10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 000-49697

REPUBLIC AIRWAYS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

DELAWARE	06-1449146
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)

8909 Purdue Road, Suite 300, Indianapolis, Indiana 46268

(Address of principal executive offices) (Zip Code)

(317) 484-6000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_____________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one) 

 Large accelerated filer o   Accelerated filer x   Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)   rYes  xNo

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of August 03, 2007, the latest practicable date.

	Outstanding on
Class	August 03, 2007
Common Stock	41,450,007

TABLE OF CONTENTS

	Part I - Financial Information
Item 1.	Financial Statements:	3
	Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2007 and December 31, 2006.	3
	Condensed Consolidated Statements of Income (Unaudited) for the Three Months and Six Months Ended June 30, 2007 and 2006.	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2007 and 2006.	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
	Part II - Other Information
Item 1A.	Risk Factors	13
Item 4.	Submission of Matters to a Vote of the SecurityHolders	13
Item 6.	Exhibits	14
	Signatures	15
Exhibit 10.9 Agreement between Chautauqua Airlines, Inc. and the Flight Dispatchers in the employ of Chautauqua Airlines, Inc. as represented by Transport Workers Union of America, AFL-CIO, dated as of June 1, 2007.
Exhibit 10.39(s)*Amendment No. 19 to Purchase Agreement DCT-014/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of June 22, 2007.
Exhibit 10.40(k)*Amendment No. 11 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of May 29, 2007.
Exhibit 10.40(l)*Amendment No. 12 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of June 22, 2007.
Exhibit 31.1 Certification by Chief Executive Officer
Exhibit 31.2  Certification by Chief Financial Officer
Exhibit 32.1  Certification by Chief Executive Officer
Exhibit 32.2  Certification by Chief Financial Officer
*A request for confidential treatment was filed for certain portions of the indicated document. Confidential portions have been omitted and filed separately with the Commission as required by Rule 24b-2 of the Commission.

All other items of this report are inapplicable

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PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
	June 30,			December 31,
	2007			2006
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	234,390		$	195,528
Receivables—net of allowance for doubtful accounts of $347 and $340 respectively		22,912			19,639
Inventories—net		37,875			31,821
Prepaid expenses and other current assets		15,656			11,411
Restricted cash		1,183			1,238
Deferred income taxes		8,017			3,467
Total current assets		320,033			263,104
Aircraft and other equipment—net		2,027,570			1,889,717
Intangible and other assets		203,579			192,285
Goodwill		13,335			13,335
Total	$	2,564,517		$	2,358,441
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	96,475		$	86,688
Accounts payable		18,667			23,899
Accrued liabilities		95,776			92,458
Total current liabilities		210,918			203,045
Long-term debt—less current portion		1,594,775			1,482,115
Deferred credits and other non current liabilities		121,570			23,566
Deferred income taxes		170,615			140,886
Total liabilities		2,097,878			1,849,612
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding
Common stock, $.001 par value; one vote per share; 150,000,000 shares authorized; 43,444,027 and 42,708,743 shares issued and 41,444,027 and 42,708,743 shares outstanding, respectively		43			43
Additional paid-in capital		290,806			281,826
Warrants		—			8,574
Treasury stock, 2,000,000 shares, at cost		(41,000	)		—
Accumulated other comprehensive loss		(3,235	)		(3,877	)
Retained earnings		220,025			222,263
Total stockholders' equity		466,639			508,829
Total	$	2,564,517		$	2,358,441

See accompanying notes to condensed consolidated financial statements (unaudited).

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REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
	Three Months Ended						Six  Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
OPERATING REVENUES:
Passenger	$	316,485		$	279,430		$	600,887		$	527,606
Charter revenue and ground handling		985			1,165			4,120			5,606
Other		2,843			3,718			5,749			8,445
Total operating revenues		320,313			284,313			610,756			541,657
OPERATING EXPENSES:
Wages and benefits		54,756			43,595			105,498			83,740
Aircraft fuel		78,184			82,137			145,133			158,660
Landing fees		13,184			10,492			25,236			19,086
Aircraft and engine rent		30,297			24,394			57,331			44,746
Maintenance and repair		32,480			24,522			59,486			46,903
Insurance and taxes		4,603			4,978			8,649			9,270
Depreciation and amortization		26,158			22,080			50,668			43,498
Other		26,105			19,555			49,380			35,277
Total operating expenses		265,767			231,753			501,381			441,180
OPERATING INCOME		54,546			52,560			109,375			100,477
OTHER INCOME (EXPENSE):
Interest expense		(26,128	)		(21,961	)		(51,532	)		(43,830	)
Other income		3,136			2,648			5,922			4,614
Total other income (expense)		(22,992	)		(19,313	)		(45,610	)		(39,216	)
INCOME BEFORE INCOME TAXES		31,554			33,247			63,765			61,261
INCOME TAX EXPENSE		12,513			12,992			25,444			24,106
NET INCOME	$	19,041		$	20,255		$	38,321		$	37,155
NET INCOME PER COMMON SHARE	$	0.46		$	0.48		$	0.91		$	0.89
DILUTED NET INCOME PER COMMON SHARE	$	0.46		$	0.47		$	0.89		$	0.86

See accompanying notes to condensed consolidated financial statements (unaudited).

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REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
	Six Months Ended
	June 30,
	2007			2006
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	137,106		$	110,066
INVESTING ACTIVITIES:
Purchase of aircraft and other equipment		(28,588	)		(43,102	)
Proceeds from sale of spare aircraft equipment		7,797			3,555
Aircraft deposits and other		(23,270	)		(3,920	)
Aircraft deposits returned		25,820			13,171
NET CASH FROM INVESTING ACTIVITIES		(18,241	)		(30,296	)
FINANCING ACTIVITIES:
Payments on short/long-term debt		(43,874	)		(35,841	)
Proceeds from exercise of stock options		7,774			1,078
Payments of debt issue costs		(2,903	)		(2,497	)
Purchase of treasury stock		(41,000	)		—
NET CASH FROM FINANCING ACTIVITIES		(80,003	)		(37,260	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		38,862			42,510
CASH AND CASH EQUIVALENTS—Beginning of period		195,528			162,005
CASH AND CASH EQUIVALENTS—End of period	$	234,390		$	204,515
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST AND INCOME TAXES:
Interest paid	$	50,290		$	43,823
Income taxes paid		861			629
NON-CASH INVESTING & FINANCING TRANSACTIONS:
Aircraft, inventories, and other equipment purchased through financing arrangements from manufacturer		166,320			104,900
Refinancing aircraft debt from manufacturer to debt permanently financed		—			115,755
Parts, training and lease credits from aircraft manufacturer		(4,560	)		(5,292	)
Fair value of warrants surrendered by Delta Air Lines		49,103			—
Engine received and to be financed		3,281			—

See accompanying notes to condensed consolidated financial statements (unaudited).

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REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share amounts)

1. Basis of Presentation 

The unaudited condensed consolidated financial statements of Republic Airways Holdings Inc. and its subsidiaries (the “Company”) as of June 30, 2007 and December 31, 2006 and for the three and six months ended June 30, 2007 and 2006 included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The subsidiaries include Chautauqua Airlines, Inc. (“Chautauqua Airlines”), Republic Airline Inc. (“Republic Airline”) and Shuttle America Corporation (“Shuttle America”). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. The results of operations for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed March 15, 2007.

Revenue Recognition

Under the Company’s code-share agreements, the Company is reimbursed an amount per aircraft designed to compensate the Company for certain aircraft ownership costs. In accordance with Emerging Issues Task Force No. 01-08, Determining Whether an Arrangement Contains a Lease, the Company has concluded that a component of its revenue under the agreement discussed above is rental income, inasmuch as the agreement identifies the “right of use” of a specific type and number of aircraft over a stated period of time. The amounts deemed to be rental income during the three and six months ended June 30, 2007 and 2006 were $75,610 and $64,113, and $146,990 and $121,816, respectively, and have been included in passenger revenue in the Company’s condensed consolidated statements of income.

New Accounting Standards

In September 2006, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and requires expanded disclosures about fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. We have not yet completed our assessment of the impact of this statement on our consolidated financial statements.

In February 2007, the FASB released SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, a new standard that permits an entity to choose to measure many financial instruments and certain other items at fair value. The objective of this statement is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is effective in the first quarter of fiscal 2008. We have not yet completed our assessment of the impact of this statement on our consolidated financial statements.

2. Delta Air Lines Amendments

In March 2007, Chautauqua Airlines and Shuttle America amended their fixed-fee agreements with Delta Air Lines (“Delta”). On March 27, 2007 the United States Bankruptcy Court for the Southern District of New York approved the amended agreements. Key terms of the amended agreements include the removal of all 15 thirty-seven seat ERJ-135 aircraft beginning in September 2008 at a rate of 2 aircraft per month, and effective May 1, 2007, an approximate 3% permanent reduction of block hour fees charged on Chautauqua Airlines’ remaining 24 fifty seat ERJ-145 and Shuttle America's 16 seventy seat ERJ-170 aircraft. In return for these amended terms, Delta agreed to surrender its warrants for 3,435,000 shares of the Company’s common stock, and the Company was granted a pre-petitioned, unsecured, general claim in the amount of $91,000 in Delta's Chapter 11 bankruptcy case. In April 2007, the Company sold the $91,000 pre-petition claim to a third party for $44,590 in cash.

In March 2007, the Company recorded a deferred credit of $44,590, which represented the net realizable value of the pre-petition claim on the approval date by the Bankruptcy Court. In addition, the Company recorded a deferred gain on the surrender of the warrants from Delta of $42,735, which was net of the write-off of the previously reported unamortized deferred warrant charge of $6,369. Stockholders' equity was reduced by $46,767, net of tax. The deferred credits for the proceeds of the pre-petition claim and the gain on the surrender of the warrants totaling $87,325 will be amortized as an adjustment to revenue over the remaining life of the agreements with Delta.

3. Risk Management

Beginning in April 2004, in anticipation of financing the purchase of regional jet aircraft on firm order with the manufacturer, the Company entered into fourteen treasury lock agreements with notional amounts totaling $373,500 and a weighted average interest rate of 4.47% with expiration dates through June 2005. Management designated the treasury lock agreements as cash flow hedges of forecasted transactions. The treasury lock agreements were settled at each respective settlement date, which were the purchase dates of the respective aircraft. The Company settled all of the agreements during 2004 and 2005 and the net amount paid was $7,472, and was recorded in accumulated other comprehensive loss, net of tax. Amounts paid or received on the settlement date are reclassified to interest expense over the term of the respective aircraft debt. The Company reclassified $216 and $75, and $385 and $150 to interest expense during the three month and six month periods June 30, 2007 and 2006, respectively. The Company had an accumulated other comprehensive loss relating to treasury lock agreements as of June 30, 2007 and December 31, 2006 of $3,235 and $3,877.

4. Stock Compensation

The Company maintains stock-based compensation plans which allow for the issuance of nonqualified stock options to officers, other key employees of the Company, and to members of the Board of Directors. The Company accounts for stock compensation using the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (SFAS No. 123(R)).

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Employee Stock Options

In connection with employment agreements for certain key employees, the Company granted options to purchase shares of the Company's common stock with exercise prices ranging from $1.75 to $18.59. Certain stock options vest ratably over the term of the employment agreements (generally 48 months) and are exercisable for five years following the vesting dates. Additional options have been granted and these options vest ratably over periods ranging from 8 months to 48 months, and are exercisable until 10 years from the date of grant. During the first quarter of 2007, pursuant to certain amended employment agreements, 440,000 stock options were granted with an exercise price of $18.59 which vest ratably over 12 months beginning either July 31, 2007 or August 31, 2007.

The following table summarizes the activity under the Company's stock option plans for the six months ended June 30, 2007:

	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value In Thousands		Weighted Average Remaining Contractual Life
Outstanding at January 1, 2007		1,725,577	$	12.54
Granted		455,000		18.71
Exercised		697,651		11.14
Forfeited		49,793		13.53
Outstanding at June 30, 2007		1,433,133	$	15.15	$	7,458	8.3 years
Exercisable at June 30, 2007		696,325	$	13.14	$	5,021	7.5 years

Restricted Common Shares

During the six months ended June 30, 2007, pursuant to certain amended employment agreements, restricted shares were granted to purchase 37,633 shares of the Company’s common stock. The shares have a purchase price of $0.001 par value per share and vest ratably over 12 months beginning either July 31, 2007 or August 31, 2007. The fair value of all restricted shares granted was $700.

During the three and six months ended June 30, 2007, $776 ($466, net of tax) and $1,205 ($723, net of tax), respectively, was charged to expense for stock compensation. The total intrinsic value of options exercised during the six month period ended June 30, 2007 was $6,426. The Company has a policy of issuing new common shares to satisfy the exercise of stock options. As of June 30, 2007, there was $3,009 of total unrecognized pre-tax compensation cost related to non-vested share-based compensation arrangements that is expected to be recognized through 2010.

Non-employee Director Stock Options 

The Company has also granted options for non-employee directors under the 2002 Equity Incentive Plan at a price equal to the fair market value of the Common Stock on the date of the grant. Each non-employee director was automatically granted options to purchase shares of common stock in May 2004 on the day prior to commencement of the initial public offering. The options vest over a 3 year period with 1/24 of the shares vesting monthly for the first 12 months and 1/48 of the shares vesting monthly over the remaining 24 months. The non-employee directors are to receive 2,500 options on the first trading day after each annual meeting of stockholders at which he or she is re-elected as a non-employee director. These options vest ratably over 12 months of continuous service. The non-employee options are exercisable until 10 years from the date of grant. During the six months ended June 30, 2007, 15,000 stock options were granted to non-employee directors.

5. Net Income Per Common Share

Net income per common share is based on the weighted average number of shares outstanding during the period. The following is a reconciliation of the weighted average common shares for the basic and diluted per share computations:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Weighted-average common shares outstanding for basic net income available for common shareholders per share		41,319,327		41,941,377		41,969,262		41,889,127
Effect of dilutive employee stock options, restricted stock and warrants		388,298		1,336,093		1,065,161		1,259,759
Adjusted weighted-average common shares outstanding and assumed conversions for diluted net income available for common shareholders per share		41,707,625		43,277,470		43,034,423		43,148,886

There were no employee stock options, restricted stock and warrants for the three and six months ended June 30, 2007 and 2006 excluded in the calculation of diluted net income per share due to their anti-dilutive impact.

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6. Treasury Stock

In March 2007, the Company entered into an agreement with WexAir LLC, the Company's former majority stockholder, to purchase two million shares of its holdings in the Company’s common stock, par value $.001 per share, at a price of $20.50 per share, for total consideration of $41,000. The transaction was recorded as treasury stock on the Company’s consolidated balance sheet. Settlement of the transaction occurred on March 21, 2007.

7. Debt

During the six months ended June 30, 2007, the Company obtained 29 aircraft, eight of which were debt-financed and 21 leased. The debt was obtained from banks and the aircraft manufacturer for terms between 12 and 15 years at interest rates ranging from 6.59% to 7.18%. The total debt incurred for the eight aircraft was $166,320. 

The Company’s revolving credit agreement with a bank was amended during the three months ended March 31, 2007. Among the significant amendments, the term was extended to March 31, 2009, the revolving credit facility was reduced to $15,000 and a liquidity covenant was added. The Company’s revolving credit agreement contains restrictive covenants that require, among other things, that the Company maintain a certain fixed charge coverage ratio, a debt to earnings leverage ratio and a liquidity covenant. The Company was in compliance with the covenants at June 30, 2007. As of June 30, 2007 and December 31, 2006, the Company had no outstanding borrowings under this agreement with the bank.

8. Commitments and Contingencies

As of June 30, 2007, the Company has 32 ERJ-170/175 regional jets on firm order. The current total list price for these 32 regional jets is $992,000. The Company has a commitment to obtain financing for all of these aircraft. The Company also has a commitment to acquire eleven spare aircraft engines with a current list price totaling approximately $47,900. These commitments are subject to customary closing conditions.

During the six months ended June 30, 2007, the Company made aircraft deposits in accordance with the aircraft commitments of $23,270 The aircraft deposits are included in other assets. All payments were made from cash generated from operations.

In July 2006, the Company announced that it had reached an agreement to operate forty-four 50-seat regional jets for Continental Airlines, Inc. Twenty of the aircraft are ERJ-145 regional jets that will be transitioned from the Company’s current US Airways operations. The Company has firm commitments to lease 24 aircraft CRJ-200 regional jets, consistent with the terms of the Continental agreement. As of June 30, 2007, 22 CRJ-200 and 16 ERJ-145 regional jets were in operation for Continental. The remaining six aircraft are expected to be placed into service for Continental by September 2007 and will be operated for terms that vary from two to five years. Under certain conditions Continental may extend the term on the aircraft up to five additional years.

In January 2007, the Company and Frontier entered into an agreement whereby the Company will operate seventeen, 76-seat ERJ-170 regional jets. As of June 30, 2007, four of the ERJ-170 regional jets were in operation and the remaining 13 aircraft will be funded by deliveries from the manufacturer.

During the three months ended June 30, 2007, the Company entered into long-term maintenance agreements for engines and APU’s for the Company’s CRJ-200 regional jets. The term of the engine agreement is through February 2010 and the term of the APU agreement is through December 2012.

9. Income Taxes

In July 2006, the FASB issued Interpretation No. 48 Accounting for Uncertainty in Income Taxes - An Interpretation of FASB 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN 48, the impact of an uncertain income tax position on an income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006.

The Company adopted the provisions of FIN 48 on January 1, 2007. At December 31, 2006, the Company had $1,200 recorded for income tax contingencies for a probable loss for uncertain income tax positions. The total amount of unrecognized tax benefits as of the date of adoption was $3,500. As a result of the implementation of FIN 48, the Company recognized a $2,300 increase in the liability for the unrecognized tax benefits which was accounted for as a reduction to retained earnings and an increase to deferred tax liability. During the three and six months ended June 30, 2007, the Company recorded an additional $263 and $578, respectively, for unrecognized tax benefits.  

All of the unrecognized tax benefits at June 30, 2007, if recognized, would affect the effective tax rate.

The Company did not record interest or penalties during the years ended December 31, 2006, 2005 and 2004 or six months ended June 30, 2007. No interest and penalties were accrued for payment at December 31, 2006 and 2005 or June 30, 2007. The Company would recognize interest and penalties accrued related to unrecognized tax benefits in income tax expense if they occur. The adoption of FIN 48 on January 1, 2007, had no effect on the Company’s accrual for interest and penalties.

The Company is subject to taxation in the US and various states. The Company’s tax years 2000 to 2006 are subject to potential examination by the tax authorities.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements. The Company may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass the Company’s beliefs, expectations, hopes or intentions regarding future events. Words such as "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements. All forward-looking statements included in this release are made as of the date hereof and are based on information available to the Company as of such date. The Company assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Annual Report on Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated into this Quarterly Report on Form 10-Q by reference. As used herein, "unit cost" means operating cost per Available Seat Mile (ASM).

Overview

Republic Airways Holdings Inc., (“the Company”) is a Delaware holding company organized in 1996 that owns Chautauqua Airlines, Inc., (“Chautauqua Airlines”), Republic Airline Inc. (“Republic Airline”) and Shuttle America Corporation (“Shuttle America”). As of June 30, 2007, we offered scheduled passenger service on approximately 1,100 flights daily to 114 cities in 36 states, Canada, Jamaica and the Bahamas pursuant to code-share agreements with AMR Corp., the parent of American Airlines, Inc. (“American”), US Airways, Inc. (“US Airways”), Delta Air Lines, Inc. (“Delta”) and United Air Lines, Inc. (“United”), Continental Airlines, Inc. (“Continental”) and Frontier Airlines, Inc. (“Frontier”). In July 2006, we entered into a code-share agreement with Continental and we began flying for Continental in January 2007. Also, in January 2007, we entered into a code-share agreement with Frontier. We began flying for Frontier in March 2007. Currently, we provide our six partners with regional jet service, operating as AmericanConnection, US Airways Express, Delta Connection, United Express, Continental Express or Frontier, including service out of their hubs and focus cities in Atlanta, Boston, Denver, Chicago, Cincinnati, Columbus, Houston, Indianapolis, New York, Philadelphia, Pittsburgh, St. Louis and Washington, D.C. (Dulles and National).

We have established Chautauqua to operate regional jets having 50 or fewer seats; Shuttle America to operate regional jets having 70-seats; and Republic Airline to operate regional jets having more than 70-seats.

We have long-term, fixed-fee regional jet code-share agreements with each of our partners that are subject to our maintaining specified performance levels. Pursuant to these fixed-fee agreements, which provide for minimum aircraft utilization at fixed rates, we are authorized to use our partners' two-character flight designation codes to identify our flights and fares in our partners' computer reservation systems, to paint our aircraft in the style of our partners, to use their service marks and to market ourselves as a carrier for our partners. In addition, in connection with a marketing agreement among Delta, Continental and Northwest Airlines, certain of the routes that we fly using Delta's and Continental’s flight designator codes are also flown under Northwest's designator code. Our fixed-fee agreements eliminate our exposure to fluctuations in fuel prices, fare competition and passenger volumes. Our development of relationships with multiple major airlines has enabled us to reduce our dependence on any single airline, allocate our overhead more efficiently among our partners and reduce the cost of our services to our partners.

For the six months ended June 30, 2007, US Airways accounted for approximately 22% of the Company’s passenger revenues, Delta accounted for approximately 34%, American accounted for approximately 10%, United accounted for approximately 26%, Continental accounted for approximately 7% and Frontier accounted for 1%.

Certain Statistical Information

	Operating Expenses per ASM in cents
	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Wages and benefits		1.95		1.93		2.01		1.98
Aircraft fuel		2.79		3.64		2.76		3.76
Landing fees		0.47		0.46		0.48		0.45
Aircraft and engine rent		1.08		1.08		1.09		1.06
Maintenance and repair		1.16		1.09		1.13		1.11
Insurance and taxes		0.16		0.22		0.16		0.22
Depreciation and amortization		0.93		0.98		0.96		1.03
Other		0.93		0.87		0.94		0.84
Total operating expenses		9.49		10.27		9.53		10.45
Interest expense		0.93		0.97		0.98		1.04
Total operating expenses and interest expense		10.42		11.24		10.51		11.49
Total operating expenses and interest expense less fuel		7.63		7.60		7.75		7.73

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The following table sets forth the major operational statistics and the percentage-of-change for the periods identified below:

	Three Months Ended June 30,						Six Months Ended June 30,
	Increase/(Decrease)						Increase/(Decrease)
	2007	2007-2006			2006		2007	2007-2006			2006
Revenue passengers	4,134,981		24.2	%	3,328,129		7,385,277		25.5	%	5,883,377
Revenue passenger miles (000) (1)	2,193,603		26.4	%	1,735,977		3,904,301		25.5	%	3,110,267
Available seat miles  (000) (2)	2,801,158		24.1	%	2,257,596		5,253,942		24.4	%	4,222,798
Passenger load factor (3)	78.3	%	1.4	pp	76.9	%	74.3	%	0.6	pp	73.7	%
Cost per available seat mile (cents) (4)	10.42		(7.3	%)	11.24		10.51		(8.5	%)	11.49
Average price per gallon of fuel (5)	$2.42		7.6	%	$2.25		$2.22		1.0	%	$2.20
Fuel gallons consumed (6)	32,314,077		(11.5	%)	36,496,459		65,376,118		(9.5	%)	72,214,458
Block hours (7)	165,878		21.4	%	136,620		315,618		22.2	%	258,252
Average length of aircraft flight (miles)	522		1.2	%	516		521		0.2	%	520
Average daily utilization of each aircraft (hours) (8)	10.3		0.0	%	10.3		10.3		1.0	%	10.2
Actual aircraft in service at end of the period	204		22.9	%	166		204		22.9	%	166

(1) Revenue passenger miles are the number of scheduled miles flown by revenue passengers.

(2) Available seat miles is the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.

(3) Revenue passenger miles divided by available seat miles.

(4) Total operating and interest expenses divided by available seat miles.

(5) Cost of aircraft fuel in gallons, including fuel taxes and into-plane fees.

(6) Excludes miscellaneous fuel and fuel consumed for a portion of our United operations in 2007. United elected to provide fuel directly for certain locations beginning in January 2007. In addition, US Airways, Continental and Frontier elect to provide fuel directly.

(7) Hours from takeoff to landing, including taxi time.

(8) Average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival).

Results of Operations

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006 

Operating revenue in 2007 increased by 12.7%, or $36.0 million, to $320.3 million in 2007 compared to $284.3 million in 2006. The increase was due to fixed-fee revenue earned from 38 additional regional jets that were added to revenue service since June 30, 2006. Twenty-two were added for Continental, 11 were added for US Airways, four were added for Frontier and one was added for Delta.

Total operating and interest expenses increased by 15.0% or $38.2 million, to $291.9 million in 2007 compared to $253.7 million in 2006 due to the increase in flight operations. The unit cost on total operating and interest expenses, excluding fuel charges, remained unchanged at 7.6¢. Factors relating to the change in operating expenses are discussed below.

Wages and benefits increased by 25.6%, or $11.2 million, to $54.8 million for 2007 compared to $43.6 million for 2006. The increase was due mainly to an $8.0 million increase in flight crew and maintenance operations wage expense to support the increase in regional jet operations and a $2.4 million increase in related employee benefit costs resulting from the additional wage expense and increased costs for employee welfare programs.  We recorded stock based compensation expense of $0.8 million in 2007 compared to $0.4 million in 2006. The cost per available seat mile increased from 1.9¢ in 2006 to 2.0¢ in 2007.

Aircraft fuel expense decreased 4.8%, or $4.0 million, to $78.2 million for 2007 compared to $82.1 million for 2006 due to an 11% decrease in the in the amount of gallons consumed partially offset by a 7.6% increase in the average price per gallon from $2.25 in 2006 to $2.42 in 2007.  Beginning in January 2007, we did not record fuel expense and the related revenue for a portion of the United operations, due to United paying for fuel directly at certain airports.  We also do not pay for or record fuel expense and the related revenue for Continental, Frontier, or US Airways operations.  The unit cost decreased from 3.6¢ in 2006 to 2.8¢ in 2007.

Landing fees increased by 25.7%, or $2.7 million, to $13.2 million in 2007 compared to $10.5 million in 2006. The increase is due to a 16% increase in departures, combined with a heavier average landing weight per departure caused by the additional 70+ seat regional jets.  Our fixed-fee agreements provide for a direct reimbursement of landing fees.  The unit cost remained unchanged at 0.5¢.

Aircraft and engine rent increased by 24.2%, or $5.9 million, to $30.3 million in 2007 compared to $24.4 million in 2006 due mainly to a $7.3 million increase in aircraft rents on the additional 25 leased regional jets since June 2006 and leases on additional spare engines, partially offset by the purchase of 5 previously leased regional jets in the third quarter of 2006. The unit cost remained unchanged at 1.1¢.

Maintenance and repair expenses increased by 32.5%, or $8.0 million, to $32.5 million in 2007 compared to $24.5 million for 2006. The increase is due mainly to the increased level of operations for both 50-seat and 70-seat flying, increasing our payments for long-term maintenance agreements by $4.9 million.  Additionally, heavy maintenance, or c-check expenses increased by $0.8 million and damage related expenses, combined with out of warranty costs, increased $2.3 million. The unit cost increased from 1.1¢ in 2006 to 1.2¢ in 2007.

Insurance and taxes decreased 7.5% or $0.4 million to $4.6 million in 2007 compared to $5.0 million in 2006.  The increase in operations was more than offset by a decline in the average insurance rates year over year.  The unit cost remained unchanged in 2006 and in 2007 at 0.2¢.

Depreciation and amortization increased 18.5%, or $4.1 million, to $26.2 million in 2007 compared to $22.1 million in 2006 due mainly to $4.3 million of additional depreciation on 18 regional jet aircraft purchased since June 30, 2006.  The amortization for aircraft take-off and landing slots was $0.1 million in 2007 compared to $0.9 million in 2006. The cost per available seat mile decreased to 0.9¢ in 2007 compared to 1.0¢ in 2006.

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Other expenses increased 33.5%, or $6.5 million, to $26.1 million in 2007 from $19.6 million in 2006, due primarily to $6.2 million of increases in pilot training expenses, flight crew travel expenses, passenger catering costs, and administrative expenses to support the increased regional jet operations.  The unit cost remained unchanged at 0.9¢.

Interest expense increased 19.0% or $4.2 million, to $26.1 million in 2007 from $22.0 million in 2006 primarily due to interest on debt related to the purchase of 18 regional jet aircraft since June 30, 2006. The weighted average interest rate increased to 6.2% in 2007 from 6.1% in 2006. The unit cost decreased to 0.9¢ in 2007 compared to 1.0¢ in 2006.

We incurred income tax expense of $12.5 million during 2007, compared to $13.0 million in 2006. The effective tax rate for 2007 of 39.7% is higher than the statutory rate due to state income taxes.

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006 

Operating revenue in 2007 increased by 12.8%, or $69.1 million, to $610.8 million in 2007 compared to $541.7 million in 2006. The increase was due to fixed-fee revenue earned from 38 additional regional jets that were added to revenue service since June 30, 2006. Twenty-two were added for Continental, 11 were added for US Airways, four were added for Frontier and one was added for Delta.

Total operating and interest expenses increased by 14.0% or $67.9 million, to $552.9 million in 2007 compared to $485.0 million in 2006 due to the increase in flight operations. The unit cost on total operating and interest expenses, excluding fuel charges, increased 0.3% to 7.8¢ in 2007 from 7.7¢ in 2006. Factors relating to the change in operating expenses are discussed below.

Wages and benefits increased by 26.0%, or $21.8 million, to $105.5 million for 2007 compared to $83.7 million for 2006. The increase was due mainly to a $15.8 million increase in flight crew and maintenance operations wage expense to support the increase in regional jet operations and a $5.5 million increase in related employee benefit costs resulting from the additional wage expense and increased costs for employee welfare programs.  We recorded stock based compensation expense of $1.2 million in 2007 compared to $0.6 million in 2006.  The cost per available seat mile remained unchanged at 2.0¢.

Aircraft fuel expense decreased 8.5%, or $13.5 million, to $145.1 million for 2007 compared to $158.7 million for 2006 due to a 9% decrease in the amount of gallons consumed. The average price per gallon was $2.22 in 2007 compared to $2.20 in 2006. The unit cost decreased to 2.8¢ in 2007 compared to 3.8¢ in 2006.

Landing fees increased by 32.2%, or $6.2 million, to $25.2 million in 2007 compared to $19.1 million in 2006. The increase was due to 16% more departures and a higher average fee charged by the airports in 2007. The unit cost remained unchanged at 0.5¢.

Aircraft and engine rent increased by 28.1%, or $12.6 million, to $57.3 million in 2007 compared to $44.7 million in 2006 due mainly to a $15.8 million increase in aircraft rents on the additional 25 leased regional jets since June 2006 and leases on additional spare engines, partially offset by the purchase of 5 previously leased regional jets in the third quarter of 2006.  The unit cost remained unchanged at 1.1¢.

Maintenance and repair expenses increased by 26.8%, or $12.6 million, to $59.5 million in 2007 compared to $46.9 million for 2006. The increase is due mainly to the increased level of operations for both 50-seat and 70-seat flying, increasing our payments for long-term maintenance agreements by $5.9 million  Additionally, heavy maintenance, or c-check expenses increased by $1.9 million and damage related expenses, combined with out of warranty costs, increased $4.4 million.  The unit cost remained unchanged at 1.1¢.

Insurance and taxes decreased 6.7%, or $0.6 million to $8.6 million in 2007 compared to $9.3 million in 2006.  The increase in operations was more than offset by a decline in the average insurance rates year over year.  The unit cost remained unchanged at 0.2¢.

Depreciation and amortization increased 16.5%, or $7.2 million, to $50.7 million in 2007 compared to $43.5 million in 2006 due mainly to $7.5 million of additional depreciation on 18 regional jet aircraft purchased since June 30, 2006. The amortization for aircraft take-off and landing slots was $0.2 million in 2007 compared to $1.8 million in 2006.  The cost per available seat mile remained unchanged at 1.0¢.

Other expenses increased 40.0%, or $14.1 million, to $49.4 million in 2007 from $35.3 million in 2006, due primarily to $12.3 million of increases in pilot training expenses, flight crew travel expenses, passenger catering costs, and administrative expenses to support the increased regional jet operations. The unit cost increased to 0.9¢ in 2007 compared to 0.8¢ in 2006.

Interest expense increased 17.6% or $7.7 million, to $51.5 million in 2007 from $43.8 million in 2006 primarily due to interest on debt related to the purchase of 18 additional regional jet aircraft since June 30, 2006. The weighted average interest rate remained unchanged at 6.1%.  The unit cost remained unchanged at 1.0¢.

We incurred income tax expense of $25.4 million during 2007, compared to $24.1 million in 2006. The effective tax rate for 2007 of 39.9% is higher than the statutory rate due to state income taxes.

Liquidity and Capital Resources

Historically, the Company has used internally generated funds, third-party financing and funds generated from common stock offerings to meet its working capital and capital expenditure requirements. As of June 30, 2007, the Company had $234.4 million in cash and a working capital surplus of $109.1 million.

During the six months ended June 30, 2007, the Company obtained 29 aircraft, eight of which were debt-financed and 21 leased. The total debt incurred for the eight purchased aircraft was $166.3 million.

Net cash from operating activities was $137.1 million for the six months ended June 30, 2007. Net cash from operating activities consists primarily of net income of $38.3 million, the receipt of the Delta pre-petition claim of $44.6 million, adjustments to reconcile net income to net cash from operating activities consisting of depreciation and amortization of $50.7 million, the changes in deferred income taxes of $23.2 million, debt issuance costs and other amortization of $3.2 million, and the effects of changes in certain assets and liabilities consisting of increases in accounts receivable of $2.2 million, prepaid and other current assets of $4.2 million, inventory of $6.1 million, other assets of $16.0 million, offset by an increase in accounts payable and accrued liabilities of $5.6 million.

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Net cash used by investing activities was $(18.2) million for the six months ended June 30, 2007. The net cash used by investing activities consists of the down payments made to purchase eight aircraft, the purchase of aircraft related equipment and aircraft deposits for future deliveries.

Net cash used by financing activities was $(80.0) million for the six months ended June 30, 2007. The net cash used by financing activities included the Company’s purchase of its common stock for $41.0 million, scheduled debt payments and debt issuance costs payments of $46.8 million offset by $7.8 million of proceeds from the exercise of employee stock options.

The Company currently anticipates that its available cash resources, cash generated from operations and anticipated third-party financing arrangements will be sufficient to meet its anticipated working capital and capital expenditure requirements for at least the next 12 months.

Aircraft Leases and Other Off-Balance Sheet Arrangements

The Company has significant obligations for aircraft that are classified as operating leases, and are not reflected as liabilities on its balance sheet. These leases expire between 2009 and 2022. As of June 30, 2007, the Company’s total mandatory payments under operating leases aggregated approximately $1.3 billion and total minimum annual aircraft rental payments for the next 12 months under all non-cancelable operating leases is approximately $145.5 million.

Other non-cancelable operating leases consist of engines, terminal space, operating facilities and office equipment. The leases expire through 2023. As of June 30, 2007, the Company’s total mandatory payments under other non-cancelable operating leases aggregated approximately $111.8 million. Total minimum annual other rental payments for the next 12 months are approximately $10.8 million. 

Purchase Commitments

The Company has substantial commitments for capital expenditures, including the acquisition of new aircraft. The Company intends to finance these aircraft through long-term loans or lease arrangements, although there can be no assurance the Company will be able to do so.

As of June 30, 2007, the Company has a commitment to purchase 32 additional ERJ-170/175 regional jets. The current total list price of the 32 regional jets is approximately $992.0 million.   During the six months ended June 30, 2007, the Company made aircraft deposits in accordance with the aircraft commitments of $23.3 million. The Company also has a commitment to acquire 11 spare aircraft engines with a current list price of approximately $47.9 million. These commitments are subject to customary closing conditions.

In July 2006, the Company announced that it had reached an agreement to operate forty-four 50-seat regional jets for Continental Airlines, Inc. Twenty of the aircraft are ERJ-145 regional jets that will be transitioned from the Company’s current US Airways operations. The Company has firm commitments to lease 24 aircraft CRJ-200 regional jets, consistent with the terms of the Continental agreement. As of June 30, 2007, 22 CJR-200 and 16 ERJ-145 regional jets were in operation for Continental. The remaining six aircraft are expected to be placed into service for Continental by September 2007 and will be operated for terms that vary from two to five years. Under certain conditions Continental may extend the term on the aircraft up to five additional years.

In January 2007, the Company and Frontier entered into an agreement whereby the Company will operate seventeen, 76-seat ERJ-170 regional jets. As of June 30, 2007, four of the ERJ-170 regional jets were in operation and the remaining 13 aircraft will be funded by deliveries from the manufacturer.

During the three months ended June 30, 2007, the Company entered into long-term maintenance agreements for engines and APU’s for the Company’s CRJ-200 regional jets. The term of the engine agreement is through February 2010 and the term of the APU agreement is through December 2012.

The Company’s commercial commitments at June 30, 2007 include letters of credit totaling $11.9 million expiring within one year.

The Company anticipates cash payments for interest for the year ended 2007 to be approximately $106.3 million, and the Company does not anticipate significant tax payments in 2007.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

Interest Rates

The Company’s earnings are affected by changes in interest rates due to amount of cash and securities held. At June 30, 2007 and December 31, 2006 all of the Company’s long-term debt was fixed rate debt. We anticipate that additional debt will be at fixed rates.

Item 4: Controls and Procedures

The Company maintains “disclosure controls and procedures”, as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, the Company’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and the Company’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were reasonably designed to ensure that material information is made known to them by others within the Company during the period in which this report was being prepared.

There have been no significant changes in the Company’s internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

-12-

Part II. OTHER INFORMATION

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006 (the “10-K”) and Part II, "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (the "10-Q"), which could materially affect our business, financial condition or future results. The risks described in our 10-K and 10-Q are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 4. Submission of Matters to a Vote of Security Holders

At the Company’s Annual Meeting of Stockholders held on June 6, 2007, three proposals were voted upon by the Company’s stockholders. A description of the proposals and a tabulation of the votes follows:

1. To elect seven directors to hold office until the 2008 Annual Meeting of Stockholders and until their respective successors shall have been duly elected and qualified. All seven nominees were elected:

	For Nominee	Authority Withheld    From Nominee
Bryan K. Bedford	33,902,769	1,529,876
Lawrence J. Cohen	33,474,996	1,957,649
Joseph M. Jacobs	29,505,225	5,927,420
Douglas J. Lambert	33,752,836	1,679,809
Mark E. Landesman	34,431,570	1,001,075
Jay L. Maymudes	29,096,977	6,335,668
Mark L. Plaumann	31,495,242	3,937,403

2.           To approve the Republic Airways Holdings Inc. 2007 Equity Incentive Plan. The Republic Airways Holdings Inc. 2007 Equity Incentive Plan was approved:

For	Against	Abstain
17,408,964	15,259,695	8,712

3.           To approve an Amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 75,000,000 to 150,000,000. The Amendment to the Company’s Amended and Restated Certificate of Incorporation was approved:

For	Against	Abstain
28,516,164	6,905,209	11,269

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Item 6.
	Exhibits

(a)	Exhibits
10.9	Agreement between Chautauqua Airlines, Inc. and the Flight Dispatchers in the employ of Chautauqua Airlines, Inc. as represented by Transport Workers Union of America, AFL-CIO, dated as of June 1, 2007.
10.39(s)*	Amendment No. 19 to Purchase Agreement DCT-014/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of June 22, 2007.
10.40(k)*	Amendment No. 11 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of May 29, 2007.
10.40(l)*	Amendment No. 12 to Letter Agreement DCT-015/2004, by and between Embraer-Empresa Brasileira de Aeronautica S.A. and Republic Airline Inc., dated as of June 22, 2007.
31.1	Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
31.2	Certification by Robert H. Cooper, Executive Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
32.1	Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
32.2	Certification by Robert H. Cooper, Executive Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
*	A request for confidential treatment was filed for certain portions of the indicated document. Confidential portions have been omitted and filed separately with the Commission as required by Rule 24b-2 of the Commission.

-14-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	REPUBLIC AIRWAYS HOLDINGS INC.
	(Registrant)
Dated: August 03, 2007	By: /s/ Bryan K. Bedford
	Bryan K. Bedford
	Chairman of the Board, Chief Executive Officer and President
	(principal executive officer)
Dated: August 03, 2007	By: /s/ Robert H. Cooper
	Robert H. Cooper
	Executive Vice President and Chief Financial Officer
	(principal financial and accounting officer)

-15-

EX-10.9

 Exhibit 10.9

AGREEMENT

between

CHAUTAUQUA AIRLINES, INC.

and

THE FLIGHT DISPATCHERS

in the employ of

CHAUTAUQUA AIRLINES, INC.

as represented by

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO

June 1, 2007  -  June 1, 2012

Signed June 20, 2007

 TABLE OF CONTENTS

Section	Title	Page
1.	Recognition and Scope	4
2.	Definitions	7
3.	Compensation	9
4.	Work Schedules and Vacations	11
5.	Seniority	14
6.	Training	16
7.	Sick Leave	17
8.	Probation	18
9.	Leave of Absence	19
10.	Benefits	20
11.	Furlough and Recall	21
12.	Grievance Procedures	23
13.	System Board of Adjustment	26
14.	Union Security	30
15.	General	37
16.	Filling of Vacancies	40
17.	Vacation	42
18,	Duration	44

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AGREEMENT

between

CHAUTAUQUA AIRLINES

and

FLIGHT DISPATCHERS

in the employ of

CHAUTAUQUA AIRLINES

as represented by

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO

This Agreement is made and entered into in accordance with the provisions of Title II of the Railway Labor Act, as amended by and between CHAUTAUQUA AIRLINES, hereinafter known as the “Company”, and the FLIGHT DISPATCHERS in the service of CHAUTAUQUA AIRLINES, who are represented by the TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, hereinafter known as the “Union”.  In making this Agreement, the Company and the Union and the represented employees recognize their duty, individually and collectively, to comply and cooperate with the intent and purpose of this Agreement.

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SECTION 1

RECOGNITION AND SCOPE

A.  Recognition

The Union is recognized by the Company, in accordance with the National Mediation Board Certification Case R-6673 dated July 22, 1999, as the duly designated and authorized bargaining agent with respect to rates of pay, rules and working conditions of Flight Dispatchers in the employ of the Company.    “Company” includes Chautauqua Airlines, Inc., Republic Airlines, Inc., and Shuttle America, Inc., so long as they remain subsidiaries of Republic Airways Holdings, Inc.

B.  Scope

It is understood and agreed that all dispatch functions as detailed in Section II (Definitions) of this Agreement as well as, at a minimum, in the Chautauqua Airlines, General Policies Manual, Revision 14, dated 20Jul00, will be performed by the employees covered under this Agreement and in accordance with the terms and conditions of this Agreement. It is specifically understood that the scope of this work includes all FAR Part 121 flying by pilots on the Chautauqua Pilots System Seniority List, performed in accordance with the terms and conditions of their Agreement, with the exception of training and delivery flights.

.

1.   Flight Dispatchers performing dispatch functions for Chautauqua, Republic and Shuttle America are covered by the Agreement.

2.   Rates of pay and working conditions shall apply to such Flight Dispatchers as set forth in the collective bargaining agreement.

C.  Operational efficiency

The purpose of this Agreement is, in the mutual interest of the Company and of the employees, to provided for the operation of the services of the Company under methods which will further, to the fullest extent possible, the safety of air transportation, the efficiency of operation, and the continuation of the employment under conditions of reasonable hours, proper compensation, and reasonable working conditions.  It is recognized by this Agreement to be the duty of the Company and the employees, to cooperate fully both individually and collectively.

D.  Management Rights

The rights of ownership, the management of the Company and the direction of the working forces, including the right to hire, promote, demote, discharge and discipline for cause, transfer, layoff, and recall, the right to direct, plan and control operations, and to establish work schedules, and the right to determine the type of work to be performed, and the right to introduce new and improved methods, equipment or facilities, and to change existing methods, equipment and to determine the location of the Company’s facilities, and the right to lease facilities or equipment, and the right to establish or change Company rules, and in general to maintain discipline and efficiency, are vested exclusively with the Company so long as the exercise of such rights shall not be in conflict with the specific provisions of this agreement.

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E.  No strike/lockout

It is the intent of the parties of this Agreement that the procedure set forth herein and in the Railway Labor Act, as amended, for the resolution of disputes shall serve as a means of peaceable settlement of all disputes that may arise between them and that, therefore:

1. The Company shall neither cause nor permit any lockout of employees covered hereunder during the life of this Agreement; and

2. Neither the Union nor the employees covered hereunder, both individually and collectively, shall authorize, cause, sanction or engage in any strike against the Company, illegal picketing of the Company’s premises, slowdown, sit-down, walk-off, work stoppage, or curtailment of work of any kind, during the life of this Agreement.

F.  Supervisor qualification shifts/operational emergencies

It is understood and agreed that, in order to maintain their proficiency, qualified supervisors may be scheduled up to twenty (20) hours per year to perform the functions of a Flight Dispatcher.  Qualified supervisors may also perform the functions of a Flight Dispatcher in the event of an operational emergency.  Supervisors may not be used to avoid the payment of overtime.

It is further understood and agreed that qualified supervisors and other employees may assist in performing the functions of a Dispatch Coordinator necessary to complete a particular operation.  Supervisors may not be used to avoid the payment of overtime.

G.  Merger

In the event of a merger of airline operations between the Company and another air carrier, where the Company is the surviving entity, the following shall apply:

1. If the employees of both carriers are represented by the TWU, the seniority lists of the two groups shall be merged in accordance with the TWU/TWU AIRLINE MERGER POLICY.

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2. If the employees of the other air carrier are represented by a different union, or are unrepresented, then:

a. The seniority lists of the two groups shall be merged in accordance with Sections 3 and 13 of the Allegheny-Mohawk Labor Protective Provisions, and

b. The representative of the merged group shall be determined in accordance with NMB rules and procedures.

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SECTION 2

DEFINITIONS

1. The term “employee” shall mean an employee of Chautauqua Airlines, Inc., who is covered by this Agreement.

2. The term “Dispatch Coordinator,” as used herein, shall mean an employee selected by the Company who may perform the duties of a Flight Dispatcher and, in addition, is the lead Flight Dispatcher on Duty.  This position is responsible for coordinating the day to day activities of flight dispatch with the appropriate departments, government agencies, and other effected parties, as applicable.  This position will also have the responsibility of assuring that shift opening and closing procedures are completed, a shift turnover log is filled out and other responsibilities, as designated by the Company, are completed.

3. The term “Flight Dispatcher,” as used herein, shall mean an employee who has been designated as such by the Company and holds a currently effective Aircraft Dispatcher’s Certificate, who is regularly assigned to be responsible for operational control concerning the dispatch, release and movement of Company aircraft.

4. The term “Check Dispatcher,” as used herein, shall mean an employee who has been designated as such by the Company to perform FAA-mandated competency checks of the Flight Dispatchers.

5. The term “Relief Flight Dispatcher,” as used herein, shall mean a Flight Dispatcher who holds a permanent position and who is required to work other than the normal work cycle on a pre-planned basis to cover known open time and in order to provide qualified relief for Flight Dispatchers for vacation, qualification trips and training, and any other abnormality as agreed to by the Union on a non-precedent setting case by case basis.

6. The term “special assignment,” as used herein, shall mean the assignment of Flight Dispatcher to duties in lieu of regular Flight Dispatcher activities, but such assignment must be directly related to the dispatch function as outlined in Section Sixteen, B.

7. The term “work cycle,” as used herein, shall mean the basic rotation of work days and regular days off established for the quarterly work period, prior to overlay of such factors as vacations, qualification flights, training, relief schedules, etc.

8. The term “bid line” as used herein, shall mean the specific assignment of individual employees by calendar quarter to a work cycle, adjusted for such factors as vacations, qualification, training relief schedules, etc.  The bid lines shall be subject to quarterly bidding procedures.

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9. The term “Work Schedule,” as used herein, shall mean a cycle of workdays and days off, developed by the Company, to which an individual Flight Dispatcher is assigned.

10. Wherever the term “Flight Dispatcher” appears in this Agreement, the provisions of the paragraph in which it appears shall apply to Dispatch Coordinators, Flight Dispatchers, Check Dispatchers and Relief Flight Dispatchers, unless otherwise stated.

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SECTION 3

 COMPENSATION

A.   Minimum Rates of Pay per Hour

Longevity	June 1, 2007	June 1, 2008	June 1, 2009	June 1, 2010	June 1, 2011
Hire date	14.22	14.58	14.94	15.32	15.70
1 Year	14.88	15.26	15.64	16.03	16.43
2 Years	15.62	16.01	16.41	16.82	17.24
3 Years	16.23	16.63	17.05	17.47	17.91
4 Years	16.80	17.22	17.65	18.09	18.54
5 Years	17.41	17.85	18.29	18.75	19.22
6 Years	18.08	18.54	19.00	19.47	19.96
7 Years	18.92	19.39	19.88	20.37	20.88
8 Years	19.29	19.78	20.27	20.78	21.30
9 Years	19.69	20.18	20.69	21.20	21.73
10 Years	20.08	20.58	21.09	21.62	22.16
11 Years	20.60	21.12	21.65	22.19	22.74
12 Years		21.70	22.24	22.80	23.37
13 Years				23.42	24.01

Any Flight Dispatcher(s) currently on the Chautauqua Flight Dispatcher Seniority List whose pay falls below that of any newly-hired Flight Dispatcher(s) that is (are) brought in above minimum salary levels outlined above, shall have his/her pay rate adjusted to that of the newly hired Flight Dispatcher (s).

Employees with more than twenty (20) years of active service will receive premium pay as follows: $.50 per hour per year to a maximum of $2.50.

B. Overtime

1. Overtime will be at time and a half (1.5 times a Flight Dispatcher’s applicable hourly rate) when a Flight Dispatcher’s time worked (including vacation and sick time) is in excess of eighty (80) hours within a single pay period.

2. In the event that the Company is unable to cover an open shift with overtime, the Company reserves the right to assign the shift to the most junior, available, qualified Flight Dispatcher.

C. Holiday Pay 

1. Holidays eligible for holiday pay are those identified in the most current Republic Airways Holdings Associate Handbook.

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2. All Flight Dispatchers will receive eight (8) hours of straight time pay on the holidays listed in paragraph C1 of this Section.

3. Flight Dispatchers who work on the holidays designated above will, in addition to the pay provided for in paragraph C2, be compensated at the rate of 1.5 times their hourly rate for all hours worked on the holiday.

D. Override for Dispatch Coordinator

A Flight Dispatcher shall receive an override as follows  while working the Dispatch Coordinator position:

June 1, 2007	June 1, 2008	June 1, 2009	June 1, 2010	June 1, 2011
4.50	4.75	5.00	5.00	5.00

E.	On-The-Job Training Pay
	Flight Dispatchers who perform on-the-job training of new, unqualified Flight Dispatchers shall be compensated at a rate $2.00 per hour higher than their current salary while performing such training.
F.	Check Dispatcher Qualification
	Effective on the date of signing, a Flight Dispatcher qualified as a Check Dispatcher shall receive an override of $4.00 per hour while performing Flight Dispatcher competency checks.

G.   Discretionary Bonus Program

1.   Dispatchers will participate in the Company Discretionary Bonus Program.

2.   Should the Company not pay a discretionary bonus for any year during the term of this agreement, the Union may reopen the Agreement, on the subject of wages only, by giving notice to the Company within 90 days of the notice that bonuses will not be paid.

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SECTION 4

WORK SCHEDULES

A.         Work Schedules

1.   Work Schedules, designated as either fixed or relief, are based on days on and days off and are determined and planned by the Company in accordance with the provisions outlined below. Fixed work schedules, once established shall not be changed except as provided in this agreement.

2.   The Company and Union will establish a work schedule committee and meet to discuss the schedules before they are posted

3.   Work schedules for Chautauqua, Republic and Shuttle America will be separately maintained and awarded/assigned

B. Position Bidding

1.   Bidding will be separate for Dispatchers and Coordinators. This will include regular shift bids.

2.   Each group will follow the same work cycle and bidding procedures.

3.   Dispatchers and Coordinators will have a separate bid sheet and will be awarded positions based on seniority as reflected on the Chautauqua master seniority list.

4.   The coordinator position will be filled by those Dispatchers that bid on the position and who meet the qualifications and standards set by the Company.  If there are no qualified bidders the junior qualified Dispatcher will be assigned the position.

5.   Once assigned a Coordinator position the Dispatcher must remain in the position for a minimum of one year and provide 120 days notice of his/her desire to bid out of the position.

6.   If a Dispatcher is denied a Coordinator position, the Company must give the reason/s for such denial in writing.

C. Fixed Work Schedules

1. Work Cycles which are fixed in nature shall be composed of four (4) consecutive workdays followed by three (3) consecutive days off.  The Company may publish up to 10% of fixed work schedules with five consecutive workdays followed by two consecutive days off. . By mutual agreement with the Company each carrier’s Membership may elect to change their fixed work cycle by a vote at the request of the Union.

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2. Workdays within a four / three fixed work cycle shall be planned as ten (10) hour shifts (inclusive of shift overlap) and eight hour shifts within a five/two fixed work cycle.

3. For the purpose of bidding a fixed work cycle, a proposed Work Schedule shall be published a minimum of forty-five (45) days in advance of each semi-annual bid period.  Fixed work cycles will be in effect for 6 month periods.  The semi-annual bid periods will run April through September and October through March.

4. The awards of bid lines for the fixed Work cycles shall be posted a minimum of thirty (30) days before each respective six (6) month bid period.

D. Relief Work Schedules

 1.   Relief Work Schedules shall be composed of a mixture of variable days on and variable days off, but shall not exceed one-hundred and sixty (160) hours in a four week period and the Company shall strive to create as many 4/3 work cycles as possible.

 2.   In the event that operational requirements necessitate, the company may, with fourteen (14) days prior notice, add a bid line (or bid lines) that does not follow the basic work cycle outlined in Section 4 (A). The basic work cycle and schedule for this (these) line(s) shall be five (5) days of work, with no shift scheduled for more than eight hours (8), followed by two (2) days off.

 3.   For the purpose of bidding a relief Work Cycle, a proposed Work Schedule shall be published a minimum of fourteen (14) days in advance for the following two (2) calendar months.  Bid periods will begin at the start of February, April, June, August, October and December.

 4.   The awards of bid lines for the relief Work Cycles shall be posted a minimum of seven (7) days before the first day of the following two month bid period.

 E. Ratio of Fixed and Relief Lines

1.   A minimum of fifty (50) percent of the bid lines within the department shall be fixed lines as outlined in this Section.

2.   A maximum of fifty (50) percent of the bid lines within the department may be relief lines as outlined in this Section.

F. Schedule start time changes

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1.   Start times will be set + or – 1 (one) hour for the initial fixed work schedule bid. (e.g. a 4 am shift may start between 3 am and 5 am).  Start times are subject to adjustment every two months during the semi-annual bid period.

2.   Nothing in this Section will prevent the Company from changing a Flight Dispatcher’s Work Schedule to accommodate assigned classroom training or specific familiarization flights assigned by the Company.  There must be a minimum ten (10) hour break between work assignment and training and training and other assignments.

3.   Shift start times may be rotated as outlined in F. 1. above, but there shall not be more than one change creating two different shift start times within a five (5) day period.  The Company shall endeavor to publish consistent rotation of shift start times for the work schedules developed for bidding and the work schedules published.  Such rotation is subject to change by the Company in accordance with F. 1. above.

G. Schedule Evaluation Meeting

1.   A meeting between the Company and the Union shall be held annually, in order to evaluate the flexibility and feasibility of revising the items contained in Paragraphs A through D above.

2.   Any change to such items must be agreed to by both the Company and the Union and revised by Letter of Agreement.

H. Extraordinary Circumstances

If, due to an extraordinary event, changes are necessary to the fixed or relief work schedules that have already been awarded, the Company will meet with the Union to seek input as to how best implement a re-bid.

I.   Overtime Bidding

In awarding/assigning overtime the following will be considered:

Timing

Position status

Seniority

Equalization

** The Union and Company will meet to determine implementation of the overtime procedures

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SECTION 5

SENIORITY

A.  Chautauqua Flight Dispatcher Seniority List

There will be one Master Seniority list maintained that includes Chautauqua, Republic and Shuttle America Dispatchers. Such list shall be referred to as The Chautauqua Flight Dispatcher Seniority List. A copy of the Seniority List as agreed upon the Date of this signed agreement is attached as Appendix A.  Dispatch employees holding an Aircraft Dispatcher Certificate shall be placed on the Chautauqua Flight Dispatcher Seniority List in order of their hire date as a Flight Dispatcher.  Should two (2) or more employees have the same seniority date, they shall be placed on the Chautauqua Flight Dispatcher Seniority List in order of their birth date with the oldest being listed first.

B.  Accrual

Seniority shall continue to accrue until such time as the employee separates from the Company or as otherwise provided in this Agreement.

C.  Dispatch Management

Dispatch Management shall be listed on the Chautauqua Flight Dispatcher Seniority List in order of their hire date into a Flight Dispatcher position.

D.  Management Seniority

Managers shall continue to accrue seniority for a period of one year while in a managerial position. Managers on the seniority list as of the date of signing will continue to accrue seniority for a period of one year.  After the one year Managers shall retain their accrued seniority but shall no longer accrue additional seniority.

E.  Displacement Protection

No Flight Dispatcher on the Chautauqua Flight Dispatcher Seniority List shall be displaced or furloughed as the result of any manager or supervisor returning to a dispatch position.

F.  Managerial Exemption

Dispatch management shall not be entitled to utilize the provisions of Sections 12 or 13 of this Agreement.  This shall apply to both discipline and contract interpretation issues.

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G.  Posting

1.   The Company shall update and distribute the Chautauqua Flight Dispatcher Seniority List twice annually to the Union and post for all Flight Dispatchers by the 15^th of January and July of each year.

2.   The Company shall provide the Section Chair with the names, employee numbers and hire dates of each new Flight Dispatcher at the beginning of classroom training.

H.  Loss of Classification Seniority

1.   A Flight Dispatcher who voluntarily transfers to a position outside the Flight Dispatch or SOC department shall be removed from the seniority list and forfeit all seniority rights under this agreement.

2.   A Flight Dispatcher whose employment with the Company is permanently severed shall forfeit his seniority rights and that Flight Dispatcher’s name shall be removed from the seniority list.  Such circumstances include, but are not limited to, resignation, discharge for cause, retirement, failure to return to active service following a furlough or leave of absence, or other reasons provided for in this Agreement.

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SECTION 6

TRAINING

A.  Required Training

For the purposes of training only, a Flight Dispatcher working a fixed work cycle may be moved off his/her fixed rotation with a minimum of ten (10) days notice. . The Company is required to notify the employee as soon as the training is scheduled but no less than 10 (ten) days prior to the beginning of training. Training (including Competency Check) shall normally be scheduled on a dispatchers regular work schedule.  Flight Dispatchers in their grace month late may be assigned to attend training on their days off provided that such training shall not result in a Flight Dispatcher being scheduled for more than six (6) consecutive days. Pay for training accomplished on days off shall be compensated at the overtime rate.

B.  Route Familiarization Flights

Route familiarization (FAM Ride) shall normally be accomplished on scheduled workdays. A Dispatcher may elect to accomplish the FAM ride on days off and be compensated at the overtime rate. If the FAM ride has not been accomplished or scheduled by the 15^th day of the Month the dispatcher may be assigned to accomplish the FAM ride on a day off.   FAM rides will be listed as Must-Ride. In the unlikely event the FAM sequence is disrupted, the Dispatchers will be listed as a positive space/must ride passenger on the first available code share back to the point of origin within the guidelines of the code share partner travel agreement.  The Company shall provide hotel accommodations, when applicable, and paid expenses in accordance with Company Policy.

C.  Check Dispatchers

Flight Dispatchers assigned by the Company as a Check Dispatcher during a shift shall receive additional compensation as set forth in Section 3E of this Agreement.

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SECTION 7

SICK LEAVE

A.  Paid Sick Time

Flight Dispatchers shall receive paid sick time in accordance with the provisions of the current Republic Airways Associates Handbook in effect but no less than listed in this section.

B.  Sick Pay Bank

The maximum six-hundred sixty (660) hour Sick Pay Bank may be accrued pursuant to the table below.  The maximum sick bank is divided into accounts of three-hundred sixty (360) and three-hundred (300) hours.  Only after accruing the maximum three-hundred sixty hours (360) in the first account may an employee begin accruing toward the maximum three-hundred (300) hours in the second account.  The three-hundred (300) hour account may be used only for major, long-term illness or injury (i.e. longer than thirty (30) calendar days), and then only after the three-hundred sixty (360) hour regular account has been exhausted.  Upon retirement, employees are entitled to be paid for all accrued but unused Sick Pay Bank hours.

Years of Service	Pay Period Accrual	Annual Accrual
1st Year	.92 Hours	24 Hours
2nd Year	1.54 Hours	40 Hours
3rd Year	1.85 Hours	48 Hours
4th Year	2.15 Hours	56 Hours
5th Year	2.77 Hours	72 Hours

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SECTION 8

PROBATION

A.  Probation

An employee shall be on probation for his/her first six (6) months of active service with the Company as a Flight Dispatcher.

B.  Adjustments to Length

Time off due to sickness, injury, leave of absence, furlough or discipline will not be counted toward completion of the active service requirement for completion of an employee’s probationary period.

C.  Applicability

A Flight Dispatcher on probation shall not be entitled to utilize the grievance and/or System Board procedures of this Agreement for any disciplinary action, including discharge.  In any case, should a Flight Dispatcher on probation be afforded a grievance or System Board hearing, by law or otherwise, the Company shall not be required to prove “just cause” in any disciplinary or discharge grievance or System Board hearing.

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SECTION 9

LEAVE OF ABSENCE

A.  Leave of Absence

When requirements of service will permit, an employee hereunder may be granted a leave of absence in accordance with Company policy, as stated in the current Associates Handbook in effect.

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SECTION 10

BENEFITS

A.  Benefits

Flight Dispatchers shall be provided a minimum level of coverage as stated in the current Republic Airways Associates Handbook in effect.

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SECTION 11

FURLOUGH AND RECALL

A.  Involuntary Furlough

1. The Company shall notify the Union prior to official announcement and implementation of a furlough of Flight Dispatchers.

2. In the event of a furlough, Flight Dispatchers will be furloughed in inverse order of seniority from the Chautauqua Flight Dispatcher Seniority List.

3. The Company shall provide fifteen (15) days notification of furlough or pay in lieu thereof, except in case of emergency, act of God, or where there is no work because of a labor dispute, or other circumstances over which the Company has no control.

4. A furloughed Flight Dispatcher shall retain all seniority and longevity accrued prior to the time of furlough for a period not to exceed five (5) years.  He/She shall continue to accrue seniority but not longevity while on furlough.  At the time of furlough, Flight Dispatchers must provide the proper contact information to Flight Operations management.

5. A furloughed Flight Dispatcher shall retain medical coverage, as provided prior to furlough, for a period of sixty (60) days following the date of furlough.  Flight Dispatchers with less than 24 months of service at the time of furlough shall be responsible to pay the employer portion of the medical cost during the sixty (60) day period.

6. Flight Dispatchers on furlough for less than thirty (30) days shall continue to accrue longevity for benefit and pay purposes during the period on furlough.

7. Flight Dispatchers who remain on furlough at the end of five (5) years from the effective date of the furlough shall be released from employment with Chautauqua Airlines, and their names shall be deleted from the Chautauqua Flight Dispatcher Seniority List.

B.  Recall

1. The Company shall notify the Union prior to official announcement and implementation of a recall of Flight Dispatchers.

2. Flight Dispatchers shall be recalled in order of seniority from the Chautauqua Flight Dispatcher Seniority List.

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3. A written recall notice shall be sent to each Flight Dispatcher entitled to recall to the last address provided to the Company.  A Flight Dispatcher shall be given fifteen (15) days from his/her receipt of the notice of recall to return to duty, and must notify Flight Operations within ten (10) days from the date of receipt of the written recall notice of his/her response to the recall on the date specified in the recall notice.  Upon request, a recalled Flight Dispatcher shall have the fifteen (15) day period to report for duty extended for a period of up to an additional period of fifteen (15) days (i.e. to a maximum of 30 days from receipt of notice of recall) should the Flight Dispatcher need the additional time to relocate in order to resume his/her position as a Chautauqua Flight Dispatcher.

4. The Company shall make a reasonable effort to provide space available air transportation on Chautauqua aircraft to Flight Dispatchers being recalled.

5. If the Company is unable to contact a furloughed Flight Dispatcher for recall or if the Flight Dispatcher fails to notify the Company of his/her response by the deadline date, the Company will consider the Flight Dispatcher to have voluntarily resigned his/her employment with Chautauqua Airlines, Inc.

6. Flight Dispatchers on furlough shall retain recall rights for up to five  (5) years from the date of furlough and thereafter shall be released from full-time employment with Chautauqua Airlines, Inc.

C.           Severance

1. In the event of a reduction in force or when the Company decides to close a station, Flight Dispatchers at that station, with at least one (1) year of service as a Flight Dispatcher, who decide not to transfer to another station will receive eighty (80) hours of severance pay, at the employee’s current hourly rate.

2. In addition to the eighty (80) hours outlined in A. above, Flight Dispatchers shall receive additional hours of severance pay in accordance with the schedule below:

Yrs. of Service	Number of Additional Hrs. For Each Yr. of Service
For Years 1-10	Eight (8) Hours
For Years 11-15	Sixteen (16) Hours
For Years 15+	Twenty-Four (24) Hours

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SECTION 12

GRIEVANCE PROCEDURES

A. A grievance is defined as a claim or dispute by an employee or group of employees covered by this Agreement concerning the interpretation and/or application of the Agreement or disciplinary or discharge action taken against the employee.

B.         Grievances Other Than Those Involving Discipline and Discharge

Pre-grievance Discussion

Any employee covered by this Agreement who believes that he/she has a grievance concerning the meaning or application of the terms of the Agreement shall, within fifteen (15) days after the employee has, or reasonably should have had, knowledge of the matter giving rise to the grievance, request an informal discussion with the Dispatch Manager, or his/her designee to attempt to resolve the dispute. The employee shall present his/her grievance in person. The Dispatch Manager, or designee, shall meet with the employee within ten (10) days of receiving a request for a discussion. The employee is permitted to have present a Union representative of his/her choice at the meeting.

Step 1

Should the result of the pre-grievance discussion be unsatisfactory to the employee or should the discussion fail to take place within the ten day period, the employee may file a grievance in writing to the Director of System Operations Control. Such grievance shall be filed within ten (10) days of the pre-grievance discussion deadline. The written grievance shall include a statement of the facts of the grievance and list the section(s) of the Agreement that relate to the dispute. The Director of System Operations Control, or designee (a person other than the person who conducted the pre-grievance discussion), shall investigate the grievance and provide a written response within fifteen (15) days of receipt of the grievance. Should the employee find the decision of the Director of System Operations Control, or designee, unsatisfactory, the grievance may be appealed to Step 2. The appeal to Step 2 shall be made in writing within thirty (30) days of the employee's receipt of the Step 1 decision.

Step 2

Representatives for the Union and the Company shall meet once each calendar quarter to discuss and attempt to resolve all grievances appealed to Step 2. All

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resolutions of grievances at Step 2 shall be final and not subject to further appeal.  Should the Union and Company representatives be unable to reach agreement on a resolution to a grievance, the Union may appeal the grievance to the Chautauqua Dispatchers' System Board of Adjustment within sixty (60) days of the Step 2 meeting in accordance with the procedures set forth in Section 15 of the Agreement.

C.     Grievances Involving Discipline and Discharge

Step 1

All actions by the Company concerning the discipline or discharge of an employee covered by this Agreement shall be confirmed in writing to the employee with a copy of such written confirmation supplied to the Union. An employee may, within five (5) days of receipt of written confirmation of the discipline or discharge file an appeal of the Company's action with the Director of System Operations Control. The Director of System Operations Control, or designee, shall investigate the facts related to the discipline or discharge and render a written decision to the employee with a copy to the Union within fifteen (15) days of receipt of the appeal. Should the decision of the Director of System Operations Control, or designee, be unsatisfactory to the employee, the dispute may be appealed by the employee to Step 2. The appeal to Step 2 shall be made in writing within fifteen (15) days of the employee's receipt of the Step I decision.

Step 2

Representatives for the Union and the Company shall meet once each calendar quarter to discuss and attempt to resolve all grievances appealed to Step 2. All resolutions of grievances at Step 2 shall be final and not subject to further appeal. Should the Union and Company representatives be unable to reach agreement on a resolution to a grievance, the Union may appeal the grievance to the Chautauqua Dispatchers' System Board of Adjustment within sixty (60) days of the Step 2 meeting in accordance with the procedures set forth in Section 15 of the Agreement.

D. General

1. All written communication required by this Section shall be either delivered in person, with a signature and date confirming receipt, or shall be sent by certified mail with a return receipt.

2. The Company shall inform an employee in advance of any meeting with such employee that may result in discipline or discharge. Nothing herein shall be construed to restrict the right of an employee covered by this Agreement to have a Union Representative present during any meeting concerning discipline or discharge.

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3. All "days" as referred to in this Section are calendar days.

4. The time limits specified herein may be extended by mutual agreement between the Company and the Union.

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SECTION 13

SYSTEM BOARD OF ADJUSTMENT

A. Establishment and Purpose

In compliance with Section 204, Title 11, of the Railway Labor Act, as amended, there is hereby established a System Board of Adjustment for the purpose of adjusting and deciding disputes which may arise under the terms of this Agreement and which are properly submitted to it. This board shall be known as the Chautauqua Dispatchers' System Board of Adjustment (hereinafter referred to as the "Board").

B. Composition of the Board

1. The Board shall consist of one (1) member appointed by the Company and one (1) member appointed by the Union. A third member shall be added to the Board to serve as a neutral referee for the purpose of hearing an arbitration conducted pursuant to this Section. The Company and the Union shall advise each other in writing of the name, position, address and phone number of their initial appointments to the Board and any subsequent replacement appointments.

2. A Chairperson and Vice Chairperson of the Board will be selected from the Board members. The office of Chairperson shall alternate yearly between the Company Board member and the Union Board member, with the Chairperson position being held by the Union-appointed Board member in even-numbered years. Whenever the position of Chairperson is filled by a Company-appointed Board member, the position of Vice Chairperson shall be filled by the Union-appointed Board member and vice versa.

3. Whenever the Board is convened to hear an arbitration, the Company and Union may elect to appoint an alternate to serve as a Board member for the arbitration.

4. The appointment of a neutral referee shall be by mutual agreement between the parties from the panel described in paragraph G below or, if the parties are unable to reach agreement, by the alternate strike method whereby each party shall alternately strike the name of a panel member with the last remaining panel member being the neutral referee for the subject arbitration.

C. Jurisdiction of the Board

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The Board shall have jurisdiction over and shall consider all disputes properly submitted to it that are covered under the terms of this Agreement and that arise through grievance out of disputed interpretations or applications of this Agreement or that involve discipline or discharge. The jurisdiction shall not extend to proposed changes in hours of employment, rates of compensation, or working conditions nor shall the Board have the authority to alter the express terms of this Agreement.

D. Submission of Disputes

Disputes properly submitted to the Board shall be addressed to the Chairperson with copies to the Vice Chairperson and the Vice President-Flight Operations. The written appeal shall include:

• The grievant's name and address,

• A statement of the question at issue,

• A summary of the facts giving rise to the grievance,

• A statement setting forth the position of the grievant,

• A statement setting forth the position of the Company,

• The relief sought, and

• A copy of the Step 2 decision.

E. Convening the Board

The Board will docket a grievance for an arbitration at the earliest date of availability for the selected arbitrator but not earlier than thirty (30) days from the date of filing with the Board Chairperson unless the parties mutually agree to an earlier date. Arbitrations involving the discharge of an employee shall be docketed for hearing within ninety (90) days from the date of filing with the Board Chairperson unless the parties mutually agree to a later date.

F. Decisions of the Board

Decisions of the Board shall be by a majority vote and shall be final and binding on all parties.

G. Neutral Referees

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1. The Company and the Union shall select a panel of nine (9) neutral referees (arbitrators) who will serve as the third member of the Board for the purpose of conducting arbitrations. The selection of the panel shall be by mutual agreement between the Company and the Union. If the parties are unable, within sixty (60) days from the signing of this Agreement, to agree on a full panel, the Chairperson and Vice Chairperson of the Board shall mutually petition the National Mediation Board and/or the American Arbitration Association for the names of three arbitrators for each unfilled position on the panel. Upon receipt of the names, the Company and the Union shall attempt to mutually agree on a member from each group of three names. In the event the parties are unable to mutually agree within ten (10) business days of receipt of the names, each remaining open position shall be filled utilizing the alternate strike method with each group of three names. The last remaining name in each group shall fill the applicable open position on the panel.

2. Once the panel is established, the Company and the Union may mutually agree to change the membership of the panel at any time. Further, either the Company or the Union may unilaterally remove a member from the panel, provided the panel member is not serving as the neutral referee for an arbitration that has commenced. The Company or the Union may not exercise a unilateral removal more often than once in any six (6) month period.

H. Board Records

The Board shall maintain a complete record of all matters properly submitted to it and of all findings and decisions made by it. The aforementioned "complete record" does not necessarily include a stenographic transcript of all testimony of all witnesses who appear before the Board.

I. Hearings

1. Arbitration hearings shall be conducted in Indianapolis, Indiana unless the Company and the Union mutually agree to an alternate location.

2. The parties should attempt to agree on a statement of issue to present to the Board prior to the commencement of the hearing. Should they be unable to agree, both parties shall submit their version of a statement of issue and shall provide the other party no later than the day prior to the arbitration with a copy of the statement of issue they intend to submit to the Board.

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3. The parties should utilize joint exhibits whenever possible.

J. General

1. All members of the Board shall be free to discharge their duties in an independent manner and witnesses shall be free to testify without fear of recrimination by either of the parties.

2. Each party will assume the expenses of its Board member, or alternate, and its own witnesses.

3. When it is mutually agreed that a stenographic transcript is to be made of a hearing, one-half the costs shall be borne equally by each party. Should one of the parties have stenographic transcript made, that party shall pay the complete cost of the transcript. The other party shall, however, be provided with a copy of the transcript upon request by paying one-half of the costs.

4. Costs associated with a hearing (e.g. hearing room rental, the arbitrator's fees and expenses) shall be borne equally by the Company and the Union.

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SECTION 14

UNION SECURITY

A. Conditions

1.   Each employee now or hereafter employed as a Flight Dispatcher under this Agreement shall, as a condition of continued employment in such work, within sixty (60) days following the beginning of such employment or the effective date of this Section, whichever is later, become a member of, and thereaf­ter maintain membership in good standing (as herein defined) in the Union, except as provided otherwise herein. Such condition shall not apply with respect to any employee to whom such membership is not available upon the same terms and conditions as are generally applicable to any other member of his/her classification, or with respect to any employee to whom membership is denied or terminated for any reason other than the failure of the employee to tender the dues uniformly required of other members of his/her classification as a condition of acquiring or retaining membership.

2.   The condition of payment shall be met if the amount due is tendered to the Treasurer of the Union in person or is mailed to him/her within the prescribed time limits.

3.   For the purpose of this Section, "membership in good standing in the Union" shall consist of the payment by the employee, not later than the last day of the second following calendar month, of dues for each calendar month, initiation fees and assessments (not including fines and penalties), which are uniformly required of his/her classification as a condition of acquiring or retaining membership.

4.   The employee may have his/her monthly membership dues deducted from his/her earnings as provided in paragraph B1 of this Section, or he/she may pay his/her membership dues directly to the Union.  Initiation fees must be paid directly to the Union.

5.   Any employee who fails to voluntarily acquire and maintain membership in the Union shall not be required, as a condition of continued employment, to become a member of the Union as set out in this section.  Such employee shall be required, beginning sixty (60) says following the beginning of employment as a Flight Dispatcher or the effective date of this Section, whichever is later, to pay the Union each month a service charge equal to the Union’s regular and usual dues.  Any such employee who, subsequent to the effective date of this Section and during the term of this Agreement, joins the Union, must thereafter maintain his/her membership in the Union as provided in this Section.

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6.   Notwithstanding any other provisions contained in this Agreement, if any person is transferred or promoted to a position in which he/she is not covered by this Agreement, the provisions of this Section shall be inoperative as to such employee.  This paragraph shall not apply to an employee who is transferred or promoted on a "Temporary" or "Acting" basis.

7.   When any person holding seniority under this Agreement returns to a position covered by this Agreement from furlough, leave of absence, military leave, or a position in which he/she was not covered by this Agreement, the appropriate provisions of this Section shall, at time of return, apply in the same manner as if he/she had been actively employed in such position on the effective date of this Section.

8.   When an employee becomes delinquent by not meeting the requirements of this Section for "membership in good standing in the Union," or paragraph 5 above, the following procedure shall be observed.

(a) The Treasurer of the Union shall notify the employee by certified mail, return receipt requested, copy to the Company's Vice President-Flight Operations, that the employ­ee is delin­quent in the payment of dues as speci­fied herein and accordingly is subject to discharge as an employee of the Company.  Such letter shall also notify the employee that he/she make the required payments within thirty (30) calendar days of the date of mailing of the notice or be subject to discharge under the terms of this Agreement.  If the notice above is not received by the employee or is delayed in reaching such employee as the result of the employee's failure to keep both the Company and the Union informed as to his correct mailing address, no extension in the time limit specified in the original notice is required.

(b) Upon the expiration of the thirty (30) day period following the mailing of the notice in subsection 8(a) above, if the employee still remains delinquent the Treasurer of the Union may certify in writing to the Company's Vice President-Flight Operations that the employee has failed to make the required payment within the thirty (30) day grace period and is, therefore, to be discharged.

(c) Within fifteen (15) days after receipt by the Company of the Union's certified notice in subsection 8(b) above that the employee is to be discharged, the Company shall discharge the employee from its services for failure to pay or to tender dues or service charges as required under this Section.

9.  Appeal

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(a) If the employee discharged or to be discharged under this Section contends that he/she is not properly subject to discharge under the terms of this Section he/she may protest such action to the Chautauqua Flight Dispatcher's System Board of Adjustment provided that such protest in writing is mailed to the Board within (10) days after the date the employee is notified of such action.  This protest shall be submitted in duplicate to the Chairman of the System Board of Adjustment, with one copy to be mailed of the Vice President-Flight Operations, at such address as he/she may from time to time designate, and the other copy to be mailed in care of the Treasurer of the Union. The letter to the Chairman of the Board and both copies shall be sent by registered mail, return receipt requested. In the event no protest is so filed within the above time limits, the action will be considered as proper and will be final and binding upon all parties concerned. Within thirty (30) days of receipt of such a protest, the System Board of Adjust­ment will meet and consider the dispute. A representative of the Company, a representative of the Union, and the employee affected will be allowed to present to the Board all evidence and argument pertinent to the issue. Prior to the expiration of the workday following such Board meeting, the Board will issue either a majority decision or a notice of deadlock. If a majority decision is issued, it will be final and binding upon all parties concerned. If a deadlock is reached, and if at the time of the deadlock the Board cannot agree upon a neutral to sit with the Board to decide the dispute, the Board will immediately request the National Mediation Board to appoint a neutral, and the Board will meet with him/her at the earliest opportunity and decide the dispute. At the meeting the Board, sitting with a neutral, a representative of the Company, a representa­tive of the Union, and the employee affected, will be allowed to present to the Board all evidence and arguments pertinent to the issue. A majority decision of the Board, including the neutral, will be issued within thirty (30) days after such meeting and will be final and binding upon all parties concerned. The expenses and reasonable compensation of the neutral selected as provided herein shall be borne equally by the parties to this Agreement.

(b) The provisions of Section 12 shall not apply to disputes arising under this Section, and the provisions of this Agreement establishing a System Board of Adjustment shall apply to such disputes except as they are superseded by the above provisions relating to proce­dure for handling disputes.

(c) The effective date of an employee's discharge under this Section will be held in abeyance during the time that a dispute is unsettled as to whether or not the individual is properly employed under the provisions of the Section. If a decision is made that the employee should be discharged, the discharge shall be effected the day following the issuance of the decision. In the event a reduction in force occurs during such time as an employee's status is being protested under the provisions of this Section, such employees will considered as having seniority under this Agreement for purposes of effect­ing the reduction.

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 10. Time limits specified in this Section may be extended in individual cases only, and then only by written agreement between the Company and the Union.

 11. An employee discharged under the provisions of this Section shall be deemed to have been "discharged for just cause" within the meaning of the terms of this Agreement.

 12. All letters and notices provided for by this Section shall be sent by registered mail, return receipt requested.  Such letters and notices or copies sent to the Union shall be addressed to the Treasurer of the Union at such address as he/she may from time to time designate.  Such letters and notices or copies sent to the Company shall be addressed to the Company's Vice President-Flight Operations at such address as he/she may from time to time designate.

 13. Nothing in this Section shall require the Company to terminate the employment of any employee until the services of a qualified replace­ment are available except that the provisions of this para­graph will not permit the Company to retain an employee in its employment in excess of ninety (90) calendar days from the date of the Union's notice given pursuant to the paragraph A(8)(c) of this Section.

 14. For the purposes of this Section, when an employee is discharged or resigns and he/she returns more than twelve (12) months from the date of discharge or resignation, he/she will be considered as a new employee for purposes of this Agreement.

 15. Both the Union and the Company, or either of them, shall have the right at any time, to notify individual employees directly of any provisions of this Agreement.

 16. When new employees are hired or transferred into classifica­tions covered by this Agreement the Company will furnish monthly to the Union the names, classification, point of employment and payroll register number of such new employees.  The Company will furnish to the Union the names, present and previous classification, point of employment and payroll register number of all employees who may transfer out of classifications covered by this Agreement; in addition, the Company will furnish to the Union the names, location, payroll register number and status of employ­ees covered by this Agreement who terminate their payroll status for any reason, such listing will be furnished monthly.

B.  DUES CHECK - OFF

 1. During the life of this Agreement the Company will deduct from the pay of each Flight Dispatcher and remit to the Union monthly membership dues or service charges uniformly levied in accordance with the Railway Labor Act, as amended, and the constitution and bylaws of the Union, provided such Flight Dispatcher voluntarily executes the agreed form, which is hereinafter included in this Agreement to be known as "check-off form," which shall be prepared and furnished by the Union. The Company will not be required to deduct monthly membership dues from the pay of employees covered by this Agreement unless the Company has received a check-off form and has not received a notice of revocation thereof.

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ASSIGNMENT AND AUTHORIZATION

FOR CHECK-OFF UNION DUES

TO CHAUTAUQUA AIRLINES

I,  , hereby assign to the Transport Workers Union of America, AFL-CIO, Union dues from any wages earned or to be earned by me as your employee and authorize and direct you to deduct the sum of $___________ each month, which are the monthly membership dues (or such monthly membership dues as may hereinafter be established by the Union as dues for employees in my present or future classification under the Agreement upon notification to the Company by the Treasurer of the Union) from one pay check per month and to remit same to the Treasurer of the Union. This assignment and authorization may be revoked by me in writing after the expiration of one (1) year from this date, or upon the termination date of the applicable collective bargaining agreement between CHAUTAUQUA AIRLINES, and the Union in effect at the time this is signed, whichever occurs sooner. This authoriza­tion and direction is made subject to the provisions of the Railway Labor Act, as amended, and in accordance with existing Agreement between the Union and the Company.

Employee Payroll No.

Job Classification

Department Location

Date

Signature of Employee

Street Address

City and State

2.  When a Flight Dispatcher properly executes such check-off form, the Treasurer of the Union shall forward the original signed copy to the Company’s Manager - Payroll.  A check-off form must be completed in a legible manner or it will be returned to the Treasurer of the Union for correction.  Any notice of revocation as provided for in this Section or the Railway Labor Act, as amended, must be in writing, signed by the employee and two copies delivered by registered or certified mail, addressed to the Treasurer of the Union. Dues deductions will be continued until one (1) copy of such notice of revocation is received by the Company’s Manager - Payroll, from the Treasurer of the Union.  Check-off forms and notices received by the Company’s Manager - Payroll will be stamp-dated on the date received and will constitute notice to the Company on the date received and not when mailed.

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3. When a check-off form, as specified herein, is received by the Manager - Payroll fifteen (15) days or more before the issuing date of the first bi-weekly paycheck of the month, deductions will commence with such paycheck and continue thereafter until revoked or canceled as provided in this Section.  The Company will remit to the Union a check in payment of all dues collected as soon after the payday on which deductions were made, as practicable and within thirty (30) days.  The Company remit­tance of Union membership dues to the office of the Treasurer of the Union will be accompanied by two (2) copies of a list for each location which includes (1) names, (2) employee register numbers and (3) individual amounts deducted.

4. An employee who has executed a check-off form and who has been (1) transferred or promoted to a job not covered by this Agreement, (exclud­ing transfers or promotions on a "Temporary" or "Acting" basis), (2) who has taken a leave of absence without pay, (3) who quits or resigns from the Company, (4) who is laid off, or is (5) otherwise terminated from the employ of the Company, shall be deemed to have automatically revoked his/her assignment as of the date of such action and if he/she (1) transfers back or returns to a job covered by this Agreement, (2) returns from leave of absence, (3) is rehired, (4) is recalled or (5) re-employed, further deduc­tions of Union dues will be made only upon execution and receipt of another check-off form.

5. Collection of initiation fees, as well as any back dues or service charges owed at the time of starting deductions for an employee, collection of dues or service charges missed because the employee's earnings were not sufficient to cover the payment of dues for a particular pay period, and collection of dues or service charges missed because of accidental errors in the accounting procedure, will be the responsibili­ty of the Union and will not be the subject of payroll deduction.  It will be the Union's responsibility to verify apparent errors with the individual Union member before the representa­tive contacts the Company's Manager - Payroll.

6. Deductions of membership dues shall be made from one (1) paycheck each month provided there is a balance in the paycheck sufficient to cover the amount after all other deductions authorized by the employee or required by law have been justified.  In the event of termination of employment, there shall be no obligation of the Company to collect dues until all such other deductions (including money claims of the Company and the Credit Union) have been made, and such obligation to collect dues shall not extend beyond the pay period in which the employee's last day of work occurs.

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C.  General

1. This Section shall be in force only so long as the Union continues as the recognized representative of the employees under this Agreement.

2. The Company shall not be liable for any wages or other claims (including discharge) of any Flight Dispatcher which may result from action taken by the Company pursuant to a written order by an employee or an authorized Union representative under the terms of this Section.

3. As used herein, the word "Union" means Local 540, and "Trea­surer of the Union" means Treasurer of Local 540 where applicable.

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SECTON 15

GENERAL

A. The Company shall share the expense of providing each Flight Dispatcher with a bound, printed copy of this Agreement with the union.

B. All orders to and requests from a Flight Dispatcher involving transfers, promotions, demotions, layoff, re-employment, leaves of absence, or anything affecting his/her pay or status, shall be writing.

C. The Company will meet with the Union to review new technology that the Company may introduce that directly relates to the Flight Dispatcher position.

D. For the term of this Agreement, neither the Union nor any employees represented by the Union will authorize, support or engage in any strikes, work stoppages, slowdowns, job actions (including any sympathy strike or refusal to cross picket lines established by other unions) directed against the Company.  The Company reserves the right to discipline, up to and including discharge, any employee who violates any portion of this provision.  Further, the Company shall not cause, permit, or engage in any lockout of its Flight Dispatchers during the term of this Agreement.

E. Should any part hereof or any provisions herein contained be rendered invalid by reason of any existing or subsequently enacted legislation or act of any authorized agency of government or by any decree of a court of competent jurisdiction, such invalidation of such part or portion of this Agreement shall not invalidate the remaining portions thereof, and they shall remain in full force and effect.  Upon the request of either party hereto, subsequent to any such invalidation, the Company and the Union shall meet to discuss whether any modifications to this Agreement are necessary.

F. A Flight Dispatcher shall be permitted to attend any formal investigation of a Chautauqua aircraft incident or accident, as such terms are defined by the NTSB, in which a Flight Dispatcher is believed to be involved.

G. The Company shall provide space for a Union bulletin board in the general work area of the Flight Dispatchers.  Such bulletin board must be lockable and shall be for the exclusive use of the Union.  Materials posted shall be limited to official Union business and shall not contain any editorial material contrary to the interests of the Company.

H. Flight Dispatchers will be afforded travel benefits similar to those extended to other employee groups as established by company policy as may be amended by the Company from time-to-time.  Whenever the Company intends to modify its online employee travel policy it shall provide the Union thirty (30) days notice of the change.  The Union will have an opportunity to comment on the change and such comments will be considered by the Company.  The Company shall make available to Flight Dispatchers, each year, a list of carriers with which it has jumpseat agreements.

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I. Flight Dispatchers who at the time of retirement are covered by this Agreement shall receive retiree travel privileges in accordance with the Company’s Employee Handbook.

J. Flight Dispatchers who are furloughed/severed under the terms of this Agreement, as the result of a reduction in force will be granted, upon request, one (1) free round trip space available pass on Company aircraft for the purpose of seeking employment.  Such pass may be to any point on the Company’s system within the continental limits of the United States, to the extent permitted by law.

K. In accordance with applicable law, there shall be no discrimination against Flight Dispatchers covered by this Agreement because of race, color, creed, national origin, religion, sex, age, handicap or disability, or veteran status (including Vietnam era veteran and special disabled veteran status).

L. The Section Chairman or alternate designee performing official Union business shall be granted time off from work to a maximum aggregate of 96 unpaid hours per calendar year.  All time granted will be contingent upon there being adequate schedule coverage.

M. The Company will continue providing for direct deposit (electronic transfer) of paychecks.

N. Flight Dispatchers covered under this Agreement shall be given time off for jury duty as per applicable state law.  Time off will be without pay unless the applicable state law changes.

O. Flight Dispatchers shall be authorized to occupy cockpit jumpseats on Company aircraft in accordance with the provisions of the Company’s General Operations Manual.  Chautauqua Flight Dispatchers will have higher priority than pilots and dispatchers employed by other carriers.

P. The Company will continue to provide the Flight Dispatchers with free parking at their work location.

Q. Upon written request to the Dispatch Manager, a Flight Dispatcher’s complete personnel file will be made available to him/her during regular business hours.

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R. The Company will not use discipline letters more than two (2) years old during the grievance process involving a Flight Dispatcher.

S. The Company will allow an opportunity for input from the Union regarding functionality and ergonomics before introducing new equipment or new furniture into the Dispatch Office, or before the Company relocates the Dispatch Office.

T. No Flight Dispatcher covered under this Agreement shall be required to perform the duties of employees who are conducting a legal strike or other job action against the Company.

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SECTION 16

FILLING OF VACANCIES

 A. Filling of Vacant Work Schedules

1.   A Permanent Vacancy on a fixed Work Schedule shall be filled by offering the fixed line to the most senior Dispatcher below the Dispatcher leaving the originally awarded position.  The offer will continue down the list until a Dispatcher who wants the fixed line is assigned.  If the dispatcher picking up the line is a fixed line holder himself his line will be put onto relief lines.  Should there be no bids  to move to the open fixed Work Schedule, the Company may assign the most junior qualified Relief Dispatcher to the open Work Schedule.

2.   A vacancy that is expected to last less than sixty (60) days shall be considered a temporary vacancy and will be filled using Relief Dispatchers.

3.   If the company obtains FAA approval for a reduced training program (3 day program) the following procedures would apply:

a.   Dispatchers will have the opportunity to bid a Flight Dispatcher position with another Certificate holder as vacancies become available.

b.   Those who are awarded positions will retain their seniority and longevity.

c.   Dispatchers once awarded a position may not voluntarily bid to another Certificate holder for a period of 2 years.

4.   A furloughed Flight Dispatcher from one certificate holder may bid a vacant position in another certificate holder, and if there is no vacant position, may displace the most junior Flight Dispatcher, if any, in another certificate holder

 B. Filling of Special Assignments

1.   The opportunity to fill Special Assignment Work Schedules within a certificate holder shall be posted by the Company. The most senior qualified Flight Dispatchers who have indicated their desire for the Special Assignment shall be selected for the assignment.  Should no Flight Dispatcher express an interest for a particular Special Assignment and the Company deems it necessary to fill the Special Assignment, the most junior qualified Flight Dispatcher may be assigned.

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2.   The opportunity to fill a Special Assignment that is not certificate holder specific will be done by posting of the Assignment and the Dispatchers shall have the right to indicate that they would like to accept the Assignment.  The Company will have sole discretion to choose from the Dispatchers indicating a desire to fill the position.

3.   Special Assignments that are not certificate holder specific will be for durations of 60 days or less.

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SECTION 17

VACATION

1.   Flight Dispatchers shall receive vacation in accordance with company policy as it relates to hourly employees as amended but no less than the schedule below.

1-6 years of service	80 hours
7-20 years of service	120 hours*

*A Dispatcher who obtains his 7^th year anniversary from Jan1-June 30 will receive 120 hours for that year.  A Dispatcher who obtains his 7^th year anniversary July 1^st and after will receive 80 hours for that year.

2.   Vacations will be bid annually in October for the following year.  Each dispatcher will be required to bid all vacation time except for 40 hours which can be held for DAT vacation.  Awards will be awarded in seniority order, as reflected on the Chautauqua Flight Dispatcher Seniority List. Once vacations are awarded, they shall not be changed by the Company without the consent of the Dispatcher. Employees shall not be junior manned on their regularly scheduled days off and trip trades off immediately prior to, during or after their scheduled vacation.

3.   At the time vacations are bid, employees may defer forty (40) hours annually of his/her vacation entitlement to be utilized as single vacation days (“DAT”).  Such days must be utilized within the calendar year.  Requests to utilize DAT days must be made by the 10th day of the preceding month prior to the start of each 2 month relief bid period prior to the DAT/s to be taken and awarded no later than 20^th day of the month prior to the start of the relief bid period^. Request for DAT/s may be made at anytime after the closing of the DAT bid awards subject to management approval but shall not disrupt prior DAT awards. DAT awards will be subject to operational requirements and must be taken after use of regular vacation bids

4.   Up to forty (40) hours of vacation remaining but not yet used by the end of December may be cashed out, or, if the company was unable to grant due to operational constraints, carried over to be used in the first calendar quarter of the next calendar year.  All vacation time not used by the end of the first quarter of the following year will be cashed out.

5.   Flight Dispatchers and Coordinators will bid separately for vacations at each certificate holder.

6.   In the event, as a result of a voluntary transfer, a Dispatcher or Coordinator transfers to another certificate holder or bid location (Coordinator to dispatcher  

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or Dispatcher to Coordinator) his/her vacation previously bid may, at the Company’s discretion be granted. In the event the Company can not grant this request, the Employee shall be allowed to choose from the remaining weeks in the new bid location.

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SECTION 18

DURATION

This Agreement shall become effective upon signing and shall continue in full force and effect through June 1, 2012 and shall renew itself for yearly periods thereafter unless written notice of intended change is served in accordance with Section 6, Title I, of the Railway Labor Act, as amended, by either party hereto not sooner than one-hundred twenty (120) days but not less than sixty (60) days prior to June 1, 2012 or a subsequent anniversary of such date, unless the parties mutually agree otherwise.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement this 20th day of June 2007.

For the Union:	For the Company:
/s/ Michael Bakalo	/s/ Wayne Heller
Name: Michael Bakalo	Name: Wayne Heller
Title: International Administrative Vice President	Title: Chief Operating Officer
Transport Workers Union of America AFL/CIO	Republic Holdings, Inc.

/s/ Gary Shults	/s/ Ron Henson
Name: Gary Shults	Name: Ron Henson
Title: International Representative	Title: Vice President Labor Relations
Transport Workers Union of America AFL/CIO	Republic Holdings, Inc.

/s/ David Durkin	/s/ Paul Kinstedt
Name: David Durkin	Name: Paul Kinstedt
Title: President Local 540	Title: Vice President Systems Control
Transport Workers Union of America AFL/CIO	Republic Holdings, Inc.

/s/ Russell Steele	/s/ Ken Pack
Name: Russell Steele	Name: Ken Pack
Title: Section Chairman Local 540, Republic Holdings	Title: Manager Employee Service
Transport Workers Union of America AFL/CIO	Republic Holdings, Inc.

/s/ Randy Foster

Name: Randy Foster

Title: Shop Steward Local 540, Republic Holdings 

Transport Workers Union of America AFL/CIO

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LETTER OF AGREEMENT

between

CHAUTAUQUA AIRLINES, INC.

and

THE FLIGHT DISPATCHERS

in the service of

CHAUTAUQUA AIRLINES, INC.

as represented by

TRANSPORT WORKERS UNION

OF AMERICA, AFL-CIO

Signing Bonus

The Union and the Company agree to the following signing bonus program on a one time basis for Employees who are on the payroll the day of ratification of the agreement.

1.   Any Employee on the payroll who has completed one year of service will receive a signing bonus of $1,000.00. The bonus will be paid within 30 days of the date of ratification.

2.   Current Employees with less than one year of service will receive $1,000.00 signing bonus on the completion of one year of service. The signing bonus will be paid the full pay period following the one year anniversary.

The

AGREED AND ACCEPTED:

/s/ David Durkin	/s/ Paul Kinstedt
By: David Durkin	By: Paul Kinstedt
President	Vice President, Systems Control
Transport Workers Union, Local 540	Chautauqua Airlines, Inc.

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LETTER OF AGREEMENT

between

CHAUTAUQUA AIRLINES, INC.

and

THE FLIGHT DISPATCHERS

in the service of

CHAUTAUQUA AIRLINES, INC.

as represented by

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO

_________________________________________

Republic Airlines, Inc.

WHEREAS Section 1.B. of the Chautauqua Flight Dispatchers Agreement (“Agreement”) dated February 19, 2001 extends to the Flight Dispatchers covered by the Agreement the right to perform dispatch functions for FAR Part 121 flying by pilots on the Chautauqua Pilots System Seniority List; and

WHEREAS pilots on the Chautauqua Pilots System Seniority List will perform Part 121 flying for Republic Airlines, Inc. (“Republic”);

NOW, THEREFORE, the parties agree that the following terms shall apply:

1. Flight Dispatchers performing dispatch functions for Republic and Shuttle America will be covered by the Agreement.

2. The rates of pay and other terms and conditions of employment as set forth in the Agreement will apply to such Flight Dispatchers, under the following terms:

a. There will be one Master Seniority list maintained, that will cover Chautauqua, Republic and Shuttle America Dispatchers.  As per Section 5 of the Agreement it will be titled Chautauqua Flight Dispatcher Seniority List.

b. Chautauqua Flight Dispatchers with 2 or more years of dispatcher seniority will have the opportunity to bid a Flight Dispatcher position with Republic and Shuttle America as vacancies become available.  Those who are awarded positions with Republic or Shuttle will retain their seniority and longevity.

c. After a Flight Dispatcher has been awarded a bid from Chautauqua to Republic or Shuttle, the Flight Dispatcher may not voluntarily bid back to Chautauqua.  However, in the event of a furlough, a furloughed Flight Dispatcher from one company may bid a vacant position in the other company, and if there is no vacant position, may displace a junior Flight Dispatcher, if any, in the other company.

d. Work schedules and vacations for Chautauqua, Republic and Shuttle will be separately maintained and awarded/assigned.

3.   Paragraph 2.a and 2.b above shall no longer apply if the transfer provisions set out in Section 16.A.3.a-c of the Agreement are implemented.

AGREED AND ACCEPTED:

/s/ David Durkin	/s/ Paul Kinstedt
By: David Durkin	By: Paul Kinstedt
President	Vice President System Control
Transport Workers Union, Local 540	Chautauqua Airlines
Date: June 20, 2007	Date: June 20, 2007

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EX-10.39(S)

EXHIBIT 10.39(s)

CONFIDENTIAL TREATMENT

REQUESTED PURSUANT TO RULE 24b-2

Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been filed separately with the Securities and Exchange Commission.

AMENDMENT No. 19 TO PURCHASE AGREEMENT DCT-014/2004

This Amendment No. 19 to Purchase Agreement DCT-014/2004, dated as of June 22, 2007 (“Amendment No. 19”) relates to the Purchase Agreement DCT-014/2004 (the “Purchase Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”) and Republic Airline Inc. (“Buyer”) dated March 19, 2004 as amended from time to time (collectively referred to herein as “Agreement”). This Amendment No. 19 is between Embraer and Buyer, collectively referred to herein as the “Parties”.

This Amendment No. 19 sets forth additional agreements between Embraer and Buyer relative to the confirmation of 5 Option EMBRAER 170 Aircraft into 5 Firm Aircraft and changes on the Firm and Option Aircraft delivery schedules.

Except as otherwise provided for herein all terms of the Purchase Agreement shall remain in full force and effect. All capitalized terms used in this Amendment No. 19, which are not defined herein shall have the meaning given in the Purchase Agreement. In the event of any conflict between this Amendment No. 19 and the Purchase Agreement the terms, conditions and provisions of this Amendment No. 19 shall control.

WHEREAS, in connection with the Parties’ agreement above mentioned, the Parties have now agreed to amend the Purchase Agreement as provided for below:

NOW, THEREFORE, for good and valuable consideration which is hereby acknowledged Embraer and Buyer hereby agree as follows:

1.    Definitions:

 1.1 Article 1.4.1 of the Purchase Agreement shall be deleted and replaced by the following:

  “1.4.1 EMBRAER 170 Aircraft: shall mean the EMBRAER 170 LR aircraft (certification designation ERJ 170-100 LR) (the "EMBRAER 170 Aircraft") or, where there is more than one of such Aircraft, each of the EMBRAER 170 Aircraft, manufactured by Embraer for sale to Buyer pursuant to this Agreement according to the Preliminary Technical Description PTD 170 – Rev.4 dated as of May 2003 (which, although not attached hereto, is incorporated herein by reference) and the Aircraft configuration described in Attachment "A" for the Aircraft listed in the table containing the delivery schedule in Article 5.1 of the Purchase Agreement with the designations “E170” and  “***” (the “*** 170 Aircraft”) and “E170” and “***”(the “*** 170 Aircraft”)  and Attachment “A-3” for the Aircraft  listed in the table containing the delivery schedule in Article 5.1 of the Purchase Agreement with the designations “E170” and  “***” (the “*** 170 Aircraft”), and as may be amended from time to time as specified in Article 11.”

2.   Subject: Article 2 of the Purchase Agreement is hereby deleted and replaced as follows:

“Subject to the terms and conditions of this Agreement:

2.1 Embraer shall sell and deliver and Buyer shall purchase and take delivery of forty-eight (48) EMBRAER 170 Aircraft and forty-three (43) EMBRAER 175 Aircraft ***;

  2.2  Embraer shall provide to Buyer the Services and the Technical Publications; and

  2.3  Buyer shall have the option to purchase up to seventy-four (74) Option EMBRAER 170 Aircraft, in accordance with Article 23.”

3.  Optional Equipment change

3.1 All EMBRAER 175 Aircraft delivered or to be delivered and EMBRAER 170 Aircraft to be delivered to Buyer *** shall ***.

3.2 Section 2.2 of  Attachment “A”, Attachment “A-1” (*** 175) and Attachment “A-2” (*** 175) to Purchase Agreement shall be amended by inserting the following:

*** ***

3.4 As a result of the above changes, the *** as provided ***.

____________

***Confidential

4.   Price

  4.1   Article 3.1 of the Purchase Agreement is hereby deleted and replaced by the following:

“3.1 Buyer agrees to pay Embraer, subject to the terms and conditions of this Agreement, in United States dollars, the following amount per unit Basic Prices:

***	***	***
***	***	***
***	***	***
***	***	***
***	***	***
***	***	***

Notes:

(1)   Aircraft EMBRAER 170 #1 to #48 were already delivered;

(2)   ***.

5.  Firm Aircraft:

5.1 Delivery: The table containing the delivery schedule in Article 5.1 of the Purchase Agreement shall be deleted in its entirety and replaced with the following:

“Firm A/C	Delivery Month	***	***	Firm A/C	Delivery Month	***	***
49	Jan 07	***	***	71	***	***	***
50	***	***	***	72	***	***	***
51	***	***	***	73	***	***	***
52	***	***	***	74	***	***	***
53	***	***	***	75	***	***	***
54	***	***	***	76	***	***	***
55	***	***	***	77	***	***	***
56	***	***	***	78	***	***	***
57	***	***	***	79	***	***	***
58	***	***	***	80	***	***	***
59	***	***	***	81	***	***	***
60	***	***	***	82	***	***	***
61	***	***	***	83	***	***	***
62	***	***	***	84	***	***	***
63	***	***	***	85	***	***	***
64	***	***	***	86	***	***	***
65	***	***	***	87	***	***	***
66	***	***	***	88	***	***	***
67	***	***	***	89	***	***	***
68	***	***	***	90	***	***	***
69	***	***	***	91	Sep 08	***	***
70	***	***	***

Note: The first 48 EMBRAER 170 Aircraft (Aircraft #1 to # 48) were already delivered.

5.2  Buyer may ***.

6.   Payment:

     6.1  The penultimate sentence of the last paragraph of Article 4.1 is hereby deleted and replaced as follows:

 “Any progress payment for *** otherwise be due *** shall be due ***.”

____________

***Confidential

7. Changes:

 7.1   The first paragraph of Article 11.1 is hereby deleted and replaced with the following:

“At delivery each EMBRAER 170 Aircraft will comply with the standards defined in Attachment “A” or Attachment “A-3”, as applicable, each EMBRAER 175 Aircraft will comply with the standards defined in Attachment “A-1” or Attachment “A-2”, as applicable,  and each Aircraft shall incorporate all modifications which are classified as Airworthiness Directives (ADs) mandatory by CTA or FAA and shall also at the Actual Delivery Date incorporate any change agreed upon by Buyer and Embraer in accordance with this Article 11.”

 7.2 Article 11.6 is hereby amended by inserting in the first sentence after “Attachment ‘A’” the following “, Attachment ‘A-1’, Attachment ‘A-2’ or Attachment ‘A-3’, as applicable,”.

 7.3 Article 11.7 is hereby amended by deleting the first sentence thereof and replacing it with the following:

“Except ***, should an EMBRAER 170 Aircraft not comply with the terms and conditions of Attachment “A” or Attachment “A-3”, as applicable, or an EMBRAER 175 Aircraft not comply with the terms and conditions of Attachment “A-1” or Attachment “A-2”, as applicable, Buyer shall be entitled to either ***”.

8.  Option Aircraft:

8.1 The opening paragraph of Article 23 and delivery schedule table of the Purchase Agreement are hereby deleted and replaced by the following:

“Buyer shall have the option to purchase up to seventy-four (74) additional Option Aircraft, to be delivered on the last day of the applicable month set forth below or such earlier date in such month specified pursuant to Article 7.1:

Option A/C	Delivery Month	Option A/C	Delivery Month	Option A/C	Delivery Month
1	Oct 08	26	***	51	***
2	***	27	***	52	***
3	***	28	***	53	***
4	***	29	***	54	***
5	***	30	***	55	***
6	***	31	***	56	***
7	***	32	***	57	***
8	***	33	***	58	***
9	***	34	***	59	***
10	***	35	***	60	***
11	***	36	***	61	***
12	***	37	***	62	***
13	***	38	***	63	***
14	***	39	***	64	***
15	***	40	***	65	***
16	***	41	***	66	***
17	***	42	***	67	***
18	***	43	***	68	***
19	***	44	***	69	***
20	***	45	***	70	***
21	***	46	***	71	***
22	***	47	***	72	***
23	***	48	***	73	***
24	***	49	***	74	Aug 12”
25	***	50	***

 8.2 Article 23.5.1 is hereby deleted and replaced by the following:

“23.5.1  Buyer shall indicate in any notice exercising its option, with respect to each Option Aircraft covered by such notice, whether ***.”

9.     Attachment A-3:  New Attachment “A-3” is hereby added to the Purchase Agreement.

10.  Miscellaneous: All other provisions of the Agreement which have not been specifically amended or modified by this Amendment No. 19 shall remain valid in full force and effect without any change.  

(Remainder of page intentionally left in blank)

____________

***Confidential

             

        CONFIDENTIAL      

    

IN WITNESS WHEREOF, EMBRAER and BUYER, by their duly authorized officers, have entered into and executed this Amendment No. 19 to Purchase Agreement to be effective as of the date first written above.

EMBRAER – Empresa Brasileira de Aeronáutica S.A.	Republic Airline Inc.
/s/ Mauro Kern Junior	/s/ Bryan K. Bedford
Name: Mauro Kern Junior	Name:
Title: Executive Vice President Airline Market	Title

/s/ José Luís D. Molina	Date: June 22, 2007
Name: José Luís D. Molina	Place: Indianapolis
Title: Vice President Contracts Airline Market

Date: June 22, 2007

Place: S.J. Dos Campos, Brazil

Witness: /s/ Carlos Martins Dutra	Witness: /s/ Lars -Erik Arnell
Name: Carlos Martins Dutra	Name: Lars Erik Arnell

      

        

ATTACHMENT “A-3” – EMBRAER 170 AIRCRAFT CONFIGURATION

        

Frontier Configuration

      

           

1. EMBRAER 170 CONFIGURATION

1.1. EMBRAER 170 Standard Aircraft

The Aircraft EMBRAER 170  shall be manufactured according to (i) the standard configuration specified in the Preliminary Technical Description PTD-170 Rev. 4 dated May 2003, which although not attached hereto, is incorporated herein by reference, and (ii) the characteristics described in the items below.

2.           EMBRAER 170 OPTIONAL EQUIPMENT

The Aircraft will also be fitted with ***:

2.1. Aircraft Model and Engines

a. EMBRAER 170 LR

b. GE CF34-8E5 Engine

2.2. ***

***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***
***	***

(1) *** does not ***.   Such e*** shall be ***.

(2) ***.

2.3.                    EMBRAER 170 Interior Configuration ***

***	***	***
***	***	***
***	***	***

***

***

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***Confidential

3. FINISHING:

The Aircraft will be delivered to Buyers as follows:

3.1 EXTERIOR FINISHING:

The fuselage of the Aircraft shall be painted according to Buyer’s color and paint scheme which shall be supplied to Embraer by Buyer on or before *** to the relevant Aircraft Contractual Delivery Date.

The wings and the horizontal stabilizer of all Aircraft shall be ***.

3.2 INTERIOR FINISHING:

Buyer shall inform Embraer on or before *** prior to the relevant Aircraft Contractual Delivery Date of its choice of materials and colors of all and any item of interior finishing such as seat covers, carpet, floor lining on galley areas, side walls and overhead lining, galley lining and curtain. The above-mentioned schedule for definition of interior finishing shall only be applicable if Buyer selects its materials from the choices offered by and available at Embraer. In case Buyer opts to use different materials and or patterns, such schedule shall be mutually agreed between the Parties at the time of signature of the Purchase Agreement.

3.3 BUYER FURNISHED AND BUYER INSTALLED EQUIPMENT (BFE and BIE):

Buyer may choose to have carpets, tapestries, seat covers and curtain fabrics supplied to Embraer for installation in the Aircraft as BFE. Materials shall conform to the required standards and comply with all applicable regulations and airworthiness requirements. Delays in the delivery of BFE equipment or quality restrictions that prevent the installation thereof in the time frame required by the Aircraft manufacturing process shall entitle Embraer to either delay the delivery of the Aircraft or present the Aircraft to Buyer without such BFE, in which case Buyer shall not be entitled to refuse acceptance of the Aircraft. All BFE equipment shall be delivered to Embraer in DDP – Embraer facilities in São José dos Campos, SP, Brazil (Incoterms 2000) conditions.

The Aircraft galleys have provisions for the following BIE items that, unless timely agreed by the Parties, are not supplied or installed by Embraer: Trolleys, ovens, coffee makers, hot jugs and standard units.

4.   REGISTRATION MARKS AND TRANSPONDER CODE

The Aircraft shall be delivered to Buyer with the registration marks painted on them. The registration marks and the transponder code shall be supplied to Embraer by Buyer no later than *** before each relevant Aircraft Contractual Delivery Date.

IT IS HEREBY AGREED AND UNDERSTOOD BY THE PARTIES THAT IF THERE IS ANY CONFLICT BETWEEN THE TERMS OF THIS ATTACHMENT “A-3” AND THE TERMS OF THE TECHNICAL DESCRIPTION ABOVE REFERRED, THE TERMS OF THIS ATTACHMENT “A-3” SHALL PREVAIL.

____________

***Confidential

EX-10.40(K)

EXHIBIT 10.40(k)

CONFIDENTIAL TREATMENT

REQUESTED PURSUANT TO RULE 24b-2

Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been filed separately with the Securities and Exchange Commission.

AMENDMENT No. 11 TO LETTER AGREEMENT DCT-015/2004

This Amendment No. 11 to Letter Agreement DCT-015/2004, dated as of May 29, 2007 (“Amendment No. 11”) relates to the Letter Agreement DCT-015/2004 (the “Letter Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”) and Republic Airline Inc. (“Buyer”) dated March 19, 2004 and which concerns the Purchase Agreement DCT-014/2004 (the “Purchase Agreement”), as amended from time to time (collectively referred to herein as “Agreement”).  This Amendment No. 11 is between Embraer and Buyer, collectively referred to herein as the “Parties”.

This Amendment No. 11 sets forth additional agreements between Embraer and Buyer related to the ***.

Except as otherwise provided for herein all terms of the Letter Agreement shall remain in full force and effect. All capitalized terms used in this Amendment No. 11 that are not defined herein shall have the meaning given in the Letter Agreement. In the event of any conflict between this Amendment No. 11 and the Letter Agreement the terms, conditions and provisions of this Amendment No. 11 shall control.

NOW, THEREFORE, for good and valuable consideration which is hereby acknowledged Embraer and Buyer hereby agree as follows:

1.   *** EMBRAER 170 ***

1.1 Embraer shall provide, or cause to be provided, to Buyer ***. Such *** shall ***.

1.2 Embraer shall provide, or cause to be provided, to Buyer ***. Such *** shall ***.

1.3 Embraer shall provide, or cause to be provided, to Buyer ***. 

1.4 In order to *** Buyer *** and *** Buyer shall be ***; provided *** that this *** shall ***.

1.5 The *** mentioned above shall *** already delivered or operated which Buyer ***; provided that Buyer shall pay Embraer the price for ***.

2.   Seat Covers

2.1 Buyer shall have the option to acquire from Embraer a new passenger seat covers ***.

2.2 *** Buyer ***, the total *** shall be added to *** if Buyer ***, provided that if Buyer does ***, Buyer shall ***. Embraer shall supply the relevant ***.

All other provisions of the Letter Agreement which have not been specifically amended or modified by this Amendment No. 11 shall remain valid in full force and effect without any change.

(Signature page follows)

____________

***Confidential

             

        CONFIDENTIAL      

    

IN WITNESS WHEREOF, EMBRAER and BUYER, by their duly authorized officers, have entered into and executed this Amendment No. 11 to Letter Agreement to be effective as of the date first written above.

EMBRAER – Empresa Brasileira de Aeronáutica S.A.	Republic Airline Inc.
/s/ Mauro Kern Junior	/s/ Bryan K. Bedford
Name: Mauro Kern Junior	Name
Title: Executive Vice President Airline Market	Title

/s/ José Luís D. Molina	Date: May 29, 2007
Name: José Luís D. Molina	Place: Indianapolis
Title: Vice President Contracts Airline Market

Date: May 29, 2007

Place: S.J. Dos Campos, Brazil

Witness: /s/ Carlos Martins Dutra	Witness: /s/ Lars-Erik Arnell
Name: Carlos Martins Dutra	Name: Lars-Erik Arnell

      

        

                      Annex 1                   

      

      

A) ***:

A.1) Main configuration changes:

***

A.2) Applicability:

***.

A.3) Documentation:

All applicable technical publications shall be updated to reflect ***.

A.4) Parts:

1) Kit of parts associated with this *** shall be provided ***

2) ***

B) ***

B.1) Main configuration changes:

***

B.2) Documentation:

1) *** for the *** shall be provide ***.

2) ***.

B.3) Kit of parts:

1) Kit of parts associated with this *** shall be ***

2) ***

B.4) Lead time and labor for ***:

1) Lead time: Parts availablity and *** within ***.

2) Labor associated with *** shall be *** or *** authorized MRO ***.

3) Time for *** shall be *** between Republic and Embraer.

***

____________

***Confidential

EX-10.40(L)

EXHIBIT 10.40(l)

CONFIDENTIAL TREATMENT

REQUESTED PURSUANT TO RULE 24b-2

Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been filed separately with the Securities and Exchange Commission.

AMENDMENT No. 12 TO LETTER AGREEMENT DCT-015/2004

This Amendment No. 12 to Letter Agreement DCT-015/2004, dated as of June 22, 2007 (“Amendment No. 12”) relates to the Letter Agreement DCT-015/2004 (the “Letter Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”) and Republic Airline Inc. (“Buyer”) dated March 19, 2004 and which concerns the Purchase Agreement DCT-014/2004 (the “Purchase Agreement”), as amended from time to time (collectively referred to herein as “Agreement”).  This Amendment No. 12 is between Embraer and Buyer, collectively referred to herein as the “Parties”.

This Amendment No. 12 sets forth additional agreements between Embraer and Buyer related to the confirmation of 5 Option EMBRAER 170 Aircraft into 5 Firm EMBRAER 175 Aircraft.

Except as otherwise provided for herein all terms of the Letter Agreement shall remain in full force and effect. All capitalized terms used in this Amendment No. 12 that are not defined herein shall have the meaning given in the Letter Agreement. In the event of any conflict between this Amendment No. 12 and the Letter Agreement the terms, conditions and provisions of this Amendment No. 12 shall control.

NOW, THEREFORE, for good and valuable consideration which is hereby acknowledged Embraer and Buyer hereby agree as follows:

1.   Spare Parts Credit:

1.1 Article 1(ii) of the Letter Agreement shall be deleted and replaced by the following:

“(ii) Spare Parts Credit:  Embraer will provide a spare parts (except for engines, engine related parts and APU), ground support equipment, test equipment credit and special services of ***.  This credit shall be made available to Buyer upon ***.  If for any reason ***, then *** Buyer shall ***.  *** only be made available to Buyer in the event there is no outstanding balance due from Buyer to Embraer related to the purchase of such Aircraft.  If *** credit is not so made available to Buyer because *** such credit shall be made available at such time thereafter ***.  Any portion of such credit which remains unused *** shall be deemed to have been waived by Buyer, and no further compensation shall be due from Embraer to Buyer for such *** credit(s).  Such credit(s) shall be applied ***.”

2. Aircraft Purchase Price

2.1 Article 2.4 of the Letter Agreement *** for ***.

3.  Conversion

3.1 The first  paragraph of Article 4.a shall be deleted and replaced by the following:

“Buyer shall have the flexibility to request the conversion of any Aircraft into the EMBRAER 170 (configured as a *** 170 Aircraft), EMBRAER 175 (configured as *** 175 Aircraft), the EMBRAER 190, or the EMBRAER 195 jet aircraft (collectively, the “Conversion Aircraft”), provided ***.”

3.2 Article 4.e shall be deleted and replaced with the following:

“e) EMBRAER 170 Conversion Aircraft Offer Price:

The Basic Price for each Conversion Aircraft that is configured as a *** 170 Aircraft (the “170 Conversion Aircraft”) ***.”

3.3 The penultimate paragraph of Article 4 shall be deleted and replaced with the following:

“Each 170 Conversion Aircraft shall be configured as a *** 170 Aircraft (as specified in the applicable conversion notice), each 175 Conversion Aircraft shall be configured as *** a *** 175 Aircraft (as specified in the applicable conversion notice) and each 190 Conversion Aircraft or 195 Conversion Aircraft shall be configured as per Exhibit 3, and shall be available to Buyer at each relevant Conversion Aircraft Basic Price and in ***.”

4. ***

 4.1 ***.

All other provisions of the Letter Agreement which have not been specifically amended or modified by this Amendment No. 12 shall remain valid in full force and effect without any change.

____________

***Confidential

IN WITNESS WHEREOF, EMBRAER and BUYER, by their duly authorized officers, have entered into and executed this Amendment No. 12 to Letter Agreement to be effective as of the date first written above.

EMBRAER – Empresa Brasileira de Aeronáutica S.A.	Republic Airline Inc.
/s/ Mauro Kern Junior	/s/ Bryan K. Bedford
Name: Mauro Kern Junior	Name:
Title: Executive Vice President	Title:

/s/ José Luís D. Molina	Date: June 22, 2007
Name: José Luís D. Molina	Place: Indianapolis
Title: Vice President Contracts
Date: June 22, 2007
S.J. Dos Campos, Brazil

Witness: /s/ Carlos Martins Dutra	Witness: /s/ Lars-Erik Arnell
Name: Carlos Martins Dutra	Name: Lars-Erik Arnell

Amended and RestatedSchedule 6

***

____________

***Confidential

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryan K. Bedford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Republic Airways Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 03, 2007

/s/ Bryan K. Bedford

Bryan K. Bedford

Chairman of the Board, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert H. Cooper, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Republic Airways Holdings Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 03, 2007

/s/ Robert H. Cooper 

Robert H. Cooper

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Republic Airways Holdings Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Bryan K. Bedford
	Bryan K. Bedford
	Chairman of the Board, Chief Executive
	Officer and President
	August 03, 2007

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Republic Airways Holdings Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert H. Cooper, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Robert H. Cooper
	Robert H. Cooper
	Executive Vice President and Chief Financial Officer
	August 03, 2007

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.