Mesa Merges While Air Canada Counts Down to Strike

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You can't say you are surprised by this one, considering how much we have discussed the major players involved. Yes, we alerted you in July to the fact that Jonathan Ornstein, CEO of Mesa Airlines (MESA) - Get Report was buying up shares of CCAir (CCAR) . We also told you before that that we felt CCAir was a good potential momentum player. And to top it all off, you know how we have talked in the past about Ornstein and his lofty ambitions to set up a regional/commuter dynasty.

Well, all this came together this morning when Mesa and CCAir said they signed a letter of intent to merge. The all-stock transaction is valued at around $60 million.

Shares of Mesa, which have been in a free-fall since earnings were released in late July, were up around 10% this afternoon, hovering around 5 3/4. CCAir's shares were up around 12 1/2% to 4 5/8 on very heavy volume.

Now -- anyone want to take a guess as to who is possibly listed next on the Ornstein pre-Christmas buying list?

Great Lakes Aviation

(GLUXC)

perhaps?

Countdown Continues at Northwest; Just Beginning for Air Canada

While we watch the clock move closer to the strike deadline of midnight tonight for

Northwest Airlines

(NWAC)

, we have not mentioned the fact that

Air Canada

(ACNAF)

is also gearing up for a possible strike with its pilots' union as well.

The airline's pilots say they are willing to ground the airline next Wednesday unless management comes up with more than it has offered so far.

Unlike the situation with Northwest, which will impact only three U.S. markets (Detroit, Minneapolis and Memphis) to any great extent if it occurs, a strike against Air Canada would be much more damaging to an already ailing Canadian economy, as Air Canada is the one and only major Canadian airline.

Canadian Airlines

is the other major Canadian carrier, but its route systems are not nearly as extensive as AC's. Many areas of Canada are only served by AC.

In addition, Air Canada has the bulk of the domestic wide-bodied capacity in the country. Canadian Airlines aircraft are mostly narrow bodied. Consequently, a shutdown of the airline would pose serious problems for cargo and mail shipments within Canada.

Shares of Air Canada, which began to slip after the airline reported less than expected earnings

figures this last quarter are down again today on the Toronto exchange, hovering around C$6.90.

Kitty Hawk Does It Again

We don't know about this one.

As most of you know, we liked cargo carrier

Kitty Hawk

(KTTY)

last year. Then it went and merged with

Kalitta

, and the company has now spent the last nine months trying to work through what we feel was a very difficult merger on many fronts. As a result, the stock has suffered.

Now just when the airline reported earnings that we thought showed the company was headed in the right direction again this past quarter, what does it do? It announced this week that it signed a letter of intent to buy

Southern Air Transport

, a privately held cargo carrier based in Columbus, Ohio.

Interesting thing here is that

Fine Air Services

had been in negotiations to purchase Southern after signing a letter of intent on July 20. But these negotiations died. Rumor has it that Kitty had tried to negotiate a deal with Southern before Fine Air announced its intentions -- and at a pretty hefty price.

Terms of the deal now in the works have not been disclosed. But it appears that Kitty is strictly looking at this as a way to get its hands on Southern's five leased 747-200 freighters. Kitty Hawk CEO Tom Christopher said that Kitty will sell off the rest of the Southern fleet.

The jury is out on this one, as we aren't sure how much the deal is going to cost Kitty Hawk. If Christopher cut a good deal -- then, OK, we can live with it. But we just don't know yet.

It would be safe to say that the market has not been impressed by the news. Shares of Kitty Hawk are down almost 3 points this week, and were trading at around 11 and change this afternoon.

Holly Hegeman, based in Dallas, pilots the Wing Tips column for TheStreet.com

. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. You can usually find Hegeman, publisher of PlaneBusiness Banter, buzzing around her airline industry Web site, at

www.planebusiness.com.