U.S. Regional Brands Republic Airways, Mesa Air Group To Merge

Republic Airways and Mesa Air Group, two regional airline brands with several decades of history and complementary Embraer fleets, have announced their intent to merge, a transaction both U.S. companies expect will close by year’s end.

The deal received unanimous approval from both boards of directors but remains subject to regulatory and shareholder approvals. It “represents the best outcome for our shareholders, employees and all of our stakeholders,” Mesa Chairman and CEO Jonathan Ornstein said. The combination will create “one of the world’s leading Embraer jet operators,” Republic President and CEO Bryan Bedford noted. “Republic and Mesa share a common mission to connect communities across America, and we believe that we can better achieve that mission together,” he said. “With this combination, we are establishing a single, well-capitalized, public company that will benefit from the deep expertise of Republic and Mesa associates.”

Founded in 1974, Republic operates an in-service fleet of 171 Embraer E175s and 30 E170s, according to the Aviation Week Network Fleet Discovery database, with 40 E175s on order plus options for another 94. The airline expects to take delivery of 15 new E175s during 2025, it said. Mesa, founded in 1982, has an in-service fleet of 57 E175s, Fleet Discovery shows. The latter has been working to divest its Bombardier CRJs and transition to an all-Embraer fleet in recent months. Currently, 29 CRJ900s are stored, according to Fleet Discovery, with another six parked.

Upon closing, the combined company will be renamed Republic Airways Holdings Inc. and be led by Republic’s executive leadership team; one director from Mesa will join six from Republic on the new board. Bedford, who first joined the regional brand in 1999, has recently been nominated to serve as administrator of the FAA, a move still pending confirmation hearings.

The merger will see an already narrowing field of regional airline players dwindle into even fewer brands. Republic already “is in effect a holding company for numerous regional airlines of the past,” notes analysis from the Swelbar Zhong Consultancy chief industry analyst William Swelbar, describing mainline pilot scope clause limits as constraining regional sector growth.

“It used to be that the mainline industry wanted many regional airlines in order to create competition to perform flying for one mainline carrier or another,” he says. But with less scope clause relaxation and with less prospect of small jet flying for regional capacity providers, “one brand at a time would fall,” adds Swelbar. “Prior to this announcement, the industry was largely left with SkyWest, Republic, Air Wisconsin, and Mesa as available operators to provide regional lift.”

Air Wisconsin in early 2025 announced the end to its regional airline partnership with American Airlines, moving instead into a codeshare and interline agreement to focus on EAS and charter operations.

Today, “the need for regional lift is no longer a labor arbitrage play to manage pilot costs,” observes Swelbar, with therefore less need for multiple airlines bidding for mainline work. “Most important today is that the regional partner is financially sound and will deliver the product envisioned by the mainline partner,” Swelbar says. “This transaction will provide stability that Mesa has rarely known and the combined entity will be able to shed any number of duplicative costs.”

According to an April 7 release announcing the transaction, the combined Republic and Mesa are expected to produce revenues of approximately $1.9 billion, pretax margins of 7% to 9%—excluding one-time merger and integration costs—and adjusted EBITDA of over $320 million. Republic’s existing capacity purchase agreements (CPAs) will remain in place with American Airlines, Delta Air Lines, and United Airlines, while Mesa’s operations will support United under a new 10-year CPA that comes as a result of the transaction. All flight crews, technicians, and other operational staff are expected to be retained within the post-merger entity, the companies said.

Mesa provides scheduled passenger service to 89 cities in 40 states, Washington D.C., the Bahamas, Canada, Cuba, and Mexico, operating all its flights as United Express. Republic provides fixed-fee flights operated under its codeshare partners’ brands—American Eagle, Delta Connection and United Express—offering scheduled passenger service to more than 80 cities in the U.S., Canada, the Caribbean and Central America. Republic employs more than 6,000, while Mesa has approximately 1,700 employees.

Mesa and Republic will continue to operate under their existing FAA operating certificates until securing a single-operating certificate for the combined airline. Upon closing, Republic shareholders will own 88% of the combined company’s common shares, while Mesa shareholders will own a minimum of 6%, and up to 12% of the combined company dependent upon certain pre-closing criteria.

All outstanding Mesa debt obligations will be extinguished as a result of the transaction.

“While this might appear to be something anti-competitive because there are few players left in the regional space, the space no longer needs a plethora of players,” adds Swelbar. “In reality there is one non-wholly owned player in the business of providing feed—SkyWest. Mesa has been a disruptor, and the space no longer needs disruption to manage cost when cost matter less. More important is to deliver a first-rate product to customers in smaller market areas needing to connect to the grid.”

For the full year 2024, Republic produced a net income of approximately $65 million, on revenues of approximately $1.5 billion. Mesa last reported financial results for the third quarter of 2024 and has yet to report results for the period ending Dec. 31, 2024. The airline recorded a net loss of $66.1 million for the nine months ended June 30, improved from a net loss of $91.8 million in the year-ago period.