United Airlines Retains Stake Amidst Republic Airways & Mesa Air Group Merger
United Airlines has detailed that following the announcement of the merger between Mesa Airlines (the subsidiary of Mesa Air Group) and Republic Airways, it will have the option to retain a stake in the new entity.
However, it will depend on certain conditions, including Mesa Air Group’s ability to dispose of its Mitsubishi (née Bombardier) aircraft assets.
Priority To Obtain Shares
Photo: Robin Guess | Shutterstock
In an SEC filing on April 8, United Airlines outlined that following the announcement of the merger between Mesa Air Group, which owns Mesa Airlines,
and Republic Airways, the carrier also entered into a three-party agreement with the two regional airlines.
The agreement stipulates that before the merger is consummated, United Airlines will terminate its capacity purchase agreement (CPA) with Mesa Airlines and sign a new, ten-year CPA following the transaction.
Following the merger, Mesa Air Group, which will be known as Republic Airways Holdings going forward, will issue 6% of its shares, which will become available to United Airlines first.
However, the three-party agreement hinges on several factors, including Mesa Air Group’s ability to dispose of its Mitsubishi (née Bombardier) aircraft assets, reduce liabilities, and “effectuate certain related transactions,” as well as United Airlines facilitating the former company’s actions to dispose of the assets and reduce liabilities.
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The deal is expected to close in the late third or early fourth quarter of this year.
Equity And Loans
Photo: Robin Guess | Shutterstock
If there are any leftover shares after United Airlines, which would be available to the airline to the extent of its “certain financial contributions” once the merger is done, they will become available to Republic Airways Holdings
(the surviving renamed entity) to pay off any debts.
If any shares are left after that, they will become available to the shareholders who held shares of Mesa Air Group before the merger became effective.
According to United Airlines’ 2024 report, as of December 31, 2024, it held a variable interest in Mesa Air Group in the form of around 10% equity interest and several loans to the company. At the same time, it was not the primary beneficiary because it did not have the power to affect Mesa Air Group’s decisions that would significantly impact the regional airline’s economic performance.
Mesa Air Group and Republic Airways announced their merger on April 7. The two airlines’ joint statement read that the merger would create a leading and publicly traded regional airline company with around 310 Embraer E170/
E175 aircraft.
Ch-aviation data showed that in addition to 60 E175 aircraft, Mesa Airlines has 11 Mitsubishi (née Bombardier) CRJ900,
22 CRJ900ER, and 13 CRJ900LR aircraft.
The merger, approved by both airlines’ Boards of Directors, should be finalized in either Q3 2025 or Q4 2025. Following the completion of the transaction, the company’s board will consist of six current Republic Airways directors and one Mesa Air Group director.
The all-stock transaction will result in the current Republic Airways and Mesa Air Group shareholders owning 88% and 6% of the new company, respectively. In the case of the latter’s shareholders, “dependent upon Mesa’s achievement of certain pre-closing criteria,” the stake could rise to 12%.
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It’s almost been 365 days since the regional jets were pulled from operating American Eagle-branded flights.
Small Share Of Regional Flights
Photo: Kevin Hackert | Shutterstock
According to data from the aviation analytics company Cirium’s Diio Mi airline planning tool, in April, United Airlines has scheduled 13,456 weekly flights to be operated by its regional partners.
Apart from the two now-merging carriers, this includes SkyWest Airlines, CommuteAir, and GoJet Airlines.
From the quintet, SkyWest Airlines will operate most flights (6,727 weekly flights, or 49.9%), followed by Republic Airways (2,006 weekly flights, or 14.9%) and Mesa Airlines (1,730, or 12.8%).
The combined entity would operate just 3,736 weekly flights on behalf of United Airlines and its regional brand, United Express,
in April. CommuteAir and GoJet Airlines are scheduled to operate 1,650 and 1,343 weekly flights on behalf of them during the month, respectively.
Cirium’s Diio Mi also showed that Mesa Airlines has not had scheduled flights with any of its CRJ aircraft since February.
