Dear Fellow Employee,

I wanted to let everyone know that US Airways has announced the award of 13 CRJ 200 aircraft to Skywest. As you may know, the Code Share agreement covering Mesa’s 7 CRJ 200s and 6 Dash 8 aircraft expires in June 2012. We had always hoped that we would be able to reach an agreement to extend the code share agreement for these aircraft to match the term of our CRJ-900s. When we approached US Airways regarding extending these aircraft, we were informed that in order to grant an extension, US Airways required significant savings and importantly that Skywest had offered to replace all 13 Mesa aircraft with CRJ-200s far below Mesa’s current costs. Skywest has excess 50 seat aircraft and is willing to price the aircraft below their cost in order to keep them flying and make at least a partial contribution towards their lease payment as opposed to continuing to pay rent on aircraft that would otherwise be parked. After receiving US Airways savings request, we reviewed the numbers and concluded that the only way to achieve the necessary savings and effectively compete with Skywest was to operate these aircraft on a break even basis and seek limited contributions from key employee groups. Even with Mesa contributing 100% of the profit associated with this flying and eliminating all “overhead” associated with these aircraft we could only achieve approximately 50% of the savings needed, the rest would have to come from other sources. Compounding the situation was the fact that US Airways required our response on an extremely quick time period. Unfortunately, our requests for contributions from the key employee groups were unsuccessful. At the end of the day, we were not able to offer the same economics as Skywest and were informed that US Airways has awarded this flying to Skywest.

Obviously it is always disappointing to lose flying from one of our partners. This loss however is particularly painful given the fact that unlike any other airline bankruptcy that we are aware of, there were no concessions imposed on any unionized employee at our company and had hoped that as a result, we could have worked together to protect this flying and the jobs associated with it. While we greatly appreciate the sacrifices made by corporate personnel and management in the form of furlough days and pay reductions those contributions alone were not enough to “bridge the gap” and retain this flying. We were hopeful that through a shared sacrifice we would be able to preserve both jobs and flying for almost four additional years. This should also serve as a stark reminder that awards for new regional flying are made based on cost – reliable and safe operations are basic requirements and simply the admission ticket necessary to be considered. This truth will govern whether we are successful in retaining or gaining flying in the future. The sooner we can all adjust to this new reality and work cooperatively to gain new flying the better off we will all be in the future.

It is never easy to deliver bad news – particularly when we have overcome so much adversity over the past couple of years. What I can assure you is that your management team is 100% focused on rebuilding Mesa into a successful growth oriented leader in the regional marketplace. I want to personally thank you for your hard work and ask that you continue to work to exceed our partners’ expectations. As always, please feel free to email me with any questions.

Sincerely

Jonathan Ornstein