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Investing.com -- Mesa Air Group, Inc. (NASDAQ: NASDAQ:MESA) stock surged 49.3% in premarket trading following the announcement of a definitive merger agreement with Republic Airways Holdings Inc., which is set to create a leading regional airline company. The all-stock transaction will result in a new entity, retaining the Republic Airways Holdings Inc. name and listing under a new ticker symbol "RJET".
The merger, hailed as a significant step in Mesa’s history by Chairman and CEO Jonathan Ornstein, aims to deliver the best outcomes for shareholders, employees, and stakeholders. The combined company is set to become one of the world’s leading operators of Embraer jets, with Republic’s President and CEO, Bryan Bedford, expressing enthusiasm for the united teams and shared mission to connect communities across America.
Republic Airways, a prominent regional airline since 1974, boasts a fleet of over 240 Embraer aircraft and served around 17.5 million passengers in 2024. The airline’s solid financial performance in 2024 included a net income of approximately $65 million on total revenues of about $1.5 billion. The merger is anticipated to bring operational and financial scale, resulting in a single, well-capitalized company with a fleet of approximately 310 Embraer aircraft and over 1,250 daily departures.
The strategic rationale behind the merger emphasizes economies of scale, enhanced capital and liquidity positions, and complementary networks and operations. The post-merger company will maintain all flight crews and operational staff and be led by Republic’s experienced executive team. The Board of Directors will consist of existing directors from both companies.
Upon closing, Republic shareholders will own 88% of the combined company, while Mesa shareholders will own between 6% and 12%, depending on the achievement of certain pre-closing criteria. The transaction, approved by both Boards of Directors, is expected to close in late third or early fourth quarter of 2025, subject to regulatory and shareholder approvals.
The merger is set to create a stronger, more competitive airline, with pro forma revenues estimated at approximately $1.9 billion and adjusted EBITDA exceeding $320 million. This strategic move is expected to deliver value to Mesa and Republic shareholders, with the combined entity poised to benefit from a more robust financial foundation and increased economies of scale.
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