Archive for the 'Mesa' Category

Mesa Files for Chapter 11

Published
by
Dan Webb
on January 5, 2010
in Mesa
. 3 Comments

Mesa said last week that it couldn’t release its annual results on time. Now that makes sense. The regional carrier announced early this morning that it is filing for Chapter 11 bankruptcy. And while it’s always sad to see that happen – the move isn’t exactly shocking. The airline has had to pull out of its venture in China, and its go! operation in Hawaii has not been financially successful. While Delta hasn’t been able to back out of its deal with Mesa-subsidiary Freedom over ERJ-145 flying (with its own legal battle), it was able to terminate the agreement for CRJ-900s. United has recently announced the termination of two Mesa agreements for Dash-8 and CRJ-200 flying, though that move has brought about its own legal issues.

Mesa chief Jonathan Ornstein said in a news release that the company is “faced with an untenable financial situation resulting primarily from our continued lease obligations on aircraft excess to our current requirements” and that “a Chapter 11 filing provides the most effective and efficient means to restructure with minimal impact on the business and our customers.”

Ornstein also noted that “ this action will give us the opportunity to reach a more timely conclusion in the litigation with Delta Air Lines in which Mesa is currently seeking damages in excess of $70 million.”

As for passengers, there isn’t much to worry about at this point. Mesa is requesting the bankruptcy court for the “authority to continue to pay employee salary and benefits, fulfill code-share partner agreements, honor customer programs, and pay vendors and suppliers for post-petition goods and services. These requests are standard and the Company anticipates receiving approval in the next few days.” It should also be noted that because it is a separate entity, the joint venture between go! and Mokulele is not affected by this move.

So, we’ll just have to sit and wait to see what happens here. There was a good Wall Street Journal article a few days ago explaining how regional flying is changing and is becoming a more difficult for those airlines as mainline carriers have decided to shift their strategies.

Hopefully this process will enable us to see a leaner and meaner Mesa in the future. But there’s a long road ahead.

Mesa and Republic Form a Joint Venture

Published
by
Dan Webb
on October 14, 2009
in Mesa and Republic
. 0 Comments

Yesterday evening it was announced that Mesa (go!) and Republic, who owns most of the shares of Mokulele, will be forming a joint venture  that results in both brands surviving as go! Mokuele.

The deal involves Mokulele dropping all of its routes flown by its three E170 aicraft which are operated by Republic subsidiary Shuttle America, so the airline goes back to flying only Cessnas. All jet flights will be with go! CRJs.

The JV is structured as follows (from the Republic press release):

Under the terms of the JV agreement, Mokulele shareholders will contribute their ownership of Mokulele to the JV and will own 25% of the new venture. Additionally, current Mokulele shareholders will be obligated to fund up to $1.5 million to capitalize the JV. Republic, which is the majority shareholder of Mokulele, will forgive Mokulele’s $3.1 million outstanding debt to Republic, net of surrendered aircraft deposits.

It’s kind of, for lack of a better word, funny that Mesa and Mokulele are working together again. The airline began operating flights as go!Express, but that relationship ended earlier this year when Republic got involved. So things have kind of returned to their previous position.

But the move makes sense as a smart way to reduce capacity in the Hawaiian interisland market – and from what I’ve read Mokulele did face a challenging environment. So now the new venture becomes the biggest competitor to Hawaian’s operation.

One question that remains to be answered specifically is how to deal effects the employees of both airlines.

All of these changes are happening pretty quickly, as the join venture goes into effect on Thursday, and the E170s will be returning to Republic for its branded flying by November. There hasn’t been any official word about what flying they will do, but for what it’s worth, only Midwest uses the E170s at this point. But, Republic gets three more aircraft to play with for its new operations. And, at the same time rumors that Republic will acquire ten E190s from US Airways persist.

More details about the partnership can be found on Mokuele’s website here.

Hawaiian Adds Additional 717s to Their Fleet

Published
by
Dan Webb
on June 6, 2008
in Boeing, Hawaiian and Mesa
. 0 Comments

I was originally going to post about the new agreement between Continental and Expressjet, but both Cranky Flier and Planebuzz have good articles on that news item, so why be redundant? So instead I’m sharing another, less important story that caught my interest.

Today in the Sky reported yesterday that Hawaiian will be adding four more Boeing 717s (leased from Boeing Capital) to their fleet for inter-island flights by the end of this year, bringing the total 717 fleet to fifteen aircraft. While four aircraft may not seem like a lot, it is a good number of seats for the inter-island market and it is also somewhat refreshing to read an announcement about fleet growth after the the press releases about capacity cuts from American, United, and Continental.

Obviously Aloha’s withdrawal from passenger service increases load factors for Hawaiian as the two carriers had similar routes from the West Coast and within the islands themselves. ATA’s closure also helps Hawaiian, though to a lesser extent (no inter-island flights, for example).

So who’s left in the inter-island market? Well there’s Mesa’s go!, Mokulele Airlines (which operates some flights for Mesa under the name go!express), Island Air, and Pacific Wings. Hawaiian has a big advantage over these carriers because they have long haul flights feeding into their inter-island flights. The only advantages these smaller carriers have is that they fly to some of the smaller airports Hawaiian doesn’t touch. It will be interesting to see what happens with go!, as it’s parent company, Mesa, is having major issues right now. In fact, Planebuzz reports today that the company’s CFO has left quickly and mysteriously.

Today in the Sky also states that Hawaiian is actually hiring people, which is fantastic news considering the current condition of the industry. Also, many of the new employees are former workers for Aloha, so it’s nice to hear that those people have jobs again.