Didn’t express jet sell their planes to United once upon a time. How did that end up for them?

 

Republic merger not happening

 

Still don't get it. If YV is selling off aircraft and leaseing, then all it is just renting. Figured now YV is having less airplanes and something is brewing up.

 

Regional business model has kind of split between two types of operations...

Some regionals just operate planes owned by mainline. Priority there is a low cost of operations, contracts are short, and planes get moved around to control costs.

The traditional model, where the regional owns the planes, allows the major to purchase capacity without having to commit to owning/leasing planes. Costs a little more, and the regional won't buy new planes without a lengthy contract, normally over ten years. Once the initial contract is done, the planes might get extended, contracted out to another major, sold, etc. Major can't fire the regional unless they're willing to give up the planes too.

Some regionals do both models. Mesa is a good fit for the former model... low cost, but you can take your planes back in a hurry if/when they fail to perform.

 

Xjt never owned any aircraft. CAL then UA always owned the 145/175’s.

 

Owning aircraft benefit = once aircraft are paid off profit margins go up.. (big issue is Mesa couldn't perform with the CRJ’s and lost the contract on aircraft that were almost laid off)

Partner owned aircraft benefit. =. Zero overhead, just a “staffing company” but living of a fixed profit margin..

Think at this point Mesa is just becoming a “Staffing company”.. ride that out as long as they can…. Then JO pulls the golden parachute…

 

Mesa Forges Aircraft Sales, Moves Toward All E-Jet Fleet

Mesa Air Group has brokered deals to sell 18 Embraer E175s to United Airlines and 15 CRJ-900s to a third party as it works to transition to an all-Embraer fleet.

The regional operator expects $229.1 million in gross proceeds from the E-Jets, of which $142.4 million will be used to pay off associated debt, Mesa Air Group said in a U.S. Securities and Exchange Commission filing. The sale of the first eight aircraft closed on Dec. 31 for a total of $35.8 million after the payoff of debt.

Phoenix-based Mesa said the sale of the remaining E-Jets would occur on Jan. 31.

Additionally, Mesa on Dec. 24 entered into an agreement to sell 15 CRJ-900 airframes with landing gear and related parts to an undisclosed third party. The company expects to gain $19 million from the sale, all of which will be dedicated to paying down Mesa’s loan with the U.S. Treasury Department.

Mesa announced in October 2024 that, at United’s request, it plans to transition to an all E175 fleet by March 1. The Aviation Week Network Fleet Discovery database shows the company has 43 of the E-Jets in service and seven inactive aircraft. Its in-service fleet of CRJ-900s is comprised of six aircraft with 33 of the jets inactive. The sale of the E-Jets and CRJ-900s follows an announcement by Mesa on Dec. 24 that after working with United’s network planning group the carrier is scheduled to increase its aircraft utilization from an average of 8.9 block hours per day in the fourth calendar quarter of 2024 to 9.5 in the first quarter, a 7% increase.

The airline’s utilization is expected to reach 9.8 block hours per day by March. “While still below pre-Covid levels, the increase in utilization is a result of significantly reduced attrition throughout all work groups, more optimal scheduling practices, and improved operational performance,” the company said.

As a result of the increased flying, the airline is starting to recall previously furloughed pilots in January.

 

Looking at the 2022 Annual report, Mesa owned 18ea Ejets. That would mean these 18 Ejets that were sold recently to United were the last of them, leaving Mesa owning a handful of unused CRJ's. Not an advantageous position for Mesa to be in.

 

Why is it bad news?

 

$229 million divided by 18 is 12.7 million per key

seems like a heck of a deal for UA, doesn't it? assuming these were planes that were flying the line recently