Mesa Air Group [MESA] is leaving the US Airways Express family.

After striking a deal earlier this month with Delta Air Lines [DAL], Mesa recently expanded its relationship with United Airlines [UALAQ]. The end result is that Mesa is pulling its 59 50-seat regional jets (RJs) from the US Airways [UAIRQ] fleet over the next 12 months. Mesa had already begun to phase out the turboprop routes it had been flying for US Airways.

Earlier this year, Air Wisconsin struck a deal to invest $125 million into a restructured US Airways. The investment earned it the right to fly for US Airways. United, which had sought proposals from other carriers to fly Air Wisconsin's established routes, closed the door on Air Wisconsin in March.

With Air Wisconsin able to fly 70 Bombardier [BBD] CRJ 200s for US Airways, Mesa's planes were no longer needed.

Mesa's US Airway's RJ fleet consists of 23 CRJ 200s and 36 Embraer [ERJ] 145s.

Mesa will begin flying 30 50-seat RJs for Delta in October and take six months to transition into the Delta Connection operation.

The additional 30 planes Mesa will fly for United Express will increase Mesa's total United fleet to 70 planes. It will be flying 45 CRJ 200s, 15 CRJ 700s and 10 Dash 8 100s. Mesa also has the right to convert up to 15 CRJ 200s to CRJ 700s through April 2010.

US Airways accounts for about 34 percent of Mesa Air's annual passenger revenue. United had been Mesa's smallest partner, accounting for 24 percent of its revenue. America West [AWAC] is its largest code-share partner, generating 41 percent of its revenue.

Since Mesa no longer faces the risk of its RJs at US Airways being displaced and left without a code-sharing partner, Raymond James analyst James Parker is continuing to rate Mesa shares as "Market Perform." "We expect Mesa's earnings to decline year-over-year in fiscal 2006 and it currently does not have any firm additional RJs expected to enter service beyond September 2005."

Mesa's relationship with US Airways has been complicated because the future of US Airway's remains complicated. US Airways and America West announced a merger last week.

In the complex Air Wisconsin deal, Air Wisconsin would remain an investor along with the parent of Air Canada, and two hedge funds. Noticeably absent from the list of investors is Republic Airways [RJET], which also had agreed to invest $125 million in US Airways as well as purchase $110 million in assets, including its fleet of Embraer 170s.

Many have speculated that Mesa would be an investor in the merged airline, but the carrier has declined to comment on the speculation. Mesa at one time had been an investor in America West.