ATW Daily News

Mesa heads to China to start new regional airline

Monday December 25, 2006

Mesa Air Group signed an agreement with Shenzhen Airlines to create a Chinese regional carrier, yet to be named, that is expected to begin service within the next year operating 50-seat regional jets.

As long ago as last spring, Mesa said it was looking to expand to the Chinese mainland (ATWOnline, April 11). The deal is the first of its kind for any US regional. Shenzhen will have a 51% stake in the new carrier with an investment of $32.6 million. Mesa will invest $31.3 million for the remaining stake, according to Merrill Lynch.

"We are delighted and privileged to be the first US passenger airline to form a strategic alliance to create a new airline to operate in the People's Republic of China," Mesa Chairman and CEO Jonathan Ornstein said. "We at Mesa look forward to making a positive contribution to the development of the regional airline industry in China and to forging a strong, long-term relationship with our friends at Shenzhen Airlines."

Shenzhen operates a fleet of 45 A320s and 737s on 100 routes within China, employs 6,300 and carried 5.3 million passengers last year. "Mesa's experience and reputation as a leader in the regional airline industry make it the perfect choice to partner with us in launching this airline," Shenzhen President Li Ku said.

Ornstein, who was in Beijing for the announcement, said Mesa will provide "significant technical capability" including support for pilots, maintenance, operations and training as well as the aircraft. Focus cities for the new service are Shenzhen, Beijing, Chongqing, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning.

by Sandra Arnoult

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