American Airlines and its regional affiliate Mesa Airlines have confirmed they are to suspend the partnership under which Mesa operated services for the carrier mainly out of Dallas/Fort Worth and Phoenix Sky Harbor airports. In a statement issued on December 19, Mesa confirmed that it will cease operations for American on April 3 as it transitions to an expanded partnership with United Airlines.
Under the new five-year agreement with United, Mesa will redeploy all of the CRJ-900 regional jets it flies for American to operate United Express routes. It may increase the number of these 76-seat aircraft available to United, dependent on the number of Embraer E-175 aircraft Mesa is operating on its own services.
In a statement issued to American’s employees late on Saturday, the airline’s CFO Derek Kerr said the ending of the partnership was due to “financial and operational difficulties” at Mesa. He stated that these issues have raised, “concerns about Mesa’s ability to be a reliable partner.”
On Monday, Mesa issued its own version of events while acknowledging that its operations for American have become unprofitable due to sharp increases in pilot wages and block hour penalties it has had to pay to its partner for not having flight crew available for flights. Under the new agreement, United—which has been hiring pilots away from the company by rising its own pay scales—will now compensate Mesa for the higher costs it is incurring in return for a commitment to serve part of its network of regional connections.
Confirmation of Mesa’s expanded partnership with United will allow Mesa to file its earnings report for the fourth quarter at the end of the 2022 financial year. On December 12, the company filed for an extension with the Securities and Exchange Commission and it now has until December 29 to complete this process.
As part of efforts to boost its balance sheet, Mesa is in the process of selling eight CRJ-550 aircraft to United. It is also selling 11 CRJ-900s to an undisclosed third party and plans to sell further surplus aircraft, as well as spare parts and engines. Mesa also intends to renegotiate lease terms for some of its fleet.
Included in Mesa’s existing partnership with United are its previously announced plans to operate up to 200 of the four-passenger eVTOL aircraft being developed by Archer. The airlines also have a separate joint agreement with Sweden’s Heart Aerospace to buy up to 300 of the 30-seat hybrid-electric ES-30 commuter that it plans to bring to market in 2028.