Mesa Air Plans Life After U.s. Airways

[JayBrian]

With US Airways (NasdaqNM:UAIR - News) facing a second filing for bankruptcy protection -- or worse, an out-and-out liquidation -- regional partner Mesa Airlines (NasdaqNM:MESA - News) is quietly laying contingency plans to reinvent itself as a low-cost carrier and replace flights that would be lost as a result if its partner goes under.


http://biz.yahoo.com/ts/040524/10161930_1.html



Jay

 

[C54Capt]

Holy Cow! I hope not.

Well, U, UA, and AWA you created them by awarding them bottom of the barrel contracts for bottom of the barrel services, so now you should have to deal with them. What is this industry coming to. All you Mesa crews: I don't direct this at you, rather the corporate philosophy and actions of your management. But of course you've heard all this before.

 

[E-TRONS]

See what happens when you deal with the devil????

I'm sure Jonny O is getting all his intel from our deposed and beloved dictator himself........

Dave Lorenzo Siegel

 

[delldude]

who's not to say rsa and gecas don't already have a contigency to move their planes to mesa.....??
oh boy this is going to get interesting...real soon..............
wheres a320pilot when ya' need him?? <_<

 

[Stick-n-Rudder]

Are we getting closer to a merger with Virgin Atlantic? A change in a board member is significant don't you think?

Things are awfully quiet for all the problems that U is having. Big things normally happen during such a "quiet" period. Are we in this phase.

Also, can't ignore the compensation that Lakefield gets if there is a merger. There is no money in this for Lakefield unless U is merged with another company. Read Lakefields employment contract.

Don't know if anyone else has heard about Ornstein's message to the employees. He stated Mesa is going to become another Southwest. Some Mesa employees are interpreting his memo as Mesa buying USAir. Mesa would not have to become Southwest if they were buying U. Also, further evidence of Mesa's problems is that they are having to go outside the US for investors. Ornstein stated he is working with a group of investors in Findland. Ornstein has burned his bridges in the investment community in the US. Burn the pension funds and don't you think the banks and investment bankers are aware of what is going on? Your reputation is critical in dealing with the investment community. Mesa no longer has a product. They want to build one. Let's see, Mesa setting up independent companies to increase the price, to increase their profits; who do you think wants to invest in this.

Again, my opinion is Mesa is in deep trouble. U is fighting with Mesa over the ownership of the aircraft. What will Mesa have if they compete directly against U? Don't you think other carriers will void their contracts if Mesa is competing directly with them. Mesa got into the antitrust lawsuit because they wanted to continue to contract with other carriers. Within four months Mesa is becoming another Southwest. Any bets on Mesa's longevity?

Just trying to follow the money!

------------------------------------------------------------

US Airways Group, Inc. Chairman Dr. David G. Bronner said, "We are pleased to have been able to attract such a high-caliber and reputable individual as Ronald Stanley to our board. The Board's actions today reflect an ongoing effort to build and maintain a strong management team and build a partnership with our employees."

Stanley is currently a director of Scholefield, Turnbull & Partners, a business travel consulting firm based in London, vice chairman and director of Decatur Foundry Inc., and strategic partner of Venpartners LLC. He previously was chief operating officer and director, HSBC Equator, and vice president at Harris Bank. He also held several key positions at the Royal Bank of Canada Europe, including general manager, Europe, Middle East and Africa. Stanley was a member of the executive committee for RBC Dominion Securities, culminating a four-year tenure as senior vice president and general manager of the bank's European division. Stanley served in the U.S. Air Force in the U.S., Europe, and South East Asia. He is a veteran of the Vietnam War.

Serck-Hanssen is responsible for US Airways' capital markets and aircraft financing, insurance programs, risk and cash management, pensions, investments programs, treasury, tax and fuel.

Before joining US Airways, Serck-Hanssen spent six years with Northwest Airlines as managing director of finance and assistant treasurer. While at Northwest, his responsibilities included bank and airport bond financing, credit and collections, insurance and risk management, fleet planning, flight profitability, labor analysis, alliance finance and the development of the company's business plans. His professional career included work for PepsiCo, where he oversaw an aggressive program for expansion into Vietnam. He also worked for PricewaterhouseCoopers in London and is a member in good standing of the Institute of Chartered Accountants in England and Wales.

He has an MBA from the University of Chicago, a BA in management science from the University of Kent, UK, and a BSc in civil engineering from University of Bergen, Norway.

 

[USFlyer]

What's funny is we keep hearing all this talk of consolidation ... yet what we're now seeing is anything but consolidation! Sooner or later all of these carriers cherry picking O&D routes will run out of routes to cherry pick. Then it will be interesting to see which LCCs survive.

 

[Stick-n-Rudder]

Hi Pat,

Thanks for posting this information as well as past financials.

There has been much talk about Mesa buying larger aircraft.(B737) Ornstein has wanted to be a "BIG PLAYER" in the industry for many years. Interesting that he has to go over seas to get financing. Especially after he and his right hand man just had the BOD at MESA extend and restructure their respective contracts which allowed them to pocket 2.5 Million dollars in cash! This at a time when MESA has such pure financials! Maybe they are doing the old "get what I can" before MESA no longer exists?

Aside on the Virgin Atlantic thing. The EU and US are currently in negotiations over open skies. There has been quite a bit written about this in the Washington Post, New York Times and WSJ. The EU Aviation Chairperson has spearheaded the need for europe's airlines to become independent entities. In the past each country would finance/subsidize its own airline. US carriers have complained for years that they could not compete with European airlines because the playing field was unfare. The lack of government financing has led to the failure or merger of at least 2 major European airlines. Swiss Air failure, KLM/AirFrance merger and Ailitalia near failure and one or two others that I can't think of.

So are we in the aviation indusrty seeing the beginings of globelization? An interesting comparison is the 1.5 Billion dollar loan that Chrysler Corp. got from the US Government. Chrysler could not compete with Japan. Chrysler had to restructure and become cost competitive. Alan Greenspan is a member of the ATSB and a proponent of globaization. Recently the US government sided with Astar Airlines(DHL) in a lawsiut filed by UPS and FEDEX. UPS/FEDEX claimed that because a majority of DHL's business was with the German postel service that infact this violated the rule that allows a foreign entity to no more than 25% ownership of a US Airline.
That 25% ownership rule has been the road block for Sir Richard Branson entering the US Airline industry.

I do wonder why Sir Richard would want to buy all of the problems associated with US Air instead of starting from scratch with new culture and cheaper labor costs?

Have you heard anything about a merger with America West? That seems to be the latest hot topic?

What aircraft are they fighting about?

 

[the turtle]

another scenario to consider is JO's attempt to curry favor w/U's BOD and current management...let's get everybody all worked up then quickly to the table for more cuts.

just my opinion.

 

[mweiss]

Then it will be interesting to see which LCCs survive.

Indeed. From a purely strategic, intellectual perspective, I'm looking forward to seeing this. I am not, however, looking forward to seeing how it will affect many good people's lives.

 

[mweiss]

I do wonder why Sir Richard would want to buy all of the problems associated with US Air instead of starting from scratch with new culture and cheaper labor costs?

He wouldn't. But what if he could buy LGA slots and access to the ex-EA gates there? Didn't he say he was thinking about being based in NY? And what about the BOS gates? Snag those not for dollars, but in exchange for equity, so as to keep Virgin USA legal.

Still makes a whole lotta sense to me. Not to say that it will happen, but it sure is plausible.

 

[Capecod]

What will Mesa have if they compete directly against U?

Mesa would only start the 737 operation as a backup to the back up and only if U goes CH7. (so we don't have to worry about going head to head with U becacse U will be gone, get it?) Option one, U makes it and life goes on. Option two, another airline (United) picks up the 50 or so rjs that Mesa has flying for U now and life goes on. Option three, one and two fail and Mesa starts the 737 operation out of Pit or Clt and goes on there own with 737's and rjs. Option three would be a total disaster so lets all hope option one works out.

"Again, my opinion is Mesa is in deep trouble."

The only one in DEEP TROUBLE is US Airways. Sorry but true.

"U is fighting with Mesa over the ownership of the aircraft. "

What are you talking about? U and Mesa arn't fight over anything. -Cape

 

[GeezLouis]

who's not to say rsa and gecas don't already have a contigency to move their planes to mesa.....??
oh boy this is going to get interesting...real soon..............
wheres a320pilot when ya' need him??

A320 is probably checking into the local Nervous Hospital!

 

[Stick-n-Rudder]

"The fight, and those are my words, is over who really owns the U aircraft that is being flown at Mesa. The only way Mesa got those planes is with the guarantee from U. Without the guarantee Mesa will be in default of the loan even if Mesa continues to make the payments. If Ornstein does not negotiate with U, one option is for U to file bankruptcy just to terminate the contracts with Mesa. This gives GE the option to pull the planes from Mesa. It is my understanding that U is negotiating to give up some 737's to get back aircraft and terminate the contracts without filing bankruptcy. That is why Mesa is trying to negotiate with the pilots. It is my opinion that this is the reason for the delay in delivery of new airplanes. Not because GE is not willing to finance."

 

[Light Years]

Whoa... explain that last bit Stick n Rudder? Are we talking about CRJs or what? I'm confused.

 

[Capecod]

"The fight, and those are my words, is over who really owns the U aircraft that is being flown at Mesa. The only way Mesa got those planes is with the guarantee from U. Without the guarantee Mesa will be in default of the loan even if Mesa continues to make the payments. If Ornstein does not negotiate with U, one option is for U to file bankruptcy just to terminate the contracts with Mesa. This gives GE the option to pull the planes from Mesa. It is my understanding that U is negotiating to give up some 737's to get back aircraft and terminate the contracts without filing bankruptcy. That is why Mesa is trying to negotiate with the pilots. It is my opinion that this is the reason for the delay in delivery of new airplanes. Not because GE is not willing to finance."

Dude, What are you talking about? This whole post makes no sence. Almost everything you said is wrong. I mean not even in the same ball park. Put down the 40 dawg and get some sleep. -Cape

ps and why are there quotes around the whole post?