CEO Rick Leach sent a memo to employees on Monday citing "razor thin" margins for success, serious difficulties hiring enough plane captains, and big shifts in the regional landscape as airlines seek to "streamline productivity."
"Last year was an exceptionally challenging financial year, and early indications point to 2020 continuing down the same path," Leach wrote in the letter, obtained by the Post-Dispatch.
"Given the reality of our challenges outlined above, coupled with United's desire to simplify and create critical mass," Leach continued, "we have come to the extremely difficult decision that an organized and well-planned wind-down of the Trans States operation is the most viable course of action."
Leach said the company will begin reducing flights before the summer hits, and will conclude all flights by year's end.
Bridgeton-based Trans States employs about 900 people, according to its website. The impact of Monday's announcement on its workforce is unclear.
Neither Leach nor a company spokesperson responded Monday to requests for comment.
The airline's parent company, Trans States Holdings, also operates Compass Airlines and GoJet Airlines. Compass is a regional carrier for American Airlines and Delta Airlines, and GoJet flies for United Airlines and Delta Airlines.
Trans States Airlines operates 40 Embraer ERJ 145 50-seat jets for United.
In total, regional carriers operated 176 ERJ 145s for United at the beginning of last year, according to securities filings.
ExpressJet Airlines, an Atlanta-based regional carrier for United, announced on Monday that it would add 36 ERJ 145 jets to its fleet over the next year. A spokesman for the company would not say if those are the planes now operated by Trans States.
Jeff Lea, spokesman for St. Louis Lambert International Airport, said the airport didn't anticipate "any impact to the flying public related to flight services because of changes at Trans States."
A United spokesman also said that the move will be seamless for customers. United hopes that many Trans States Airlines pilots will get jobs with United carriers such as GoJet Airlines, he said, and that others will apply to a recruitment and development program United launched in fall 2019, called "Aviate."
United Express Senior Vice President Sarah Murphy said in Leach's letter that "we're working hand-in-hand" with Trans States to provide opportunities for Trans States employees "to remain part of the United Express family."
In the letter, Leach said major airlines have been shifting planes among their regional carriers. American Airlines ended its relationship with Trans States Airlines in December 2018.
The company looked at other options, beyond ending operations, he said, but none are "achievable in a realistic time frame."
"In short, our expenses continue to rise, resulting in a balance sheet that is neither profitable nor sustainable," Leach wrote.
Stephen Magoc, chair of the Department of Aviation Science at St. Louis University, said regional airlines face a number of challenges these days. Some are pressured by the major airlines' desire to find the most cost-efficient agreements, and many find it difficult to recruit enough pilots.
Airlines are "losing pilots at a pretty good pace," Magoc said. The general public is flying more, which translates into a demand for more aircraft, routes, pilots and mechanics, Magoc said.
"It's just becoming a little bit more critical as time goes on," Magoc said.
Magoc said that pilot training is rigorous and often expensive, which can deter people from the industry. Word is getting out — application numbers are up and many flight schools have wait lists — but finding pilots is still likely to be a challenge for airlines, he said.
In recent months, Delta Airlines reached agreements to end its relationships with Compass and GoJet by the end of 2020, according to securities filings. GoJet operates 19 aircraft for Delta, and Compass operates 24 for the major airline.
Trans States Holdings' GoJet will continue to fly for United. GoJet owns or leases 25 of its own 70-seat CRJ-700 jets contracted to fly for United.
And Trans States' Compass Airlines operates 20 76-seat Embraer E-175 jets for American Airlines.
Trans States began as Resort Air in 1982, and in 1985 started flying as a regional carrier for the former Trans World Airlines, which had its hub at Lambert.
Post-Dispatch reporter Annika Merrilees contributed to this report.
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