Republic Airways and Mesa Air Group to Combine, Creating America's Regional Airline of Choice

Core Viewpoint - Republic Airways Holdings Inc. and Mesa Air Group, Inc. have announced a definitive agreement to merge, creating a leading publicly-traded regional airline company in an all-stock transaction, with the combined entity expected to be named Republic Airways Holdings Inc. and listed under the ticker symbol "RJET" [1][2][10] Company Overview - Republic Airways has been a significant player in the regional airline sector since 1974, operating a fleet of over 240 Embraer 170/175 aircraft and serving approximately 17.5 million passengers in 2024, with total revenues of around $1.5 billion and net income of approximately$65 million [3][6] - Mesa Air Group, founded in 1982, operates a fleet of 60 Embraer 175 aircraft, providing scheduled passenger service to 89 cities across 40 states and has approximately 1,700 employees [15] Strategic Rationale - The merger is expected to create economies of scale, enhancing operational efficiency and productivity through a larger, unified fleet, which will improve access to capital markets and attract global institutional investors [4][6] - The combined company is projected to generate revenues of approximately $1.9 billion, with adjusted EBITDA exceeding$320 million and pretax margins between 7% to 9%, excluding one-time merger costs [6][10] Management and Governance - The merged entity will be led by Republic's executive leadership team, with a Board of Directors consisting of six existing Republic directors and one independent director from Mesa [7] Transaction Details - Upon completion, Republic shareholders will own 88% of the combined company's common shares, while Mesa shareholders will own between 6% to 12% based on pre-closing criteria [8][10] - The transaction has received unanimous approval from both companies' Boards of Directors and is expected to close in late Q3 or early Q4 of 2025, subject to regulatory and shareholder approvals [10]