Mesa Air has emerged from chapter 11 bankruptcy protection as its reorganization plan came into effect. 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 has shed inefficient aircraft, significant debt and extended its partnership with US Airways to present a more competitive threat.
Mesa chairman and chief executive officer Jonathan Ornstein said: “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. 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 airline highlighted its restructuring accomplishments, which included: the 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,” said 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 US Department 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,” noted Ornstein.