Mesa Air Group Files for Chapter 11 Bankruptcy

JaceTheAce

JaceTheAce

Well-Known Member
http://www.rttnews.com/ArticleView.aspx?Id=1170630&SMap=1

PHOENIX, AZ—January 5, 2010—MESA AIR GROUP, INC. (the “Company”), (Nasdaq: MESA), today announced that it has commenced a financial restructuring through the voluntary filing of petitions to reorganize under Chapter 11 of the U.S Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the “Court”). During the restructuring, the Company will continue to operate as normal, without interruption, which includes its code-share agreements with its partners US Airways, United Airlines and Delta Air Lines. Mesa’s go!-Mokulele joint venture, an independent Hawaiian inter-island operation, is not included in the filing, will continue to operate its full flight schedule


Today, we announced that we have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy code. Unfortunately after working much of the last year on restructuring “out of court”we were unable to gain all of the necessary agreements to avoid this more structured “in court” reorganization. During the restructuring, the Company will continue to operate as normal, without interruption, which includes its code-share agreements with its partners U.S. Airways, United Airlines and Delta Air Lines. The Company’s go! Mokulele joint venture is not included in the filing and will continue to operate outside of Chapter 11.
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What back in their right mind would provide exit financing for Mesa right now?

Or I should say, which regional?
 
jtrain609 said:
What back in their right mind would provide exit financing for Mesa right now?

Or I should say, which regional?
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A good question. The only airline financing I could see happening would be from Airways. LCC doesn't exactly have a ton of extra cash to throw around, but LCC is the only major left that is highly dependent on MESA for regional lift with 36 90 seaters and as many 50 seaters on the west side as well. We shall see.
 
Phuz said:
A good question. The only airline financing I could see happening would be from Airways. LCC doesn't exactly have a ton of extra cash to throw around, but LCC is the only major left that is highly dependent on MESA for regional lift with 36 90 seaters and as many 50 seaters on the west side as well. We shall see.
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Wow, if LCC spends what little cash they have on saving Mesa... I don't thnk LCC would make it through next year and both would go under.
 
Roger said:
RAH buys the scraps.

You heard it here first.
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RAH is out of the kind of cash to buy that kind of operation right now. They'd have to loan them money or provide some to buy them. They did that with Frontier and Midwest and have not done that with Mesa. I think it's more likely Republic would strike a deal with US Airways to fly the remaining 15 of their 190s and take over the -900 flying, but that hasn't happened because...there's not enough money! Time will tell what happens with Mesa. I agree that they are a very risky investment right now.
 
Best of luck to their pilots. I truly mean that. I hope they get preferential interviews at every ALPA regional and can move right in once any furloughs are back.

That said, I hope the company itself doesn't make it through this. They probably will though. They'll write off a bunch of debt, force pay concessions on their labor groups, and be out there bidding on new CPAs in no time.
 
I am in continual amazement how willing investors are to throw good money down the tube in this industry. Mesa will be back, but the bar will be even lower due to bankruptcy "concessions".
 
Clocks said:
Best of luck to their pilots. I truly mean that. I hope they get preferential interviews at every ALPA regional and can move right in once any furloughs are back.

That said, I hope the company itself doesn't make it through this. They probably will though. They'll write off a bunch of debt, force pay concessions on their labor groups, and be out there bidding on new CPAs in no time.
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JO has always seemed to find some way to keep his head above water, seemingly.

“It’s not like we have a business that doesn’t work,” Mesa Chairman and Chief Executive Officer Jonathan Ornstein said. “We have a business that works, but unfortunately we have assets that we can no longer utilize.”
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Hmmmm.
 
IIRC, Mesa going into any kind of Bankruptcy activates contractual clauses with Delta and Airways giving the two legacy carriers open options on immediate contract termination without penalty.
 
If a major actually exercises their ability to get rid of mesa under the bankruptcy clause then that will be the end of Mesa. They had no way of even paying back anything before BK because they simply couldn't, they tried to milk it but time is running out. Now they were forced to file BK and if DAL or UA force them the termination clause they will literally have nothing to go with in court. RIP Mesa.
 
No it's not..There is a lot to consider, such as, how do you replace the regional lift currently being provided by Mesa. And at Airways it's a substantial number of seats.
 
RightSeatGirl said:
No it's not..There is a lot to consider, such as, how do you replace the regional lift currently being provided by Mesa. And at Airways it's a substantial number of seats.
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Well I wasn't thinking in terms of lift because there are plenty of planes out there with bloodthirsty pilots willing to do anything to get the holy phx domicile.

I was thinking in terms of how a bankruptcy judge is going to interpret this sort of stuff. If the company can get to a state of barely solvent by shedding some leases, I just cant see a judge letting a major basically withdraw that much revenue on poor ole mesa and thus basically shutting the doors for good. Jtrain, throw some legalese on here as to what the possible outcomes are?
 
I'm no expert, and I know Mesa's demise has been incorrectly forecast a number of times, but I don't see how they get out of this one. "Hey we're bleeding money like a stuck pig and trying to screw our investors, but it's not our fault because we have lots of airplanes no one wants not doing anything. Why don't YOU give us some money?"

PS. Will someone PLEASE put a stake in its heart this time?
 
DAL will cancel immediately. LLC and UAL will cancel but allow MESA to operate until the replacements are ready.
 
Daddy Delta has been trying to put the can on Freedom for the past year, through legally margional means. If they have a clear cut "its easy to can Freedom, lookie right here clause" they will exercise it el pronto.
 
Sorry for anyone flying for Mesa - sincerely. Sucks about this and I mean no disrespect at all...but I think they may be toast.
 
Hootie said:
Well I wasn't thinking in terms of lift because there are plenty of planes out there with bloodthirsty pilots willing to do anything to get the holy phx domicile.

I was thinking in terms of how a bankruptcy judge is going to interpret this sort of stuff. If the company can get to a state of barely solvent by shedding some leases, I just cant see a judge letting a major basically withdraw that much revenue on poor ole mesa and thus basically shutting the doors for good. Jtrain, throw some legalese on here as to what the possible outcomes are?
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Asking me for legal advise is like asking a pre-solo student tips on flying a 737; most of what I say will be wrong because I'm making it up.

More to the point, it would be unwise for a law student to give legal advice on the internets, which is why I focus on policy, which is what I studied as an undergraduate, and not my current area of study.
 
OldTownPilot said:
Daddy Delta has been trying to put the can on Freedom for the past year, through legally margional means. If they have a clear cut "its easy to can Freedom, lookie right here clause" they will exercise it el pronto.
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I'm sure their lawyers are already filing with the BK court. JO made a smart move by doing the joint Go!/Mokelilee(sp) venture. That kept Go! out of BK court, which still gives MAG a revenue stream....if any.:rolleyes:
 
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