Carrier May Also Be Booted From NASDAQ Exchange

The future isn't a bright one for beleaguered Mesa Air Group... which finished 2008 with a $31 million quarterly loss, fueled by an underperforming joint venture in China and an ongoing contract fight with an airline customer.

The Arizona Republic reports Mesa faces a number of challenges to be resolved. The carrier must make arrangements within the next two months to either repay, or renegotiate $92 million in bonds against existing debt... and, come to an amicable resolution in its contract dispute with Delta Air Lines.

The carrier must also weather reduced demand for its contract services. Also on Tuesday, US Airways announced it plans to trim the number of US Airways Express flights Mesa operates this year.

Mesa released its financial results Tuesday, several days sooner than it had planned... after the NASDAQ financial index announced Monday the airline was at risk of being delisted, due to its failure to maintain certain standards. Chief among those concerns was Mesa's stock price, which closed Tuesday at just 26 cents per share; NASDAQ typically requires a minimum trading price of $.50.

There were some bright spots. While a net loss of $31 million isn't anything to cheer, the loss came on gross operating revenues of $325.3 million... and compares favorably to Mesa's Q4 2007 performance of a $62.2 million loss, against revenues of $327.8 million.

Mesa CEO Jonathan Ornstein noted his airline's go! Airlines interisland Hawaiian carrier seems to be coming into its own, helped by strong advance bookings and lower fuel prices... though go! remains a money-loser for now.

"2008 was a very challenging year operationally and financially for the company," said Ornstein. "While many obstacles lay ahead, we are encouraged that the restructuring efforts begun in 2008 may permit the emergence of a reinvigorated company in 2009. We continue to execute our restructuring plan and take steps needed to improve the financial and operational performance of the company."

As of September 30, 2008, Mesa operated 45 CRJ-900s, 44 CRJ-200s, 20 CRJ-700s, 34 ERJ-145s and 16 DeHavilland Dash 8 turboprops.

FMI: www.mesa-air.com