Mesa Air Files Bankruptcy
A Sacramento bankruptcy attorney comments on the Mesa Air Chapter 11 filing...
On January 5, 2010, Mesa Air Group, Inc. filed for Chapter 11 bankruptcy protection. The company was founded in 1982 and is based in Phoenix, serving 127 cities in 41 states in North America. At the time of filing, it listed assets totaling approximately $975 million and debts of almost $869 million owed to as many as 10,000 creditors. Mesa Air was forced to seek bankruptcy protection after private negotiations with aircraft manufacturers and other parties broke down.
Due to its current financial crisis, Mesa Air has already parked 52 plans and has plans to eliminate another 25 from its fleet by May. Chairman and Chief Executive of Mesa Air stated that the airline’s primary purpose in filing for bankruptcy protection was so that it could break leases on some of the 130 aircraft in its fleet that it no longer needs. While the airline used to be considered one of the most innovative regional carriers, in recent years it has been weighed down by legal disputes and an unsuccessful joint venture in China.
The company will continue to operate through the restructuring, which was filed by Mesa for itself as well as 11 affiliated companies. Mesa’s Hawaiian joint venture was not include in the filing and will continue full operations. The company has long stated that it may seek Chapter 11 protection and is hoping by doing so will help to speed the settlement of a lawsuit with Delta, in which Mesa is seeking more than $70 million in damages. The lawsuit arose when Delta sought to terminate a contract before it ended in 2008.
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