Republic Airways and Mesa Air Group Inc. are merging through an all-stock transaction to form a regional airline with an expanded fleet for enhanced service capabilities.
Financial specifics of the agreement were not detailed in the announcement released on Monday.
Republic Airways, established in 1974, operates over 240 Embraer 170/175 aircraft and served approximately 17.5 million passengers across more than 300,000 flights over the past year.
This airline primarily operates in the Northeast and Mid-Atlantic regions, partnering through long-term capacity purchase agreements with American Airlines, Delta Air Lines, and United Airlines.
On the other hand, Mesa Air Group, founded in 1982, functions as the parent company of Mesa Airlines.
As a regional carrier, it provides service to 89 cities in 40 states, as well as international destinations like Washington, D.C., the Bahamas, Canada, Cuba, and Mexico.
It maintains a fleet of 60 Embraer 175 aircraft and executes over 250 scheduled daily departures with the support of approximately 1,700 employees.
Operating all its flights as United Express, Mesa is bound by a capacity purchase agreement with United Airlines.
The merger of these two entities will produce an airline with a unified fleet of around 310 Embraer 170/175 aircraft, facilitating over 1,250 daily departures.
The company will persist in servicing American Airlines, Delta, and United Airlines and aims to retain all existing flight crews, technicians, and other operational staff members.
“Republic and Mesa share a united mission to connect communities across America,” expressed Bryan Bedford, Republic’s President and CEO.
“With this merger, we’re on course to create a single, robust public company benefiting from Republic and Mesa’s combined expertise, offering prolonged value for all stakeholders.”
The newly formed company will be known as Republic Airways Holdings Inc., publicly traded on the Nasdaq under the ticker symbol “RJET.”
Its board composition will feature six directors from Republic’s current board and one independent director from Mesa’s board.
Following the completion of the transaction, Republic shareholders will possess 88% of the merged company’s stock, while Mesa shareholders are expected to own between 6% and 12%, depending on fulfilling certain pre-transaction conditions.
Additionally, all existing debt obligations of Mesa will be nullified as a consequence of the merger.
The merger has been ratified by the boards of both companies and is anticipated to conclude either later in the third quarter or at the beginning of the fourth quarter.
Nonetheless, it remains contingent upon the approval of shareholders from both Republic and Mesa.
Ahead of the market opening, Mesa Air Group, headquartered in Phoenix, Arizona, saw its shares leap by over 67% to $1.20.