Republic Airways, Mesa Air to MergeUpdate
By Katherine Hamilton and Alison Sider
Republic Airways and Mesa Air Group agreed to merge, creating a publicly traded regional-airline giant.
The deal is the latest move in a long-running shake-out among regional airlines that fly on behalf of larger carriers.
The Carmel, Ind., and Phoenix companies said Monday they plan to name the merged company Republic Airways and list it under the symbol RJET. The all-stock deal is set to close late in the third quarter or early fourth quarter of 2025. The companies did not disclose financial terms.
Mesa shares rose 42% to 79 cents in Monday morning trading.
Regional airlines struggled after the Covid-19 pandemic. They had trouble hanging on to pilots as bigger airlines raided their ranks, and costs rose as they clamored to pay higher wages to attract and retain crews.
Smaller, independent regional airlines have been squeezed as the big airlines they serve have shifted flying to their own larger planes, or to wholly owned subsidiaries.
Mesa, which flies for United Airlines after having parted ways with American Airlines in 2023, has been losing money and has been selling planes, engines and other assets as it has tried to regain its footing and boost liquidity.
The combined company is expected to generate about $1.9 billion in revenue, and it will be led by Republic's executive leadership team, the companies said. Republic and Mesa anticipate merging will help them grow financially and operationally with a larger, unified fleet.
Republic shareholders will own 88% of the combined airline's common shares. Mesa shareholders will own a minimum of 6% and up to 12%, dependent on Mesa's achievement of certain pre-closing criteria, the companies said.
Republic flies primarily in the Northeast and Mid-Atlantic for American, United and Delta Air Lines. Bryan Bedford, its chief executive officer, has been nominated to serve as administrator of the Federal Aviation Administration.
Before the merger closes, Mesa has to dispose of certain assets and address certain liabilities, the companies said. All of Mesa's outstanding debt obligations will be extinguished as a result of the transaction, and the company won't contribute any debt to the new airline, they said.
Write to Katherine Hamilton at katherine.hamilton@wsj.com and Alison Sider at alison.sider@wsj.com