American Airlines is dropping Mesa, citing financial problems

American Eagle Bombardier CRJ-900ER aircraft seen at Phoenix Sky Harbor International Airport.

Alex Thai | SOPA | Getty Images

American Airlines On Saturday, it said it would drop mesa air For some of its regional flights, it points to concerns about its partner’s financial and operational problems, issues related to rising costs and the industry’s pilot shortage.

“As a result, we have concerns about Mesa’s ability to be a trusted partner for America’s future,” Derek Kerr, America’s chief financial officer and president of American Eagle’s regional brand, said in a staff memo. said, which was spotted by CNBC. Saturday. “The United States and Mesa agree that the best way to address these concerns is to conclude our agreement.”

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The last Mesa flight to American will be April 3, although American is reducing Mesa flights in March, Kerr said in his memo.

Now, Arizona-based Mesa plans to “fly all of our CRJ900s. United Airlines“A career that is already taking flight, Mesa CEO Jonathan Ornstein said in a memo to employees on Saturday, which was seen by CNBC.

United Refrain from commenting.

Major carriers like American, United States and Delta Air Lines Regular regional airlines are contracted to fly most short-haul routes, and they account for roughly half of all flights, although this varies by airline.

The heart of the problem stems from a shortage of pilots, which is most acute at regional carriers, and has become more severe after demand for travel has rebounded after the pandemic travel slump. Mesa and other regional airlines have raised wages sharply to attract and retain fliers. America raised wages in its local subsidiaries.

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American refused to fund higher pilot rates for other regional partners, Mesa’s CEO told employees, adding that they were penalized for not meeting pre-Covid contractual obligations.

“With this in mind, we are pleased to announce that we have negotiated the end of our operations with American and a new agreement with United that will allow all CRJ900s that “Mohal flies United Express for American Eagle,” said Misa Ornstein. .

American did not comment on Mesa’s memo to employees.

Mesa had a net loss of about $67 million in the nine months ended June 30, according to a securities filing. Last week, the airline delayed its quarterly earnings report.

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American said its contract with Mesa was mostly tied to its hubs at Dallas/Fort Worth International Airport and Phoenix Sky Harbor International Airport.

American plans to concentrate its flights with its wholly-owned regional subsidiaries such as Ambassador and PSA, as well as an independent regional carrier. SkyWest. Kerr said Air Wisconsin will also fly for the American Eagle brand, starting its contract earlier than originally planned.

Kerr wrote: “The flights already operated by Mesa will be replenished by these high-quality regional carriers as well as our mainline operations, ensuring that we can build the best global network for our customers and Keep delivering,” Kerr wrote.

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