Mesa Air Group files for Chapter 11 protection, commences restructuring
Mesa Air Group announced (05-Jan-2010) it has commenced a financial restructuring through the voluntary filing of petitions to reorganise under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York. During the restructuring, the Company will continue to operate as normal, without interruption, which includes its codeshare agreements with its partners US Airways, United Airlines and Delta Air Lines. Mesa's go!-Mokulele joint venture, an independent Hawaiian inter-island operation, is not included in the filing and will continue to operate its full flight schedule. The company stated, that a Chapter 11 filing provides the "most effective and efficient means to restructure with minimal impact on the business and our customers". Imperial Capital is serving as financial advisor, and Pachulski, Stang, Ziehl & Jones LLP is serving as legal counsel to the Company and its subsidiaries in connection with the restructuring. [more - Bankruptcy Filing Release] [more - CEO letter to suppliers] [more - go!Mokulele not included in filing] [more - Perspective]
Mesa Air Group: "This process will allow us to eliminate excess aircraft to better match our needs and give us the flexibility to align our business to the changing regional airline marketplace, ensuring a leaner and more competitive company poised for future success. Over the past two years, we have worked closely with our lessors, creditors and other constituents to restructure our financial obligations. These efforts have led to the elimination of over USD160 million of debt obligations, the return of a number of aircraft, and the restructuring of inventory management and engine overhaul agreements. 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 USD70 million...We remain committed to our partners and customers by providing continued low cost regional air service that has permitted Mesa to become a leading regional airline. Our Company has ample liquidity to support itself during this process and we are confident we will emerge from Chapter 11 an even stronger operation", Jonathan Ornstein, Chairman and Chief Executive. Source: Mesa, 05-Jan-2010.