U.S.: Mesa Air and Republic Airways Merge
Mesa Air Group and Republic Airways Holdings have signed a definitive merger agreement to create a larger regional airline. The transaction, structured as an all-stock deal, will result in a new entity that will retain the name Republic Airways Holdings Inc. and continue to be publicly traded.
Jonathan Ornstein, Chairman and CEO of Mesa, described the announcement as “an exciting milestone in the company’s 40-plus-year history,” emphasizing that this union represents the best option for shareholders, employees, and other stakeholders. “By combining the strengths of our organizations, we will create a regional airline that will continue connecting communities across the United States while offering growth opportunities for our employees,” he stated.
Bryan Bedford, CEO of Republic, added: “We are thrilled to bring together the teams of Republic and Mesa to create one of the world’s leading Embraer jet operators. This merger establishes a well-capitalized, standalone public company backed by the expertise of both organizations.”
Republic Airways: A Strong Track Record
Founded in 1974, Republic Airways is currently one of the largest regional airlines in the country. It operates over 240 Embraer 170/175 aircraft and in 2024 carried approximately 17.5 million passengers on more than 300,000 flights, logging 591,000 block hours.
That same year, the company recorded revenues of approximately US$1.5 billion and net income of US$65 million. With EBITDA of $254 million, pre-tax income of $87 million and operating expenses of $1.3 billion (including $117 million in depreciation and amortization and $50 million in net financial expenses), Republic closed the year with a cash position of $323 million and debt of $1 billion. By 2025, it expects to receive 15 new E175 aircraft, all with debt financing.
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Strategic Benefits of the Merger
Greater Operational and Financial Scale
The combination of Republic and Mesa will enable operational scaling and increased efficiency in regional flights and crew management. With a larger unified fleet, the company will be better positioned to attract global institutional investors and gain improved access to capital markets.
Enhanced Financial Strength and Liquidity
The merged company will have a pro forma leverage ratio of 2.5x and liquidity exceeding 15% of its revenues. This solid financial foundation will support strategic investments, sustained profitability, and customer service improvements under a single brand.
Complementary Networks
The company will operate a combined fleet of approximately 310 Embraer 170/175 aircraft and more than 1,250 daily departures, maintaining the existing bases and routes of both airlines. While working toward a single FAA operating certificate, both carriers will continue operating under their current certificates.
Culture and Safety as Core Pillars
Both Republic and Mesa are enrolled in the IATA Operational Safety Audit (IOSA) program, the global standard for safety and operational excellence. This merger reaffirms their commitment to safety, reliability, and professional opportunities for their employees.
What to Expect from the New Company
Republic will maintain its capacity purchase agreements (CPAs) with American Airlines, Delta Air Lines and United Airlines. Mesa, meanwhile, will operate for United under a new 10-year CPA. The merged company is expected to generate revenues of $1.9 billion, with pre-tax margins of 7% to 9% (excluding one-time integration costs) and adjusted EBITDA in excess of $320 million.
Post-transaction, the company will have $285 million in cash and $1.1 billion in debt.
Leadership and Structure
The executive leadership will be headed by Republic’s current team. The board of directors will include six current Republic members and one independent director from Mesa.
Transaction Details
Upon closing, Republic shareholders will own 88% of the merged company’s common stock. Mesa shareholders will hold between 6% and 12%, depending on the fulfillment of certain pre-closing criteria. All outstanding Mesa debt will be canceled as part of the merger.
Simultaneously, Mesa, Republic, and United have signed a tripartite agreement covering the sale of specific assets by Mesa, the extinguishment of liabilities, and other actions required to complete the transaction.
The merger, unanimously approved by the boards of both companies, is expected to be finalized between the end of the third quarter and the beginning of the fourth quarter of 2025, subject to regulatory and shareholder approvals.
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