Regional carrier Mesa Air exploring options to raise capital after United switch
19/12/2022 13:24
Dec 19 (Reuters) - Mesa Air Group Inc MESA.O said on
Monday it was exploring options to raise money amid rising costs
after the U.S. regional carrier handed its pilots bumper
contracts to deter switching to other airlines.
Shares of Mesa, which said it was finalizing an agreement to
operate regional flights for United Airlines UAL.O , were up
about 7% before the bell.
Regional carriers run flights to places that do not attract
routes from the bigger U.S. airlines. For instance, American
Eagle is a network of six regional carriers operating 3,400
daily flights under a codeshare with American Airlines AAL.O .
Mesa said it was moving to United's network from next year
after opting to wind down flights for American Airlines.
The company added it was finalizing a previously announced
sale of remaining eight CRJ-550 jets to United, adding it also
has an agreement to sell 11 surplus CRJ-900 aircraft to an
unnamed third party.
"Mesa is pursuing other avenues to increase liquidity
through the sale of additional surplus aircraft, spare parts and
spare engines," said Arizona-based Mesa in a statement.
Reducing debt has become a priority for the airline industry
that went on a borrowing binge to survive the pandemic. The
industry is also facing cost pressures from fuel prices and new
labor contracts.
Mesa had raised pilot salaries earlier this year by as much
as 172%.
The carrier, which recently postponed the release of its
fourth-quarter results scheduled for Dec. 12, had total assets
of $1.32 billion as of June 30 versus total liabilities of
$897.1 million.
(Reporting by Kannaki Deka in Bengaluru; Editing by Krishna
Chandra Eluri)
((Kannaki.Deka@thomsonreuters.com;))