Mesa emerges from bankruptcy

 - February 25, 2011, 10:15 AM

Phoenix-based Mesa Air Group expected to emerge from Chapter 11 bankruptcy in February, after the U.S. Bankruptcy Court for the Southern District of New York in late January approved its reorganization plan.

Mesa listed as its main restructuring accomplishments the extension of its code-share agreement with US Airways through September 2015, the elimination of more than 100 aircraft leases and financings that contributed to the "deleveraging" of its balance sheet by $700 million in capitalized leases and $50 million in debt; the restructuring of aircraft leases and financings for its fleet of Bombardier CRJ200s and Dash 8s, resulting in flexibility and no long-term lease exposure on the 50-seat CRJ200s; and its emergence as a private company, issuing new notes, common stock and warrants to its creditors.

During its restructuring, Mesa cut the size of its fleet from 178 airplanes to 76 CRJ700 and CRJ900 regional jets, while losing a long fight to maintain its Delta Connection code-share contract. The plan cedes control of the carrier to unsecured creditors and grants US Airways a 10-percent stake in the regional group. Mesa and its various units operate as US Airways Express, United Express and go!Mokulele in Hawaii.