Shareholders of Mesa Air Group have approved a merger with Republic Airways Holdings that will result in Republic’s shareholders owning at least 88% of the combined company.
The parent of Phoenix-based Mesa Airlines said on 18 September that its shareholders had approved “all proposals presented” during a special meeting, including the proposal to tie-up with fellow regional airline operator Republic.
The merger proposal received more than 99% of 29.7 million votes, Mesa says, with more than 70% of shareholders casting a vote in person or by proxy.
“We appreciate the strong and clear support our shareholders have provided,” says Jonathan Ornstein, Mesa’s chief executive. “This vote confirms the strategic value of combining Mesa and Republic and positions the combined company for enhanced scale and long-term stability.”
The companies in April revealed their plan to combine through an all-cash transaction. Mesa will be the surviving company but take the name Republic Airways Holdings and also trade under Republic’s current “RJET” stock symbol.
Shareholders of Mesa Air Group stand to own 6-12% of the post-merger company, with Republic owning at least 88%.
Neither company immediately responded to FlightGlobal’s questions about the deal’s structure.
Mesa says that, considering Republic’s “strong performance” in the year’s first half, the combined company will generate between $1.8 billion and $2 billion in annual revenue.
Additionally, Mesa’s 60-strong fleet of Embraer 175s will be supported post-merger by a new 10-year capacity agreement with United Airlines.
Currently, Mesa operates exclusively for United under the United Express brand. It previously also operated on behalf of American, before the longtime partnership fell apart in an acrimonious split finalised last year.
“We are pleased Mesa would support day-one benefits for the combined company, and we continue to work closely with the Republic executive team to position our airline for a successful merger closing and integration with Republic,” Ornstein said in September.
After joining fellow E175 operator Republic, the post-merger company would operate about 280 regional jets, making it potentially the second-largest regional carrier in the USA, after SkyWest Airlines.
Republic flies under the American Eagle brand on behalf of American Airlines, in addition to its capacity agreements with Delta Air Lines and United.
Last month, Mesa’s postponement of its annual shareholder meeting triggered a warning of non-compliance from the Nasdaq stock exchange, though the company said it believes it will avoid being de-listed.
The company has struggled to comply with the Nasdaq’s listing rules for the past 18-24 months, with its share price at times dipping below the Nasdaq’s required minimum of $1 and multiple failures to report quarterly financial results in a timely manner. The recurring issue is reflective of what has been a decidedly rough patch for Mesa since emerging from the Covid-19 pandemic.
