Mesa Air Group will take a controlling stake in Republic Airways subsidiary Mokulele Airlines under the terms of a deal signed yesterday that will see three Republic/Shuttle America Embraer E170s exit the Mokulele fleet next month in favor of Bombardier CRJs flown by Mesa’s Hawaiian subsidiary, Go!. Under the terms of the contract, Mesa will take a 75-percent interest in the joint venture and Republic a 25-percent share.
While second-quarter traffic posted by some of the largest publicly traded regional airlines in the U.S. followed the prevailing patterns set by their mainline partners, some carriers reacted to the exercise in “resizing” better than others.
Republic Airways, on July 31, completed its acquisition of Midwest Airlines, then won a bid last month for Frontier Airlines after Southwest Airlines withdrew when talks between the airlines’ pilots for a new labor deal stalled. Republic paid $6 million in cash and has issued a $25 million five-year note convertible to Republic stock at $10 a share for Midwest. It bid $108.75 million for Frontier.
Republic Airways stands to become the 11th largest airline in the U.S. if its plans to acquire Milwaukee-based Midwest Airlines and sponsor Frontier Airlines’ emergence from Chapter 11 bankruptcy meet with regulators’ approval. Republic, which now consists of Republic Airlines, Chautauqua Airlines and Shuttle America, already ranks as one of the regional airline industry’s largest groups, flying 212 regional jets for six mainline partners.
Republic Airlines injected another $2.5 million into its partnership with Hawaii’s Mokulele Airlines on May 1 and this month plans to send a fourth Embraer E170 to the islands as it stages a more serious effort to raise its profile in the market. This past March Republic demoted former Mokulele CEO Bill Boyer to head of sales and marketing and installed its own vice president for strategic alliances, Scott Durgin, as interim CEO.
SkyWest Airlines hasn’t found some magic elixir to help it escape the ravages of the global recession, but as long as it continues to perform to its partners’ contractual standards, the country’s largest regional carrier and the host for this year’s RAA convention can count on a steady revenue stream and a strong enough capital position to weather the economic storm.
Hawaii’s Island Air will fly de Havilland Dash 8s between Kahului, Maui, Lihue, Kauai and Hilo as Go!Express under the terms of a tentative code-share deal it signed with Mesa Air Group in late February.
A labor arbitrator rejected a grievance filed by the ALPA-represented pilots of Midwest Airlines challenging the Milwaukee-based carrier’s decision to replace mainline Boeing 717 service with 12 Embraer E170s operated by Indianapolis-based Republic Airways. The first of the 76-seat Embraer jets, at one time used to serve Republic’s now dissolved Frontier Express network, began flying as Midwest Connect on October 1.
Six months ago, business aircraft manufacturers were publicly confident that their backlog of new aircraft orders stretching well into the next decade would provide a buffer to ease the industry through what was already flagged as an economic crisis. Today, cancellations and delivery deferrals are eating
into those backlogs, and the OEMs are making adjustments that were only being hinted at two months ago.
Six months ago, business aircraft manufacturers were publicly confident that their backlog of new aircraft orders stretching well into the next decade would provide a buffer to ease the industry through what was already flagged as an economic crisis. Today, cancellations and delivery deferrals are eating into those backlogs, and the OEMs are making adjustments that were only being hinted at two months ago.