Delta Air Lines in agreement to settle lawsuit against Republic

(Reuters) - Delta Air Lines Inc has agreed to settle a lawsuit that accused Republic Airways Holdings Inc of breaching a contract to operate flights for Delta, Republic said in a news release Thursday.

As part of the agreement, Delta will continue to contract flights to Republic while entering into a credit agreement that gives the regional carrier $75 million and gradually relieves it of obligations to fly 50-seat jets, seen by airlines as uneconomical, according to the release.

Republic, which filed for bankruptcy restructuring last month, said the agreement will provide "immediate improvements in profitability and cash flow."

The agreement is subject to court approval, with a hearing in Bankruptcy Court in New York scheduled for April 14.

Delta could not be reached immediately for comment.

(Reporting by Amrutha Penumudi in Bengaluru and Jeffrey Dastin in New York; Editing by Leslie Adler)