The vultures will descend and pick up the pieces, hopefully at a higher level of remuneration for services by holding the majors feet to the fire more than MESA could. There will be a severe depletion of connecting service capacity due to the fact that MESA is so large, and a lot of RJs listed on the aviation equivalent of Ebay!
I see this discussion over and over again and I always wonder why people think Mesa would just shut down and liquidate without first going into bankruptcy. Isn't it more likely that Mesa would go into bankruptcy, restructure, and then continue as a somewhat smaller company?
Bankruptcy would not affect their agreements, they would file and immediately affirm those contracts and reject all 50 seat aircraft. If anything their filing BK would make them more attractive to Airways, United and Delta because they could use bk the same way as the majors to come out with the absolutely lowest costs operation. Be careful what you wish for, the unintended consequences may be much worse that the status quo.
You are 100% incorrect about this. I know for a FACT that DL's contract with Mesa stipulates that a change of ownership or Bankruptcy is immediate terms for cancellation of the contract with no penalty or notice.
US Airways Code-Sharing Agreements
The code-share agreement is subject to termination prior to that date in various circumstances including:
If our flight completion factor or arrival performance in our Phoenix hub falls below certain levels for a specified period of time, subject to notice and cure rights;
If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement;
Failure by us or US Airways to perform the covenants, conditions or provisions of the code-share agreement, subject to 15 days notice and cure rights;
If we or US Airways fail to make a payment when due, subject to ten business days notice and cure rights;
If we are required by the FAA or the U.S. Department of Transportation ("DOT") to suspend operations and we have not resumed operations within three business days, except as a result of an emergency airworthiness directive from the FAA affecting all similarly equipped aircraft, US Airways may terminate the agreement;
Upon a change in our ownership or control without the written approval of US Airways.
United Code-Sharing Agreement
The code-share agreement is subject to termination prior to these dates under various circumstances including: If certain operational performance factors fall below a specified percentage for a specified time, subject to notice and cure rights;
Failure by us to perform the material covenants, agreements, terms or conditions of the code-share agreement or similar agreements with United, subject to thirty (30) days notice and cure rights;
If either United or we become insolvent, file bankruptcy or fail to pay debts when due, the non-defaulting party may terminate the agreement; or
In the event that we merge with, or if control of us is acquired by another air carrier or a corporation directly or indirectly owning or controlling another air carrier.
Delta Code-Sharing Agreement
The agreements may be subject to early termination under various circumstances including:
[*] If either Delta or we file for bankruptcy, reorganization or similar action or if either Delta or we make an assignment for the benefit of creditors;
[*] If either Delta or we commit a material breach of the code-share agreement, subject to 30 days notice and cure rights; or
[*] Upon the occurrence of an event of force majeure that continues for a period of 30 or more consecutive days.
In addition, Delta may immediately terminate the agreements upon the occurrence of one or more of the following events:
If there is a change of control of Freedom or Mesa;
If there is a merger involving Freedom or Mesa;
If we fail to maintain a specified completion rate with respect to the flights we operate for Delta during a specified period; or
If our level of safety is not reasonably satisfactory to Delta.