An American Eagle Bombardier CRJ-900ER aircraft is seen at Phoenix Sky Harbor International Airport.
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American Airlines said Saturday that it will fall Air Mesa for some flights in the region, citing concerns about the partner’s financial and operational problems, issues related to increasing costs and industry impacts pilot shortage.
“Therefore, we are concerned about Mesa’s ability to become a trusted partner for Americans in the future,” said Derek Kerr, American chief financial officer and regional brand president, American Eagle, in a statement. in an employee note, seen by CNBC on Saturday. “The Americans and the Mesa agree that the best way to address these concerns is to rescind our agreement.”
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Kerr said in his note, the last Mesa flight for Americans will take place on April 3, although Americans will cut Mesa flights into March.
Now, Arizona-based Mesa is planning to move “all of our CRJ900 to unified airline“, an airline it flew to,” Mesa CEO Jonathan Ornstein said in a note sent to employees on Saturday, seen by CNBC.
unified declined to comment.
Big firms like American, United and Delta Airlines regularly contract with regional airlines to fly more of the shorter routes, and they account for about half of all departures, although this number varies by airline.
The heart of the problem stems from a shortage of pilots, most acutely on regional airlines, and has become more acute since travel demand rebounded after a slump in tourism. calendar due to pandemic. Mesa and other airlines in the region have dramatically increased salaries to attract and retain pilots. Americans raise wages at regional subsidiaries.
Mesa executives told employees that Americans had refused to fund higher pilot rates to other partners in the region, adding that they were penalized for not being able to meet obligations pre-Covid contract.
“With that in mind, we are pleased to announce that we have negotiated downsizing our operations with American and are finalizing a new agreement with United that will deliver all CRJ900 aircraft currently flying to the United States. American Eagle to United Express,” Mesa’a Ornstein said.
The Americans did not comment on the Mesa note to staff.
Mesa posted a net loss of about $67 million for the nine months ended June 30, according to a securities filing. Last week, the airline postponed its quarterly earnings report.
As of September 30, 2021, about 45% of Mesa’s revenue comes from Americans and 52% from United, according to the company’s most recent annual filing, published a year ago. Mesa also flies for DHL.
American says its deal with Mesa is primarily tied to its transit hubs at Dallas/Fort Worth International Airport and Phoenix Sky Harbor International Airport.
American plans to centralize flying operations with its wholly owned regional subsidiaries such as Envoy and PSA, as well as an independent regional carrier SkyWest. Kerr said Air Wisconsin will also fly for the American Eagle brand, starting the deal earlier than originally planned.
Kerr writes: “The flight previously operated by Mesa will be filled by these high-quality regional carriers as well as our mainline operations, ensuring we can continue to build and deliver best global network for its customers”.
