Mesa Air Group Inc said on Monday it was exploring options to raise money amid rising costs after the U.S. regional carrier handed its pilots bumper contracts to deter switching to other airlines.
Shares of Mesa, which said it was finalizing an agreement to operate regional flights for United Airlines, were up about 7% before the bell.Mesa Air Group Inc said on Monday it was exploring options to raise money amid rising costs after the U.S. regional carrier handed its pilots bumper contracts to deter switching to other airlines.
Shares of Mesa, which said it was finalizing an agreement to operate regional flights for United Airlines, were up about 7% before the bell.
Regional carriers run flights to places that do not attract routes from the bigger U.S. airlines. For instance, American Eagle is a network of six regional carriers operating 3,400 daily flights under a codeshare with American Airlines.
Mesa said it was moving to United’s network from next year after opting to wind down flights for American Airlines.
The company added it was finalizing a previously announced sale of remaining eight CRJ-550 jets to United, adding it also has an agreement to sell 11 surplus CRJ-900 aircraft to an unnamed third party.
“Mesa is pursuing other avenues to increase liquidity through the sale of additional surplus aircraft, spare parts and spare engines,” said Arizona-based Mesa in a statement.
Reducing debt has become a priority for the airline industry that went on a borrowing binge to survive the pandemic. The industry is also facing cost pressures from fuel prices and new labor contracts.
Mesa had raised pilot salaries earlier this year by as much as 172%.
The carrier, which recently postponed the release of its fourth-quarter results scheduled for Dec. 12, had total assets of $1.32 billion as of June 30 versus total liabilities of $897.1 million.