DOT approves Mesa Airlines and Republic Airways to operate under Mesa Air’s ownership
However, the DOT warned that this does not mean it approved their merger.
The United States Department of Transportation (DOT) has approved Mesa Airlines and Republic Airways to operate under the ownership of Mesa Air Group, the parent company of Mesa Airlines, until they finalize their merger, which the pair announced in April 2025.
In a filing on October 23, the DOT approved Mesa Airlines and Republic Airways to “operate under the common ownership of Mesa Air Group, Inc.” However, the two regional airlines, which sell their capacity through capacity purchase agreements (CPAs) to other US airlines, including American Airlines, Delta Air Lines, and United Airlines, will continue to operate as separate entities until the DOT approves the de facto transfer application related to their merger.
“[The] Department has previously found that requiring the postponement of market transactions until applicable regulatory processes have been completed is not necessarily in the public interest and can be unjustly punitive.”
In addition, the DOT noted that the Department of Justice (DOJ) has so far not objected to their merger, and in their application for an exemption to operate under a single company, the two regional airlines promised to remain independently run organizations until the DOT’s final ruling.
The DOT reiterated that the two regional carriers should not interpret this approval as the go-ahead decision for their merger, with the Department’s decision on that matter still pending.
Mesa Airlines and Republic Airways announced their merger in April 2025. At the time, the two airlines detailed that Republic Airways would be merged into Mesa Air Group, and while the parent company of Mesa Airlines will be the surviving entity, Republic Airways’ shareholders will “own 88% of the combined company's common shares.”
Mesa Air Group’s shareholders would own between 6% and 12%, while United Airlines, a shareholder of Mesa Air Group and Republic Airways, would either not own any shares of the new company or retain a 6% stake.
The post-merger entity would be renamed to Republic Airways and would remain listed on the NASDAQ stock market index under the ‘RJET’ ticker.
Jonathan Ornstein, the Chairman and Chief Executive Officer (CEO) of Mesa Air, said that the merger was “the best outcome for our shareholders, employees, and all of our stakeholders.”
“By bringing the best of our organizations together, we will create a regional carrier that continues to connect communities across America while providing advancement opportunities to our employees.”
The two companies pointed out the five main benefits of the merger: economies of scale, enhanced capital and liquidity position, complementary operations, similar cultures, and talented employees that position the company for exciting growth opportunities.
“The combined company is expected to produce revenues of approximately $1.9 billion, pre-tax margins of 7% to 9%, excluding one-time merger and integration costs, and adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization – ed. note] in excess of $320 million.”
When Mesa Air Group published its Q3 FY25 financial results – it later re-adjusted its fiscal year to end on December 31, not September 30 – it disclosed a net income of $20.9 million, yet, following adjustments, it was a net loss of $0.5 million.
While compared to September 2024, its long-term debt was slashed from $259.8 million to $28.2 million, the company’s current portion of long-term debt, which needs to be paid out in the next 12 months, increased from $50.4 million to $84.7 million.
As such, its shareholders' equity turned into -$41.2 million, compared to $110.2 million at the end of September 2024, resulting in shareholders receiving zilch if the company were to be liquidated.
Republic Airways is currently not a publicly listed company.
Planespotters.net data showed that Mesa Airlines has 60 Embraer E175 aircraft, all of which operate flights on behalf of United Airlines’ regional subsidiary, United Express. Republic Airways has 31 E170 and 185 E175s, operating flights on behalf of American Eagle (American Airlines), Delta Connection (Delta Air Lines), and United Express.
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