An American Eagle Bombardier CRJ-900ER was seen at Phoenix Sky Harbor International Airport.
Alex Tai |: SOPA |: Getty Images:
American Airlines said on saturday it would go down Mesa Air: for some regional flights, citing its partner’s financial and operational problems, problems related to rising costs and an industry pilot shortage.
“As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward,” Derek Kerr, American’s chief financial officer and president of the American Eagle regional brand, said in a staff memo seen by CNBC. on Saturday. “American and Mesa agree that the best way to address these concerns is to terminate our agreement.”
related investment news
American’s last Mesa flight will be April 3, although American is reducing Mesa flights in March, Kerr said in a post.
Now based in Mesa, Arizona, it plans to move “all of our CRJ900s that fly to United Airlines,” a carrier for which he already flies, Mesa CEO Jonathan Ornstein said in a memo to staff Saturday seen by CNBC.
United declined to comment.
Major carriers like American, United and Delta Air Lines regularly contract regional airlines to fly much shorter routes, and they account for roughly half of departures, although this varies by airline.
The crux of the problem stems from a pilot shortage, which is most acute at regional carriers and has become more acute as demand for travel has fallen back in the wake of the travel pandemic. Mesa and other regional airlines have raised wages dramatically to attract and retain aviators. America has raised the wages of its regional subsidiaries.
American has refused to fund higher trial rates for other regional partners, Mesa’s CEO told staff, adding that they were fined for failing to meet pre-Covid contractual obligations.
“With that in mind, we are pleased to announce that we have negotiated a termination with American and are preparing a definitive agreement with United that will transfer all CRJ900s currently flying American Eagle to United Express.” , said Messaa Ornstein. .
American did not comment on Mesa’s post to staff.
Mesa had a net loss of about $67 million in the nine months ended June 30, according to a securities filing. The airline delayed its quarterly earnings report last week.
As of Sept. 30, 2021, about 45% of Mesa’s revenue came from American and 52% from United, according to the company’s most recent annual filing, released a year ago. Mesa also flies for DHL.
American said its agreement with Mesa is primarily related to its hubs at Dallas/Fort Worth International Airport and Phoenix Sky Harbor International Airport.
American plans to consolidate its flights with wholly-owned regional subsidiaries such as Envoy and PSA, as well as an independent regional carrier. SkyWest. Air Wisconsin will also fly for the American Eagle brand, starting its agreement earlier than originally planned, Kerr said.
“The flights previously operated by Mesa will be complemented by these high-quality regional carriers as well as our mainline, ensuring that we can continue to build and deliver the best global network for our customers,” Kerr wrote.