Karen Walker
A parting of the ways between codeshare partners United Airlines and Mesa Air Group is posing questionmarks over Mesa's future and possible new partners for United.
Regional independent Mesa, which operates as America West Express, United Express, US Airways Express, WestAir and Mesa Airlines, has been struggling to contain costs resulting from bringing its operations up to the Federal Aviation Administration's Part 121 standard. In 1997, the company posted a $48.6 million net loss. In the fourth quarter, losses reached $44.2 million as operating costs soared from $111.3 million to $200.2 million. The company expects costs related to the Part 121 transition to remain some $4.5 million a year.
But Mesa's dispute with United will be even more costly. Mesa operates 80 of its fleet of 186 aircraft as United Express under two codeshare agreements with United. One agreement, with WestAir, covers services in the western US. The second is with Mesa Airlines and covers its Denver operations as well as half of its operations in Los Angeles, Portland and Seattle.
United has confirmed it will not renew the WestAir codeshare after it expires in May, and is 'unlikely' to pursue the Denver agreement, contracted to continue until 2005. The likelihood of a total split has prompted Mesa to write off $72 million in its fourth quarter, of which $26 million relates to the loss of the Denver operations.
United says it is committed to maintaining and improving service out of Denver and along the west coast, prompting speculation that new codeshares could be signed soon with SkyWest Airlines and Great Lakes Airlines.
Source: Airline Business
