dark clouds on Mesa's horizon...
11-04-2009, 07:16 PM
#1
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Joined APC: Oct 2005
Position: E170/175 CA
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dark clouds on Mesa's horizon...
Mesa Air Group, Inc. and AAR Corp. Agree to Modify Certain Maintenance Support Agreements and Retire Mesa's Senior Convertible Notes Due in 2023 - Yahoo! Finance
Mesa renegotiated its contracts with a maintenance provider. The article points out that Mesa will have fewer aircraft to maintain, and consequently wanted to pay less for the services of AAR. Nothing too earth-shattering there.
What I found most interesting is the line about how Mesa was able to add a provision to the new mx contract whereby Mesa may, without penalty, terminate relevant parts of the contract if they decide to remove an entire fleet type. Wow. If that isn't telling, I don't know what is. From what I gather in the article, AAR only provides support for the ERJ and CRJ. The wind down of the Dash fleet would not explain the addition of this fleet removal clause. I think the CRJ fleet is overall the most likely survivor of the two jet types. The CRJ 700's for UAL and the CRJ-900's for Airways have not been put on the endangered species list yet, and Mesa still has -200's out in Hawaii. The ERJ is operated strictly for Delta, and Delta has made it's intentions quite clear. I think this is the first credible sign that Mesa expects to lose it's Freedom flying in the relatively near future.
Mesa also gave away a large number of shares to avoid future cash debt payments to AAR, which has a negative impact on Mesa's fund-raising efforts.
A I don't think we will see a BK filing by Mesa in 2009, as Mesa will still be receiving all expected compensation through the end of the year. However, if Mesa has no success in finding work for the UAL Dashes and -200's in the next three months or so, I would expect them to file during early 2010, while revenue is still being generated and some cash/leverage remains for trying to restructure other contracts.
Having worked for a now-defunct airline, I know how hard it is going to work while everyone is on corporate death-watch. Hang in there, but seriously start working on plan B.
Mesa renegotiated its contracts with a maintenance provider. The article points out that Mesa will have fewer aircraft to maintain, and consequently wanted to pay less for the services of AAR. Nothing too earth-shattering there.
What I found most interesting is the line about how Mesa was able to add a provision to the new mx contract whereby Mesa may, without penalty, terminate relevant parts of the contract if they decide to remove an entire fleet type. Wow. If that isn't telling, I don't know what is. From what I gather in the article, AAR only provides support for the ERJ and CRJ. The wind down of the Dash fleet would not explain the addition of this fleet removal clause. I think the CRJ fleet is overall the most likely survivor of the two jet types. The CRJ 700's for UAL and the CRJ-900's for Airways have not been put on the endangered species list yet, and Mesa still has -200's out in Hawaii. The ERJ is operated strictly for Delta, and Delta has made it's intentions quite clear. I think this is the first credible sign that Mesa expects to lose it's Freedom flying in the relatively near future.
Mesa also gave away a large number of shares to avoid future cash debt payments to AAR, which has a negative impact on Mesa's fund-raising efforts.
A I don't think we will see a BK filing by Mesa in 2009, as Mesa will still be receiving all expected compensation through the end of the year. However, if Mesa has no success in finding work for the UAL Dashes and -200's in the next three months or so, I would expect them to file during early 2010, while revenue is still being generated and some cash/leverage remains for trying to restructure other contracts.
Having worked for a now-defunct airline, I know how hard it is going to work while everyone is on corporate death-watch. Hang in there, but seriously start working on plan B.
11-04-2009, 07:55 PM
#2
2 days off
Joined APC: Jun 2009
Position: Embraer Systems Analyst
Posts: 1,853
Mesa Air Group, Inc. and AAR Corp. Agree to Modify Certain Maintenance Support Agreements and Retire Mesa's Senior Convertible Notes Due in 2023 - Yahoo! Finance
Mesa renegotiated its contracts with a maintenance provider. The article points out that Mesa will have fewer aircraft to maintain, and consequently wanted to pay less for the services of AAR. Nothing too earth-shattering there.
What I found most interesting is the line about how Mesa was able to add a provision to the new mx contract whereby Mesa may, without penalty, terminate relevant parts of the contract if they decide to remove an entire fleet type. Wow. If that isn't telling, I don't know what is. From what I gather in the article, AAR only provides support for the ERJ and CRJ. The wind down of the Dash fleet would not explain the addition of this fleet removal clause. I think the CRJ fleet is overall the most likely survivor of the two jet types. The CRJ 700's for UAL and the CRJ-900's for Airways have not been put on the endangered species list yet, and Mesa still has -200's out in Hawaii. The ERJ is operated strictly for Delta, and Delta has made it's intentions quite clear. I think this is the first credible sign that Mesa expects to lose it's Freedom flying in the relatively near future.
Mesa also gave away a large number of shares to avoid future cash debt payments to AAR, which has a negative impact on Mesa's fund-raising efforts.
A I don't think we will see a BK filing by Mesa in 2009, as Mesa will still be receiving all expected compensation through the end of the year. However, if Mesa has no success in finding work for the UAL Dashes and -200's in the next three months or so, I would expect them to file during early 2010, while revenue is still being generated and some cash/leverage remains for trying to restructure other contracts.
Having worked for a now-defunct airline, I know how hard it is going to work while everyone is on corporate death-watch. Hang in there, but seriously start working on plan B.
Mesa renegotiated its contracts with a maintenance provider. The article points out that Mesa will have fewer aircraft to maintain, and consequently wanted to pay less for the services of AAR. Nothing too earth-shattering there.
What I found most interesting is the line about how Mesa was able to add a provision to the new mx contract whereby Mesa may, without penalty, terminate relevant parts of the contract if they decide to remove an entire fleet type. Wow. If that isn't telling, I don't know what is. From what I gather in the article, AAR only provides support for the ERJ and CRJ. The wind down of the Dash fleet would not explain the addition of this fleet removal clause. I think the CRJ fleet is overall the most likely survivor of the two jet types. The CRJ 700's for UAL and the CRJ-900's for Airways have not been put on the endangered species list yet, and Mesa still has -200's out in Hawaii. The ERJ is operated strictly for Delta, and Delta has made it's intentions quite clear. I think this is the first credible sign that Mesa expects to lose it's Freedom flying in the relatively near future.
Mesa also gave away a large number of shares to avoid future cash debt payments to AAR, which has a negative impact on Mesa's fund-raising efforts.
A I don't think we will see a BK filing by Mesa in 2009, as Mesa will still be receiving all expected compensation through the end of the year. However, if Mesa has no success in finding work for the UAL Dashes and -200's in the next three months or so, I would expect them to file during early 2010, while revenue is still being generated and some cash/leverage remains for trying to restructure other contracts.
Having worked for a now-defunct airline, I know how hard it is going to work while everyone is on corporate death-watch. Hang in there, but seriously start working on plan B.
11-04-2009, 08:20 PM
#3
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Joined APC: Mar 2008
Posts: 483
When is Delta able to cancel the Freedom ERJ flying? Obviously if Mesa files for BK then they can cancel, but if there is no BK, when is that flying gone?
11-04-2009, 08:22 PM
#4
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Joined APC: Jan 2006
Position: A-320
Posts: 6,929
tomorrow should be an interesting day for some of us...........
11-04-2009, 08:27 PM
#5
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Joined APC: Jul 2008
Position: Reverse cowgirl
Posts: 246
Joeymeatballs, I've become quite the infrequent lurker around here in the past year....What happened to saabrowski?
11-04-2009, 08:42 PM
#8
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Joined APC: May 2007
Position: A320 CA
Posts: 1,531
And no one ever claimed it would be on the call.
11-04-2009, 08:44 PM
#9
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Joined APC: Dec 2007
Position: Furlough Specialist
Posts: 285
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