- American Airlines will stop flying with Mesa Air, which will now fly its planes for United Airlines. American Airlines routinely contracted smaller regional airlines to take care of shorter routes, but the partnership ends in March. The last flight of the partnership will take place on April 3rd.
- The CFO of American, Derek Kerr, has blamed this decision on Mesa’s financial and operational problems due to a rise in costs and the industry’s pilot shortage. While Mesa says it would not raise pilot rates for its non-affiliated carriers, American Airlines penalized Mesa for not following pre-covid contract hours. This resulted in $5 million in losses per month for Mesa and led to a severing of ties.
Why it matters
Post-COVID, there has been a surge in travel which has resulted in a pilot shortage. American, Mesa, and other regional airlines will have to significantly boost wages to attract and retain pilots.