Amg4me

I am beginning to wonder if United is going to acquire Mesa. Consolidation seems a realistic possibility given the state of industry. United does not wholly own any regionals and AA has 3, with 2 of its' regionals opening bases in DFW and Phoenix. The Mesa stock price is low enough to be a realistic target. I would think JO is reaching retirement age and he has a relationship with Scott Kirby. United subsidizing Mesa raises and buying Mesa planes. The rumors of bankruptcy seem unrealistic given the timing and expense, wouldn't a better strategy be to bring in a white knight. United buys the stock gets the pilots and the planes, Mesa C suite gets bonuses on stock sale and everyone goes home happy. Just a thought

ClappedOut145

I highly doubt it. I believe that the UA f/a’s have a clause in their scope that stipulates that any wholly owned entity has to have UA f/a’s on it. If anything, UA ALPA should be fighting to bring the flying back to United and not farm it out.

Amg4me

Okay, but if United acquires Mesa, all the employees of Mesa become employees of United, so there are United FAs flying on the planes and the flying has been brought back to United and not farmed out. Think more in terms of a merger, I wouldn't expect the Mesa brand to survive. Think AA and US Airways.

dera

That's some extremely strong crack you are smoking there.

pangolin

It’s for sale in the crystal palace.

Amg4me

Thank you, it's important to be able to think outside of the box, particularly in volatile markets, just trying to consider scenarios piecing together current events and likely future events. So, a few have commented it ain't gonna happen, but none have said why not, other than United FA's would have to work the Mesa routes. But if the Mesa pilots and FAs become employees of United because Mesa no longer exists as a separate company, seems that would not be a problem. So what is the reason you think this is not a possibility?

Think about this, Mesa currently has about 36.2 million shares outstanding. At a current stock price of $1.40, that's a price of $50.7 million dollars. United is purchasing 18 CRJ-700s from Mesa for about $50 million. So, from a price perspective, it is not unrealistic to acquire the rest of fleet for the price of stock, considering the debt. Would need to do more evaluation of lease agreements, but the stock price should reflect the actual net value of the company.

Ravenwing

If United wanted to own a regional airline it would already own one. Regional airlines are designed to keep labor costs down, not only pilot costs, but also ramp, maintenance, dispatch, and FA costs. The airlines that do own regionals have chosen not to merge them in order to keep all these separate costs down, even when pilot labor costs have increased. United does not appear to be in any hurry to give their own pilots a good labor contract, and integrating labor groups from another airline would create even more complexities and tension.

Scott Kirby has stated he wants to reduce regional jet feed and he does not see them as profitable in markets served by low cost carriers. Short term, United is moving towards using CRJ 550s to elevate the customer experience and create loyalty, and they are helping Commutair get E175s up and running. Long term, they created United Aviate Academy to supply more pilots in the future. United allowed Expressjet to pretty much go under and dropped their contract with Air Wisconsin.

If United succeeds in turning Commutair into an E175 carrier, that will reduce flights operated elsewhere in the United system due to scope. Some of that is due to the pilot shortage, but it may be United’s way of preparing in case one of its E175 partners goes under. United prefers to let its regional carriers compete against each other to keep costs down, and in a crisis, they support the cheapest one.

golfandflows

And if someone here said this summer that Mesa would be leading pay by the fall at 100 / hr you would have said the same. But here we are.

dera

Ok. So Mesa will merge with United and all Mesa pilots will become United pilots.

I'm not gonna hold my breath on this one. Got suggestions on how to merge the seniority lists? Nr1 at Mesa becomes a IAH 777 CA?

That's not one of the, that is THE, craziest scenario I've heard in a few years.

Amg4me

How did they make it work when AA acquired US Air? The model is there due to arbitration in the suit regarding seniority. You have a framework and already the knowledge of the litigation that occurred and how the it was settled, i.e., you have precedent to draw from.