Friday May 23, 2008 Mesa Air Group said yesterday that if Delta Air Lines succeeds in ending its service agreement for 34 ERJ-145s, MAG may have to file for Chapter 11 bankruptcy protection as the loss of business and the resulting cash crunch would make it impossible for the regional to continue operations.
The carrier said in a filing with the US Securities and Exchange Commission that it would seek protection "available under US reorganization laws in order to avoid or delay actions by its lessors, creditors and codeshare partners which would materially adversely affect the company's ability to continue as a going concern."
Mesa said it expects to lose $20 million per month in revenue, or $960 million over the next four years, if the DL contract is terminated and that it would have difficulty redeploying the ERJs "in a timely manner." In addition, it would incur $250-$300 million in labor and leasing costs during the period.
Delta notified MAG in late March that it would terminate its agreement with Mesa subsidiary Freedom Airlines, claiming that it failed to meet specified completion rates (ATWOnline, April 3). Mesa denied the charge and filed a breach of contract lawsuit asking for a preliminary injunction to prevent what it considered "wrongful termination" of the agreement. A hearing is scheduled May 27-29 with a ruling expected at the end of the proceedings.








by Sandra Arnoult













http://www.atwonline.com/news/story.html?storyID=12798

Feel bad for pilots but will be improvement for industry

I don't think you'll see a significant difference in the industry other than 1500+ pilots added to the looking for work list.

by the time all this settles down I'm guessing that we're going to have a heck of a lot of pilots looking for work. Mesa's and everyone elses. I'd really be rethinking a aviation career right now if I was still in college, and probably will be anyway before it's all over with

Inefficiency + lowest bidder on thin profit margin code shares + illegal activity/lawsuits + employees don't like the company + arrogrant management = Mesa financial tailspin

JO deserves this more than anyone. I hope you guys ride this one in hard, don't let management blameshift this on the pilot group. Management had their chance to save Mesa and they blew it, like the hundreds of other things in the last few years. RIP Mesa.

I'm confused how this helps any one?

Ugh this is going to get ugly really quick for the MAG guys...

I feel for ya'll but JO's reign of terror needs to end...and soon...

More flying/jobs will be available for all and the industry would be rid of MESA.

Getting rid of the bottom feeder that drags down our careers wouldn't be a bad thing. Lowered standards at 8 days off a month, no block or better, terrible mx, junior manning, etc. Getting rid of all that can only do good things for the piloting profession. The Mesa management team has profitted off the backs of Mesa employees for too long.

Just to summarize...

-Possible loss of $20 million in monthly revenue from the Delta deal could lead to a cascade of defaults if it can't restructure its debt, acquire additional capital or otherwise restructure.

-Last week, the airline said it would shut down subsidiary carrier Air Midwest, cutting off service to 16 small cities in 10 states, because of soaring fuel prices. Air Midwest operated government-subsidized "essential air service" flights to the cities.

-Its Hawaiian carrier, Go, has struggled to make a profit and sparked a lawsuit with Hawaiian Airlines (HA) that ended with Mesa agreeing to pay $52.5 million.

-Last week, Mesa shareholders authorized it to issue millions of new shares to help pay off $37.8 million in senior convertible notes due in June.

-A separate company filing Thursday said the carrier agreed with some of its bondholders to repurchase some of the notes and delay requiring the company to buy back others.

-Mesa's shares have dropped more than 75% since the beginning of the year. They lost 9 cents to close at 48 cents Thursday.

-The company had a net loss of $4.2 million on revenue of $326.6 million in the first quarter.