Republic of strength: Bedford’s regional group


Bryan Bedford’s Republic Airways group reflects the great changes in the regional industry since the turn of the century At the turn of the century, the old Republic was nearly bankrupt, flying an ageing fleet of small turboprops, while in its home town of Indianapolis, the big player was ATA Airlines, a rising star as it entered low-cost scheduled service while shedding its charter past. Today, both carriers are still based in Indianapolis, but after 16 months of bankruptcy reorganisation ending in March 2006, ATA does not fly to Indianapolis any more and does much of its scheduled passenger flying at the behest of its investor and partner, Southwest Airlines. Meanwhile Republic is a holding company with the largest fleet of Embraers in the world and profit margin and growth rates unmatched by the majors. The Republic group, Bedford says, “has gone through every airline bankruptcy workout except that of Northwest”, while increasing its revenues from about $150 million in 2000 to over $1 billion last year. He adds, though, “Of course we took our costs down over 50% over this time”.

Bedford himself represents a generation of regional leaders, having entered the industry from an accounting background that brought him into contact with the airlines and eventually to the helm of Mesaba Aviation. At Mesaba, he helped create a strong brand identity that made it a natural as a Northwest Airlink partner while he learned the ways of the regional and the difficulties of transitioning out of turboprops – even the modern Saab 340 turboprop – and into jets.

At just 45, he plans to be at Republic for as long as he can see. And even though Republic flies for others, Bedford says he strives to build an identity through subtle branding on its aircraft, from seatback inserts to in-flight announcements.Mesaba is itself interesting shorthand for what has happened to some regionals. Once a high flyer and a favourite of investors, it fell on hard times as Northwest went through the difficulties of the 1990s, eventually seeking bankruptcy protection just weeks after Northwest’s own 2005 filing. Attempts by managers at Mesaba’s parent, MAIR Holdings, to sell the unit or to take it private had failed, and after a near meltdown in labour relations, Mesaba agreed in early 2007 to be bought out by Northwest parent NWA Corp. But it was by that time a shadow of itself, having lost some of its Airlink flying to lower-cost providers such as Pinnacle. Mesaba and its pilots quarrelled over everything that airline and pilots argue about, but one of the sticking points, and one resolved only in the bankruptcy process, was the fate of Mesaba’s Avro RJ (nee BAe 146) four-engine regional jets, a rarity among US carriers. 20060823-MesabaRJ.jpgMesaba had been a code-share partner for the old Republic Airlines, and when Republic Airlines was bought by Northwest Orient, as Northwest was then called, it switched its affiliation. But Bedford had a name to take with him when he went to then-struggling Chautauqua Airlines and with backing from private equity fund Wexford Holdings began transforming it into the major player it is now. Republic has a separate FAA certificate (AOC) for each of its three units, and has separate (but identical) control centres and the like, but centralised purchasing and hiring. It has Bedford explains a single pilot seniority list to help avoid any suspicions among the pilot group that it is trying to play one unit off against the other. But Bedford says the group has no plans to buy any other units but instead wants to grow organically.

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