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Speculating Mesa.

Flybywire44

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Speculating MESA

1)
10 Dash-8 aircraft terminates in July 2013 unless terminated by United by giving notice six months prior to April 30, 2010... 20 50-seat regional jets terminate in April 2010
(http://scottsdale.brand.edgar-onlin...d=6367&ppu=%2fdefault.aspx%3fcompanyid%3d6367) United is supposedly accepting RFPs for regional flying at this time. If MESA said losing the DAL flying would put them out of business, what will losing UAL flying do?

2) On August 10th Mesa's "current and noncurrent restricted cash was 35 million." (http://www.reuters.com/article/pressRelease/idUS97121+10-Aug-2009+PRN20090810) On August 24th MESA exchanged $14.3 million of the notes for 13.6 million shares of the company's common stockstock... which at their current stock price of $.255 is valued at ~$3.4 million. (http://ca.us.biz.yahoo.com/ap/090820/us_mesa_air_group_notes.html?.v=1)

3) Mesa is still fighting DAL over a contract that won't be renewed in 2012.
As of December 31, 2008, we operated 28 ERJ-145 aircraft for Delta pursuant to the Amended DCA. Flight operations for Delta are performed by our wholly-owned subsidiary, Freedom Airlines. The Amended DCA provided for the addition of six ERJ-145 aircraft for an initial term of two years. These aircraft are scheduled to be removed from service in April 2009. The parties are currently in disagreement regarding the effectiveness of a notice issued by Mesa to extend the term of these aircraft for an additional one year term at reduced compensation in accordance with the terms of the amendment. Also, pursuant to the Amended DCA, commencing in August 2008, the parties agreed to remove eight ERJ-145 aircraft at a rate of three aircraft per month. As discussed below, the Company is currently involved in litigation with Delta regarding the Amended DCA and intends to pursue its legal remedies against Delta regarding the Expansion DCA.
(http://aviationweek.typepad.com/files/mesas1.rtf)

4)
The agreements with US Airways expire in 2012; the regional jet revenue-guarantee agreements with Delta expire between January 2017 and January 2018, but can be terminated earlier in November 2012; the agreement with United expires between 2010 and 2018.
(http://aviationweek.typepad.com/files/mesas1.rtf)

5) Mesa's stock has not be valued over a dollar since April 2007.

6) Both NASDAQ and NYSE are reinstating their delisting practices:
We wanted investors to take a collective breath," says Glenn Tyranski of NYSE. "But … the market has come back, and it was time to restart the rule. It's potentially a big problem for investors, as nearly 200 Nasdaq and NYSE stocks, including companies such as Sirius XM Radio (SIRI), Jones Soda (JSDA) , Pacific Ethanol (PEIX) and Joe's Jeans (JOEZ) face being cut off.
(http://www.usatoday.com/money/markets/2009-10-04-delist-stocks-nasdaq-nyse_N.htm) On October 5th Mesa stated
Mesa expects to be granted an additional 180 days from October 2, 2009, or until April 1, 2010, to demonstrate compliance with the minimum bid price requirement of The NASDAQ Capital Market.
http://www.prnewswire.com/news-rele...er-to-the-nasdaq-capital-market-63547757.html (also see http://www.thestreet.com/story/10358340/3/what-happens-when-my-stock-is-delisted.html) If NASDAQ does not approve [a] Company's transfer application, NASDAQ will provide written notification to [a] Company that its Ordinary Shares will be delisted. (http://www.marketwatch.com/story/bo...aq-global-market-listing-standards-2009-09-21) There are many companies applying to transfer from The NASDAQ Global Market to The NASDAQ Capital Market because it has lower listing standards and because it will buy the companies 180 days to fix their sinking ships or pull off reverse stock splits.

Corrections and commentary?
 
Last edited:

SPDBRD747400

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Wow!

Mesa Sucks!
 

Cpt Oveur

I had the fish for dinner
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It will force them to declare bankruptcy but it may not mean chapter 7. The company will go to its creditors and ask for a deal, they'll go to their labor groups and ask for a deal, and then they'll go to the government for help. It will void their contracts but that doesn't mean that their flying is immediately terminated. If their mainline partners can get a better deal out of it they will. It would not be the end of Mesa, yet....
 

captfred

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It is my understanding that if they file Chapter 11 their contract with U S Airways can be terminated at U S Airways discretion. That would leave a mark.

It would most likely just get altered and downsized.
 

CaptainChris77

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It will force them to declare bankruptcy but it may not mean chapter 7. The company will go to its creditors and ask for a deal, they'll go to their labor groups and ask for a deal, and then they'll go to the government for help. It will void their contracts but that doesn't mean that their flying is immediately terminated. If their mainline partners can get a better deal out of it they will. It would not be the end of Mesa, yet....

I don't think the gov't is gonna be much help with Mesa chief. I think the more likely turnout would be Mesa reorganizes under Ch.11, shrinks by about 70%, and sells off some of their assets. Maybe SkyW, Gojets, ASA, AWAC would pick up some of the planes to put into service with whoever. Then again. Maybe not.
 

Cpt Oveur

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I heard a rumor that XJT is buying some of the assests.

A plausible rumor. If CAL was ever going to gobble up assets and routes in a fire-sale, they'll probably leave the regionals and their contracts out of it, put everything up for fresh bid, and it would be the smart way to shed capacity.
 

Dubya

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The most important contract Mesa has is with sucking, and that is good through 2145.


W
 

planejockey

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A plausible rumor. If CAL was ever going to gobble up assets and routes in a fire-sale, they'll probably leave the regionals and their contracts out of it, put everything up for fresh bid, and it would be the smart way to shed capacity.

They are already expanding to the west coast and they seem to like the new low price of DepresssJet so it might happen. A true race to the bottom brought to you in the accelerated version by RAH (REAL A// Hole) and the its pilots.
 
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