American Ending Agreement with Mesa Airlines, United to Step In

December 18, 2022

American says 'financial instability and operations' led to decision to sever agreement

Regional carrier Mesa Airlines will phase out operations with American Airlines and will instead start to ramp up flights with United Airlines according to multiple reports and a statement by Mesa's CEO.

Mesa’s CEO Jonathan Ornstein told employees in a note:

“We are excited to announce we have negotiated a wind down of our operations with American and are finalizing a new agreement with United which would transition all CRJ900s currently flying for American Eagle to United Express.”

American Had Concerns with Mesa's Operational Costs 

Yesterday, Derek Kerr, Chief Financial Officer and President of the regional brand American Eagle for American Airlines, informed staff that Mesa Air Group and American Airlines will be ending their flying agreement. This decision was due to a variety of issues that have arisen in recent months, such as an increase in operational costs, a pilot shortage throughout the industry and financial concerns with the regional carrier.

“As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward,” Kerr said in an employee memo. “American and Mesa agree the best way to address these concerns is to wind down our agreement."

American Airlines will be ceasing all operations that Mesa has been providing on behalf of the airline by April 3rd, 2023. This includes flights out of two major American hubs, Dallas Fort Worth International Airport (DFW) and Phoenix Sky Harbor International Airport (PHX).

Large carriers such as American, United and Delta Air Lines often outsource the operation of certain shorter routes to regional airlines. This accounts for around half of all the flights operated on a daily basis by these major carriers, though this share is subject to fluctuation depending on the specific airline in question.

Mesa had a net loss of about $67 million in the nine months ended June 30, according to a securities filing. Last week, the airline postponed its quarterly earnings report.

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