American Airlines is dropping Mesa, citing financial problems

American Airlines said Saturday that it will drop Mesa Air for some of its regional flying, citing concerns about its partner’s financial and operational problems, issues that are tied to a rise in costs and the industry’s pilot shortage.

“As a result, we have concerns about Mesa’s ability to be a reliable partner for American going forward,” Derek Kerr, American’s chief financial officer and president of American’s regional brand American Eagle, said in a staff note, which was seen by CNBC on Saturday. “American and Mesa agree the best way to address these concerns is to wind down our agreement.”

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The final Mesa flight for American will be on April 3, though American is slashing Mesa flights in March, Kerr said in his note.

Now, Arizona-based Mesa is planning to transition “all of our CRJ900 flying to United Airlines,” a carrier it already flies for, Mesa’s CEO Jonathan Ornstein said in a note to staff on Saturday, which was seen by CNBC.

United declined to comment.

Large carriers like American, United and Delta Air Lines routinely contract regional airlines to fly many shorter routes, and they account for roughly half of departures, though that varies by airline.

The heart of the problem stems from a shortage of pilots, which is most acute at regional carriers, and has become more severe since travel demand snapped back after a…