Regional carrier Republic Airways filed for Chapter 11 bankruptcy protection on Thursday, blaming several quarters of falling revenue after having to ground aircraft amid a pilot shortage.
Republic said the bankruptcy process would allow it to continue normal business while restructuring its finances and contracts.
"We worked hard to avoid this step," Republic Chairman Bryan Bedford said in a statement but added that the restructuring would "restore our airline and take it to new heights."
Republic offers approximately 1,000 daily flights to more than 100 cities in the United States, Canada, the Caribbean, and the Bahamas.
It is the first U.S. airline bankruptcy since American Airlines filed in 2011.
Republic said it has sufficient assets and liquidity to meet its working capital and operating expenses during the restructuring process and will continue to deliver safe services and pay its employees, providers and vendors.
The carrier, with a staff of about 6,000, will also continue to honor its collective bargaining agreements with its unions, it said.
The company's major investors include Solus Alternative Asset Management, BlackRock, Man Group, Dimensional Fund Advisors, Axar Capital Management and Manning & Napier Advisors, according to court documents.
The case is In re Republic Airways Holdings Inc., 16-10429, U.S. Bankruptcy Court, Southern District of New York.