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The CEO of regional airline Mesa Air Group Inc (NASDAQ:MESA) announced on Saturday an agreement to operate regional carriers for United Airlines Holdings Inc (NASDAQ:UAL).
In a company memo, Mesa Air CEO Jonathan Ornstein said that the Arizona-based carrier is "finalizing a new agreement with United Airlines which would transition all CRJ900s currently flying for American Eagle to United Express," Reuters reports.
The CRJ900 is a regional jet made by Canada's Bombardier Inc (OTC:BDRBF) with around 75 seats. Those Mesa Air jets are part of American Airlines Group Inc's (NASDAQ:AAL) American Eagle network of six regional carriers operating 3,400 daily flights.
Also Read: Mesa Air Group Announces Fourth Quarter and Fiscal Year 2022 Earnings
Ornstein explained that the decision was driven, in part, by an ongoing pilot shortage.
"American significantly raised regional pilot wages for their wholly owned subsidiaries to deter pilots from going to national carriers and attract pilots from the ever-shrinking pool of qualified pilot applicants," Orenstein stated in the memo. Adding that "American chose not to fund the higher pilot rates for their non-affiliated carriers," which includes Mesa Air.
Ornstein also pointed out that United ordered 100 787 Dreamliners and 100 737 MAX airplanes last week, according to Reuters.
"United's growth plan provides extensive advancement opportunities for our people," Ornstein wrote. "This deeper relationship will position us as the preferred carrier for future regional flying opportunities with United."
In a memo, American Airlines said that other regional carriers will backfill the flights operated by Mesa. The memo added that "Air Wisconsin is preparing to join the American Eagle family earlier than planned."
Mesa Air said it would end service for American Airlines on April 3, 2023, after significantly reducing flights in March.
Photo: Courtesy of redlegsfan21 on flickr.
