Mesa Cash Crunch
 

best news I have heard all year

As a result of losing the Delta flying, Mesa will lose $1 billion dollars in sales over the next four years. Take that along with their already small cash balance and their very small market capitalization, I think it is only a matter of time. I just wish they would release their 1st quarter earnings (it ended 52 days ago!) so I could make a more accurate prediction as to when they will be gone.

As for my guess, I say Mesa is in Ch.11 by the end of June and out of business by the end of the year.

I dont think Mesa is going anywhere, they are going to go into bankruptcy, get rid of all debt any flying they don't want (50 seats) impose a contract on all workers, and then be the cheapest 70-90 seat operator in the country and the cycle will continue. Thats just how it works. I hope I am wrong.

I think BK is very likely, because (in addition to everything else) JO has to get rid of all those senior ERJ pilots...if he is forced to furlough from the bottom of the list and retrain senior ERJ people on the CRJ, the training costs alone could kill him. BK will let him terminate the pilot contract and fire whoever he likes.

has any airline ever gotten aproved to furlough outside of senority order?

Approved by who? A BK court? There's no reason a court would force unneeded massive training expenses on a bankrupt airline.

There's nothing magical or holy about airline seniority...in the real world most companies layoff whoever they please when the time comes: Unneeded skills, poor performers, older (highly paid) employees, etc

I would say this could be the end. Performance is why Delta dumped them. They are already bleeding money.

I feel bad for the employees. JO (Jack OF%) can bite me though!

I tend to agree..... or if not out a business a mere shell of its former self.

tick tok.... time will tell.

I heard furlough warning notices went out today to the bottom 400. Anyone know if this is true?

that was like two weeks ago, doubt anything will happened soon.

If mesa goes BK they will look at the books, I wonder what they will find?

I'd like to be a fly on the wall for THAT evolution :eek:

WARN notices went out last week I think. Are you talking about actual furlough notices?

I heard furlough noties yesterday as well...But I doubt it would have stayed a secret from APC if it was, in fact, true LoL

Where are the Junior Mesa guys?

Real classy of JO to blame the Delta incident for all of Mesa's problems.....

"Classy," and JO or Mesa do not belong in the same sentence, paragraph, article, newspaper, etc...

Thing that blows my mind is the fact that the shareholders and BOD let OJ and croanies stay in power while they sink the ship......... they should have been ousted long ago....i really don't get it.....

Jo seems to own the BOD. As for the shareholders...apathy? Lack or organization? Institutional investors seem to think that a company cannot go wrong by eliminating or mistreating employees...announce some layoffs and your stock will usually jump. Maybe they figured that if some abuse is good, then more abuse must be better. They may be about to define the bottom boundary of just how low CAN you go...

No furloughs. My F/O is fresh off IOE, one of the most junior in IAD.

Were on day 3 of 4 right now. He's still here.

They're all his buddies. They're all still making good $.

With the economy in the tank, why would the oust him? They know they'll be replaced when he is.

Why do Good Pilots choose BAD Airlines?

I know it would require funds which us pilots really dont have alot of. But with the price at an all time low and what seems like only going lower. How much and how many shares would it take to get controlling interest in Mesa? It would be funny if the pilot group had controlling interest in MESA and could have the power to fire him. I know easier said than done

I think the debt obligations due in June are going to be enough for Chapt 11.

he got the cash to pay the debt in june with the hawaii settlement

38 due and 37.5 back from the hawaiian deal

Cash balance as of December 31, 2007 was $67 million, with 7 million of that restricted cash. They have not yet released their first quarters number (I wonder what they are trying to hide!). Given the money they burned through operating Go! in the first quarter, they certainly lost money in the first quarter. Now Delta is going to pull $20 million a month in revenue from Mesa, yet Mesa still has to pay those pilots/FA/ground crew on payroll and 36 ERJ's on leases. The Air Midwest shutdown is going to cost them money. Again, pilots/FA/ground crew on payroll.

I just cant see how long they can survive on that $60 million cash balance when they are losing money left and right, and their stock is worthless.

I wouldn't exactly count on MAG losing the Delta lawsuit. I'm sure I'm in the minority here, but DL claims to be dropping F8 over failure to meet preformance goals. Yet the nucleus of the situation envolves Delta trying to adjust the nums for DL intiated cxl, if you removed the DL intiated cxl you see the F8 is still meeting contractual obligations. BTW for at least three months that Delta calims Freedom didn't meet expectations they still paid them there preformance bonus.

Fun thought, buy the tyrant and torture him...but, he has a nice seperation clause/severance agreement I am sure. Also, even though that woudl be fun...who would want to buy/start/invest in an airline now?

True, fun thought, but it would be a bad move. Sure, the pilots could pool their money together and buy the equity stake in Mesa, but then the existing debt obligations would take the company away when there is no money to pay the bills.

I like where you are going with this... back to the drawing board.

I am not sure the pilot group would come up with enough money.

I just ran the numbers at 60,000 pilots, I read somewhere that was about how many of us there are, but room for correction and 45 cents a share.
27000 a person. I know I cannot swing that

Good for Mesa. In Hawaii we call it "Bachi" which is basically the same as "what comes around goes around".

Maybe "go!" will finally be "gone!"

Haere ra go! :D

I think what Hawaii KGMB's Howard Dicus had to say about Mesa's bankruptcy was interesting... he says that if Mesa does file for Ch. 11, the judge may decide that Jonathan Ornstein is unfit in the best interest in the company and have him removed. A trustee would then be appointed... a scenario similar to what happened with former CEO John Adams and Hawaiian Airlines during their last bankruptcy.

Not True. In an effort to halt unfounded rumors here is the actual letter that was sent on 05/12/2008. "Adverse Employment Action" I would actually be happy about this whole thing if the market was doing half way decent and some good airlines were hiring. I believe this will get me out of my training contract and allow me to part ways with this horrible airline. The way the market is right now with all the other pilots out there from ATA, Skyway, Skybus, etc. looking for jobs I am really nervous about going job hunting. Not to mention if I do get a job with another regional who knows if or when they will go under with the majors in the shape they are in. Mesa will be in court with Delta May 27th till May 29th so we will see next week. Anyway, here it is:

As you know, Delta Air Lines has given Freedom Airlines notice that it plans to terminate Freedom’s ERJ contract. It is our position that Delta’s actions are in violation of the Delta Connection Agreement in place between Freedom and Delta. As you are also aware, we have filed a lawsuit against Delta in order to protect our rights within the agreement. Delta has provided a schedule that significantly reduces the Freedom ERJ flying in June and eliminates all ERJ flying in July. While we strongly believe that Delta’s actions are not justified, and we have a strong argument in our litigation, we are nonetheless required by federal law under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2102(b)(2)(A).to provide affected employees written notification that there may be adverse employment action due to Delta’s planned termination of our agreement. Positions that could possibly be affected include, but are not limited to, pilots, flight attendants, Freedom Airline mechanics; Freedom Airline stores/purchasing personnel, Freedom Airline dispatchers, and Freedom Airline management personnel. We are issuing this notice out of an abundance of caution and are working tirelessly to prevent the termination of this Delta agreement. If you are receiving this notice, your position may be subject to an adverse employment action in the event that the Delta agreement is terminated.

We certainly understand this communication may cause concern with employees, however this notice is required by law and no layoffs are scheduled at this time. We will continue to do our best to present our case to the court and keep everyone informed.

Geez
 

I guess this will only exacerbate the current attrition problem there. Good motivation for everyone to get the hell out of that stinkhole!!!

Good luck to all.