IrishTiger

Email from Jonathan Ornstein......

Dear Fellow Employee,

I hope everyone had a Merry Christmas and Happy New Year. While we are certainly facing difficult times I think we can all agree – we still have much for which to be thankful. Before we get into the details, let me start with the most important point. I am confident that working together we will get through this challenge.

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.

First and foremost, you do not need to be concerned about the Company going out of business. Chapter 11 means reorganization, not liquidation. In other words, we are open for business and plan to be for many years to come.

During this process and with the Bankruptcy Court’s approval, the Company will honor obligations to its employees and other valuable constituents like customers and vendors. Asking for Bankruptcy Court approval is standard and we fully expect this approval to be granted.

Chapter 11 permits, and in fact encourages, daily operations to continue. We will serve our customers, pay you, and purchase goods and services just as before.

Specifically we intend to:

·Pay employee wages and maintain healthcare policies, vacation policies, and similar benefits without interruption;
·Operate a full schedule of flights for our code-share partners and for our independent operations;
·Honor tickets and reservations and provide refunds and exchanges per the existing terms for such transactions for the passengers in our go! Mokulele operations;
·Maintain our frequent flier program and other customer service programs for our passengers in our independent operations;

I want to express my appreciation for your hard work this past year– it has resulted in considerable improvement in many areas of the Company. We are nonetheless faced with an untenable financial situation resulting primarily from our continued lease obligations on aircraft excess to our current requirements. In addition, this action will give us the opportunity to reach a more timely conclusion in the litigation with Delta Air Lines in which Mesa is currently seeking damages in excess of $70 million.

This process will allow us to match aircraft lease obligations with our underlying code-share agreements and give us the flexibility to align our business model to changing air travel needs in the marketplace, ensuring a leaner and more competitive company poised for future success.

As always, passengers count on us for their safe and timely travel. With your help, passengers will see no change in the unparalleled level of service that you and Mesa have provided in the past.

In the next week or so you will be receiving a notice from the Bankruptcy Court informing you of the Chapter 11 proceedings. This is required under the Bankruptcy Code.

I know you have many questions about what the Chapter 11 means for our Company and you personally. We have attached an Employee Q&A to this email and you can also find it in the Employee section of the Company website. In addition, we have set up a special section of the website so that we can keep all of our constituents up-to-date, www.mesa-air.com/restructuring. You may also listen to the CEO Hotline by calling +1-877-MESA CEO (+1 (877) 637-2236) for additional information.

Since our founding in 1982, we have grown and succeeded by operating a low cost, high quality, regional airline service. We have always been dynamic and resilient and I know that collectively we have more than enough talent and dedication to succeed. More importantly it is not just “business” – I know many of you personally, some of you for over 20 years. We have literally “grown up” together in the Mesa family. While we have certainly faced many difficult situations in the past, working together, we have always risen to the occasion. It is my confidence and trust in each of you that gives me faith this time will be no different.

Thank you for your on-going hard work and support. You have our commitment that we will provide updates to you as we move through this process.

Regards,

Jonathan G. Ornstein
Chairman and Chief Executive
Mesa Air Group