MARY KIRBY / WASHINGTON DC & MARIA WAGLAND / LONDON
Regional operator keen to assist United and keep Washington Dulles airline as a feeder
US regional operator Mesa Air Group says it would shelve Atlantic Coast Airlines' (ACA) plans for a new independent budget carrier if its proposal to acquire the United Express operator goes ahead.
Last week Mesa made an unsolicited bid to acquire the Washington Dulles-based ACA, and the offer is being reviewed by ACA chairman Kerry Skeen and its board.
In July, ACA told United Airlines it would end its United Express feeder deal after the US major leaves Chapter 11 bankruptcy protection, and would reposition itself in the low-fares market - a move that would put ACA in competition with United at Dulles. ACA has already held talks with Airbus and Boeing about the acquisition of narrowbodies for the new services.
Having signed on as a feeder carrier for United in July, Mesa is keen to assist its partner and maintain ACA as a feeder, and part of the strategy would be to maintain ACA's services for United at Dulles.
"We think that [the low-fares model] is the wrong strategy for [ACA] when it can have 7%, 8%, 9% margin that can be guaranteed by a major carrier," says Mesa chairman and chief executive Jonathan Ornstein. He admits Mesa spoke to United about its plans to bid for ACA. "[United] would like to maintain ACA as a feeder operation. As far as we can be involved in that decision, it would be helpful," he says.
Ornstein argues that a combined ACA and Mesa would be strategically beneficial, as it would boast a fleet of nearly 300 aircraft and have a broad reach across major US markets. Several Canadian analysts have said if the merger goes ahead, the deliveries of 42 Bombardier CRJs that ACA rescheduled in June could be brought forward.
Mesa's United Express deal covers the operation of 50-seat and 70-seat jets and Bombardier Dash 8s on United's behalf. Prior to the ACA bid, Mesa had not said if some of the aircraft would replace ACA flights at Dulles.
Source: Flight International
