition to the fleet changes identified above, United has also agreed to postpone from September until November 20, 2004 its ability to terminate the code-share agreement with Republic Airline, if Republic Airline or Chautauqua is unable to obtain certification to operate the ERJ-170s. Greg Taylor, Senior Vice President - Planning of United commented: “United is very pleased to have Republic Airways be a part of the United Express program and looks forward to seeing the first ERJ-170 take off for us in October.”

Robert “Hal” Cooper, Republic’s Executive Vice President and CFO, commented: “Although we will fly ERJ-170s for United a little later than anticipated, we believe that the short delay will have no material effect on our financial condition or results of operations. In fact, changing the mix of aircraft from 50 to 70 seats should result in a win - win situation for both Republic and United.”
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