Originally Posted by FreqFlyer001

DON'T HOLD YOUR BREATH

No regional airline is being bought or merged with anyone until the new FAA Funding bill is signed into law. Especially not a debt laden loss-making airline like Mesa whose underperformance continues to disappoint even the most optimistic industry analysts. Today, Mesa announced a staggering $46.7 Million loss over a relatively short three month fiscal period. This isn't sustainable no matter who's paying the pilots salaries. Mesa's future is indeed unclear. Just about every airline both large & small periodically models their long-term growth prospects and capital investments in new aircraft, training facilities, labor contracts etc. Given the pilot shortage in recent years, just about all airlines have based these models on the assumption that congress would raise the retirement age for pilots in the next FAA funding bill.

AGE IS JUST A NUMBER, RIGHT?

Age 67 is anything but a done deal. The Age 67 amendment passed the House, but still has yet to clear the Senate. Raising the pilot retirement age to 67 will effectively be a lifeline to the regional airline industry, which is already in its death throes. Age 67 will temporarily help regional airlines like Mesa slow its Captain attrition rate by forcing older mainline pilots (Age 65+) out of their international seats, and into domestic flying, as ICAO's 65 year age limit will go unchanged regardless of the outcome of the FAA funding bill. Age 67 will relieve pressure on Mesa but the airline's future is all but certain. If the new FAA funding bill fails to raise the retirement age, it's very possible that Mesa, and other regional airlines may be headed for bankruptcy. ALPA, AFA, and several other AFL-CIO affiliate unions which collectively hold a death grip on the U.S. Senate are overwhelmingly against raising the retirement age. It's a bold position that could end up accelerating the end of the regional airline industry within months.

SHORT TERM PAIN

While Mesa is notorious for its operational mismanagement and fiscal incompetence, there are many factors outside of the company’s control that have affected the entire regional airline industry. The pilot shortage is the biggest factor, and has been exacerbated by the FAA with outdated certification standards, the majority of which were written in the 1960's. Some FAA regs are preserved in law under the false guise of promoting safety to the traveling public, while others are knee-jerk reactions to accidents & incidents, like the 1500-hour rule, an unnecessary barrier to many who might otherwise be actively flying in the airline industry right now. Thousands of pilots are also medically grounded on any given year by the FAA (Federal Air Surgeon) due to outdated medical certification standards which were also written in the 1960's. Raising the retirement age alone will not address the pilot shortage in any lasting or meaningful way. It's merely a temporary bandage. Unless the Senate has the appetite for a comprehensive review of the FAA's pilot certification, and medical standards, and/or is willing to place badly needed restrictions on the FAA which enjoys unlimited 'discretion' then it's probably in everyone's best interest to let the regional airline industry die.

EXHALE, BREATHE NORMALLY

In spite of United's existing investments and small strategic ownership stake in Mesa, it's unlikely United would merge or acquire Mesa Airlines anytime soon. At least not now, and not in Mesa's current financial state. What is likely though are more financial losses, more complex transactions, e.g. aircraft sales, parts auctions, leases, debt swaps, which through preferential pricing can sometimes shift & deflect blame for bad business decisions. In short you can expect more of the same until we all find out what's in the new FAA funding bill, specifically whether Age 67 will officially be signed into law. In the meantime I wouldn't hold my breath on any merger or acquisitions announcements.