Mesa Air files bankruptcy

[Poug Darker]

I know it won't happen, but this is an opportunity for Doug to do the right thing. Every furloughed pilot could be brought back immediately if mainline absorbed the Mesa flying. There's a slew of 737-300s available for lease at penny rates.

That's the first post by you that I've agreed with 1000%.
There might be hope after all.
Cheers.

 

[ClueByFour]

And, if US Airways is successful at getting DCA perimeter rule exemptions for flights to the Caribbean and the West Coast, as proposed by Doug Parker in a recent Crew News session, then these longer range flights could add even more Primary Lines to DCA flying due increased future ASMs.

Won't happen. Will be less successful than the effort to get PANYNJ to let them fly out west.

 

[ClueByFour]

My understanding is that the contract with Mesa actually is expiring this year so US could dump them if they wanted to and I sure hope they do!! The only problem is though, is there another regional out there that has the current resources (or ability to quickly increase the resources) to take over all the flying that Mesa currently operates for US?

US won't replace the flying.

Tempe has been trying to reduce lift (they've got the mainline pilots at essentially the fleet and block hour minimums). The only ways to do that are reduce wholly owned flying or get out of express contracts. This is a golden opportunity to continue to shrink.

I think that's lost on some here--Tempe has no interest in "backfilling" Mesa--this is a perfect opportunity to continue to downsize.

 

[aptboeses]

I don't think it would be a good idea to give Republic ANY flying out of PHX if Mesa is out. Republic already has a large chunk of flying out East. They also are now competitors with the Midwest and Frontier purchases. Not to mention they haven't been playing fair and have been positive spacing crew on US flights to operate their Midwest operation.

No need to fund a competitor any more than we already have to.

 

[FWAAA]

According to this document YES.

The code-share agreement is subject to termination prior to that date in various circumstances including:

* If our flight completion factor or arrival performance in our Phoenix hub falls below certain levels for a specified period of time, subject to notice and cure rights;

* If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement;

Federal bankruptcy law trumps this contract provision and prohibits a termination by US.

 

[USA320Pilot]

I believe both of the comments below are inaccurate:

"I think that's lost on some here--Tempe has no interest in "backfilling" Mesa--this is a perfect opportunity to continue to downsize."

"Federal bankruptcy law trumps this contract provision and prohibits a termination by US."

Regards,

USA320Pilot

 

[USFlyer]

Federal bankruptcy law trumps this contract provision and prohibits a termination by US.

I just spoke to an attorney friend on this. Obviously he knows very little about the details. However, all the Court can do is affirm or terminate the contract. Modifications must be negotiated between the two parties.

If affirmed, the clause stands and US can terminate the agreement. If terminated, there is no contract and US can simply walk away.

 

[aquagreen73s]

"Federal bankruptcy law trumps this contract provision and prohibits a termination by US."

It is a correct statement. The BK judge is authorized to adjust or eliminate contract provisions in the best interests of all the creditors as well as the petitioner. There are due process requirements - notice, hearing, etc. but DP is never an issue as interested parties always show up, even if they're pro se. The BK code is heavily statutory but in reality, at the end of the day there's a lot left up to the judge. Furthermore, Mesa's filing triggers an automatic stay so nobody can do anything right now. This will grind on for quite a while, perhaps even beyond next year's contract expiration with LCC.

 

[av8tor76]

This was posted on another thread. It provides some insight about the contracts Mesa has with other airlines.




All of the facts above can be seen on the Mesa Airlines website under, financial information.

http://phx.corporate-ir.net/phoenix....-reportsAnnual

1. Direct quote from the 2008 annual report:

Airways:
"The code-share agreement is subject to termination prior to that date in various circumstances including: If either US Airways or we become insolvent, file for bankruptcy or fail to pay our debts as they become due, the non-defaulting party may terminate the agreement;"

UA:
The code-share agreement is subject to termination prior to these dates under various circumstances including: If either United or we become insolvent, file bankruptcy or fail to pay debts when due, the non-defaulting party may terminate the agreement;"

DL:
The agreements may be subject to early termination under various circumstances including: If either Delta or we file for bankruptcy, reorganization or similar action or if either Delta or we make an assignment for the benefit of creditors;"

 

[boeingplt]

Works for me!

Could we then call the west base Piedmesa?

How about UPIEDWEST

 

[USA320Pilot]

Here are some key points I know to be factual:

1. US Airways' Mesa "fee for service" agreement expires in less than 12 months on January 1, 2011. This gives US Airways leverage to modifiy terms with Mesa. Another words, if Mesa wants any of US Airways' business before it exists bankrupty then the two companies must negotiate a new mutually acceptable agreement or Mesa will lose all of its US Airways Express flying.

2. US Airways has a plan in place to back fill Mesa flying. US Airways' network restructuring will reduce Express ASMs as ClueByFour indicated, but the vast majority of 2010 Express ASM reductions will come out of LGA. US Airways will have over 99 percent of its network flown with point-to-point service from CLT, DCA, PHL, and PHX. This mainline service requires feed to support longer-haul flying.

3. US Airways has current "fee for service" agreements in place with companies like Air Wisconsin and Republic and must have their LGA ASMs flown some where in the network when LGA Express flying is dramatically reduced due to the Slot Transaction. I understand this flying will be reallocated to CLT, DCA, PHL, and PHX, which will back fill Mesa's current service when removed.

4. The only flying US Airways can contractually remove is that flown by Mesa, Piedmont, PSA, and the 15 E-190s. According to Doug Parker at a recent Crew News Session US Airways has very little room to further reduce flying except the 15 E-190s or its wholly owneds, but at this point there is no intention of reducing PSA and Piedmont's fleet. In addition, I have been told that Piedmont will likely open PHX as a Station and Crew Base.

Regards,

USA320Pilot

 

[USFlyer]

Crazy thought and probably not likely to happen ...

I wonder if there's any benefit to buying some of Mesa's CRJs and Dash-8s and simply integrating the additional aircraft into PSA and Piedmont, respectively. And, not renewing the Mesa agreement come January. This would obviously require cash, etc. and may not be financially advantageous, but it was a thought I had this morning.

 

[cynic]

Crazy thought and probably not likely to happen ...

I wonder if there's any benefit to buying some of Mesa's CRJs and Dash-8s and simply integrating the additional aircraft into PSA and Piedmont, respectively. And, not renewing the Mesa agreement come January. This would obviously require cash, etc. and may not be financially advantageous, but it was a thought I had this morning.

Last I heard PSA still had some 200s parked and pilots on furlough, bringing them back on line would be relatively easy. As for Piedmont, could they operate Q400s out west? I know there were issues with the East pilot contract, would those issues still apply to a "west" operation as well?

 

[USA320Pilot]

post made in error and deleted by author.

Regards,

USA320Pilot

 

[luvn737s]

Mesa has an exclusive right to USAirways Express service in Phoenix. If the judge allows US to break the contract (keep in mind US pays alot of up-front fees [i.e. property taxes, insurance, lease payments, etc.] on Mesa's behalf and will be stuck for those if they do) then they can backfill. Otherwise they are stuck bailing out Orenstein double.

It's not an instant opportunity (nay a "lottery ticket"?) for US that some might believe.