Does anyone know...
In typical corporate bankruptcy cases, do the customers (in this case, Delta, US Air, etc..) have the legal right to dump the bankrupt supplier? More specifically, if Mesa goes BK, can Delta automatically terminate their supply relationship, like they've been trying to do for a while now?
If the answer is yes, then one way of looking at this move by Mesa is that they might be thinking that BK is a given, and they're looking to get out of the regional business altogether. In BK, they can restructure, shed some debt and planes, enter into new leases, and create a new (old) identity as "Aloha" with larger planes. The larger planes would only be possible, scope wise I assume, if they exited their current regional contracts.
If it's true that they have over $100M due in the next few months, I don't see any way they can avoid BK. I think they're on track for something like $35M in cash by year end. I can't imagine any way that they can convince either creditors or potential owners that their current business model is worth an additional $100M in this tight environment. After all, they probably need more than $35M in cash reserves just to continue normal business operations.
I think a key thing here is whether the major carrier customers can terminate the supply relationship if a supplier goes BK. If so, I think Mesa might be looking for a different avenue of survival.
In typical corporate bankruptcy cases, do the customers (in this case, Delta, US Air, etc..) have the legal right to dump the bankrupt supplier? More specifically, if Mesa goes BK, can Delta automatically terminate their supply relationship, like they've been trying to do for a while now?
If the answer is yes, then one way of looking at this move by Mesa is that they might be thinking that BK is a given, and they're looking to get out of the regional business altogether. In BK, they can restructure, shed some debt and planes, enter into new leases, and create a new (old) identity as "Aloha" with larger planes. The larger planes would only be possible, scope wise I assume, if they exited their current regional contracts.
If it's true that they have over $100M due in the next few months, I don't see any way they can avoid BK. I think they're on track for something like $35M in cash by year end. I can't imagine any way that they can convince either creditors or potential owners that their current business model is worth an additional $100M in this tight environment. After all, they probably need more than $35M in cash reserves just to continue normal business operations.
I think a key thing here is whether the major carrier customers can terminate the supply relationship if a supplier goes BK. If so, I think Mesa might be looking for a different avenue of survival.
