Two months ago regional airline Mesa was rumored to be on the verge of Chapter 11 bankruptcy and planning to stop its Bombardier CR-9 flying for American Airlines. That will leave it flying only for United, where it has operated 70- and 76-seat Embraer ERJ-175 regional jets focused on Houston and Washington Dulles.
Mesa simply didn’t have the pilots to operate all of its commitments, and it was losing money. Its deal with American ran through the end of 2025, but the two carriers have terminated their deal early.
— 🇺🇦 JonNYC 🇺🇦 (@xJonNYC) December 17, 2022
The regional carrier says that American should have paid it more than was required under its late 2020 deal, because pilots had become more expensive, and without this they weren’t able to attract and retain employees needed to fulfill its obligations.
New: @MesaAirlines plans to transition @AmericanAir CRJ900 flights to @united pic.twitter.com/xgY70urBTb
— davidshepardson (@davidshepardson) December 18, 2022
Mesa 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. It’s the bottom-feeder of the regional industry, derisively known as ‘Messy’ for the poor condition in which some of their cabin interiors are kept. And compared to Mesa it’s not wrong for American to describe their wholly-owned regional carriers as top-notch. We’ll see how much of the Mesa backfill gets filled by other carriers, though hopefully not much by Air Wisconsin.
The problems American was having with Mesa, and that it would lead to an unraveling, were first publicly discussed by aviation watchdog JonNYC and the end of Mesa’s flying for American was first spotted by Cranky Flier Brett Snyder who noted that the “[l]ast day [of Mesa’s flying for American] is Apr 3 except for a couple random stragglers on DFW-ELP after that.”
United dropped Air Wisconsin and gained more Mesa. Neither is a great experience, but the trade seems to align with United’s network strategy and American’s cost strategy. The Mesa bankruptcy stalking horse that had been much-discussed likely played a role in the ability for Mesa and American to terminate, since if they didn’t Mesa wouldn’t be able to continue ‘losing $5 million per month’ and therefore American’s ability to insist on either specific performance or penalties wasn’t sustainable indefinitely.
There were a whole lot of other people that knew that the AA-Mesa relationship was disintegrating but CF tweeted first – of industry followers that I saw – that schedules were being pulled.
The only thing interesting in all of this is that AA and UA continue to fight it out over swapping regional carriers in order to maintain their regional carrier networks even while those regional carriers are paying hefty six figure pilot bonuses while DL continues to reactivate 717s and take delivery of even more A220s to replace RJ flying with mainline aircraft and pilots just as AS is doing with its turboprop operation. DL just loaded a bunch of new mainline flight replacements for RJ flying in its hubs, shifting more of its large flying to more point to point hubs such as NYC and BOS. The economics of regional jet flying for connections don’t work although 76 seat flying used to fly connections LOSES less money than mainline. AA and UA refuse to commit to a new generation small mainline aircraft leaving market to DL and B6 among “network” carriers.
For American Eagle, Mesa is the only operator of oldwr CRJ900s that are not the NextGen version. Will those get retired or transferred to American Eagle’s other regional partners?
Can UA add CRJ900 under existing scope agreements? How many and how many seats per plane?
In the end, AA remains resource constrained.
Dave, the routes belong to AA and the aircraft belong to Mesa. In order for AA to maintain operations on those routes, AA will have to do a water balloon exercise. That is, squeeze here and it pops out there. But, I wouldn’t count on it. Which remaining routes would be squeezed for aircraft? To AA, would the juice be worth the squeeze? (Sorry for the mixed metaphors.)
Tim Dunn notes that certain industry watchers were aware of the AA-Mesa troubles for some time and saw flight schedules changing. In comments to another article on another site, while I had no idea about the AA-Mesa troubles, I mentioned that I was seeing flight schedule changes on AA’s regional routes. With Tim Dunn’s perspective, I now understand that the issue was bigger than I realized. To be fair, all of the airlines seem to be in a pickle regarding their regional operations.
By the way, let’s agree to not talk about CJRs. Instead, let’s agree to talk about EMBs. 🙂
@ Tim Dunn
The 717 LMAO , I was flying those at TWA … DL isnt ahead in any of this !! They stopped making them in 2006.
I remember flying Mesa on something like GSO-CLT back around the time of the AA/HP merger on a then new CRJ-900 that was all coach and had HP cloth seats. It looked ratty then.
Yesterday’s Mesa adventure on United Express involved my seat being inop, so got moved to another and a non-rev got bumped back to coach followed by a 30 minute delay, where as the pilot said, they were on the phone with MOC “verifying the expiration of our emergency equipment because nobody is sure.” Having 20 years in the airline industry I can point out a half dozen things wrong to lead up to that statement on an originating flight.
What are the route implications? Specifically, will AA no longer service certain destinations from DFW?
Who won this trade? AA is taking on the CRJ-200 (the airline the UA and DL are desperately rushing to get rid of) and UA is getting the CRJ-900.
Never change American. Keep handing your competitors their growth on a golden platter while hurting yourself.
TIm j,
DC9 family aircraft never die. They just become economically obsolete.
The 717 right now is lower CASM than most regional jets -and DL can staff them.
Do know that DL’s 717 fleet is younger than AA’s A320 fleet?
This is a win for AA. SkyWest can expand, maybe even Envoy or PSA into DFW and PHX. Unless AW gets 70 plus seaters, they won’t be in play. Mesa is a messy airlines, often late or cancelled flights, dirty cabins and so so crews. AA’s other regional operations either owned or contracted are run much better. Good luck UA and woo who for AA.
You know, when I worked for ZW before UA took it over and dismembered it like a rotisserie chicken, it was a pretty good regional airline. It’s sad to see how the regional carrier I spent twenty years of my career waiting for as a Lead Agent in ground service and customer service has fallen. The old ZW under Preston Wilbourne was a great place to work and had every reason to hold its head high in the industry.
Not so much anymore, it seems.
Delta already owns the 717s and had parked them at the beginning of the pandemic. They might regret not mothballing their MD90s too. If it’s less expensive to operate the 717 on a seat mile basis, then it makes sense. The entire economic model of the regional contractors is ridiculous. How many of these carriers not owned by the majors have prospered? American refused to pay Mesa more than what was agreed to in 2020, but they certainly raised the fares from the 2020 levels the contract rate was negotiated on. American is a shock airline and has been since it was acquired by America West DOING BUSINESS AS US AIRWAYS.
Mesa “GO” came into the Hawaiian interisland market and destroyed Aloha Airlines and tried to do it to Hawaiian by beinging fares down to $15. Didnt work. Go went away and now years later Southwest is trying it again. SW will end up like Go…Hawaiian has a lock with the best milage program.
Hard to flip the residents.