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Delta’s offer of US$75m to fund Republic Airway’s chapter 11 case has run into trouble with shareholders and the federal govt, which complain the financing terms offer Delta extraordinary, and possibly illegal, protections. In an objection filed Thursday, a US attorney said the financing terms would “impermissibly protect Delta,” may be “unlawful” and should therefore be denied the bankruptcy court’s approval. Republic shareholders also urged the court to deny the financing, which in conjunction with a related settlement between Delta and Republic they say would give Delta “enormous power” in Republic’s chapter 11 case. Through code-share agreements, Republic operates flights for Delta and other large carriers. “Granting that power to Delta should not be considered lightly,” the shareholders said in court papers filed Thursday. <br/>

Saudi Arabia’s national carrier, Saudia, has announced a new low-cost subsidiary to be known as Flyadeal. A Saudia official said the new subsidiary will have its own management structure, would be operational in mid-2017 and would “add substantially to [Saudia’s] potential.” No details were given of the number or type of aircraft to be used by the new carrier. The announcement of Flyadeal comes against the backdrop of the long-awaited liberalisation of the Saudi domestic market. Until now, there have been just two Saudi Arabian-based carriers in the domestic marketplace, Saudia and hybrid carrier flynas. Saudia has rougly 90% of the market. Under the planned liberalisation, two new carriers, SaudiGulf Airlines and Qatar Airways’ offshoot Al Maha Airways have been chosen by Saudi aviation regulator GACA to add competition, but both new contenders have been stymied by long delays in gaining an air operators certificate. <br/>