Good News from the Mesa Front

davetheflyer

New Member
DC and VA are investigating for anti-trust violations between UAL and Mesa. They filed a friend of the court brief on behalf of ACA and it sounds like they are trying to get the judge to postpone the vote to replace ACA's board with Mesa's picks.

Dow Jones Business News
State Officials Probe Mesa Air For Antitrust Behavior
Tuesday December 9, 5:29 pm ET
By Elizabeth Souder, Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--Virginia and the District of Columbia are probing whether Mesa Air Group Inc. (NasdaqNM:MESA - News)'s takeover bid for Atlantic Coast Airlines Holdings Inc. (NasdaqNM:ACAI - News) constitutes antitrust behavior.






Both the attorney general of Virginia and the Corporation Counsel of the District of Columbia filed briefs in court Monday in support of Atlantic Coast's request for a preliminary injunction to halt Mesa's bid.

A preliminary injunction would stop Mesa's takeover until a judge can rule on a separate complaint filed by Atlantic Coast that Mesa's bid is anti- competitive.

If the preliminary inquiry by the state and district officials becomes an investigation, and officials find anti-trust behavior, the officials could take Mesa to court to prevent the takeover, said Peter Lavallee, spokesman for the Corporation Counsel. He said the counsel is the District of Columbia's equivalent of an attorney general.

Attorneys for the District of Columbia and Virginia said in the brief they take no position on whether Atlantic Coast's accusations are true.

In October, Phoenix regional airline Mesa announced a bid to buy Atlantic Coast in a stock swap valued at $511.7 million. Mesa, which owns less than 5% of Atlantic Coast shares, proposed a new slate of board members, though Mesa hasn't set a date for shareholders to vote on the new board.

Atlantic Coast officials resist the takeover because merging with Mesa would mean continuing to operate as a regional airline, flying on behalf of UAL Corp. (UALAQ) and other major airlines. Atlantic Coast wants to get out of its current contract to fly for UAL and become an independent, low-cost carrier.

Atlantic Coast complained to the court last month that Mesa's bid would prevent the emergence of Atlantic Coast as a low-cost airline. Further, Atlantic Coast accused Mesa of being in cahoots with UAL to squash Atlantic Coast as an independent competitor. No other low-cost carrier uses Washington as a hub.

Mesa said it signed an agreement with UAL that, should Mesa acquire Atlantic Coast, the combined airline would fly for UAL.

Mesa officials weren't immediately available for comment, but Mesa in the past has denied any anti-competitive behavior.

Mesa chief executive Jonathan Ornstein has said the memorandum of understanding with UAL was negotiated like any other agreement, with both sides working in their own best interest. Ornstein has also said he wants to offer Atlantic Coast shareholders the chance to vote on the business model of their company.

Officials in Virginia and the District of Columbia said in the brief filed Monday that not halting the takeover process right away could result in an irreversible vote by Atlantic Coast shareholders before Atlantic Coast's main lawsuit goes to court.

"If Mesa were allowed to proceed with a plan to replace Atlantic's directors, an event that Atlantic contends would effectively terminate its plan to introduce a new low-cost airline based at Washington Dulles International Airport, any resulting harm to airline competition and to consumers of air travel could be irreversible," state and district attorneys said in the brief.

"It is in the public interest for Atlantic's antitrust allegations to be subject to a careful, factual inquiry by this court prior to the occurrence of events that could eliminate Atlantic as a competitor," the brief said.

-By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; elizabeth.souder@dowjones.com
 

aloft

New Member
These investigations are politically motivated; if TWA and AA merging wasn't an antitrust violation, Mesa buying ACA sure as hell isn't.
 

davetheflyer

New Member
You are correct that they are politically motivated, but what isn't?

The basis for the lawsuit is that ACA is going to launch a low fare competitor, then all of a sudden, Mesa makes their move. And what do you know, they have a letter of agreement with UAL. It looks extremely fishy.

And apparently ACA has friends in high places who would like to see Independence Air succeed. It would definitely be advantageous for the DC area.

Personally, anything that protects me from Mesa is good news.
 

Tired

New Member
[ QUOTE ]
These investigations are politically motivated; if TWA and AA merging wasn't an antitrust violation, Mesa buying ACA sure as hell isn't.

[/ QUOTE ]

AA and TWA were allowed to merge because it was hoped that it would save some jobs over at TWA. TWA would have gone BK if they hadn't been able to find someone to buy them out. Ofcourse, all the TWA folks lost their jobs and Eagle is getting screwed, but atleast they tried.
 
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