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Mesa Air Files Chapter 11

January 5, 2010 By: George Dooley

Mesa Air Group has filed to reorganize under Chapter 11 of the U.S. bankruptcy code in the United States Bankruptcy Court for the Southern District of New York. The airline will continue to operate as normal, without interruption, which includes its code-share 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, Mesa said.

"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," said Jonathan Ornstein, chairman and CEO of Mesa. "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. The foundation of our business - our people, operational integrity and values - remains intact, and the 20 plus years that many of us have worked together form a bond from which we will draw our strength as we face and overcome this challenge.

“A Chapter 11 filing provides the most effective and efficient means to restructure with minimal impact on the business and our customers," Ornstein said. "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."

Founded in 1982, Mesa has grown from a company operating a single seven passenger airplane into one of the largest independent regional air carriers. It was one of the first airlines to operate regional jets and pioneered the "revenue guarantee" business model - both now standards in the industry. In 2005, Mesa was named Regional Airline of the Year.

"Over the past two years, we have worked closely with our lessors, creditors and other constituents to restructure our financial obligations," Ornstein said. "These efforts have led to the elimination of over $160 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 $70 million."



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