Republic/Trans States Merging

[4EngineETOPS]

Republic Airways is nearing a deal to buy Trans States

This is the only source I found, so I'm not sure the acquisition is definite. However, it definitely appears that Republic is close to buying Trans States Holdings, which includes Trans States, GoJet, and Compass. If this does go through, the regional airline business would be comprised of two independent stalwarts in Republic Airways Holdings and Skywest, as well as Delta's Endeavor and American's American Eagle/Piedmont/PSA. Given the state of ExpressJet and the relatively small market shares the remainder of the industry players (Horizon, Mesa, Air Wisconsin, etc.) hold, it looks like there will largely be a duopoly competing for United's business, as well as non-wholly owned operations for Delta and American.

While I'm not sure this is necessarily a good thing from a dispatcher perspective since there will be a few less independent airlines to choose from, it's not as if the amount of flying will substantially change. I think this can actually be a good thing for the regional airline industry. Given that the regional's source of revenue is major airline contracts, consolidation should seemingly help somewhat. Since the regional airline industry now has fewer players, it won't be as easy to whipsaw regionals against each other. Some crewing issues should also be marginally improved. There are definitely downsides, but hopefully a stronger negotiating position on regionals' behalfs should gradually improve the regionals' revenues and give dispatch unions something to latch onto. Probably wishful thinking, but the current regional situation has major airlines pouring money into regional pilot hiring, so there isn't much of an end in sight to $15 an hour regional pay without a significant change catalyst.

 

[A1TAPE]

Whens the earliest in theory that it could go through if it actually did? If it is a merger would each regional still have bases? Like as to how even though skywest holdings owns both OO and expressjet they each have their own OOCs. Would Republic keep their indy OOC, trans keep their Bridgeton OOC and Compass keep their OOC in MSP?

 

[Sliced_Bread]

Whens the earliest in theory that it could go through if it actually did? If it is a merger would each regional still have bases? Like as to how even though skywest holdings owns both OO and expressjet they each have their own OOCs. Would Republic keep their indy OOC, trans keep their Bridgeton OOC and Compass keep their OOC in MSP?

All fair questions but nobody can possibly have answers to them beyond pure speculation. Honestly until I start seeing more sources reporting, get some kind of memo, or find someone willing to pay $18 to actually see the whole article I'm calling BS on the whole thing. The fact that in the very first sentence the author calls a holdings company an airline makes me suspicious about the quality of information being reported.

 

[Burrito]

O"C"C, my guy.

Operations Control Center... System Operations Center... Long Island Support Center.

 

[A1TAPE]

All fair questions but nobody can possibly have answers to them beyond pure speculation. Honestly until I start seeing more sources reporting, get some kind of memo, or find someone willing to pay $18 to actually see the whole article I'm calling BS on the whole thing. The fact that in the very first sentence the author calls a holdings company an airline makes me suspicious about the quality of information being reported.

Heres the full article

• Airlines
• Jon Ostrower
• August 1, 2018
• 3 Min Read

Republic Airways is nearing a deal to buy Trans States

Another wave of U.S. airline consolidation is here.

Updated with Republic Airways declining to comment.
Republic Airways is nearing a deal to acquire U.S. regional airline Trans States Holdings, according to three people briefed on the matter.
The merger of the second and third largest regional airlines would mark another major consolidation in the U.S., where regional carriers have struggled to stay afloat amid a severe shortage of qualified aviators.
The pair recently signed a Memorandum of Understanding establishing the preliminary terms for the acquisition, according to two of the people briefed on the talks. A formal announcement is expected as early as later this month. Both companies are privately held.
A spokesman for Indianapolis-based Republic Airways declined to comment. A spokeswoman for Bridgeton, Missouri-based Trans States didn’t immediately respond to a request for comment.
Republic Airways and Trans States Holdings operates Go Jet Airlines, Compass Airlines and Trans States Airlines on behalf of the three largest U.S. airlines. The combined carrier would be roughly 75% of the size of SkyWest Airways, the largest U.S. regional carrier, measured by Available Seat Miles in 2017.
“They’ve got to have a volume game, because their margins are being squeezed” by the three major U.S. airlines, said Henry Harteveldt, founder of the Atmosphere Research Group.
And despite Republic’s profitability, the carrier filed for bankruptcy in 2016 citing the acute shortage of pilots as part of its need to revamp its corporate operations. Republic exited Chapter 11 bankruptcy restructuring in April 2017.
Further, said Harteveldt, “one of of the big benefits is getting access to Trans States pilot corps.”
The union could also have broad implications for the manufacturers of regional jets, removing a customer from the market as part of the overall consolidation. The deal could potentially be a major blow to Mitsubishi’s ambitions to secure a spot for its new Mitsubishi Regional Jet in The U.S..
Trans States holds a commitment for 50 airplanes, but has so far been limited by scope clauses that limit operation of the MRJ90 in the U.S. Trans States, along with Sky West, has options to convert to the 76 seat MRJ70. Republic is exclusively a user of Embraer aircraft and at the Farnborough Airshow signed an agreement committing to 100 additional E175 jets.

 

[Victor's_Vector]

This potential merger has been much discussed in some places over the last months and - if it goes through - it will be interesting to see how Republic, as an all 175/170 fleet, manages TransStates 145's (and the inbound MRJ's) as well as GoJet's 700/900's. Compass seems like the real gem of this transaction for RPA - all 175's, trained personnel to go with them, and a western position that complements RPA's current Midwest/Eastern stomping grounds well. Wait, how many of TSH's birds are actually TSH-owned? (CPZ's 175 fleet is all AA & DL owned, if I'm not mistaken, and I believe most/all of TransStates' 145 fleet is TSH-owned, but what about GoJet's 700/900's?)

 

[CPZ9900]

This potential merger has been much discussed in some places over the last months and - if it goes through - it will be interesting to see how Republic, as an all 175/170 fleet, manages TransStates 145's (and the inbound MRJ's) as well as GoJet's 700/900's. Compass seems like the real gem of this transaction for RPA - all 175's, trained personnel to go with them, and a western position that complements RPA's current Midwest/Eastern stomping grounds well. Wait, how many of TSH's birds are actually TSH-owned? (CPZ's 175 fleet is all AA & DL owned, if I'm not mistaken, and I believe most/all of TransStates' 145 fleet is TSH-owned, but what about GoJet's 700/900's?)

A merged company likely will not operate any CRJs... United already ordered 1 for 1 replacements for the 25 700's G7 operates and the CRJs they operate for Delta will likely be moved to Endeavor. And no, Trans States does not own most of their 145s. They have received quite a few from ExpressJet which are owned by United. I believe they only own a total of 5 aircraft, those with tail numbers that end in HK. All their American Eagle planes are currently being returned to Envoy. Delta/American owns all the Compass aircraft. Republic is the largest operator of the 175... there's nothing that Compass knows about the plane that Republic does not.

Trans States Holdings holds little to no assets.

 

[Stanimal]

Great...... AX changed their LinkedIn page

 

[manniax]

And no, Trans States does not own most of their 145s. They have received quite a few from ExpressJet which are owned by United.

Are you sure United owns the aircraft? My understanding is that ExpressJet is owned by SkyWest. You may be correct about the plane ownership, though, I haven't followed regional goings on closely for some time.

 

[crow]

Are you sure United owns the aircraft? My understanding is that ExpressJet is owned by SkyWest. You may be correct about the plane ownership, though, I haven't followed regional goings on closely for some time.

I believe he means the planes received from expressjet are owned by United, not that expressjet itself is owned by them.

 

[F9DXER]

Well having worked under the RPA umbrella for a few years, I am sure RPA will totally duck things up.

 

[CPZ9900]

Are you sure United owns the aircraft? My understanding is that ExpressJet is owned by SkyWest. You may be correct about the plane ownership, though, I haven't followed regional goings on closely for some time.

Yes. I am 100% positive that United still owns all the 145 aircraft that are/were at ExpressJet. That includes the 145s now at Trans States and CommutAir.

 

[dispatchguy]

And the only one making out like a bandit is uncle hulas...

 

[manniax]

I believe he means the planes received from expressjet are owned by United, not that expressjet itself is owned by them.

Yeah, that's what I figured. Surprised UA owns the aircraft and not SkyWest, but not shocked - maybe that's the way it's done for big regionals these days.

 

[crow]

Depends on how each contract is negotiated I believe but I could be mistaken. Plus the 145s came from the old days when United was more able to screw its regionals over if I’m not mistaken. I would imagine it’s changed with the 175s coming in to operation but who knows

 

[bbmikej]

I believe almost all of the 145s are from the time when ExpressJet was wholly owned by Continental. The aircraft stayed with the parent company through the merger and are now owned by United.

 

[Flying Saluki]

I think this is about getting control of TSA's pilot cadre. They don't need the planes. They need the pilots.