Mesa Airlines & American Have Nasty Breakup

It’s telling that Mesa was happy to lose $5m per month for how long…? Nothing mutual about the break up.
They’ll file chptr 11 then be bought out by UA’s Mana air

You forgot AA’s 3rd wholly owned subsidiary, Envoy……FYI.

Mesa Airlines will start flying for United Airlines —- Mesa has already been flying for UA for some time now.

Upper management decisions that put a supposed contractor partner at financial risk are creating the environment for decreased reliability of the process and increased risk.

Don’t forget Republic also flies for American.

Ben's assessment is correct. AA is more of a "loser" in this than UA but let's not forget that UA continues to talk about shrinking its RJ operations while signing up new regional carriers.
The reason is obvious from UA's fleet guidance update that it gave just last week; UA is not going to receive dozens of new MAXs that it had expected to receive in 2023 and has pushed deliveries back to 2024 and make 2024 its peak year for deliveries instead of 2023 as originally planned. UA cannot afford to let go of any regional carrier capacity that it can fly.
And UA is undoubtedly paying Mesa far more than AA paid. Mesa would not be running from one money-losing contract to another which simply means that UA is willing to continue to subsidize its regional jet operation to maintain feed.
Meanwhile, AS is on the verge of eliminating turboprop regional operations in favor of a smaller all E175 regional operation while DL is eliminating all 50 seat flying by this coming summer and reactivating 717s and taking delivery of new A220s because the economics of regional jet flying continue to deteriorate wiht massive regional carrier pilot bonuses which all carriers have to pay in order to hope to staff their operations.

Mesa has always been unreliable even before COVID. Their planes were dilapidated and they were notorious for delays. American should’ve dropped them way sooner with all the issues they had. They were known to many at AA as Messy Mesa.

Irrespective of the "he said/she said," AA continues to have resource constraints. A number of AA's regional routes that had been relatively short non-stop flights prior to COVID became half-day connecting flights during COVID. Given the circumstances, we all dealt with it. In mid-2021, non-stop flights resumed for about six months then reverted to connecting flights. At that time, AA projected restoration of non-stop flights in three months. But, AA has been in a "rolling black-outs" mode, pushing out restoration three months at a time. According to AA's current flight schedule for some routes, we're looking at August 2023. But, one simply can't rely on that projection, especially with the news regarding Mesa. Moreover, the projected schedule is a shadow of the pro-COVID schedule, making certain connections not even possible.

At the same time, other carriers have initiated service on these routes. In my particular case, Delta and JetBlue. I've moved my primary short-haul route to Delta. And, given all that has transpired with AA, I don't see that business ever going back. At first, it was frustrating. Now, as Michael Corleone says, it's not personal, it's just business.

There are two huge issues not talked about.

UA is already at the limit for 70/76-seat planes with their pilot scope clause. How on earth will UA bring these planes into their fleet?

Mesa says UA has agreed to maintain existing domiciles and maintenance bases?

Maintenance bases? Sure.

Domiciles? Mesa is going to have countless pilots and flight attendants deadheading from PHX and DFW and then being put up in hotels.

Ornstein has been a sleazeball ever since is NPA days.

PS Since Tim Dunn brings up Alaska, it is experiencing the same thing. And, its conversion away from turboprops makes me inclined to think such changes will be permanent.

You might be on to something here. UA might fully integrate them into UA and have the planes be flown by UA pilots. I can't see any other way for UA to deal with the scope clause.

So what's going to replace Mesa at PHX and DFW? As far as I can tell, almost all regional flights at PHX were operated by Mesa.

So all the planes need to be repainted with United Express livery? How long will that take?

Another telling thing is check out Mesa's help wanted page. They have vacancies in critical functions throughout their organization. It's not just a matter of pilots.

Based on my reading (multiple sources) it looks like some of this has been in the works for a while. So I'm guessing it'll be a net positive for both parties. One of my sources, Ted and Dan Reed's book about the US Airways American merger, strongly suggests that Mesa's Jonathan Ornstein and Scott Kirby were the executives who had the strong relationship, not Doug Parker nor Robert Isom. Mesa helped America West emerge from its lone bankruptcy, so the ties are long standing and deep.

A few other posts and spins on this story (and American Eagle generally) inform me of some interesting possibilities, all of which could be dead wrong. I've seen speculation that Republic and United were looking to wind down the former's 70 seat E-170 flying. American is apparently bringing in every E-170 it can get its hands on. Mesa could easily reduce the number of seats on its CRJ-900s to 70 to comply with United's scope clause and say bye bye to the Republic E-170s, which can easily be reconfigured to seat 65, which American has almost no limit on flying. I've also read where American is parking a number of PSA CRJ-700s at Kingman, Arizona. It wouldn't surprise me to see some of those make their way to Air Wisconsin. Again, all of this is speculation.

To reiterate, I'm guessing this whole thing has been in the works for a while. It's too bad that the two parties couldn't have parted in a more amicable way.

Here's a thought:

Perhaps UA intends to make a big push in PHX. Mesa has over 90 CR9's in service and stored. Simply changing the paint and continuing the core of the service would give UA quite a turn key operation in a market it has not given much attention to.

That would go a long way to explaining why UA has a agreed to keep the domiciles open there.

ZW did start doing some CR7 training, even though it has no aircraft of that type and that it couldn't add any more 70-seaters to UA's fleet because of scope clause limits.

That would make sense since ZW's CRJ's aren't quite the flying dead, but they will be soon,

Last weekend I flew on American Eagle (operated by Mesa) Phoenix-Grand Junction. I was terribly frustrated that they couldn't provide accurate flight status in either direction. For some reason they were showing that the 1 hour flight would take closer to 3 hours in flight statuses.

I was amazed to note just now that effective last Thursday, Mesa is no longer flying this route, which is now flown by Skywest and Envoy.

I'd be curious to hear if any other routes are changing sooner than April.

regional carrier schedules more than about 3 months out are meaningless because there is no assurance they can be staffed.
AS and DL are growing their mainline operations to provide some level of assurance to their schedules.
AA and UA will continue to try to one up each other in a game where the outcome is known and it is simply a matter of when the regional carrier industry collapses.

Will there be route implications? Specifically, will AA no longer service certain destinations from DFW?

Makes no sense whatsoever….. Mesa doesn’t own those gates, American does. How do you plane on fitting 90 900s out of the 2 or 3 UA gates. Mesa is simply hired lift, and bare bones infrastructure beyond planes/pilots/FAs/Mx, it’s kept that way so their partner can shuffle the around at the drop of a hat.

I've flown Mesa (for AA) probably hundreds of times over the past 10 years from most of their SW US airports. I've had awful experiences in Tucson, Phoenix, Denver, Albuquerque, Santa Fe, and all over TOLA region too. One particularly memorable flight was in Palm Springs, when I was seated in the 1st class bulkhead seat and Bees/Wasps invaded the plane and were stinging all of us in FC and FA was gossiping with the ground crew and keeping the door open while we were all dying of hear exhaustion and bee stings! We told them multiple times and just started filming it because THEY DID NOT CARE. So, BYE FELICIA to Mesa Airways. Good Riddance!

Ben, the unsaid in your post is the service ramifications at DFW and moreso PHX? How is AA going to bridge the gap?

Why does American have three wholly owned subsidiaries? Why can’t they merge them?

The only reason that Mesa is keeping current crew bases is so that current employees keep working. If they have to commute they would probably leave. UA will either deadhead them or Mesa put it into the contract which means long trips

The middle? Where in the middle? I think it's going to be about 95 percent toward's American's version.

PSA is opening a DFW base in 2023 and Eagle(Envoy) is opening a PHX base. MESA won’t be missed.

I wonder what’s gonna happen with that CRJ 900 puddle jumper route that goes back and forth between HOU and DFW for American.

That smaller ‘pencil’ plane without first class that air Wisconsin will be flying out of ORD is comfy. You don’t need first class on such a short flight anyways.

Keeping 3 certificates and 3 pilot groups give AA leverage on pilot costs, or at least it used to. If one pilot group demanded too much, the parent airline simply threatened to move the fleet to another carrier. The former US Airways regionals (Piedmont and PSA) had a lot of their back office functions consolidated prior to the merger.

An Envoy FA told me about the planned PHX crew base back in September. I think AA has been planning for this breakup for awhile.

Interesting that some of the regional airlines such as SkyWest fly for many airlines. We will have to see how this pans out for a lot of the regional airlines. I think that it has to do with consistent pay structures and whether the major airline can maintain their agreement. I think more of these regional airlines will have upcoming problems and some may have a problem if they focus on one carrier.

They should just paint these planes all white so they can fly for any carrier and passengers can take pics of them to show off on social media as if they’re flying private.

Delta dropped their SLC:GJT route operated by Mesa this year. A big loss for us based in ATL with family in GJT. Hopefully AA doesn't also now drop GJT otherwise it will leave me no choice but to drive from DEN or SLC because flying this rout on UA is unacceptable given past horror show experiences.

Mesa is the worst regional to train and work under. Everyone knows it. I'm a Flight Attendant with Envoy. They're extremely professional, Mesa doesn't compare at all and American has seen something in this past year.

Exactly

I think the fact that UA so far hasn't said a peep tells you that there are a lot of blanks to be filled in.

It's a really shameful thing to leave the PHX employees hanging.

UAs FA contract restricts UA from owning more than a 51% (or 50%, not certain) share of another airline. I doubt they would want to deal with merging contracts and seniority lists with a regional carrier. Who knows?... Crazy times indeed!

Mesa was crap. Delayed flights, canceled flights, broken planes. Whenever it was Mesa you can guarantee the flight would be either delayed or canceled

Both perspective could be valid accordingly.

Mesa signed a contract to fly for AA , base on pre-Covid level cost/market condition. Cost is a lot higher now and staffing is difficult.

Mesa ask AA to chip in for the higher staffing cost because Mesa can’t afford to / can’t find enough staff at what can afford to pay to keep providing service per the contract signed.

AA refused to chip in because, well, they had a deal and a deal is a deal.

Mesa, without the extra money, just don’t have the staff to keep up with the contract requirement and started slipping up. Making AA’s overall network operations also suffer because, well, it’s an integrated network.

Finally, they decided that this just isn’t working anymore.
AA needs a reliable partner who will fly the flights that need to be flown. So they stop using Mesa.
Mesa can’t keep losing money with the old contract, so they are glad that they got out of it and presumably United is willing to pay more.

As a generic business case -
Big company contracted a vendor / sub-contractor to provide services to big company’s customers.

The contract was signed with prevailing terms / prices at the time - usually benefiting the big company because of its size/pricing power . The vendor/sub-contractor have to assumed a certain level of cost and risk.

However, ultimately the big company have the responsibility to their ultimate end-user/customer and a reputation to protect. If the sub-contractor/vendor can’t deliver, big company need to make it right.
The vendor/subcontractor could do business elsewhere/with someone else. They might even make more, but indeed in a highly consolidated market, there might only be a few major players to work for/sell to and the vendor/subcontractor could back themselves into a corner.

Mesa operated our only Phoenix flight from Roswell(ROW). American paused service temporarily over the summer due to the exclusive Mesa contract with United, and said SkyWest, which operates our flights to DFW, will take over later this month. Rumor is that Phoenix service might be delayed or canceled altogether due to a shortage of SkyWest pilots. Have you heard any official word on this?