It didn’t take long for Mesa Air Group’s seemingly innocuous new code-share deal with United Airlines to raise far wider implications, as Mesa chairman and CEO Jonathan Ornstein last month launched a bid to spread his company’s influence beyond its already substantial breadth with an overture to buy Atlantic Coast Airlines. The proposal, issued after what Ornstein described as a thorough analysis of ACA’s plans to create a new low-fare airline based at Washington Dulles International Airport, called for an exchange of nine-tenths of a Mesa share for each share of ACA stock, at the time representing a 25-percent premium on the Virginia-based regional’s trading value. At press time ACA had yet to respond formally to Mesa, but released a statement confirming receipt of the proposal and its intent to review the offer.
The estimated $510 million deal would not only double the size of Mesa’s fleet and significantly alter the competitive balance of the nation’s regional airlines; it would also give United a vital East Coast feed alternative to ACA, which, after rejecting United’s demands for lower contract fees, over the summer revealed plans to establish a low-fare operation independent of its long-time mainline partner. Fully aware of the implications, United moved to solidify and expand its relationships with other partners, including Mesa. Not coincidentally, Mesa rejoined the United Express family in April with a modest code-share deal involving 10 de Havilland Dash 8s, followed by a much wider agreement involving Bombardier CRJ200s and -700s over the summer.
