badog
Right career, Wrong time
- Joined
- Jun 1, 2003
- Posts
- 219
alpas' view
Mesa Bankruptcy Update The Mesa Air Group made it clear in its Chapter 11 filing last month that excess aircraft—not labor—was the problem. After nearly eight weeks, everything filed by Mesa in the bankruptcy court seems to be consistent with that position and with Mesa’s stated desire to exit bankruptcy in a reasonable time frame. In what appears to be an early step in the company’s restructuring plan, the rejection of aircraft associated with some CRJ-200 leases can be expected. This is a result of the code-share agreement with United concerning these aircraft not being renewed past May 2010; however, Mesa’s code-share agreement with United provides for continued CRJ-700 flying at least through 2013. As for the code-share agreement with Delta, litigation concerning ERJs and claims about rate disputes and a most-favored-nation clause will be transferred to the bankruptcy court, and a trial will is scheduled to begin July 12. The litigation concerning ERJs and claims about alleged performance will remain in the Georgia court, where a trial is scheduled on April 20. The company also reached a settlement agreement with Raytheon covering the return of 20 Beech 1900s parked since AMW shut down. This agreement removes approximately $32 million of debt from Mesa’s balance sheet.
On the labor front, there has been no indication that the company plans to seek concessions from the pilots or reject their labor agreement; nevertheless, the MAG MEC is fully prepared to defend against such actions. The MEC is also engaged in active negotiations with the company to secure additional contract improvements and reach advantageous grievance settlements. For example, the MEC recently settled three pay-related grievances that—combined with the pilots’ new, progressive contract—will generate nearly $3.2 million in value for the pilot group each year (as compared to pilot pay calculated without scheduled/actual and without line guarantees). This agreement is subject to approval pursuant to certain general settlement procedures that were just approved by the bankruptcy court.
Mesa Bankruptcy Update The Mesa Air Group made it clear in its Chapter 11 filing last month that excess aircraft—not labor—was the problem. After nearly eight weeks, everything filed by Mesa in the bankruptcy court seems to be consistent with that position and with Mesa’s stated desire to exit bankruptcy in a reasonable time frame. In what appears to be an early step in the company’s restructuring plan, the rejection of aircraft associated with some CRJ-200 leases can be expected. This is a result of the code-share agreement with United concerning these aircraft not being renewed past May 2010; however, Mesa’s code-share agreement with United provides for continued CRJ-700 flying at least through 2013. As for the code-share agreement with Delta, litigation concerning ERJs and claims about rate disputes and a most-favored-nation clause will be transferred to the bankruptcy court, and a trial will is scheduled to begin July 12. The litigation concerning ERJs and claims about alleged performance will remain in the Georgia court, where a trial is scheduled on April 20. The company also reached a settlement agreement with Raytheon covering the return of 20 Beech 1900s parked since AMW shut down. This agreement removes approximately $32 million of debt from Mesa’s balance sheet.
On the labor front, there has been no indication that the company plans to seek concessions from the pilots or reject their labor agreement; nevertheless, the MAG MEC is fully prepared to defend against such actions. The MEC is also engaged in active negotiations with the company to secure additional contract improvements and reach advantageous grievance settlements. For example, the MEC recently settled three pay-related grievances that—combined with the pilots’ new, progressive contract—will generate nearly $3.2 million in value for the pilot group each year (as compared to pilot pay calculated without scheduled/actual and without line guarantees). This agreement is subject to approval pursuant to certain general settlement procedures that were just approved by the bankruptcy court.
