Wed, Mar 02, 2011
Exits Chapter 11 As Reorganization Plan Takes Effect
Mesa Air Group’s Plan of Reorganization became effective
Tuesday, allowing the company to emerge from its reorganization
under Chapter 11 of the U.S. Bankruptcy Code. Mesa and its related
subsidiaries entered bankruptcy protection on January 5, 2010 and
Mesa’s exit from bankruptcy protection in 13 months places it
among the fastest reorganizations in aviation history. Mesa is well
positioned to compete aggressively in the regional aviation
industry, having shed inefficient aircraft, significant debt and
extended our partnership with US Airways.
“Today marks a new beginning for Mesa, one that allows the
company to build on its almost 30-year history and reestablish
ourselves as one of the world’s leading regional airlines,"
said Mesa Chairman and Chief Executive Officer Jonathan Ornstein.
"We are deeply appreciative of the support we have received during
our reorganization from our creditors, airline partners and
employees, and we will work hard to repay this trust by building a
successful Mesa Air Group.”
The Company’s restructuring accomplishments included:
- Elimination of 100 excess aircraft and associated leases and
debt which contributed to the deleveraging of Mesa’s balance
sheet in the approximate amount of $700 million in capitalized
leases and $50 million in debt;
- Restructuring of aircraft leases and financings for
Mesa’s remaining CRJ 200 and Dash 8 fleets resulting in
flexibility, no long term lease exposure and lower costs on the CRJ
200 50-seat regional jet aircraft;
- Emerging as a private company that will issue four new series
of notes, shares of common stock, and/or warrants to purchase
shares of its common stock to its creditors in exchange for their
claims in the Chapter 11 proceedings;
- Extending the term of the code-share agreement with US Airways
through September 2015.
“Upon our exit from bankruptcy, we will take the intensity
and effort of the past 13 months and transfer it from the triage of
the bankruptcy process to focus on opportunities that exist in our
rapidly changing industry,” continued Ornstein.
“Throughout our bankruptcy the Company’s operations
remained at the highest level of reliability and safety. Our people
did a fantastic job and nothing reflects their competitive spirit
better than the fact that during our bankruptcy Mesa consistently
delivered operational performance which continues to lead the
regional airline industry in nearly every category monitored by the
U.S. Dept. of Transportation.
“This strong operational performance came during a time
when many of our employees contributed to our financial savings by
taking additional unpaid days off. This level of dedication and the
resulting operational performance has provided a solid foundation
upon which to return our airline to sustained profitability and
future growth. In addition, through the restructuring process Mesa
is among the first regional airlines to address the risks
associated with fifty-seat regional jet aircraft which have
increasingly fallen out of favor with mainline carriers. We believe
the elimination of exposure related to this fleet provides Mesa
with a significant competitive advantage,” he said.
Mesa currently operates 76 aircraft with approximately 450 daily
system departures to 94 cities, 38 states, the District of
Columbia, and Mexico. Mesa operates as US Airways Express and
United Express under contractual agreements with US Airways and
United Airlines, respectively, and independently as go! Mokulele.
This operation links Honolulu to the neighbor island airports of
Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and
Janie Risley in New Mexico in 1982.
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