Mesa says it will halt American Airlines flights, finalizing deal with United (updated)
18/12/2022 03:15
(Updates with Mesa statement, no United comment, no further
American Airlines comment)
By David Shepardson
WASHINGTON, Dec 17 (Reuters) - Mesa Airlines MESA.O
said late Saturday it is finalizing an agreement to operate
regional flights for United Airlines UAL.O after an
announcement it will wind down flights for American Airlines
AAL.O early next year.
In a memo sent to employees and provided to Reuters by the
company, Mesa Air Group Chief Executive Jonathan Ornstein said
the Arizona-based carrier is "finalizing a new agreement with
United which would transition all CRJ900s currently flying for
American Eagle to United Express." The CRJ900 is a regional jet
made by Canada's Bombardier Inc BBDb.TO that has around 75
seats.
American Eagle is a network of six regional carriers
operating 3,400 daily flights under a codeshare with American –
often flights to smaller regional cities. Three of the six are
American Airlines subsidiaries, and three are contract carriers
including Mesa.
A United spokeswoman declined to comment.
American declined to comment on Ornstein's memo. The airline
said earlier on Saturday that Mesa would halt service for the
airline on April 3 after significant reductions in March.
American said in a memo made available to Reuters by the
company that flights operated by Mesa will be backfilled by
other regional carriers, adding "Air Wisconsin is preparing to
join the American Eagle family earlier than planned."
Mesa said the switch was prompted by a regional pilot
shortage and American's actions related to that.
Ornstein said American "significantly raised regional pilot
wages for their wholly owned subsidiaries to deter pilots from
going to national carriers and attract pilots from the
ever-shrinking pool of qualified pilot applicants."
But, Ornstein added in the Mesa memo, "American chose not to
fund the higher pilot rates for their non-affiliated carriers.
At the same time, we were being penalized for not producing the
required block hours under our pre-COVID contract with American.
These two actions were costing us approximately $5 million in
losses per month."
Ornstein said, "As a result, we have concerns about
American's ability to be a reliable partner going forward ... We
just do not believe it is in Mesa's long term interest to fund
ongoing losses at American."
The latter cast the decision differently in its memo, saying
Mesa "has experienced various financial and operational
difficulties this year. As a result, we have concerns about
Mesa's ability to be a reliable partner for American going
forward."
Mesa's Ornstein said under the anticipated new agreement,
"United would maintain all existing domiciles and maintenance
bases currently operated for American and plans to add Denver as
a domicile and Houston as a CRJ domicile."
Ornstein noted that United announced a huge Boeing
BA.N order Tuesday - 100 787 Dreamliners and 100 737 MAX
airplanes.
"United's growth plan provides extensive advancement
opportunities for our people," Ornstein wrote. "This deeper
relationship will position us to be the preferred carrier for
future regional flying opportunities with United."
(Reporting by David Shepardson; Editing by Jonathan Oatis and
Kenneth Maxwell)
((David.Shepardson@thomsonreuters.com; 2028988324;))