Mesa to file Chap 11 or Cease Ops?

[meyers9163]

NEW YORK, May 22 (Reuters) - Mesa Air Group Inc (MESA.O: Quote, Profile, Research), which provides regional flights for major airlines, said on Thursday it might be forced to file for bankruptcy protection if it loses a legal fight with Delta Air Lines Inc (DAL.N: Quote, Profile, Research).
If it files for bankruptcy, Mesa would be the eighth airline to seek Chapter 11 protection or close down operations in the past five months, following Frontier Airlines Holdings Inc FRNTQ.PK, Skybus Airlines Inc, ATA Airlines and others, as they grapple with record fuel prices.


Mesa, which operates regional flights for Delta, UAL Corp's (UAUA.O: Quote, Profile, Research) United Airlines and US Airways (LCC.N: Quote, Profile, Research), has been in dispute with Delta since March, when Delta told Mesa that it planned to terminate their partnership, accusing Mesa of failing to complete a specified number of flights.
Mesa denies that allegation, and in April it sued Delta, saying the airline had breached their agreement.


Earlier this month, Mesa filed a motion in the U.S. District Court for the Northern District of Georgia to prevent Delta from terminating the agreement. A court hearing is set for May 27-29, and Mesa said it expects a ruling when that is completed.
In a regulatory filing early on Thursday, Mesa warned that if it loses the case, and Delta ends the agreement -- worth about $20 million a month to Mesa -- then it might file for bankruptcy.
That lost revenue, and about $250 million to $300 million in labor, leasing and other costs over the next four years, would cause Mesa to default on lease agreements, the company said, which would seriously affect its operations and finances.
"In such event, the company's financial condition would require that the company seek protection under applicable U.S. reorganization laws in order to avoid or delay actions by its lessors, creditors and code-share partners," Mesa said in its filing.

The airline, which is already struggling to shore up its finances by issuing shares to buy back debt, closed its Air Midwest unit earlier this month.
Other airlines that have filed for bankruptcy or shut down recently are Eos Airlines, Champion Air, Aloha Airlines and MAXjet Airways Inc. (Reporting by Bill Rigby; editing by John Wallace)

[surreal1221]

Good luck to the pilots.

Find work.

[777forever]

Its a blessing that flight instructing pays well these days...

[Chris_Ford]

Originally Posted by 777forever

Its a blessing that flight instructing pays well these days...

Yeah, that's a real blessing

[Velocipede]

I hate to say this, but with each airline that collapses, we are getting closer to where we have to be in this country.

At the point where the government steps in and reregulates the industry. Reregulation meaning that consumers are FORCED to pay what it costs to create the service. No more fare wars/fare sales. Figure the cost of fuel per flight, divide it by the number of seats in the airplane and add it directly to the ticket price. No questions asked.

It HAS to happen or the entire industry will collapse. And this country cannot operate without a viable airline industry.

Either that or nationalize ALL the airlines in the U.S.

[Doug Taylor]

I was walking past one of the monitors here in JFK which was playing CNN. There was the newsdolly reading viewer email and it went something like:

"<blah blah blah> preposterous about American charging for checked luggage <blah blah blah> already make PLENTY of money with their overpriced seats <blah blah blah> I'll never fly American again <blah blah blah>"

So the lady with time enough to email CNN determines what AMR'S costs-of-goods-sold is and how preposterous it is that they price their tickets and adjust their services to reflect the higher price of Jet-A?

Wow...

Really.

[Velocipede]

Actually, the more I consider it, the more I like the idea of a nationalized aviation industry.

Call it "Ameriflot."

[dvtpilot]

This rumor has been flying around the halls for a while.

I also heard a new one today that set a target time of August for a definite Ch 11.

Who knows. I'll just show up till they change the codes on the door and remove the computers from the crew room. Or I find a new place to go.

[surreal1221]

Originally Posted by 777forever

Its a blessing that flight instructing pays well these days...

Well, I'm really not too sure that that is really something to be happy of to be honest.

In a slight attempt to secure future employment as an instructor at a previous employer the outlook was not bright. Student enrollment is down, Instructor utilization is down, and overall too many instructors for current student enrollment - and this is at a school that does a majority of International training.

YMMV.

[kellwolf]

Originally Posted by Doug Taylor

I was walking past one of the monitors here in JFK which was playing CNN. There was the newsdolly reading viewer email and it went something like:

"<blah blah blah> preposterous about American charging for checked luggage <blah blah blah> already make PLENTY of money with their overpriced seats <blah blah blah> I'll never fly American again <blah blah blah>"

So the lady with time enough to email CNN determines what AMR'S costs-of-goods-sold is and how preposterous it is that they price their tickets and adjust their services to reflect the higher price of Jet-A?

Wow...

Really.

Ya know, I almost wonder if it woulda been better just to hike ticket prices $15 over the bag charge. More than likely (although it's no guarantee) the other airlines would follow given the current state of things, and you don't get the bad PR from Joe Six Pack thinking you're trying to nickel and dime them to death. In addition, you get that extra $15 from people that aren't bringing an extra bag.

Eh, but what do I know. I'm just the guy that grumbles at the pump when gas goes up another $.10 overnight......

[meyers9163]

Originally Posted by kellwolf

Ya know, I almost wonder if it woulda been better just to hike ticket prices $15 over the bag charge. More than likely (although it's no guarantee) the other airlines would follow given the current state of things, and you don't get the bad PR from Joe Six Pack thinking you're trying to nickel and dime them to death. In addition, you get that extra $15 from people that aren't bringing an extra bag.

Eh, but what do I know. I'm just the guy that grumbles at the pump when gas goes up another $.10 overnight......

Yeah you could almost make it a "bag tax" and a flat rate fee ontop of the base fare.... Then they all would not be complaining.

[madmax]

Originally Posted by Velocipede

Actually, the more I consider it, the more I like the idea of a nationalized aviation industry.

Call it "Ameriflot."

Only if we can have an awesome logo like them.