Regional airline operators Republic Airways and Mesa Air Group completed a business combination on 25 November that creates the second-largest feeder airline in the USA.
In the works since April, the deal’s completion comes after Mesa’s shareholders approved the tie-up last week.
Republic shareholders now own 88% of the combined company’s existing stock, while Mesa’s shareholders will hold between 6-12%, depending on the “final settlement of Mesa’s pre-closing obligations”.
Mesa is technically the surviving company but takes the name Republic Airways Holdings, with Republic’s leadership team guiding the post-combination company. David Grizzle, who was appointed Republic’s chief executive after Bryan Bedford left the airline to lead the Federal Aviation Administration, will stay on as the company’s CEO and board chairman.
“Today, Republic returns to the public markets as a well-capitalised airline with a strong strategic plan, a capable and proven workforce of aviation professionals and a horizon bright with opportunity,” Grizzle says.
Republic had been de-listed from the US stock market following its Chapter 11 bankruptcy in March 2016. But the post-combination company now trades under Republic’s revived “RJET” stock symbol.
Republic Airways Holdings emerges from the combination with the world’s largest fleet of Embraer regional jets, and the second-largest regional fleet only to SkyWest Airlines. It says that its 310 E-Jets will support more than 1,300 daily departures.
However, the carriers will continue operating separately for now, ”while the combined company works to consolidate the two airlines to operate as a single carrier”.
Republic will continue flying on behalf of American Airlines, Delta Air Lines and United Airlines, while Mesa will exclusively support United under a new 10-year capacity purchase agreement.
Patrick Quayle, United’s senior vice-president of global network planning and alliances, says the combined company will operate a total of 120 E-Jets under the United Express brand.
”These regional jets are a key part of what allows United Airlines to operate the most comprehensive global airline network in the business, by enabling connections from smaller communities into our broader mainline network,” he says.
Mesa said last week that it anticipates the combined company will generate $1.8-2 billion in annual revenue.
