Mesa Air Group (MESA) announced on Tuesday that shareholders overwhelmingly approved the proposal for the company to merge with Republic Airways Holdings Inc.
CEO Jonathan Ornstein said the vote confirms the strategic value of combining Mesa (MESA) and Republic and positions the combined company for enhanced scale and long-term stability. The merger, which remains subject to customary regulatory approvals and other closing conditions, is expected to close later this week. The U.S. Department of Transportation has approved both airlines to operate under common ownership in the interim but has not yet granted the single operating certificate for the de facto transfer related to the final merger.
The merged company will be named Republic Airways Holdings and is anticipated to trade on Nasdaq under the symbol RJET. Republic shareholders are expected to hold the majority of shares, while Mesa shareholders will own between 6% and 12%, depending on pre-closing factors. The combined entity will continue to serve American Airlines (AAL), Delta Air Lines (DAL), and United Airlines (UAL), with Mesa’s (MESA) operations primarily supporting United (UAL) under a new 10-year agreement
The combined company is forecast to have a 12-month run-rate annual revenue of between $1.8 billion and $2 billion.
Republic Airways traces its roots to Chautauqua Airlines, founded in 1973. The holding company, Republic Airways Holdings, was formally organized in 1998. In the 2000s, Republic Airways Holdings grew by acquiring several other regional airlines and assets, including Shuttle America, Midwest Airlines, and Frontier Airlines, which was later spun off. The company filed for Chapter 11 bankruptcy protection in 2016, primarily due to a pilot shortage and financial strain. It then successfully emerged from bankruptcy in April 2017.
Shares of Mesa Air (MESA) are up 44% on a year-to-date basis to make it the top-performing U.S. airline stock.