Mesa Air Group, which operates regional jet routes under the United Express and American Eagle brands, is plotting a course to become the first U.S. regional airline group with operations in Europe.

The Phoenix-based company has entered into a joint venture with London-based consultancy Gramercy Associates, with the goal of replicating its U.S. business model on the continent.

Gramercy is led by Tony Davis, a former CEO of Singapore-based budget carrier Tiger Airways, which merged with Singapore Airlines Group's low-cost Scott brand in 2017.

The new joint venture plans to apply for an EU air operator's certificate using Bombardier CRJ-900 aircraft, which have a standard configuration of 90 seats.

In the U.S., major carriers Delta, United and American contract with regional airlines such as Mesa and SkyWest to operate regional flights. The arrangement offers flexibility to the large carriers, as well as cost efficiencies.

The model exists in Europe as well, although it's not as pervasive, said John Strickland, director of London-based JLS Consulting. One example is Air Nostrum, which flies Iberia's regional network under the Iberia Regional Air Nostrum brand. Another example is Dublin-based CityJet, which flies CRJ-900 routes for Scandinavian Airlines (SAS).

In fact, those two carriers were working toward a merger before the Covid-19 pandemic torpedoed the plan.

Strickland said that the regional airline market is more challenging in Europe than in the U.S. due to robust competition from budget airlines such as Ryanair and EasyJet; efficient high-speed rail alternatives to shorthaul flying; and higher air transport taxation.

But he said that in looking to Europe, Mesa might be trying to capitalize on the proportional increase in airlines' need for small aircraft due to the decreased number of flyers.

"If demand shrinks for a long time, and so 737s and the A320 family prove too big, that's where Mesa may see an opportunity," Strickland said.

Supporting that thesis are recent comments made by Warner Rootlieb, managing director of KLM's regional subsidiary KLM Cityhopper, to Aviation Week. Rootlieb said that KLM's balance between regional planes and Boeing 737 could shift slightly toward more regional aircraft over next year or two as the regional fleet takes over some KLM mainline routes.

"We are very excited at the potential to expand our regional business overseas," said Mesa CEO Jonathan Ornstein.


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