Mesa Air (MESA, Financial) and Republic Airways just dropped a game-changing merger that could reshape the U.S. regional airline industry. The two carriers are joining forces in an all-stock deal to form a larger, leaner Republic Airways Holdings Inc., set to operate a 310-aircraft Embraer 170/175 fleet. The merged airline will keep flying under capacity agreements with the majors—American, Delta, and United—with Mesa locking in a new 10-year deal to serve United. The new entity plans to list on Nasdaq under the ticker RJET, and the merger is expected to close later this year.
Mesa Air's stock exploded on the news—soaring 44% at 1.42pm today—as investors bet on the financial reboot and scale advantages. Mesa's been in rough waters, losing money and offloading assets to stay afloat, while Republic's been holding steady flying in the Northeast and Mid-Atlantic. Under the deal, Republic shareholders will own 88% of the combined company, and Mesa shareholders will take home 6% to 12%, depending on how things shape up pre-closing. Mesa's entire debt load will be wiped, and its liabilities cleaned up before the deal closes—a major reset for the struggling regional player.
This isn't just a survival move—it's a strategic leap. With regional carriers still reeling from pilot shortages and margin pressure, combining into a single, debt-free platform gives the new RJET a shot at operational scale and financial stability. Estimated revenue? Around $1.9 billion. With Republic's leadership team at the helm and a simplified fleet, the combined airline is betting big on post-pandemic growth, operational efficiency, and a tighter grip on major airline partnerships.
