Mesa up on nearing United Airlines deal, American Airlines wind-down
19/12/2022 13:14
** Shares of regional carrier Mesa Air Group Inc MESA.O up
6.8% at $1.25 premarket
** MESA is finalizing a 5-yr agreement to operate regional
flights for United Airlines UAL.O after an announcement it
will wind down flights for American Airlines AAL.O , it said on
Monday, confirming a Reuters report from Saturday
** MESA's AAL operations will end on April 3, 2023; UAL
aircraft expected to be placed by March 2023
** "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" - MESA CEO
Ornstein, in co's memo seen by Reuters
** 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" - AAL, in its memo seen by Reuters
** AAL and UAL up less than a pct premarket
** MESA has fallen 79% this year through last close; AAL
down 12% and UAL down 29%
(Reporting by Ruhi Soni in Bengaluru;)
((Ruhi.Soni@thomsonreuters.com
Twitter: https://twitter.com/ruhithere))