Mesa gets new UAL deal.....

[tarp]

Lovely,

So the whole ACA TA thing was just a waste of time.

Although never really fun, at least I got 2000 turbine in the old logbook. Oh well.

I think United and Mesa will make a lovely couple.

Best of luck to all my ex-ACA pilot friends - you guys made the flying great, even if the company was somewhat chaotic. Time to move on.

 

[azpilot]

Whenever possible this is why a regional carrier should not feed a single carrier or have a vast majority of its business from a single carrier. It is my understanding that 85% of ACA's business is from United. While I don't agree with Mesa's pay rates and many other things at least they do have things spread around in case one of their partners tanks. Of course Mesa seems to need to do this for other reasons. They seem to consistently piss off their partners. Even in a good economy you can never tell what management will do or what business decisions will be made. Good luck to the ACA folks. I am sure you have done a great job for United. Sadly that may not matter in the eyes of the decision makers.

 

[Obi-Wan]

CHICAGO, July 1 (Reuters) - Regional air carrier Mesa Air Group Inc. said on Tuesday that it has reached a 10-year deal to provide expanded feeder service to bankrupt United Airlines .

Shares of Mesa Air Group rose 28 cents, or 3.5 percent, to $8.24 on the Nasdaq, while shares of rival regional carrier Atlantic Coast Airlines Holdings Inc. , which has not yet announced a deal with United, fell 13.3 percent to $11.54.

Mesa, based in Phoenix, said it has signed a memorandum of understanding with United running from August through December 2013 pending final details that will add 35 regional jets to the service with an option for 25 more.

Under the agreement, Mesa will operate 20 larger 70-seat jets and 15 smaller 50-seat regional jets as United Express in addition to 10 turboprops already in service for United.

In June, United and regional carrier SkyWest Inc. announced an expanded 11-year deal for United Express service. United remains in talks with Atlantic Coast about setting 2003 rates and separately on a longer term service agreement.

"We view the selection of Mesa as a United Express partner as a distinct negative for 'underweight'-rated Atlantic Coast," J.P. Morgan airline analyst Jamie Baker said in a note.

An Atlantic Coast spokesman could not comment immediately.

About 85 percent of Atlantic Coast's revenue comes from United Express service with the rest from Delta Connection regional service provided to Delta Air Lines .

 

[crashpad]

Originally posted by azpilot
Whenever possible this is why a regional carrier should not feed a single carrier or have a vast majority of its business from a single carrier.
---------------------------------------------------------------------------

Oh so true, Mesa will prevail even if UAL does not for just this reason. Their stock is soaring and that's because Wallstreet
investors recognize what's happening in the industry.

 

[erjman]

Score one for Mesa.

Before we all go pissing on mesa for being a low bidder, cancer, plague, or whatever we like to call them, here's my take. Airlines do what they have to to secure their business. The fact that ACA made their original proposal to UAL post bancruptcy with an increase in rates rather that a decrease may have a lot to do with their being left out. Also, I was talking to one of our station operators in CLE the other day who stated that Mesa is the number 1 operator of the EMB for dispatch reliability. He stated that they consistently have better numbers than the other ERJ operators.
If Mesa wants to garner new business, and they have folks who want to make less per hour for increased job security and advancement, then can we really blame them? Might we do the same if faced with a furlough. I recall reading a post by an AIR WIS guy who stated that they would bid as low as they had to in order to be lower than Mesa. So is AirWIS the new Cancer? I think not, they are just protecting their position.

 

[rightrudder]

Mama always said, just because something is cheaper doesn't mean it is a good deal.

I think UAL will get exactly what it deserves, oops, pays for.

 

[big dog1]

Some notes from Jo conference call on united expansion
Starts in Aug 03
90% of jets to be in place by middle of fiscal 2004 hope to have all 35 by end of fiscal 2004
Some of the AWA deliveries may be pushed back to accommodate united
Jets will be operated on selected routes that will be determined by united later. (I.E. Denver is just speculation).
70 seat jets operate at about 15% less per ASM than 50 seat.
Hope to have 200 million of cash on hand by year end
Training reduced 60% by pilot contract will help place more jets per month up from around 2 to as many as 4 a month.
Once all jets in service should increase rev 250 million per year (35 Aircraft)
Frontier jet express set to still operate through Jan 2004.
Contract with united is not aircraft specific (i.e. CRJ or ERJ)
Contract will insure profits of between 6% and as much as 10% with incentives kickers
Additional 25 aircraft to be optioned by united if we meet operational requirements




A letter from JO about the deal...

clamp

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Dear fellow Mesa Employees,

It gives me great pleasure to tell you we have been chosen to
significantly expand our code share partnership with United Airlines with the addition of up to 60 regional jets. As many of you know, prior to losing our United code share in 1997, Mesa was United's largest regional partner and we are delighted that we have been able to regain United's confidence in Mesa. This expansion was possible as a result of our ability to offer United the highest levels of reliability and service, in conjunction with providing an efficient, low cost operation.

In addition to the 10 Dash-8 aircraft already under contract, under the expanded agreement, Mesa will operate 35 regional jets on select portions of United's United Express service. The 35 regional jets include 20 larger 70-seat and 15 50-seat aircraft. United also has the right to add, at its option, an additional 25 regional jets. The addition of these 25 regional jets will be dependant upon our ability to operate at the highest levels of reliability while maintaining our existing low cost structure. The expanded agreement runs until December 2013.

We'd like to thank all of our employees who have worked hard to make this possible. We envision that the expansion will generate
approximately 1,500 jobs and create many opportunities for
advancement within the Company. For example, the initial 35 jets
alone will create almost 200 regional jet captain positions. Make no mistake about it, this was an incredibly competitive process in which virtually every other US regional jet operator was participating.

United thoroughly analyzed data for over a year and to date we are the only carrier chosen to be a new United Express operator, it is a tremendous credit to all of you. In addition, we would like to thank all the employee leaders who had the vision to work with us in a proactive and constructive manner. And while there are still challenges, the biggest being our ability to find financing for additional regional jets, we believe this agreement greatly
strengthens the foundation of our business and provides greater job security for all of us. Although we aren't "out of the woods yet," working together with you, we believe that we have done everything we can to ensure a successful future.

Thank you all for a job well done.

Congratulations,

Jonathan Ornstein
Mike Lotz
Peter Murnane
Michael Ferverda
Carter Leake

 

[ATR-DRIVR]

"maintaining our low cost structure".......
That pretty much says it all...

 

[Guppiedriver]

This expansion was possible as a result of our ability to offer United the highest levels of reliability and service, in conjunction with providing an efficient, low cost operation.

How was JO able to convince UAL that Mesa is a reliable product? All UAL had to do is look at Mesa's numbers in the AWA system. In May, Mesa was canceling nearly 20% of their flights in the AWA system on a daily basis. Of the flights they didn't cancel about 65% were on time. Highest levels of reliability and service? Providing an efficient, low cost operation? Well I guess one out of four ain't bad.

The 35 regional jets include 20 larger 70-seat and 15 50-seat aircraft. United also has the right to add, at its option, an additional 25 regional jets. The addition of these 25 regional jets will be dependant upon our ability to operate at the highest levels of reliability while maintaining our existing low cost structure.

Unless Mesa concentrates all of their resources on the UAL feed, (ie; robbing Peter, AWA and USA, to pay Paul), they will not get to add those 25 additional jets anytime soon.

Some of the AWA deliveries may be pushed back to accommodate united.

Finally some good news!

 

[KingAirKiddo]

I hope Mesa falls on their ugly face.