8-K: Republic Airways Completes Mesa Merger, Secures United CPA

Republic Airways Holdings Inc. has successfully completed its merger with Mesa Air Group, Inc., forming a leading regional airline and securing a new 10-year capacity purchase agreement with United Airlines.

Summary

• Mesa Air Group, Inc. merged with and into Republic Airways Holdings Inc. (formerly Legacy Republic), with Republic Airways Holdings Inc. as the surviving entity.
• Legacy Republic stockholders now own approximately 88% of the combined company's common stock, while pre-closing Mesa stockholders retain 6% to 12%, subject to final settlement of Mesa's pre-closing obligations.
• Shares equivalent to the remaining 6% interest (2,853,454 Escrow Shares) have been delivered into escrow, primarily for United Airlines in exchange for forgiveness and repayment of certain Mesa debts and obligations, estimated at $54.2 million.
• A new 10-year Capacity Purchase Agreement (CPA) was entered into with United Airlines and Mesa Airlines, Inc., under which Mesa Airlines will provide passenger service as United Express using 60 Embraer E175 aircraft.
• The prior capacity purchase agreement between Mesa and United Airlines was terminated.
• Mesa Airlines repaid approximately $31.9 million (plus accrued interest and fees) of a loan to Jefferies Capital Services, LLC, resulting in a $12.3 million gain on extinguishment of the related loan balance.
• United Airlines forgave, extinguished, and released all debt and other obligations Mesa Airlines and its affiliates owed under a Second Amended and Restated Credit and Guaranty Agreement.
• Mesa effected a 15-for-1 reverse stock split of its common stock prior to the merger, and converted from a Nevada to a Delaware corporation.
• Each share of Legacy Republic common stock was converted into the right to receive 38.9933 shares of the Company's common stock.
• The Company now has approximately 46.9 million shares of Common Stock outstanding, including restricted and escrow shares.
• The Company's common stock commenced trading on The Nasdaq Global Select Market under the ticker symbol RJET on November 25, 2025, with a new CUSIP number: 590479408.
• CBIZ CPAs P.C. was dismissed as Mesa's independent registered public accounting firm, and Deloitte & Touche LLP was appointed as the Company's new independent registered public accounting firm.
• Significant changes occurred in the Board of Directors and executive officers, with David Grizzle appointed as CEO and Matthew J. Koscal as President and Chief Commercial Officer.
• The Republic 2025 Equity Incentive Plan was approved by Mesa stockholders and became effective.
• The Company adopted a new Code of Business Conduct and Ethics, replacing Mesa's previous code.

Sentiment

Score: 8

Explanation: The filing details the successful completion of a strategic merger, significant debt resolution, and the securing of a long-term, high-value contract with a major airline. The new management team and board are experienced, and the outlook statements are highly positive, indicating a strengthened market position and future growth potential. While there's minor uncertainty regarding escrow shares, the overall impact is overwhelmingly positive for the company's strategic and financial standing.

Positives

• Successful completion of the merger creates a larger, more diversified regional airline, Republic Airways Holdings Inc.
• Secured a new 10-year Capacity Purchase Agreement (CPA) with United Airlines for 60 Embraer E175 aircraft, providing long-term revenue stability.
• Resolved significant debt obligations, including the repayment of a $31.9 million loan and the recognition of a $12.3 million gain on extinguishment.
• United Airlines forgave other substantial debt and obligations owed by Mesa Airlines, significantly improving the company's financial health.
• The combined entity now owns the world's largest Embraer jet fleet of 310 E-Jets, supporting over 1,300 daily departures.
• The merger is expected to create value for all stakeholders and strengthen the regional aviation industry.
• New management team and Board of Directors bring extensive experience and a strong strategic plan.
• Cultural alignment between Republic and Mesa is expected to foster continued growth and development for over 8,000 aviation professionals.

Negatives

• Pre-closing Mesa stockholders retain a smaller percentage (6-12%) of the combined company, potentially indicating dilution.
• The final allocation of the 2,853,454 Escrow Shares, intended for United Airlines' debt forgiveness, is subject to final determination within 60 days and the price per common share of Mesa at the Share Settlement Date, introducing some uncertainty.
• The new CPA with United Airlines includes termination clauses, allowing United to terminate with 30 days' notice for failure to meet operating performance targets or immediately for a labor strike lasting ten or more consecutive days.
• Significant turnover in the Board of Directors and executive leadership occurred as a result of the merger.

Risks

• The Capacity Purchase Agreement (CPA) may be terminated by United Airlines upon 30 days' written notice if the Company fails to attain certain operating performance targets for a specified period, subject to a right to cure.
• The CPA may be terminated by United Airlines immediately upon written notice following the occurrence of a labor strike for ten or more consecutive days.
• The final allocation of the 2,853,454 Escrow Shares is subject to final determination within 60 days of the merger completion and the price per common share of Mesa at the Share Settlement Date, creating potential for variability.
• Contractor may incur denied boarding expenses if it fails to provide timely and accurate station-specific estimates regarding weight restrictions and aircraft limitations to United Airlines.
• The Company is responsible for and indemnifies United against penalties or interest arising from certain transaction taxes, customs, duties, and other assessments.
• Contractor must conduct operations in compliance with all Environmental Laws, with potential liabilities for non-compliance or unpermitted releases of Hazardous Materials.
• Risk of product loss and pilferage in the inflight product sales program, for which Contractor may be charged by United Airlines.
• Contractor is liable for any damage, destruction, loss, theft, or governmental taking of Wi-Fi Equipment or spare parts in its custody, except for normal wear and tear or damage caused by United/Gogo/Intelsat during installation/maintenance.

Future Outlook

The combined Republic Airways Holdings Inc. is positioned to become a leading publicly traded regional airline, owning the world's largest Embraer jet fleet of 310 E-Jets and supporting over 1,300 daily departures. The company expects to create value for all stakeholders, strengthen the regional aviation industry, and continue a growth trajectory spanning over five decades. The cultural alignment of the combined organization is anticipated to lead to continued growth, development, and long-term success for its aviation professionals, and create new job and career opportunities, offering a compelling investment opportunity.

Management Comments

• David Grizzle, CEO of Republic Airways, stated: 'This merger establishes a combined company with a common mission to provide safe, clean, and reliable service to connect people and communities across America. The transaction will create value for all of our stakeholders and strengthen the regional aviation industry.'
• David Grizzle also commented: 'Today, Republic returns to the public markets as a well-capitalized airline with a strong strategic plan, a capable and proven workforce of aviation professionals, and a horizon bright with opportunity.'
• Matt Koscal, President of Republic Airways, explained: 'Bringing Republic and Mesa together is the natural next step for Republic. It continues a growth trajectory that stretches back more than five decades, makes us a stronger and more capable partner for our customers, will create new job and career opportunities for our people, and offers a compelling investment opportunity in an essential industry.'

Industry Context

This merger represents a significant consolidation within the U.S. regional airline sector, creating a larger entity with a substantial fleet of Embraer E-Jets. The new 10-year Capacity Purchase Agreement with United Airlines underscores the continued reliance of major carriers on regional partners for network feed. The emphasis on operational efficiency, safety standards, and staffing capacity reflects ongoing industry challenges and the strategic importance of reliable regional operations to the broader airline ecosystem.

Comparison to Industry Standards

• Contractor (Mesa Airlines) is required to achieve at least the comparable quality of airline service and standards of care as provided by United Airlines or generally required by United of its other United Express Carriers.
• All procedures and means of measurement for regional airline services shall be no more stringent than those used by United with respect to the performance of all other operators of regional aircraft for United.
• Contractor is insured by insurers of recognized financial responsibility against losses and risks in amounts and with deductibles customary for businesses of its size and nature in the industry.
• United Airlines will gather Aircraft Communication and Reporting System (ACARS) data for early brake release measurements under the same parameters for all United Express carriers operating E175 aircraft whose technology allows for similar measurements.
• United requires Contractor to adhere to aircraft interior deep clean standards consistent with and not materially more burdensome than what United requires of its other E175 regional partners.

Management Changes

Corporate Governance

Related Party Transactions

• A new 10-year Capacity Purchase Agreement (CPA) was entered into with United Airlines, Inc. and Mesa Airlines, Inc., replacing a prior agreement. United Airlines is a significant partner and creditor.
• United Airlines forgave, extinguished, and released all debt and other obligations that Mesa Airlines and its affiliates owed to United Airlines under a Second Amended and Restated Credit and Guaranty Agreement.
• Shares equivalent to 6% interest in the Company (2,853,454 Escrow Shares) were delivered into escrow, primarily to United Airlines in exchange for the forgiveness and repayment of certain debts and obligations of Mesa, estimated at $54.2 million.
• Indemnification agreements were entered into with the newly appointed directors, executive officers, and Principal Accounting Officer, providing protection against liabilities incurred in their corporate roles.

Stakeholder Impact

• **Shareholders**: Legacy Republic stockholders now own 88% of the combined company, while pre-closing Mesa stockholders retain 6-12%. The final allocation of escrow shares for debt forgiveness introduces some uncertainty for Mesa stockholders. The stock now trades under RJET on Nasdaq Global Select Market.
• **Employees**: The merger unites two organizations with a shared culture, positioning over 8,000 aviation professionals for continued growth, development, and career opportunities. Significant changes in management and board roles will affect leadership and potentially organizational structure.
• **Customers**: The combined company will continue to provide regional airline services under the American Eagle, Delta Connection, and United Express brands, with a new 10-year CPA with United Airlines. The focus on operational efficiency and quality of service aims to benefit passengers.
• **Creditors**: The repayment of a $31.9 million loan to Jefferies Capital Services, LLC, and the forgiveness of debt by United Airlines significantly improve the company's balance sheet and reduce its financial leverage.
• **Partners (e.g., United Airlines)**: United Airlines benefits from a new 10-year CPA with Mesa Airlines, ensuring continued regional service. The escrow shares mechanism addresses outstanding debts, strengthening the partnership.

Next Steps

• Final determination and allocation of Escrow Shares within 60 days of the merger completion.
• The combined company will work to consolidate the two airlines to operate as a single carrier.
• Financial statements of businesses acquired and pro forma financial information will be filed by amendment to Form 8-K no later than 71 calendar days after the filing date.
• Parties will use good faith efforts to update the terms and conditions for United Wi-Fi services.
• Parties will use good faith efforts to incorporate new cybersecurity provisions substantially similar to those in the Republic CPA.
• Contractor shall comply with all manufacturer warranty and guaranty programs applicable to each Covered Aircraft.

Key Dates

Recommendation

The completion of the merger between Republic Airways and Mesa Air Group creates a significantly larger and more robust regional airline, Republic Airways Holdings Inc., with the world's largest Embraer jet fleet. The new 10-year Capacity Purchase Agreement with United Airlines provides a stable, long-term revenue stream and solidifies a critical partnership. Crucially, the company has resolved substantial debt obligations, including a $12.3 million gain on extinguishment and the forgiveness of other significant debt by United Airlines, which dramatically improves its financial health and reduces risk. The reconstituted board and executive team bring extensive industry experience, positioning the company for enhanced operational efficiency and strategic growth. While the final allocation of escrow shares introduces a minor element of uncertainty, the overall strategic and financial restructuring is highly favorable, making this a compelling investment opportunity in the regional aviation sector.

Keywords

Regional Airline, Merger, Capacity Purchase Agreement, United Airlines, Embraer E175, Debt Forgiveness, Reverse Stock Split, Corporate Governance, Airline Industry, SEC Filing, RJET, Mesa Air Group, Republic Airways