United Express carriers in dispute

A lawsuit filed Tuesday aimed at blocking a messy takeover fight between two United Express carriers accused United Airlines of secretly orchestrating the battle for its own benefit, a claim that United “categorically” denies.
Atlantic Coast Airlines Holdings Inc. (ACA), the Virginia-based carrier that is United`s largest commuter airline affiliate on the East Coast, accused Mesa Air Group Inc. of “materially false and misleading statements and omissions” in its attempt to replace ACA`s board and acquire the firm.
ACA`s lawsuit says the takeover “is nothing more than an attempt by Mesa and its undisclosed backer, United,” to block ACA`s plan to launch an independent, discount carrier.

In a statement, United Airlines “reaffirms categorically that it did not participate in Mesa Air Group`s offer to acquire ACA, and to suggest otherwise is baseless and irresponsible. In fact, United expressly declined Mesa`s invitation to participate in its offer.”

“Their claims are without merit,” a Mesa spokesman says, adding that “given their interest in corporate governance we hope that allows their shareholders to vote on the future direction of the company.” An Atlantic Coast spokesman declined comment.

If Mesa does succeed in acquiring Atlantic Coast, which still appears likely, it will benefit United because the failure to cut a deal with ACA threatened United`s control over a major portion of its feed into Washington`s Dulles International Airport, its major East Coast hub.

Analysts are skeptical that ACA`s legal objections will sway shareholders, given the market`s negative reaction to ACA`s plan to get out from under United`s wing on July 28.


ACA announced plans to break ties with United on July 28 after the two carriers failed to reach agreement on a reduced rate structure that United has negotiated with its other United Express carriers in order to get out of bankruptcy.

Despite those plans, ACA and United continued to negotiate a new agreement until last week, when ACA broke off the talks.

United now plans to negotiate a deal with Mesa to continue United Express service if it is successful in acquiring ACA, according to the statement by UAL Corp., United`s Elk Grove Township-based parent.

Mesa, based in Phoenix, offered to acquire Atlantic Coast for $512 million in an all-stock offer earlier this week.