American Airlines has acquired a 20.8% minority stake in Republic Airways Holdings, making it the largest investor in the newly merged regional carrier among the ‘Big Three’ US airlines.
On December 19, American published an SEC filing showing that it has acquired 9.7 million shares in Republic.
American’s stake was secured through an agreement connected to the merger of Republic and Mesa Airlines, which closed in November this year, the filing states.
As part of the transaction, American agreed not to sell any Republic stock for at least 180 days after the closing date.
American joins its rivals United Airlines and Delta Air Lines as a major shareholder in Republic.
Following the transaction, United acquired an 18.8% stake in the merged entity, and Delta acquired a 14.4% stake.
Republic is now the largest independent regional airline in North America, and the largest operator of Embraer aircraft in the world, with a fleet of approximately 310 E170s and E175s.
This constitutes one-third of Embraer’s total E170 and E175 production to date, and one sixth of its entire E-jet family (which also includes the larger E190 and E195s).
Following the merger, Republic now supports over 1,300 daily departures and expects to generate close to $2bn in annual revenue.
Upon closing, the Mesa business segment also entered into a brand-new 10-year capacity purchase agreement (CPA) with United.
Republic and Mesa will maintain parallel operations until they can be consolidated under a single operating certificate.