Mesa Air Group (MESA) Files for Bankruptcy Protection Under Chapter 11
January 05, 2010 2:08 PM
Mesa Air Group (NASDAQ: MESA) is planning to undergo major restructuring operations as it files for bankruptcy under chapter 11. Mesa provides regional service for US Airways Group Inc (NYSE: LCC), Delta Air Lines (NYSE: DAL) and other carriers.
Mesa currently has about 700 daily system departures to 127 cities in the United States, Canada and Mexico. It is planning to downsize its unused fleet because of the rising fuel prices and drop in travel demand. Almost 50% of Mesa’s fleet is idle and it hopes to achieve cost efficiency by getting rid of this excess fleet.
Mesa shares plunged 55 percent to about 5 cents in midday trading because of this bankruptcy announcement. Usually, new shares are issued when a company emerges from Chapter 11. However, Brian Gillman, Mesa's general counsel, said it was too soon to say whether Mesa would issue new shares.
