Mesa’s Fleet Falls, Rises, and Falls Again

Watching Mesa Air Group over the last couple decades has been like watching a roller coaster. That airline makes the rest of the industry look downright stable in comparison. With Mesa’s recent bankruptcy reorganization plan out in the wild, I thought it would be interesting to look at the airline’s fleet over the last 15 years.

For those of you who don’t know Mesa, that’s because very few if any flights fly under the airline’s name. Oh sure, there used to be Mesa-branded flights operating in the Southwest US but those have been gone for a long time. Instead, Mesa is primarily focused on flying as a regional provider under major airline names. Today, there is a small contract with United that will likely be phased out over the next few years. The rest of the contracted fleet is with US Airways, and it was only when that airline agreed to a renewal of the agreement until 2015 that Mesa was really able to come out of bankruptcy.

After poring over annual reports from the last 15 years and piecing together the airline’s future contracts, I’ve come up with the following total fleet count. (All of these charts are only airplanes contracted to fly under a major brand.)

Lots of ups and downs for sure and I’ve highlighted the major events to show why things changed so much. That sharp drop after 1997 was when United decided to stop contracting with Mesa. As part of that, Mesa shut down WestAir and United moved its west coast flying over to SkyWest. That was a big win for SkyWest for sure and it has paid dividends over the years. But as many ups and downs as we see here, this chart actually tells very little of the story. Here’s a chart showing fleet change by contracted airline.

This is where it gets really interesting. You can see how big of an impact that loss of United flying had on Mesa. It left the airline with just US Airways and America West (both are combined under US Airways in this entire graph) as partners. There were a couple of false starts with short-lived flying for Frontier and the Kunpeng joint venture in China that fell apart quickly. But things were great in the early 2000s as Mesa won back some United flying, added Delta, and kept growing its US Airways/America West partnerships.

Then things started to fade. When US Airways and America West merged, that resulted in a fleet reduction for Mesa, primarily 50 seat jets. Then United and Delta walked away from as much flying as possible from Mesa which left a major hole. The US Airways flying has continued to shrink and likely won’t stabilize until 2012. This projection may even be a bit optimistic since it shows the six Dash 8 aircraft going out beyond that point. In reality, those airplanes can be removed with only six months notice at any time.

But there is one other dimension here and that’s the aircraft types that have flown under the Mesa banner. This one is actually much more representative of the regional industry as a whole. It’s amazing to see what’s changed in 15 years.

Back in the 1990s, Mesa was flying more than one hundred 19-seat props around the US (primarily Beech 1900s and Jetstream 31s). Today, there are none. Much of that is economics and the invention of the regional jet, but it’s quite sobering to see such a change. And it’s not just the 19-seat props but rather props in general. You can see that the 30 seat prop category has shrunk as well and now it’s only the tentatively-placed six Dash 8 airplanes with US Airways left in the Mesa fleet.

But while props were declining, regional jets were skyrocketing. Take a look at the meteoric rise and fall of the 50 seat jet. Mesa couldn’t have enough of them in the early 2000s and then airlines realized they weren’t profitable. Today, there are only 8 left in the US Airways fleet and those will go away in 2012.

That leaves the 70 and 90 seat jets as the only areas for growth. The 70 seat jets originally started with America West, but America West opted to switch to the 90 seats jets instead and Mesa flew the 70 seaters under the United brand. The decline of the 70 seat jet here is a Mesa issue, not an industry one. United has opted to end that agreement so they are slowly being phased out. But the industry still demands the 70 seat jet. As for the 90 seat jet, it continues to soldier on with Mesa. That is the one solid agreement that Mesa has left. It is 38 strong with US Airways and the new agreement through 2015 reduces rates even more for US Airways.

So now, we wait and see what’s next for Mesa and for the industry. I think additional growth of 90 seat jets for regionals is unlikely. The airlines that are allowed to fly them are already doing so. I can’t imagine we’ll see airlines like United or American ever being allowed to outsource that. But Mesa has pulled out some miraculous tricks to survive over the years. I just wonder what else is up the airline’s proverbial sleeve.