Just in time for what appears to be a run on the record level fuel prices again, Mesa Air Group has announced it is emerging from Chapter 11 bankrupcty protection. They entered chapter 11 proceedings approximately 14 months ago.
The airline emerged slimmer and in hopefully better financial position to deal with the coming high fuel costs. Unfortunately, it's also emerging at a time when airlines are looking to trim their regional fleets and options as well.
Mesa is down to about 75 airplanes in service, about 100 airplanes less then it had prior to its Chapter 11 filing. It is retaining its larger regional jets, with 70 and 86 seat configurations and plans to operate about 450 daily flights to 94 destinations under their contract with US Airways and United Airlines.
The airline's elimination of nearly 100 excess aircraft and their associated leases removed about $700 million in capitalized leases and $50 million in debt from it's balance sheets per the press release.
The company is emerging as a private company (not publicly traded on the stock markets as before.)
In the press release, Mesa Chairman and Chief Executive Officer Jonathan Ornstein stated that 'Today marks a new beginning for Mesa, one that allows the company to build on its almost 30 year history and reestablish ourselves as one of the world’s leading regional airlines. We are deeply appreciative of the support we have received during our reorganization from our creditors, airline partners and employees, and we will work hard to repay this trust by building a successful Mesa Air Group.'
He continued on, saying 'Upon our exit from bankruptcy, we will take the intensity and effort of the past 13 months and transfer it from the triage of the bankruptcy process to focus on opportunities that exist in our rapidly changing industry. Throughout our bankruptcy the Company’s operations remained at the highest level of reliability and safety. Our people did a fantastic job and nothing reflects their competitive spirit better than the fact that during our bankruptcy Mesa consistently delivered operational performance which continues to lead the regional airline industry in nearly every category monitored by the U.S. Dept. of Transportation.
This strong operational performance came during a time when many of our employees contributed to our financial savings by taking additional unpaid days off. This level of dedication and the resulting operational performance has provided a solid foundation upon which to return our airline to sustained profitability and future growth. In addition, through the restructuring process Mesa is among the first regional airlines to address the risks associated with fifty-seat regional jet aircraft which have increasingly fallen out of favor with mainline carriers. We believe the elimination of exposure related to this fleet provides Mesa with a significant competitive advantage.”
How succesful Mesa will be going forward in what appears to be a building challenging environment will take time to see.