US regional carrier Mesa Airlines intends to remove all MHIRJ CRJ900 regional jets from its fleet with United Airlines by March 2025, shifting to a smaller fleet composed only of Embraer 175s.
Mesa Air Group, the Phoenix-based parent of Mesa Airlines, disclosed the changes on 16 October, the same day it reported losing $19.9 million during the second quarter of 2024.
The company, which operates flights under contract with United Airlines, has not yet disclosed financial results from the third quarter, which just ended. Mesa in recent quarters has been filing delayed financial reports amid financial troubles and a restructuring.
“Our second-quarter results have begun to demonstrate an improvement in our business and reflect our efforts over the past year-and-a-half to restructure and strengthen our operations… and balance sheet,” says Mesa chief executive Jonathan Ornstein.
As of end-June, the airline operated 73 jets – including 55 E175s and 18 CRJ900s – for United, now Mesa’s sole airline partner.
But the fleet is shrinking.
Mesa does not specify how many aircraft it currently operates but notes in regulatory filings that United had capped its fleet at 60 aircraft as of this month.
Additionally, Mesa says that on 25 September it reached a new fleet agreement with United. That deal allows Mesa’s fleet to remain at 60 aircraft through January 2025 but stipulates that Mesa operate “an entirely E175 fleet by March 2025”, regulatory filings show.
Mesa says United requested the changes due to “seat-scope limitations and commitments for 70- and 76-seat aircraft for other United Express partners”.
Those partners include CommuteAir, GoJet Airlines, Republic Airways and SkyWest Airlines. Seat-scope limitations refer to provisions in United’s contract with its pilots that define flying that United can outsource to regional airline partners.
“United has asked us to accelerate the removal of CRJ900 aircraft and transition the pilots to our E175 fleet. This will lead to increased costs and impact our block-hour capabilities while these pilots are in training,” Mesa says.
United has agreed to pay Mesa $14 million as reimbursement of costs associated with the fleet changes, and committed to purchase four of Mesa’s CRJ700s for $11 million in total proceeds, Mesa says.
The regional airline has struggled financially in recent years, having been hit hard by factors include a shortage of pilots. In April last year, Mesa and American Airlines ended a decades-long partnership, and Mesa has since flown only for United.
Mesa lost $66 million in the nine months ending in June, due largely to charges attributed to sales of 19 CRJ900s and 61 spare engines. The airline ended June with $16 million in cash and cash equivalents.
Mesa expects “to meet its cash obligations for the next twelve months”, while also warning of a possible cash crunch.
“These conditions and events raised financial concerns about our ability to continue to fund our operations and meet our debt obligations over the next twelve months,” it says.
