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Latest from J.O.

rchcfi

How slow can you go
Joined
Sep 18, 2002
Posts
385
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Some
January 14, 2009 Mesa Predicts Profits This FY
In an ominously short fourth quarter conference call in which only two investment analysts tuned in, Mesa revealed its strategy this year is to solve its big money problems, including its note holders in order to reduce costs. In the meantime, it delayed the delivery of 10 CRJs and negotiated the return of $6 million of the $6.5 million in deposits already paid Bombardier as part of an amended purchase agreement. It is also in discussion with other venders “who have a vested interest in seeing us succeed” to provide cash, if necessary.
The drop in the price of fuel is a huge benefit since every dime saved equals $45,000, he said, adding that, although 96 percent of its operation is under contract in which fuel costs are passed along to mainline partners, the drop will help go! significantly. Fuel has dropped from $4 million to $1.75. He indicated that the reduction also changes the business case for the CRJ 200s and made it easier to reassign six idle CRJ 200s which have been subleased since the end of the company’s fiscal year in September 30.
It has already solved the litigation problems it was facing with Aloha which happened in November, its fiscal first quarter for 2009. Related Story www.aviationtoday.com/ran/topstories/28152.html In addition, shareholders agreed to issue shares to cover debt to note-holders due this year and, with the settlement of the legal issues in Hawaii, it is saving legal costs, according to Chair Jonathan Ornstein, who said the current business plan calls for the company to be both cash flow positive and profitable this year, although he declined to give numbers. Mesa is still negotiating with note-holders in hopes of reaching a settlement without issuing the full 900 million shares “in a manner that will be satisfactory to all partners.”
The company is expanding its go! operation in Hawaii with the addition of one CRJ 200 in time for the busy spring/summer season, bringing its fleet to six and is awaiting a court decision that would allow it to use the Aloha Airline name for its at-risk operation there. Ornstein reported that forward bookings at the Hawaiian regional were robust and double what they were last year. In addition, he said operating revenues for go! increased to $18.1 million thanks to an increase in fares and enplanements.
He expects to be able to lease the Aloha name, saying “we’d be better off based on our experience with Virgin,” he said, alluding to his days working with the company in Europe. “We owned European Belgian Airlines and licensed the Virgin name and it was worth it. The licensing costs for Aloha would be offset by the benefits and maybe more. It would help in pursuit of code-share agreements.”
It continues to fight the termination of its Delta Connection flying with seven CRJ 900s and plans to file a lawsuit shortly. In addition, a hearing on Delta’s termination of Freedom Airline’s ERJ 145 service, for which it was able to gain an injunction last summer, is scheduled for January 30.
Ornstein also reported that the company hopes to settle its claims in removing itself from the KunPeng Airlines partnership with Shenzhen Airlines, shortly. Related Story www.aviationtoday.com/ran/categories/commercial/23986.html Ornstein also reported that the delay in issuing its Q4 statistics, resulted from a tax issue regarding net operating losses.
“The company faces a lot of challenges but we are working through the bond issue and we also have hurdles with Delta,” he said. “But I’d like to think those can be resolved in a productive and amicable fashion. Our environment puts a lot of questions in people’s minds. But we continue to have strong relationships and our US Airways and United business models are successful and will see us through this period.”

Discuss......
 

Dan Roman

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Well I can say that his use of the Aloha name may very well backfire. His analogy to what he did in Europe just underscores how ignorant he is about doing business in Hawaii. Newsflash, Hawaii is not Europe. A lot of people in Hawaii, and not just ex Aloha people, will deeply resent his using the name.
Hawaii is a small place and it is an island. You can't get ahead over here by stepping on peoples toes.
At the risk of name dropping, I know a fairly high ranking and influential State Senator over here that thought that Go would be good for Hawaii. He is disgusted with them now. My wife works in the medical field and sees many people that don't work for the airlines. She can attest that beyond airline employees many people in Hawaii do not like that airline.
Of course some people will fly them, but it will be hard for them to turn a profit when a very substantial part of the market he is competing for deeply resents his presence. A LOT of people in Hawaii had friends or relatives that worked at Aloha and Aloha, like Hawaiian does, had a lot of loyal passengers that wouldn't dream of flying on Go, no matter what they paint on the side of the airplane.
Also, the profit margin for flying inter-island is very low. His seat mile costs are substantially higher than Hawaiians 717's, adding an extra expense of having to pay out of every ticket the right to use the Aloha name guaranties the continued cash drain caused by Go.
Essentially he is paying for the right to create resentment in the market he serves.
 

B.T.Justice

Well-known member
Joined
Mar 3, 2006
Posts
100
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3500
-Back to court with Delta on 1/30
-Convertible notes may become due on 1/31/09 and 2/10/09
-It looks like USair will be parking 1 CRJ every six months
-Has to invest another 28.6m in Kenpeng by 5/16/09, unless they can sell their interests in it.

As of 9/30/08 Mesa had about 65M in cash
 

Draginass

Well-known member
Joined
Nov 29, 2001
Posts
1,852
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5000+
Sounds like he's just keeping it going while he loots the last bit out of the company. Then, a sudden shutdown, ala Braniff.
 

cybourg10

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May 11, 2006
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481
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I am curious as to what the target amount is for MESA to file bankruptcy. You need a decent amount of cash on hand to file CH11, I believe the number at XJT was about $60 million of cash and they would have to file......
 

B.T.Justice

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I am curious as to what the target amount is for MESA to file bankruptcy. You need a decent amount of cash on hand to file CH11, I believe the number at XJT was about $60 million of cash and they would have to file......

It was said in the conference call that the company needs little cash for operations, and historically has not had much cash available. I think it will depend on if the note holders demand cash in the next few weeks, if Delta is successful in terminating the contract, and if they can't sell their interests in Kenpeng, that could become a cash drain in the spring. If any of these happen....MESA will have little cash left over.
 

RP170

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It was said in the conference call that the company needs little cash for operations, and historically has not had much cash available.

Makes sense since they obviously undercut everyone and fly for the least amount of money.
 

CALRepublic

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Jan 11, 2008
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576
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plenty
Mesa is not going anywhere, they're like freeking cancer, you want it to go away, but it doesn't. At least the spreading stop, THANK GOD
 

McNugget

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messiah
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Sep 14, 2005
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.....
I am curious as to what the target amount is for MESA to file bankruptcy. You need a decent amount of cash on hand to file CH11, I believe the number at XJT was about $60 million of cash and they would have to file......

so sorry your company had to file
 

A-V-8

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Feb 27, 2006
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355
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I hope Delta wins the lawsuit and gets rid of those cockroaches

Delta doesn’t have to win to drop Mesa. After the judge rules they can say we have the right to fire you now or they can say your fired, J.O. go grieve it. One route results in a law suit that Mesa may or may not win the other results in a lawsuit that Mesa will almost definitely not win. Either way the ERJs that we operate for Delta will most likely be the last flying that Mesa ever does for Delta.
 

IBNAV8R

Stand-up Philosopher
Joined
Jul 3, 2008
Posts
843
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9:30
Well I can say that his use of the Aloha name may very well backfire. His analogy to what he did in Europe just underscores how ignorant he is about doing business in Hawaii. Newsflash, Hawaii is not Europe. A lot of people in Hawaii, and not just ex Aloha people, will deeply resent his using the name.
Hawaii is a small place and it is an island. You can't get ahead over here by stepping on peoples toes.
At the risk of name dropping, I know a fairly high ranking and influential State Senator over here that thought that Go would be good for Hawaii. He is disgusted with them now. My wife works in the medical field and sees many people that don't work for the airlines. She can attest that beyond airline employees many people in Hawaii do not like that airline.
Of course some people will fly them, but it will be hard for them to turn a profit when a very substantial part of the market he is competing for deeply resents his presence. A LOT of people in Hawaii had friends or relatives that worked at Aloha and Aloha, like Hawaiian does, had a lot of loyal passengers that wouldn't dream of flying on Go, no matter what they paint on the side of the airplane.
Also, the profit margin for flying inter-island is very low. His seat mile costs are substantially higher than Hawaiians 717's, adding an extra expense of having to pay out of every ticket the right to use the Aloha name guaranties the continued cash drain caused by Go.
Essentially he is paying for the right to create resentment in the market he serves.

In my view:

The proud people of Hawaii, in their spirit of Aloha and "Kokua" are the ones who put AQ out of business. It's not like GO! had any codeshare business. It was ALL point-to-point traffic.

There will, no doubt, be the resentment of which you speak. But, when the tickets are $10 cheaper than the competition they will again choose price over pride. And JO has no problem operating at a loss - and maybe put another airline out of business. He'll just sue someone else to try to get more capital.
 

Dan Roman

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Truth be told, It was the management of Aloha that put Aloha out of business.
That said, the Go operation is not very highly thought of in Hawaii, Aloha was a respected name and for an operation like Go to take over the name and try to act like they are Kamaaina will create a lot of resentment towards them.
 
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