Regional carrier Mesa Airlines is rumored to be considering Chapter 11 bankruptcy, or as they say Chapter 22 because this would be the airline’s second trip to the courthouse. They last used the bankruptcy process to shed aircraft obligations in 2010.
This information is passed along by aviation watchdog JonNYC.
"Mesa has made it quietly clear their need to enter Ch 11. They can’t staff existing capacity agreements. They can’t run their operation as-is. AA flying would be dropped, UA flying would be heavy on E175s… sometime between now and Q1 2023."
— 🇺🇦 JonNYC 🇺🇦 (@xJonNYC) October 17, 2022
A slimmed-down carrier would eliminate flying as an American Airlines regional affiliate, and focus on its United Airlines contract. Currently Mesa flies Bombardier CR-9 regional jets for American out of Dallas-Fort Worth and Phoenix, and 70- and 76-seat Embraer ERJ-175 regional jets for United focused on Houston and Washington Dulles. Mesa’s five year agreement with American is just two years old (running through December 31st, 2025).
Credit: Mesa Airlines
Recently Mesa sold its Bombardier CRJ-550 aircraft to United and has sought innovative ways of attracting and developing new pilots amidst a shortage that has seen numerous employees taken on by mainline carriers.
Mesa Airlines is incredibly excited to announce a program that will revolutionize the way pilots build their time to ATP minimums. We will be purchasing 29 state-of-the-art light sport Pipistrel aircraft for cadets to build time for $25 an hour with zero up front costs. pic.twitter.com/5Z1ZldC0NY
— Mesa Airlines 🛫 (@MesaAirlines) September 22, 2022
The airline’s stock, though, doesn’t seem to buying the strategy.
Mesa is run by CEO Jonathan Ornstein, who has held the position since 1998. Previously he served as head of Europe’s Virgin Express and Continental Express, and ran the Westair division of Mesa (United Express on the West Coast). He also had a sketchy past working in financial services.
The regional airline previously operated as US Airways Express and America West Express and under a number of other brands, including its own intra-island Hawaiian airline (go!) and Kunpeng Airlines in a joint venture with China’s Shenzhen Airlines.
While passengers whose American Eagle flights are replaced by other operators are likely to experience an upgraded service (Mesa is derisively known as ‘Messy’ for the poor condition in which some of their cabin interiors are kept), we might see some routes dropped altogether.
Who is @xJonNYC and how does he know everything? The New York Times or Wall Street Journal should hire him.
FNT Delta
It’s obvious you haven’t been following the mainstream airline rumors and inside info for at least the last 20 years.
JonNYC wants everyone to think that is some great industry insider but he is simply either an American employee or has access to a very chatty AA employee as a source.
The rest of what he says is either copied from others elsewhere or not terribly difficult for anyone to come up with.
Mesa is by far the most vulnerable US regional carrier – it is not wholly owned and has a pretty bad reputation.
AA is willing to pay top dollar for regional carrier capacity but it also owns the majority of its large RJs – all of its E175s, nearly all of its 170s, and 2/3s of its CRJ900s, the model Mesa flies for them.
in other words, if AA isn’t willing to pay what is necessary for Mesa to recruit and retain pilots, they will default on their contract and AA can cancel it.
UA won’t have any more success in staffing those planes unless they are willing to pay top dollar and UA execs have said they want fewer rather than more RJs in a few years – and that supposes that Mesa can even take any of those aircraft that have any life left to UA.
It doesn’t take a rocket scientist or industry insider to make any statements about Mesa.
“The rest of what he says is either copied from others elsewhere or not terribly difficult for anyone to come up with.”
– an idiot
good.
I am glad you are reading.
the most remote understanding of the US regional airline industry would allow ANYONE to know that Mesa is in trouble. Add in a search of MESA news on any number of business news sites and anyone can come up with a prediction of doom. Raymond James had negative commentary about Mesa just two weeks ago.
Lurking around sites that post your work to trash anyone that criticizes you shows you are more concerned about your image than the “news” which you propagate.
@Jon NYC – thanks for reporting (or reposting – I don’t care where you get your info). My real job doesn’t allow me the leisure time to search any number of business news sites for “MESA news” or any other random airline industry search terms, so I’m glad that when I have a few minutes to indulge my hobby I’m able to find curious stuff here. I’m not one to call out individuals for complaining about posts that they don’t like, so I’ll just thank @Gary for sharing this type of stuff.
LoeFlyer,
You probably don’t read business newspapers or sites at all – because airline news consistently gets pretty high coverage. Bankruptcy or the risks of it is a business subject. you can set news filters from multiple sources to get business related news if you care about business issues of airlines. Some of us read business publications because we are in, wait, wait, business.
When a person makes a career out of publishing leaked information – without citation – it is the lowest form of journalism.
The Wall Street Journal, Seeking Alpha, The Motley Fool and others require that their writers use their own names and attribute their sources; Jon NYC does neither.
Mesa stock has a short interest ratio of 2.44% which is lower than every other major airline except for LUV and 1/6th of the short interest ratio on AAL. The market does not see MESA as declining.
Jon is free to leak AA’s latest product news and I won’t give a hoot. The minute he ventures into talking about business-related topics which the market, not he, decides, I’ll respond to it. When he posts something as a hot tip and claims it as his own when it has been published by multiple other people before, I’ll respond to it.
and that is not just about Jon NYC but about the practices he uses and topics which he addresses.
Tim Dunn is right about this.
How does that person get categorized as an aviation watchdog? Seems more like someone repeating what AA employees and AA suppliers share.
Based on what I’ve seen from Jon NYC over the years, he tends to be quite accurate about what he posts. Then there’s Tim Dunn, who misuses DOT data to “calculate” the exact profit margin of each route each airline flies to the penny – NOT!!!
To further illustrate, Tim wrote (above): “AA is willing to pay top dollar for regional carrier capacity but it also owns the majority of its large RJs – all of its E175s, nearly all of its 170s, and 2/3s of its CRJ900s, the model Mesa flies for them.”
The part about AA being willing to pay top dollar may or may not be accurate. But based on what I’ve seen over a number of years, Republic, which flies E-170s and E-175s for the three legacy carriers owns all of its aircraft. American doesn’t own one of those aircraft (including the 16 its transferring from Tim’s “perfect airline” (That’s Delta for those not in the know).. Also, Sky West’s 20 E-175s it flies for American Eagle are owned by that airline, not American. If Tim wants to check that out he can look at Sky West’s 10-Q and 10-K filings. So who’s more reliable? I’ll leave it to the reader to determine that.
To the broader point, Republic used Chapter 11 to rework its capacity purchase agreements. It won’t surprise me to see Mesa do the same. It also won’t surprise me to see some of Mesa’s CRJ-900s being bought by American. But that’s speculation on my part.
Ghost,
It is precisely because you don’t have a clue what data exists about the airline industry and you don’t like 90% of it that others know exists that you trash anyone that dares note uncomfortable realities.
In fact, AAL’s own annual report lists the number of regional jets that AAL owns and leases and then assigned to regional carriers to fly under contract and also lists aircraft that are owned or leased by regional airlines and assigned to fly for major/legacy carriers.
Airlines do submit detailed cost information by cost group including fuel burn and fleet ownership costs as well profits and losses by global region.
Nowhere have I ever said that I know the profitability of any specific airline route but, as usual, you resort to hyperbole and distortion rather than accept the
and Mesa’s own 10K shows that they own or lease 40 of the CRJ9s which they operate for AA. Those are the only aircraft it controls in the relationship with AA. and if Mesa wants to take those aircraft and use them to fly for UA instead, they need to have AA either terminate the relationship or file for bankruptcy where they can reject contracts they have with vendors.
and if you or Jon bothered to check Mesa’s webpage they are proudly noting that they are paying the highest pilot rates in the regional airline industry. They are paying that only within what the contracts it has with AA and UA can support.
There is nothing factual that Jon has posted that isn’t available from any number of even remotely researched sources.
And there is, once again, far more information about AA and Mesa’s relationship than you even know about. Other people can and do come to accurate conclusions about the business of aviation because they don’t read just airline press releases.
And legitimate business discussions are sourced and cited, not written in anonymity.
I love reading Jon NYC. He is clearly an insider, not news junkie. He loves AA. I complained about crappy treatment on AA and he blocked me on twitter. i thought that was a bit extreme.
Putting personal reputations to the side . . . one AA executive (we know who) has said that the network is the product. Should a departure of Mesa from AA’s network actually occur (no pun intended), AA will have a product problem. Also, the pilot shortage issue (on each of the regional carriers) has forced AA to convert some routes that had normally been non-stop flights into connecting flights. This adds to the product problem.
One route I fly regularly falls into the second case. What should be a one-hour non-stop flight is now a five-plus hour connecting journey. Restoration of the non-stop flight has been continually pushed back and pushed back. Like rolling black-outs. Currently, it is scheduled to return in the early summer of 2023. That business has moved to Delta. Separately, if I need to take a two-segment flight just to get to my long-haul point of departure, the product no longer serves me.
In the end, whether it is AA or any other airline, it is management by numbers and statistics. I don’t say this in a spiteful way. Just matter of fact. It’s just the way it is.
More importantly, we in PHX would not like to see Mesa go bankrupt as a corporate citizen but would LOVE a replacement for their service out of PHX Sky Harbor. AA’s Mesa flights are packed but usually late. If the move the planes (YES AA owns or leases many of their regional jets to their partner, which is pretty standard btw) and have Republic or Piedmont run the operation, it would be a HUGE WIN for the hub (which BTW is NOT being closed after they merger) which has become a top 4 performer and continues steady growth.
My rumor. . .look for PHX to Tokyo by AA or JAL JV within the next two years due to the exploding hi-tech world that is the new silicon valley.
JonNYC is a moron. The ukraine flag in is profile should give that away.
@JonNYC
A guy with a ukraine flag in is Profile is calling another person and idiot. Lol
Let’s just say xjonnyc has his hands very high up… I’ll leave it at that. his accuracy is almost flawless. so, that’s another item.
Mesa bought 4 737’s to fly for DHL. Three have been mx hogs and grounded. Endeavor is suppose to be replacing Mesa on the AA routes.
@Sally- Endeavor is wholly owned by Delta. They would never fly under the AA banner, nor would AA give its money to a Delta subsidiary. If this is all true, I assume Mesa’s flying will go to SkyWest, possibly PSA.
Mesa has been buying up 73-700s. I believe this is just a restructuring.
This is all speculation . Unfortunately Mesa has never been able to shake the bad worst etc. All airlines are susceptible to have a run with bad service , WX delays or logistical meltdowns.Every airline is guilty. Here is what I know? Mesa is a independently owned and operated carrier. So every other airline within their flying system UA or AA including the wholly owned companies are quick to throw them under the bus because that is human nature we are all guilty one way or another to compare our airline with others. Also Mesa has never had a good PR dept from advertising to Choice of Liveries to choice of aircraft. And unfortunately you never here about when they do something exceptional or positive. What airline employees need to do is not be so quick to judge or rude or bad mouthing any airline within the flying system they are apart of because you are hurting yourself and defaming your own airline and its slander. PAX only see UNITED or AMERICAN on the side of the aircraft. Also Mesa has been around since 1982 they have an interesting history with HP via partial ownership with stocks by injecting w/ ca$h saved America West Airlines from going belly up and helped keep pilots flying US Airways with the Jets4Jobs program in 2003 thru 2006 which also kept US Air from folding in their 2nd Bankruptcy. You can’t knock the Pilots Pay scale at YV now so they always will find something else to nitpick at. I flew as a Flight Attendant with MESA from 1999 thru to 2012 and it was the same crap threads and probably same disgruntled unhappy saps posting them. In reality Mesa is a huge success story; what ever happened to positive happy flying?
This would explain why AA picked up Air Wisconsin, something that given ZW’s fleet, seems like a major step backwards. Additional, ZW is still part of United’s Aviate program where pilots can move from regionals directly to mainline UA, so AA will still have to suffer pilot loss from one of their regionals with no benefit to their mainline.
The other signal for Mesa’s future is CommuteAir bringing the EMB-175 into its fleet. UA has maxed out on 70/76-seat regionals, so for CommuteAir to fly the EMB-175 for United Express would only happen if another regional withdrew.
Yep it’s all speculation as was the flatbed from a equipment rental company loading up the MESA maintenance gocarts in DFW yesterday and hauling them off.