Republic and Mesa Merge to Form New Regional Airline

Republic Airways Holdings and Mesa Air Group have entered into a definitive agreement to merge their operations and create a single regional airline company under the name Republic Airways Holdings. The proposed transaction, expected to close in the late third or early fourth quarter of 2025, is subject to regulatory and shareholder approvals and is set to combine the extensive route networks and fleet capabilities of both companies. Under the merger plan, the new regional airline will continue to serve key partners such as American Airlines, Delta Air Lines, and United Airlines using a combined fleet of approximately 310 Embraer aircraft, including both E170 and E175 models.

In the new structure, Republic’s shareholders will hold 88% of the combined company’s common shares, while Mesa’s shareholders will own between 6% and 12%. As part of the arrangement, Mesa’s outstanding debt obligations will be extinguished, marking a significant step in streamlining the balance sheets of the merging parties. At the end of the second quarter of 2024, Mesa Air Group had USD366.4 million in total debt and only USD16.3 million in unrestricted cash, a situation that has heightened the focus on the benefits of the merger. Furthermore, Mesa Air Group has been under pressure from Nasdaq for non-compliance with listing rules, and the consolidation with Republic is expected to help stabilize the financial position of the combined entity.

The ch-aviation fleets module indicates that Mesa Airlines operates a fleet of 107 aircraft, consisting of forty-six CRJ900s, sixty E175s, and one Learjet 60XR. In contrast, Republic Airways currently operates 209 aircraft, including thirty-one E170s and 178 E175s. Mesa had earlier announced plans to sell its CRJ fleet as it moves towards an all-Embraer fleet, following its recent exit from the cargo market and the loss of its American capacity purchase agreement. With the merger, the new airline will maintain a single fleet focused on Embraer models, providing operational consistency and efficiency. The combined airline is set to operate over 1,250 daily departures, a figure that underscores its significant role in the regional airline market.

Both Republic and Mesa will continue to operate under their existing US Federal Aviation Administration operating certificates until they secure a single certificate for the combined airline. According to the joint press release, the merger is not expected to result in any workforce reductions, ensuring that existing personnel will be retained as the companies integrate their operations. The merged entity will be led by Republic’s executive leadership team, and the board of directors will be composed of six current Republic directors along with one independent director from Mesa’s board. Republic Airways Holdings is also expected to remain listed on Nasdaq under the new ticker symbol RJET.

This merger represents a bold move in the regional airline industry as it combines the strengths and extensive networks of two well-established carriers. Republic Airways, which flies to more than 80 cities in North America, the Caribbean, and Central America under brands such as American Eagle, Delta Connection, and United Express, will merge with Mesa Airlines, which serves 89 cities across the United States, the Bahamas, Canada, Cuba, and Mexico exclusively for United Express. The consolidation of these two airlines is poised to create a more competitive and financially robust carrier capable of responding to evolving market demands and delivering enhanced service to its partners and passengers.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com