Mesa Air sets sights on China
Apr. 11, 2006
Mesa Air Group is eyeing China as fertile ground for new growth, Chairman and CEO Jonathan Ornstein said Friday at a meeting for financial analysts in Los Cabos, Mexico.
"They have a total of 40 RJs in the country," Ornstein said. "It's the most rapidly expanding economy in the world. We think there are some really good opportunities there." He said the Chinese airline industry should follow the US example of using regional aircraft to feed mainline carriers from smaller destinations. "As competition grows keener, the most efficient way would be to develop a hub-and-spoke system. We would do it in some sort of partnership."
Mesa Executive VP and CFO Peter Murnane recently returned from a fact-finding mission to China exploring marketing opportunities and seeking potential business partners. But Ornstein emphasized that the plan is very preliminary and would require years to develop: "We could put some RJs in there, being there first, working with the right people. I think there's a good chance Mesa will be involved."
GE Commercial Aviation Services Senior VP Edward Sun agreed that China does have market potential for RJ operations but noted there are a number of regulatory hurdles to overcome. "Jonathan thinks out of the box. That's what I like about him. He's exploring various ideas," Sun told ATWOnline.
Separately, Ornstein provided an update on Mesa's plans for inter-island startup go!, which will launch in Hawaii June 9 with four CRJ200s acquired from defunct Independence Air. He said he is optimistic the new carrier eventually will strike a codeshare arrangement with either US Airways or Delta Air Lines. He maintained the financial risk for Mesa will be minimal and said bookings for the introductory $39 fares are encouraging. "If we can run load factors in the 80% range, we're not going to lose much money," he claimed.