Mesa Air Group Files for Chapter 11 Bankruptcy

Cptnchia said:
True, but based on what I have seen in airline BK cases, judges are more than happy to abrogate LABOR contracts, but are loath to touch any that are between the petitioner and any vendor/contractor/ other company.
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Indeed, but I'm not sure they're limited in abrogating other contracts.

I don't know anything about BK proceedings, rules, or any of that other jazz. What I do know is what I've witnessed, which has been absolute gutting by BK judges. If I view their history correctly, they have a lot of leeway and if you get the right judge, they could say to Mesa, "Sorry, you want to dump aircraft? Then you're done with your United and Delta contracts too." Maybe they'd reason that he'd rather sacrifice Mesa as opposed to Delta.
 
Cptnchia said:
True, but based on what I have seen in airline BK cases, judges are more than happy to abrogate LABOR contracts, but are loath to touch any that are between the petitioner and any vendor/contractor/ other company.
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BINGO!
 
meyers9163 said:
Ann Arbor MI still? I thought you are out West?
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Ahh...you're a tiny bit behind the times.

I lived in Utah for about two years, but now I'm living in Ann Arbor and going to school in southeast Michigan.

I moved from Park City to Ann Arbor in July.
 
Here is a question for those more familiar with the legalese of Airline BK...Does a CH11 filing not mean that a judge could actually rule MAG cannot return to profitability considering all factors then force MAG into a CH7 and liquidation?
 
I can't see a judge making DAL or anyone else that MAG is a vendor for requiring the continued use of the entity. Abrogate labor contract to reduce costs? Sure, it saves some money for the creditors. Force Delta to continue using MAG against their wishes, if they have a contractual out? Can't feature that occuring.
 
Mesa Bankrupt

By Ann Keeton and Doug Cameron
Of DOW JONES NEWSWIRES

The airline industry downturn claimed its first U.S. casualty in more than a year as Mesa Air Group, Inc. (MESA) on Tuesday filed for Chapter 11 bankruptcy protection.
The Phoenix-based carrier plans to cut more aircraft from its fleet but continue normal operations after failing to reach an out-of-court deal with aircraft manufacturers and other parties.
Mesa's star has waned from what was once one of the most innovative regional carriers, weighed by legal disputes and an abortive joint venture in China.
U.S. regional carriers operate mainly on behalf of network carriers and have been squeezed by more onerous contract terms and the shift away from regional jets that has left hundreds parked in the desert.
Bombardier Inc. (BBD.B-TSE) and Embraer (EMBR3-BS) were listed as its two largest creditors, with the regional jet manufacturers owed $133 million and $42 million, respectively.
The airline has a fleet of 178 aircraft and operates on behalf of United Airlines, a unit of UAL Corp. (UAUA), Delta Air Lines, Inc. (DAL), and US Airways Group Inc. (LCC). It also flies in Hawaii under its own name and as go! Mokulele, although the latter unit is not included in the filing.
It has already parked 52 planes and plans to eliminate another 25 from its fleet by May.
Mesa said Tuesday it plans to eliminate excess aircraft in its fleet as it continues to face business challenges.
"Over the past two years, we have worked closely with our lessors, creditors and other constituents, to restructure our financial obligations," Jonathan Ornstein, chairman and chief executive, said in a prepared statement.
The airline is filing for bankruptcy mainly as a means to break leases on some of the 130 aircraft in its fleet that it no longer needs, Ornstein said.
Mesa said it hopes to speed the settlement of a lawsuit with Delta, in which Mesa is seeking more than $70 million in damages.
The airline filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.
U.S. network airlines have reduced regional flying to cut costs and sought to renegotiate contracts to pay lower fees to their regional carriers.
Mesa carried 11.2 million passengers in 2008, down from 13 million in 2007.
For the nine months ended June 30, its most recent financial report, Mesa reported a net loss of $24.2 million after making a profit for the full year in 2008.
Mesa has said repeatedly that it might seek Chapter 11 protection. The Delta lawsuit resulted from a move by Delta in 2008 to terminate a contract before it ended. An appeals court last summer held a lower court's injunction that barred Delta from ending the contract for 22 of the 50-seat jetliners.
Mesa is scheduled to appear in court Tuesday afternoon to seek approval for routine requests to continue operating. Judge Martin Glenn has been assigned the case.



</PRE>-By Ann Keeton, Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com
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Anyone have any idea how many pilots we are talking about, I heard one roumor at 300 + Furloughs??
 
Re: Mesa Bankrupt

galvestonaggie said:
Anyone have any idea how many pilots we are talking about, I heard one roumor at 300 + Furloughs??
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MAG already has 233 on furlough, with another 100-200 on the way in the coming months. That's just based on the pulldown of UAL flying. If DAL is able to escape, then expect another couple of hundred, I would say.
 
Re: Mesa Bankrupt

CamYZ125 said:
MAG already has 233 on furlough, with another 100-200 on the way in the coming months. That's just based on the pulldown of UAL flying. If DAL is able to escape, then expect another couple of hundred, I would say.
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hmmmm. I feel MESA management has run out of ideas (and lessors ran out of patients) and BK is the only way to go. I feel MAG already knows Delta's intention and is willing to take that risk.


and in other news Mesa's at ORD no longer does overnight MX

(MAG MGMT threw a hissy fit at ORD from what I hear but they always complain) although I personally think there are not too many planes to work on anymore. That leaves only IAD, CLT, and CAE, in the east (which will close soon) that does night MX.


(CVG is Freedom's MX base)
 
CRJDriver said:
I think it’s sad how everyone is waiting for Mesa’s death so that maybe their regional airline can pick up some flying.
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I don't think that's an honest assessment. The thinking individual will se that the main reason Mesa can't find work is the asset class the own is oversubscribed. No one wants or needs old Dashes or 50 seat lift. I'm not sure how many CR7s and CR9s (I think a fairly small percent of their fleet) they have, but those are the only aircraft that have any ability to be placed. In the current environment, I can see the code share partners using this as a means to continue to shed unwanted lift with ease. Yes there will be an impact, but I can se AWAC or PSA getting the required 50/70/86 seat lift at pennies on the dollar. Actually, thinking a bit more on it, this allows AWAC an opportunity to get back into the more than 50 seat lift category for pennies on the dollar. Then again, the previous collapse of Mesa gave rise to SkyWest and retooled Mesa for another 10 year growth cycle during the unbridked insanity that was the regional jet fervor.In any case, the employees of Mesa are going to be hosed. My sympathies go out to them.
 
Polar742 said:
In the current environment, I can see the code share partners using this as a means to continue to shed unwanted lift with ease. .
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That's how I see it, too. At least on the DAL side of things. It's no secret that Daddy Delta is trying to reduce their 50 seat lift. This is pretty much a silver platter for that. What we'll likely see happen if Delta opts to exercise their contractual options is CMR picking up some lift out of CVG and some shuffling elsewhere. Honestly, if anyone sees a bump in flying, it's likely to be Comair. I know Pinnacle can barely handle what we have now with the staffing we've got. If Delta said "You're getting another 3000 block hours" we'd be HOSED from a staffing perspective.
 
My thinking is that they are toast.

Who in their right mind is going to provide the financing?

A few years ago, when Mesa was getting an award for regional airline of the year from my former employer, ALPA wanted to do some informational picketing at the event. I knew one of the guys in their communications department, and I told him they'd be wasting their time because the event was going to be attended by people from companies that wanted to sell things to Mesa. I also said that sooner or later, Ornstein was going to get shafted as badly as he shafted his employees.

I believe that he has a lot of stock in the company, so it just went to zero. It may not be as bad as the shafting he gave to his employees, but I'm sure his bunghole isn't feeling too good right now.
 
I see a possible sale of 50 seat equipment to carriers looking to move up from existing less-than-50 seat airplanes.

ie, Eagle, Mesaba, Skywest, etc.

I see companies like ASA/Skywest, Pinnacle, and ExpressJet in a bidding war over new flying that Mesa previously did. That includes USAir, United, and Delta. I see Republic moving in and beating whatever offer the previous carriers mentioned make by stepping on the necks of its employees- again. Skywest, probably, too, when I think about it. (Haven't they lost enough lately?)

I see United crapping itself- huge amounts of United feed out of O'Hare seems to be done my Mesa. This could leave quite a hole in United's ORD op. (Denver too, maybe?) Either they've already given up on that, or United's about to get their lunch eaten in ORD by American.

Interesting times. The 'fall of Mesa' has been called out many times previously. Oddly enough, there's a slim chance they'll still exist after all of this, which is weird, and in broad terms, a little sad.

My condolences and sympathy to all of the employees at Mesa. Management screwed you one last time.
 
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