Mesa Chap 11 filing
 

Why New York?
did that involve paper shredding to keep you out of jail when the courts go through the books?
Let the good times Roll

Saw this coming a mile away yesterday,,,

oh crap. In other news ORD no longer does overnight maintainiance

And here comes XJT. Time to load up on this stock.

And they filed on the anniversary of FlyI's last flight.

Best luck

Holy crap they actually filed! Things must be really bad for the creditors not to even give them anything out of bankruptcy. Good luck for hopefully non liquidation I guess?

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

So how long till DL dumps them? They seem pretty unhappy with Freedom. What about the others? Can they even get financing to come out of chapter 11 eventually?

Best of luck to the employees of Mesa I have a feeling this is going to get real ugly for you.

Funny how he didn't even mention that he plans on gutting YOUR contract to the fullest extent of the law.

Best of luck you guys.

Ha. There's no need to do that. They just pulled PBS and took all the gains away we had. There's really nothing left to strip out now. :rolleyes:

The contract should be the least of your worries.....

I'm not worried about anything. I'm out in like 2 weeks anyways. lmao

If the court doesn't just let Mesa out of paying the leases on the parked aircraft they have 0% shot at making out of this.

Yea but what are the odds if that happening. The court doesn't want to raise unemployment any more than it is right now either...

He says they'll continue to pay employees, but doesn't BK ultimately allow for petitions to alter labor agreements as part of any final restructuring ?

In other words, look for contract decimation to the bone, including pay.

Additionally, regardless whether they win or lose against Delta, Delta will be dump them at the first opportunity and this will only leave U as the major carrier partner, so look for a noticable reduction of the current fleet and that means more downgrades and furloughs for pilots. There will probably be noticable downsizing even before Delta kicks Mesa to the curb as noted in the statement.

Again, it would be wise for Mesa employees to see the clear writing on the wall (no one can deny this now). Mesa has little future and those that do remain for any extended period of time can expect a company that scrapes the bottom of the barrel even more then it does now.....a lot more.

Employees should consider Mesa a tempoary method of avoiding the hassles of unemployment and should agressively seek firmer ground for theirs and their families future.

But do remember.......your considerate friend Johnny wishes you a very merry christmas and happy new year !

its actually more what the creditors want, the court is more of a mediator.

The courts primary responsibility is to the creditors.

(Phuz beat me to it by a minute)

I'd say the odds are still there. United and DAL can now break contract and I wouldn't be surprised if they do.

Can the courts prevent Delta and United from doing that?

Delta's probably assembling a team in ATL to finalize their severance as we speak...........that grinding sound in ATL is the sharpening of the ax.

They've got too much feed now anyway.

It wouldn't surprise me if they released a statement later today.

How exactly will chapter 11 help them with there suit against Delta? Delta can now cancel there contract with no liabilities... I just don't get it.

Usually a company will already have a plan to deal with the downsizing of that feed within the initial days of bankruptcy. I would expect the DAL contract will probably be drawn down rather quickly. Otherwise the judge could temporarily force DAL to honor the contract, however, no one will provide any type of dip or exit financing to mesa if it is dependent on a null and void contract.

Well yea they will, that's why they filed. I'm a little puzzled why the creditors didn't help them out before BK because now they're probably going to get nothing. On the other hand now the partners can dump Mesa. It's a mess, you've got to hand it JO he's still saying they'll operate for many years to come, yea after all the contracts run out with a couple of RJs in Hawaii.

Mesa's in Ch 11. They don't have any assets. They already dumped 300,000,000 shares on the market just to pay bills last time. They've burned their cash on parked aircraft they're still paying leases on and about to see that number of aircraft more than double. Frontier made it because they received DIP financing which after purchase was later dropped. Mesa has nothing to secure DIP financing with. This goose is cooked. Expect to hear from DAL, UAL, and US Airways soon. Without the ability to secure new financing, which I guess could be possible if JO meets someone that hasn't heard of him before, the majors won't see Mesa as a stable regional to place feed. They don't want the liability of having to cover all that flying all the sudden. I'd assume they are looking to spread out what they can to other carriers and cancel the rest.

OJ has to keep company moral up. If he preaches the truth of doom and gloom the employee's will not work as hard, Show up, exc,exc....its management 101.......He will continue to paint a rosy picture until they lock the doors....best of luck to my mesa brothers and sisters....RIP Mesa

Mesa would have a hard time touching the pilot contract in BK because they need to show that they are being held back from being a successful company by that contract. That is a very tough sell when their pilots, FAs and mechanics are on the low end of every regionals pay scale.

I really dont think they will disappear. I think they will re-work one or two of their contracts and fly 40-50 aircraft for US-Airways and United for substantially reduced rates. I believe the Hawaii operation will be sold off. There is always another possibility that another regional could buy mesa with an agreement in place with delta, united, and US Airways. Skywest could agree to buy mesa and end this lawsuit with delta to secure more flying as well as get a foot in the door at airways.

interesting though

That is what's probably going to happen. Assuming they survive. I don't think there's ever been a regional to come out of BK without being bought up or greatly reduced as an airline, if they actually come out at all.

JO is making t sound as if itsadone deal that Delta will have to keep Mesa lift an give the $70 million in damages. And no one seems to know how any of the escape clauses ie airways and united, seem to work.

SkyWest has been waiting for this day, and is quite ready to act. Of course, of the planes Mesa has, I suspect only the -900's will continue operating. Republic has their hands full, so I don't expect a lot of competition.

This will make SkyWest a real monster. Not sure if that's good or bad.

Yep.

Doesn't he have a history of misrepresentation and lies when it's in his best interest ?

Hasn't he been bounced from several companies in his past for unethical and perhaps illegal acts ?

Hasn't he been involved in an issue of evasion and deliberate destruction of records in regards to the situation in Hawaii ?

Is anyone here so nieve, so as to believe that he's not acting in anyones best interests but his own ?

I think it's time to wake up and roll out of bed here.

So speculation time: What does Skywest stand to gain from this?

Nothing since for USairways at least the number of large RJ's are in violation of the contract. USAPA will win easily if these RJ's are then given away yet again to violate the contract even more.....

The only people that are dependent on Mesa is Airways. The question is, who has enough cash to get Mesa's CRJ900 operation? Airways or another regional and under ownership or a scrap yard sale?

Several months ago D Parker was quoted somewhere saying that if Mesa were to fold shop tomorrow they have contingency plans in place and USAir would hardly skip a beat.......that was several months ago but I am sure they still have that same contingency plan

I think AWAC is the only operator that could afford the -900's

Skywest... Easily! But the question comes down will USAPA sit and allow CRJ900's to be given away yet again and violate the current contract with the number of large RJ's....

Aren't they already in violation?