US’s Mesa Airlines eyes 2022 debut for EU subsidiary

Mesa Air Group is planning to launch its European Union-based subsidiary, a joint venture with UK-based Gramercy Associates, in 2022 and not by the end of 2021 as previously announced.

“We continue to make progress on the project, and we are expecting to start operations in the calendar year 2022. Due to EU regulations, Mesa will be a minority partner in the JV, but Mesa will be providing technical support and expertise to help with the startup,” Senior Vice-President (Finance) Torque Zubek said during the carrier’s quarterly earnings call.

President and Chief Financial Officer Michael Lotz clarified that the launch would most likely happen in the first quarter of 2022. Although the airline previously said that the still-unnamed start-up would operate CRJ900s, it has yet to determine the source of the aircraft.

“We are just really looking closely at the cost-benefit analysis of taking a Mesa Airlines aircraft, reconfiguring it to all coach, getting it certified versus just potentially leasing an aircraft that may already be over in Europe in that configuration… We’re still in the evaluation phases. So we’re not sure which way we’re going to go,” Lotz said.

Chief Executive Jonathan Ornstein added that the COVID-19 pandemic increased aircraft availability on the market and opened up opportunities other than transferring aircraft from Mesa’s fleet. He underlined that the aircraft were available at very “reasonable” leasing rates. On the other hand, the pandemic also “decimated” services to smaller airports, providing an even better business case for launching a new capacity provider operating on behalf of larger carriers.

According to the ch-aviation fleets advanced module, Mesa Airlines operates sixty-four CRJ-900s, including forty-five contracted to operate on behalf of American Airlines with the remainder primarily in storage and used as spares support.

Mesa Airlines also said that it was very satisfied with its other recent expansion, namely the launch of cargo ACMI operations on behalf of DHL Express. It currently operates two B737-400(SF)s on behalf of the integrator but has plans to add the third unit of the type shortly after conversion. Ornstein said that in the future, Mesa would also look at B737-800 freighters.

“I think if we’re going to continue to add aircraft, [the opportunity to look at the] B737-400 is sort of limited. I think that the B737-800 may be the next aircraft we look at. But the strength within the cargo market is there. It’s just that I think it’s also fairly well known that you’re not going to get an order for 25 aircraft. The cargo operators go much more incrementally,” he stressed.