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UPDATE 2-Republic Air files for bankruptcy protection, blames pilot shortage

(Corrects to show Republic Air is not the most recent U.S. airline bankruptcy since American Airlines in paragraph six)

By Tracy Rucinski

CHICAGO, Feb 25 (Reuters) - Regional carrier Republic Airways Holdings Inc filed for Chapter 11 bankruptcy protection on Thursday, blaming several quarters of falling revenue after having to ground aircraft amid a pilot shortage.

The Indianapolis-based short-haul carrier, which feeds flights to American Airlines Group Inc, Delta Air Lines Inc and United Continental Holdings Inc brands, listed assets of $3.6 billion and $3.0 billion of liabilities, court documents showed.

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 among of handful of regional airlines that have filed for bankruptcy since American Airlines filed in 2011.

United said in a statement on Thursday that it does not expect to change its flight schedules because of the bankruptcy. American said it is too early to assess an impact on scheduling, and Delta did not immediately return a request for comment.

"It's not going to affect the flying public at all," aviation consultant Michael Boyd said. "But it does recognize that that sector of the industry... is atrophying."

"We maintain that within three years, most 50-seat jets will be parked," he said of the small jets flown by regional airlines.

United has said it aims to cut the number of 50-seat planes flown under its United Express brand in half by 2019, reducing its reliance on contractors, improving its fuel-burn per passenger and giving it space for multiple cabin classes and the chance to up-sell customers.

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 Inc, Man Group Plc, 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.

(Reporting by Tom Hals in Wilmington, Delaware and Jeffrey Dastin in New York; Editing by Cynthia Osterman)