Mesa Air Group, Inc. (MESA): Business Model Canvas [Dec-2025 Updated]

You're looking at Mesa Air Group, Inc. after its late-2025 merger, and honestly, the story now boils down to a laser focus on one major customer. As an analyst who's seen a few airline turnarounds, what really jumps out is the pure-play Capacity Purchase Agreement (CPA) with United Airlines, which generated $66.0 million in contract revenue in Q3 2025 alone. We're talking about a simplified operation-just 60 Embraer E-175s-where success hinges entirely on hitting those operational metrics for their new parent, Republic Airways Holdings Inc., and keeping that $278.2 million nine-month operating revenue stream flowing reliably. Dive into this Business Model Canvas to see exactly how this new, singular focus shapes their key resources, cost structure, and value delivery.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that define the combined entity's operational stability following the November 25, 2025, merger with Republic Airways Holdings Inc.

United Airlines

The relationship with United Airlines is cemented by a new, long-term Capacity Purchase Agreement (CPA) secured as part of the merger transaction. This agreement is for a 10-year term. This new CPA specifically covers 60 E175 aircraft. Under this structure, United Airlines is responsible for Partner Direct Charges, which include aircraft fuel, landing fees, certain engine maintenance, and aircraft ownership. The prior capacity purchase agreement between Mesa and United Airlines was terminated upon the merger closing. Prior to the merger, Mesa Airlines operated 60 Embraer E175 aircraft under contract with United.

Republic Airways Holdings Inc.

The merger, which closed on November 25, 2025, established Republic Airways Holdings Inc. as the surviving entity. Republic Airways Holdings Inc. now commands the world's largest Embraer jet fleet, totaling 310 E-Jets (E170/175 models). This combined operation supports more than 1,300 daily departures. Post-merger ownership splits show Republic shareholders own approximately 88% of the common stock, while former Mesa stockholders hold between 6% and 12%. The combined workforce exceeds 8,000 aviation professionals. The integration is designed to target approximately $1.9 billion in annual revenue.

Embraer

The operational backbone is the exclusive use of the Embraer regional jet family. Mesa Airlines completed its transition to an entirely E175 fleet by March 2025. The combined fleet size of the new Republic Airways Holdings Inc. is 310 E-Jets, encompassing the E170 and E175 models. In January 2025, Mesa executed a sale-leaseback agreement with United Airlines involving 18 units of Embraer 175 aircraft for $229.1 million.

Aircraft Lessors/Financiers

The merger provided a significant financial reset by extinguishing Mesa's prior debt obligations. A $43.0 million secured term loan facility was settled by repaying approximately $31.9 million in cash, which resulted in a $12.3 million gain on extinguishment. The January 2025 sale of 18 E175s to United Airlines was specifically allocated to pay down $142 million of Mesa's debt to the U.S. Treasury. The new structure means the 60 E175 aircraft under the new United CPA are effectively financed through that agreement's structure, which includes United covering aircraft ownership costs.

The key financial relationships underpinning the fleet are summarized below:

Maintenance, Repair, and Overhaul (MRO) Vendors

The operational strategy now centers on a single aircraft type, the Embraer E175, which simplifies the supply chain and maintenance requirements. The fleet homogenization reduces the need for diverse spare parts inventories and specialized crew training across different airframes. The combined entity continues to rely on external MRO vendors to support the large, standardized fleet of 310 E-Jets.

• Fleet type: Exclusively Embraer E175 (post-CRJ-900 retirement by March 2025).
• Daily Departures Supported: More than 1,300.
• Combined Workforce: Over 8,000 professionals.

Finance: draft 13-week cash view by Friday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Key Activities

You're focused on the core execution of the current contracts and the financial cleanup needed to support the pending merger. Here's a look at the hard numbers driving the Key Activities for Mesa Air Group, Inc. as of late 2025.

Executing the new 10-year United CPA flights reliably

The entire operation now centers on the Capacity Purchase Agreement (CPA) with United Airlines, which is the source for 99% of Mesa Air Group's revenue. The key activity here is delivering the contracted flying schedule with maximum reliability, which directly impacts revenue recognition and performance incentives. The fleet is now exclusively Embraer 175s, which simplifies scheduling and training compared to the previous mixed fleet.

The performance under the United CPA shows strong operational control, especially in the September 2025 quarter:

The utilization target planned for the first quarter of 2025 was 9.8 block hours per day.

Maintaining the all-Embraer 175 fleet efficiently

Mesa Air Group completed the transition to an all-Embraer 175 fleet by March 2025, retiring all CRJ-900 aircraft at United's request. This standardization is a major efficiency driver, as it reduces maintenance complexity and crew training overhead. As of March 31, 2025, the fleet comprised 60 E-175s. By the September 2025 quarter, 60 large (70/76 seats) E-175 jets were operated under the United CPA.

The fleet reduction was aggressive; Mesa sold 18 Embraer E175s to United Airlines for expected gross proceeds of $229.1 million. This sale was key to balance sheet repair, with $142.4 million of the proceeds used to pay off associated debt.

Managing pilot and crew training for the single E-175 type

Operating a single type, the E-175, streamlines training, which was evident in cost reductions. Flight operations expense in Q2 2025 was lower by 26.6% compared to Q2 2024, partly due to decreases in pilot training costs. The Mesa Pilot Development (MPD) program started operations in Glendale, AZ, in February 2025. The company also began recalling previously furloughed pilots starting in January 2025, anticipating increased utilization.

Debt reduction and balance sheet restructuring post-merger

A primary activity has been aggressively deleveraging the balance sheet ahead of the Republic Airways merger. You can see the impact clearly in the debt reduction figures:

• Total debt as of September 30, 2024, was $315.2 million.
• Total debt as of June 30, 2025, was $113.7 million.
• Total debt as of September 30, 2025, stood at $95.2 million.
• Net cash used in financing activities Year-to-Date (YTD) September 30, 2025, was $(62.0) million, related to debt repayments.
• During the September 2025 quarter, the Company paid $18.5 million in debt.
• Principal debt maturities due by year-end 2025 were $62.2 million.

The balance sheet remains stressed, with stockholders' equity at negative $52.6 million as of September 30, 2025. Total assets have shrunk to $158.9 million from $383.6 million at year-end 2024, largely due to aircraft asset sales.

Achieving high operational metrics, like 100.00% controllable completion factor

Reliability is non-negotiable for the United CPA. Mesa Air Group achieved a perfect 100.00% controllable completion factor for United in the first quarter of fiscal 2025 and again in the September 2025 quarter. This metric excludes cancellations due to weather and air traffic control. For context, the Q2 2025 controllable completion factor was 99.9%.

The focus on operational metrics is critical for the ongoing contract, so you should track these points:

• Controllable Completion Factor (United): 100.00% (Q3 2025).
• On-time arrival rate (within 15 minutes): 81.8% (Q3 2025).
• United NPS: 36.1 (Q3 2025).

Finance: review the impact of the $14.6 million remaining deferred revenue balance on Q4 2025 revenue recognition by next Tuesday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Key Resources

You're looking at the core assets Mesa Air Group, Inc. (MESA) relies on to execute its business, especially as it finalizes its transformative merger with Republic Airways Holdings Inc. These aren't just line items; they are the tangible and intangible engines of its operations, particularly its deep, almost singular reliance on United Airlines.

The most critical physical resource, post-restructuring, is the standardized fleet. Mesa completed its mandated transition from the mixed CRJ/E175 fleet to a single type by March 2025, fulfilling United Airlines' requirement. This homogenization simplifies maintenance and crew training, a major operational advantage.

The company's regulatory foundation is its Air Operator's Certificate (AOC) and all necessary Federal Aviation Administration (FAA) approvals, which permit it to operate scheduled passenger service across its network, currently focused on United Express operations. This certification is non-negotiable for any air carrier.

Financially, a significant, though non-cash, resource is the accumulated tax shield. As of June 30, 2025, Mesa Air Group reported aggregate federal Net Operating Losses (NOLs) of approximately $277.6 million. This NOL balance, which expires between fiscal years 2030 and 2038, offers a substantial future tax benefit to offset taxable income once profitability is consistently achieved.

The contractual relationship with its primary partner is arguably the most valuable intangible asset. The Long-term Capacity Purchase Agreement (CPA) with United Airlines is the lifeline, as United accounted for about 98% of Mesa Air Group's revenue for the nine months ended September 30, 2025. This agreement dictates the operational scope and revenue floor for the business.

Here's a quick look at the scale of the human capital and fleet assets as of mid-2025, before the full integration of the Republic merger:

The human capital-the experienced pilots, flight attendants, and maintenance personnel-are essential to maintain the high operational standards required under the CPA. While Mesa had approximately 1,650 employees as of March 31, 2025, the merger with Republic Airways is set to combine forces, positioning over 8,000 aviation professionals for future growth.

The structure of the United CPA itself is a key resource, especially following the January 2024 amendment which increased block-hour rates, projected to generate approximately $63.5 million in incremental revenue over the twelve months following that agreement.

You should note the composition of the operational workforce as of the second quarter of 2025, which reflects the streamlined focus:

• Experienced pilots and crew trained exclusively on the E175 type.
• Maintenance personnel specialized in the Embraer platform.
• Operational staff capable of achieving high controllable completion factors, such as 99.9% for United in Q2 2025.
• Personnel ready for integration into the larger entity post-merger.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Value Propositions

You're looking at the core promises Mesa Air Group, Inc. makes to its key partners and customers as of late 2025, especially following the merger with Republic Airways Holdings Inc. on November 25, 2025. These aren't abstract goals; they are tied directly to operational metrics and contractual agreements.

Reliable regional feed for United's hub-and-spoke network.

Mesa Air Group, now part of a combined entity with Republic Airways Holdings Inc., solidifies its role as a dedicated regional feeder for United Airlines under a new 10-year Capacity Purchase Agreement (CPA) signed in connection with the merger. This commitment ensures consistent service delivery for United's network structure. As of March 31, 2025, Mesa Airlines was operating approximately 238 daily departures to 82 cities in 32 states, the District of Columbia, Cuba, and Mexico. All of Mesa Air Group's consolidated contract revenues for the fiscal year ended September 30, 2024, were derived from operations associated with the United CPA, representing 97% of revenue.

Operational consistency with a 100.00% controllable completion factor.

Reliability is a measurable proposition here. For United operations in the first quarter of fiscal 2025, Mesa reported a controllable completion factor of 100.00%. This metric, which excludes cancellations due to weather and air traffic control, shows sharp operational focus, improving from 99.92% in the first quarter of 2024. The prior quarter, Q4 2024, saw only one controllable cancellation. Furthermore, the company has been driving efficiency through increased aircraft usage:

• Block hour utilization target for the June 2025 quarter: 9.8 block hours per day.
• This represented a 10% increase from the 8.9 block hours per day average in the fourth calendar quarter of 2024.

Simplified, cost-effective single-fleet E-175 operation.

Mesa Air Group completed a significant strategic shift requested by United Airlines to operate an entirely Embraer E175 fleet by March 2025. This transition simplifies scheduling, training, and maintenance significantly. The final CRJ crews completed E-Jet training in August 2025. The company sold 18 Embraer E175 aircraft to United for gross proceeds of $229.1 million as part of this move. The fleet composition as of the Q1 2025 report included 54 E-175s and eight CRJ-900s under the United CPA. By August 2025, the active fleet stood at 57 active E175s. The move to an all-E175 fleet also supported a major balance sheet cleanup, with total debt reduced to $230.6 million as of Q1 2025 from $481.0 million year-over-year.

Seamless passenger experience under the United Express brand.

Mesa Air Group operates all its flights exclusively under the United Express brand pursuant to the CPA. This means passengers experience a consistent brand presentation, even though Mesa is the operator. The focus on the larger, higher-capacity E-175 jets aligns with United's broader fleet strategy for regional service. The combined Republic and Mesa entity, post-merger in late 2025, will operate the world's largest Embraer jet fleet of 310 E-Jets.

Access to smaller, underserved markets for the major carrier.

The core function of Mesa Air Group's operation is providing essential regional connectivity that the major carrier, United Airlines, relies upon. This is quantified by the number of cities served, which stood at 82 cities in 32 states, Cuba, and Mexico as of March 31, 2025. The following table summarizes the fleet supporting this value proposition as of early 2025 data points:

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Customer Relationships

The relationship with United Airlines is the core of Mesa Air Group, Inc.'s business, defined by a dedicated, long-term Capacity Purchase Agreement (CPA).

Dedicated, long-term Capacity Purchase Agreement (CPA) with United.

Mesa Air Group, Inc. operates all its flights as United Express under the terms of the CPA with United Airlines, Inc.. Following the merger with Republic Airways Holdings Inc. expected to close on November 25, 2025, Mesa's operations will be supported by a new and enhanced CPA with United Airlines that is set to run for the next ten years. All of Mesa Air Group, Inc.'s consolidated contract revenues for the nine months ended September 30, 2025, were derived from operations associated with this CPA, leases of aircraft to a third party, and Mesa Pilot Development (MPD).

The contract structure provides guaranteed monthly revenue for each aircraft under contract, a fixed fee per block hour (time in revenue service), and reimbursement for certain direct operating expenses in exchange for providing regional service.

High-touch, strategic relationship management with the major airline partner.

Mesa Air Group, Inc. maintains close coordination with the major partner, evidenced by working closely with United's Network Planning group to schedule utilization. This collaboration is critical for optimizing flight schedules and aircraft deployment under the CPA. The company's focus on fleet standardization, moving to an exclusive E-175 fleet by March 31, 2025, simplifies the operational interface with United.

Performance-based contract structure focused on operational metrics.

The CPA is structured around performance, with operational metrics directly impacting the relationship and financial outcomes. For the three months ended September 30, 2025, Mesa Air Group, Inc. achieved a perfect 100.00% controllable completion factor for United operations. Controllable completion factor excludes cancellations due to weather and air traffic control. Furthermore, the company recorded a United Airlines Net Promoter Score of 36.1 for the September 2025 quarter, which was reported as the highest among United regional operators for that period. The contract revenue stream is sensitive to the number of aircraft under contract; contract revenue for the September 2025 quarter was $66.0 million, a decrease of 29.6% from $93.8 million in the September 2024 quarter, driven by a reduction in contractual aircraft. The operational performance for the United E-175 segment generated an adjusted pre-tax profit of $2.2 million in the September 2025 quarter.

Here's a look at the operational performance metrics under the United CPA:

The company is focused on maximizing utilization, with block hours per day anticipated to reach 9.8 in the June 2025 quarter, up from 8.9 in the fourth calendar quarter of 2024.

Indirect relationship with the end-customer (passengers) via United's brand.

Mesa Air Group, Inc. provides scheduled passenger service exclusively under the United Express brand name. The end-customer, the passenger, interacts solely with the United brand for ticketing, scheduling, and overall service experience, meaning Mesa Air Group, Inc.'s direct customer relationship is with United, not the flying public. The operational metrics, such as the Net Promoter Score provided by United, serve as the primary feedback mechanism from the end-customer base back to Mesa Air Group, Inc..

The relationship is further cemented by the fact that Mesa Air Group, Inc. is transitioning to a single fleet type, which aids in consistency for the major partner:

• Fleet type operated as of March 31, 2025: Exclusively 60 E-175 aircraft.
• Fleet type operated as of September 30, 2025: 60 Embraer 175 ('E-175') regional aircraft.
• Total daily departures as of September 30, 2025: Approximately 234.

Finance: draft 13-week cash view by Friday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Channels

You're looking at how Mesa Air Group, Inc. gets its service in front of the end customer, which is almost entirely dictated by its primary partner. The main channel for revenue generation is deep integration with the larger carrier's distribution network.

The primary channel is through United Airlines' global reservation and ticketing systems. This means every flight Mesa Air Group operates is sold directly through United's established infrastructure, which includes their website, mobile app, and global distribution systems (GDS) used by travel agents worldwide. This channel provides immediate access to United's entire customer base without Mesa Air Group needing to build out its own extensive, costly sales and marketing apparatus.

All services are delivered under the United Express branding and flight codes. This is critical because the customer experience, from booking to baggage claim, is framed by the major airline's identity. For instance, Mesa Air Group operated flights using the United Express designator, meaning the flight number you see on your ticket is a United code, even though Mesa pilots are flying the aircraft.

The operational focus of these channel flights is connecting passengers to and from major United hubs: Houston-Intercontinental (IAH) and Washington-Dulles (IAD). These hubs act as the critical nodes where Mesa Air Group's regional service feeds into United's domestic and international long-haul network. The routes are specifically designed to funnel traffic into these major connection points.

Here's a quick look at the operational scale tied to this primary channel as of the first half of fiscal 2025, before the merger finalization:

Still, Mesa Air Group, Inc. maintains a direct channel for non-operational communication. This is Mesa's own website for corporate and investor communications. You use this channel to find official financial filings, like the Form 10-Q for the Second Quarter 2025 Financial Results, and to access direct contact information for the investor relations team, such as the email investor.relations@mesa-air.com. This channel is for stakeholders, not for booking passenger travel.

• Investor Relations Contact Email: investor.relations@mesa-air.com
• Primary Fleet Type: Embraer E-175
• Operational Reliability (Q2 2025): 99.9% controllable completion factor
• Post-Merger Daily Departures (Projected): Over 1,250

Finance: draft 13-week cash view by Friday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Customer Segments

You're looking at the core of Mesa Air Group, Inc.'s revenue engine, and honestly, it's incredibly concentrated. For a company like Mesa Air Group, Inc., the customer segment isn't the passenger; it's the major airline they fly for. This is the reality of the regional carrier model.

United Airlines, Inc.: The direct, sole revenue-generating customer.

United Airlines, Inc. is defintely the linchpin here. Following the wind-down of the American Airlines contract in early 2023, United Airlines, Inc. became Mesa Air Group, Inc.'s exclusive major airline partner. This relationship is governed by a Capacity Purchase Agreement (CPA). To give you a sense of the dependency, for the fiscal year ended September 30, 2024, Mesa Air Group, Inc.'s consolidated contract revenues derived from operations associated with the United CPA accounted for 97% of total revenue. This means nearly every dollar of contract revenue flows directly from United Airlines, Inc.

Here's a quick look at the structure of that primary relationship as of the latest available data points:

Regional air travelers: Indirectly served passengers connecting through hubs.

The passengers themselves are the indirect customers. These are travelers using the United Express network, relying on Mesa Air Group, Inc. to provide the first or last leg of their journey, typically connecting into or out of major United Airlines, Inc. hubs. Their experience directly impacts the performance metrics United tracks, such as the United Airlines Net Promoter Score, which Mesa reported at 36.1 for the September 2025 quarter.

Business and leisure travelers flying to 76 cities in 32 states and Mexico.

Mesa Air Group, Inc. serves the end-user market by flying to numerous smaller and mid-sized communities that major carriers might not serve directly with mainline aircraft. As of September 30, 2024, Mesa Airlines provided scheduled passenger service to 67 cities across 34 states, plus international destinations in Cuba and Mexico, all operating under the United Express brand. This network reach is what makes Mesa Air Group, Inc. a vital feeder for the larger airline's network.

The scope of the service network, which feeds the United Airlines, Inc. system, includes:

• Service to 67 cities as of September 30, 2024.
• Coverage across 34 U.S. states.
• International service points including Mexico.
• Operation under the United Express brand.

Finance: draft 13-week cash view by Friday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Cost Structure

You're looking at the core expenses for Mesa Air Group, Inc. as they finalize their transition to an all-E175 operation and manage debt reduction through asset sales. Here's a breakdown of the cost structure elements as of late 2025, focusing on the numbers that matter.

Flight operations expense was reported at $35.7 million for Q3 2025. This line item reflects the costs associated with running the flights, but you'll see how fleet changes impact other areas.

Aircraft maintenance costs saw a notable reduction, which is a direct benefit of operating a single E-175 fleet type. For the three months ended September 30, 2025, aircraft maintenance expense was $42.3 million, a decrease of $5.3 million, or 11.2%, compared to the same period in 2024. Still, you have to factor in the pass-through mechanism; total pass-through maintenance expenses reimbursed by United actually increased by $4.1 million during Q3 2025 versus Q3 2024.

Pilot and crew wages, training, and benefits are a significant component. The move to the single E-175 fleet simplified training, contributing to lower flight operations expense year-over-year. For instance, lower pilot wages and decreased pilot training were cited as reasons for the Q3 2025 flight operations expense decrease. To give you a sense of the pay scale, a First Officer could earn a flying pay rate of $100 per hour for the first year of service, based on official career page information. General and Administrative expense also saw a decrease of $0.5 million, or 4.2%, in Q3 2025, primarily driven by decreases in wages.

Fuel costs are largely insulated from direct volatility because they are mostly passed through under the Capacity Purchase Agreement (CPA) with United Airlines. While the pass-through revenue component saw an increase of $3.2 million, or 14.9%, in Q3 2025, this was primarily attributed to higher pass-through maintenance expense, not fuel.

The balance sheet focus has clearly been on deleveraging, which directly impacts future interest expense. Here is the debt reduction picture:

The company used proceeds from asset sales, like the sale of 18 E-175 aircraft to United for $227.7 million, to pay down debt. Principal debt maturities due by year-end 2025 stood at $62.2 million, which included the UST Loan principal.

You should also note the specific compensation details that factor into the overall wage structure:

• First Officer hourly rate (Year 1): $100.
• CRJ-900 First Officer hourly rate (Year 1, based on 2022 scale): $101.00.
• Pilot Development Program time building rate: $60/hour.
• Pilot Development Program initial funded hours: 300 hours.
• Per Diem (Hourly): $1.89.

Finance: draft 13-week cash view by Friday.

Mesa Air Group, Inc. (MESA) - Canvas Business Model: Revenue Streams

You're looking at the core engine of Mesa Air Group, Inc.'s business, which, as of late 2025, is heavily concentrated around its major airline partner. Honestly, the numbers show a clear picture of dependency; for the nine months ended September 30, 2025, United Airlines accounted for about 98% of Mesa Air Group's total revenue. This concentration is the defining feature of your revenue stream right now, especially as you navigate the final stages of the Republic Airways merger.

Let's look at the top-line performance for the period leading up to the merger close. Total operating revenues for the nine months ended September 30, 2025, came in at $278.2 million. This is down from the prior year, reflecting the ongoing transition and asset dispositions, but the structure of that revenue is what matters for the canvas.

Here's a snapshot of the most recent reported revenue figures:

The bulk of this revenue stems from the Capacity Purchase Agreement (CPA) with United Airlines, which is now underpinned by a new, enhanced agreement set to run for the next ten years. The revenue generated from this contract is not a single payment; it's a carefully structured arrangement designed to cover your operational costs and provide a margin. Specifically, you are paid through a combination of mechanisms that compensate Mesa Air Group, Inc. for having the assets ready and for actually using them.

The revenue streams are fundamentally built around the commitment to United for operating the E-175 fleet, which stood at 60 aircraft as of the end of the September 2025 quarter. The components you need to map out clearly are:

• Contract Revenue from United CPA, which was $66.0 million for the third quarter of 2025.
• Fixed monthly fees for aircraft availability and ownership, ensuring a baseline return regardless of daily flight volume.
• Variable fees based on block hours flown and operational performance metrics, which directly tie revenue to utilization and service quality.
• Pass-through revenue, which increased by 14.9% in Q3 2025, driven primarily by higher pass-through maintenance expense.

You've got to keep an eye on those block hours, as they directly influence the variable portion of the contract revenue. Finance: draft 13-week cash view by Friday.