Against the backdrop of a red-hot job market, Indianapolis-based Republic Airways Inc. and its flight school have taken legal action against a dozen former students who the airline says failed to honor their commitment to fly for Republic after graduation.
Between Oct. 6, 2022, and Jan. 25, Republic and its Leadership in Flight Training Academy LLC filed 12 separate lawsuits in Marion Superior Court, each one against an individual defendant who had enrolled in Republic’s LIFT Academy.
Each of the complaints is very similar to the rest, and in each case Republic says the defendants owe money for tuition reductions that were offered under the agreement that the defendants would take jobs with Republic.
One of those suits is Leadership in Flight Training Academy, LLC, Republic Airways Inc. v. Tyler Stewart, 49D01-2301-PL-002872. In its complaint Republic alleges that Tyler Stewart, of Warren County, Ohio, received a $20,000 tuition discount in exchange for his agreement to accept a job offer as a first officer at Republic after completing his flight training. Stewart’s enrollment agreement also included a commitment that Stewart would work for Republic for five years of continuous employment.
Republic says Stewart “failed to meet his obligations to Republic and left his employment to join a competitor airline.” As a result, Republic alleges, Stewart is obligated to repay Republic for the $20,000 tuition discount, plus an additional $9,700 in tuition assistance payments that he received.
Before any discounts are applied, the lawsuit says, Stewart’s cost of full tuition at LIFT Academy would have been $85,000.
Stewart has not yet filed a legal answer to Republic’s complaint.
“We’re currently analyzing the claims and his (Stewart’s) potential defenses,” said Stewart’s attorney, Jason Cleveland of Indianapolis firm Cleveland Lehner Cassidy Attorneys at Law. “We’ll be filing our answer soon.”
Cleveland, whose firm handles employee-side employment law, said he’s worked on similar cases in which an employee receives a signing bonus with the agreement that the employee will remain at the company for a set amount of time in exchange.
But Cleveland said it’s premature to say exactly what his defense strategy will be in Stewart’s case: “I think every case has its own set of facts that you have to analyze.”
In another case filed in October, Leadership in Flight Training Academy, LLC, Republic Airways Inc. v. Kyle Woods, 49D01-2210-PL-034739, Republic alleges that Kyle Woods owes $31,550 after he took a job for a fellow regional airline, Envoy Air, rather than fulfill his commitment to work for Republic.
Woods’ attorney, Joe Duepner of Noblesville firm Duepner Law LLC, said his client’s position is that Republic breached its contract with Woods first by failing to offer him a job in a timely fashion.
According to court documents, each of the 12 defendants signed LIFT Academy enrollment agreements between September 2018 and October 2019. Republic alleges the defendants owe it varying amounts ranging from $27,000 to $55,000. Between the 12 cases, Republic sought a combined $406,550 in back tuition from the defendants.
Of those 12 cases, 11 are pending. The twelfth, Leadership in Flight Training Academy, LLC, Republic Airways Inc. v. John Blake McLemore, 49D01-2210-PL-035141, was concluded in late January with a confidential settlement, said John McLemore’s attorney, Drew Kirages of the Noblesville firm Dollard Evans Whalin LLP.
In a statement emailed to Indiana Lawyer, a Republic spokesperson said in part, “We committed to make a significant investment in these pilots by providing highly subsidized flight training at LIFT Academy, and subsequent career development, all done to support the pilots in obtaining their necessary operating experience.”
Republic said its pay and benefits for first-year pilots exceeds $100,000, and that the airline incurs “substantial direct and indirect costs” when students break their agreements to begin their career at Republic. The airline also added that “the vast majority of our pilots honor their contracts.”
The legal action is taking place amid a severe pilot shortage — which could help explain the situation, one aviation expert says.
Most regional airlines right now are paying pilots $90 to $100 per hour, and some are offering sign-on bonuses and other financial incentives of $100,000 or more, said Tim Genc, chief adviser and executive editor at Future & Active Pilot Advisors, or FAPA.aero, a Nevada-based pilot advisory firm.
The high-dollar offers can be persuasive, Genc said. “This is why so many pilots are jumping ship from regionals — or from regional to regional.”
For perspective on how much pay has risen in recent years: Republic was paying its entry-level pilots $40 per flight hour in 2016.
Genc said, to his knowledge, Republic’s current starting salary and incentives are in line with industry norms. But he also said that different airlines can structure their pay and incentives differently, so a job-hopper might perceive that one airline’s offer is better than another when in reality the two offers might be pretty similar.
According to consulting firm Oliver Wyman, the aviation industry will face a shortage of nearly 80,000 pilots globally by 2032 if conditions continue on their current trajectory — i.e., no downturn in demand and no big efforts to bolster the pilot supply.
Various factors are driving the shortage, Genc said.
Under federal law, commercial airline pilots must retire at age 65, Genc said, and the disruptions caused by the pandemic prompted some late-career pilots to retire early. At the same time, not enough young pilots are entering the industry to replace those retirees.
“We’ve got a perfect storm creating the pilot shortage that we’re facing right now,” Genc said.
The situation is especially tough for regional airlines like Republic, which operate routes on behalf of major carriers and which typically are a first stop for commercial pilots early in their careers. The major carriers recruit many of their pilots from the regional airlines, which in a tight job market can leave those regional airlines scrambling to replenish their ranks.
Republic opened its Indianapolis-based LIFT Academy in 2018. The facility is currently located at Indianapolis International Airport. Republic is working to open a $200 million facility in Carmel that would include both the training facility and the company’s headquarters, which are currently located at 8909 Purdue Road near the intersection of Interstate 465 and Michigan Road.
Republic is also in the process of opening a second LIFT Academy campus in Myrtle Beach, South Carolina. The company expects its first Myrtle Beach training class to begin this year.
LIFT Academy is designed to take students with no flight experience and train them to become Republic pilots. Republic’s website says students can complete their flight training in as little as 18 months, after which students can obtain paid positions while they build up their required flight time. The school’s first students to obtain jobs flying for Republic did so in May 2021, a little less than three years from when they had started school.
LIFT Academy also has a track for students who want to become aviation maintenance technicians.•