Republic sues flight school students over deal for reduced tuition
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Against the backdrop of a red-hot job market, Indianapolis-based Republic Airways Inc. and its flight school have sued a dozen former students 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 lawsuits in Marion Superior Court, each one against an individual defendant who had enrolled in Republic’s LIFT Academy.
In each case, Republic says the defendant owes money for tuition reductions that were offered under the agreement that the defendant would take a job with Republic.
In one of those suits, Republic alleges that Tyler Stewart, of Warren County, Ohio, received a $20,000 tuition discount in exchange for agreeing to accept a job offer as a first officer, or co-pilot, at Republic after completing his flight training. Stewart’s enrollment agreement also included a commitment to work for Republic for five continuous years.
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 he received.
Without discounts, 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 [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 stipulation that the employee remain at the company for a set amount of time.
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 a suit filed in October, 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, for a combined total of $406,550.
Of those 12 cases, 11 are pending. The 12th, filed against former LIFT Academy student John McLemore, concluded in late January with a confidential settlement, according to McLemore’s attorney, Drew Kirages of the Noblesville firm Dollard Evans Whalin LLP.
In an emailed statement, 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. 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 might help explain the situation, one aviation expert says.
Most regional airlines are paying pilots $90 to $100 per flight 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 offers can be persuasive, Genc said. “This is why so many pilots are jumping ship from regionals—or from regional to regional.”
Republic pays its entry-level pilots $90 per flight hour. In 2016, that figure was only $40.
Genc said different airlines 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 are pretty similar.
According to consulting firm Oliver Wyman, the aviation industry will face a shortage of nearly 80,000 pilots globally by 2032 if high demand continues and the supply of new pilots continues to fall short.
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,” he said.
The situation is especially tough for regional airlines like Republic, which operate routes on behalf of major carriers and typically are a first stop for commercial pilots in their careers. The major carriers recruit many of their pilots from the regional airlines, which, in a tight job market, can leave those regionals scrambling to replenish their ranks.
Republic opened its Indianapolis-based LIFT Academy in 2018. The facility is currently 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 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 they 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 started school.
LIFT Academy also has a track for students who want to become aviation maintenance technicians.
This story first ran in IBJ’s sister publication The Indiana Lawyer.