UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A


(RULERule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT


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14a-12

MESA AIR GROUP, INC.

(Name of Registrant as Specified In Itsin its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)



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Note: PDF provided as a courtesy

MESA AIR GROUP, INC.


410 North 44th Street,
Suite 100
Phoenix, Arizona 85008

TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
ELECTION OF DIRECTORS
CORPORATE GOVERNANCE
REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
DISCLOSURE OF AUDIT AND NON-AUDIT FEES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
EXECUTIVE COMPENSATION AND RELATED INFORMATION COMPENSATION DISCUSSION & ANALYSIS
NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2007
DIRECTOR COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

NOTICE OF ANNUALSPECIAL MEETING OF SHAREHOLDERS

To Be Held on April 17,December 22, 2008

To Our Shareholders:

The 2008 AnnualSpecial Meeting of Shareholders of MESA AIR GROUP, INC., a Nevada corporation (the “Company”"Company"), will be held at the Company’s offices,Company's headquarters, which are located at 410 N.North 44th Street, Suite 160,100, Phoenix, Arizona 85008 on April 17,December 22, 2008, at 10:00 a.m., Arizona time, for the following purposes:

1. To elect eight (8) directors to serve for a one-year term;
2. To ratify the selection of Deloitte & Touche LLP as independent registered public accountants for the Company; and
3. To transact such other business as may properly come before the meeting or any postponement(s) or adjournment(s) thereof.
Our

  1. To approve the issuance of such number of shares of the Company's common stock as may be necessary to repurchase all of its outstanding Senior Convertible Notes due 2023 and Senior Convertible Notes due 2024 if the Company is required by noteholders to repurchase such notes in accordance with the indentures under which the notes were issued and certain related contractual agreements with respect to the 2023 notes, and if the Company elects to satisfy all or a portion of its repurchase obligations by issuing shares of its common stock;

  2. To approve the issuance, if necessary, of shares of the Company's common stock that may result in a person, persons, a group, or groups acquiring more than 20% of the company's outstanding common stock due to the Company's issuance of shares of common stock in satisfaction of its note repurchase obligations;

  3. To approve the amendment of the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 75,000,000 shares to 900,000,000 shares; and

  4. To transact such other business as may properly come before the meeting or any postponement(s) or adjournment(s) thereof.

Management of the Company cordially invites you to attend the special meeting and vote on these important matters. The attached Proxy Statement explains the reasons for the proposals and why the Company's Board of Directors encourages you to vote for approval of each of the proposals.

The Company's Board of Directors has fixed the close of business on March 3,November 10, 2008, as the record date for the determination of shareholders entitled to notice of and to vote at the special meeting or any postponementpostponement(s) or adjournmentadjournment(s) thereof. Shares of the Company’sCompany's common stock may be voted at the meeting only if the holder is present at the meeting in person or by valid proxy. A copy of the Company’s 2007 Annual Report, which includes audited financial statements, was mailed with this Notice and Proxy Statement to all shareholders of record on the record date.

Management of the Company cordially invites you to attend the Annual Meeting. Your attention is directed to the attached Proxy Statement for a discussion of the foregoing proposals and the reasons why the Board of Directors encourages you to vote for approval of Proposals 1 and 2.

By Order of the Board of Directors

JONATHAN G. ORNSTEIN

JONATHAN G. ORNSTEIN


Chairman of the Board and Chief Executive Officer

Phoenix, Arizona

March 14,
November [_], 2008

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IMPORTANT: IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THIS MEETING. PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

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MESA AIR GROUP, INC.
410 North 44th Street, Suite 100
Phoenix, Arizona 85008

PROXY STATEMENT

The Board of Directors (the "Board") of MESA AIR GROUP, INC., a Nevada corporation (the “Company”"Company"), is soliciting proxies to be used at the 2008 annuala special meeting of shareholders of the Company to be held on April 17,December 22, 2008, at 10:00 a.m., Arizona time, atthe Company's headquarters, which are located at the Company’s offices, 410 N.North 44th Street, Suite 160,100, Phoenix, Arizona 85008, and any adjournment(s) or postponement(s) thereof (the “Annual Meeting”"Special Meeting"). This proxy statementProxy Statement and the enclosed form of proxy will be mailed to shareholders beginning March 14,November [__], 2008.

QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT

Q: What am I voting on?

A: You are voting on three proposals:

First, the issuance of such number of shares of the Company's common stock, no par value per share (the "Common Stock"), as may be necessary for the Company to repurchase its outstanding Senior Convertible Notes due 2023 (the "2023 Notes") and Senior Convertible Notes due 2024 (the "2024 Notes", and together with the 2023 Notes, the "Senior Notes"), if the Company is required by noteholders to repurchase the 2023 Notes in accordance with the Forbearance Agreements Relating to Senior Convertible Notes due 2023 previously entered into between the Company and certain holders of the 2023 Notes (collectively, the "Forbearance Agreements") and the Indenture dated June 16, 2003 (the "2003 Indenture"), and if the Company is required by noteholders to repurchase the 2024 Notes in accordance with the Indenture dated February 10, 2004 (the "2004 Indenture"), and in each case, if the Company elects to satisfy all or a portion of its repurchase obligations by issuing shares of Common Stock;

Second, if the Company is required by noteholders to repurchase the 2023 Notes or the 2024 Notes in accordance with the Forbearance Agreements or the 2004 Indenture, respectively, and if the Company elects to satisfy either, or both, of these repurchase obligations by issuing shares of Common Stock, the issuance by the Company, if necessary, of such number of shares of Common Stock as may result in a person, persons, a group, or groups holding more than 20% of the outstanding Common Stock due to the Company issuing shares of Common Stock in satisfaction of its repurchase obligations;

Three, the amendment of the Company's Articles of Incorporation to increase the number of authorized shares of Common Stock.

For a detailed description regarding the number of shares of Common Stock that may ultimately be issuable if the proposals are approved, see the Section of this Proxy Statement entitled "The Effect of the Common Stock's Market Price."

Q: Why does the Company Need to Hold this Vote?

A: Under the 2003 Indenture, the holders of the Company's 2023 Notes had the right to require the Company to repurchase the 2023 Notes on June 16, 2008 (the "2008 Put Right") at a price of $397.27 per $1,000 of 2023 Notes. During May of 2008, the Company and holders of approximately $77.8 million in aggregate face amount of 2023 Notes (collectively, the "Forbearing Holders") entered into Forbearance Agreements, pursuant to which the Forbearing Holders agreed to forebear from exercising their 2008 Put Rights, in exchange for the Company granting the Forbearing Holders, among other things, the right to require the Company to repurchase their outstanding 2023 Notes on January 31, 2009 (the "Forbearance Put Right") at a price of $412.89 per $1,000 of 2023 Notes. While the Company cannot predict if some or all of the Forbearing Holders will exercise their Forbearance Put Rights, if all of the Forbearing Holders exercise their Forbearance Put Rights, the Company will be required to repurchase their 2023 Notes on January 31, 2009 for approximately $23.1 million in cash, Common Stock or a combination thereof.

Holders of the Company's 2024 Notes have the right to require the Company to repurchase the 2024 Notes on February 10, 2009 (the "2009 Put Right") at a price of $583.40 per $1,000 of 2004 Notes, plus any accrued and unpaid cash interest. While the Company cannot predict if some or all of these noteholders will exercise their 2009 Put Rights, if all of the holders of the outstanding 2024 Notes exercise their 2009 Put Rights, the Company will be required to repurchase the 2024 Notes on February 10, 2009 for approximately $71.4 million in cash, Common Stock or a combination thereof.

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If the Company elects to use shares of Common Stock to satisfy its repurchase obligations for either, or both, of the Forbearance Put Rights or 2009 Put Rights (collectively, the "Note Repurchase Obligations"), Nasdaq rules require that it not issue more than 20% of its outstanding Common Stock, in the aggregate, without shareholder approval. Without shareholder approval, the Company would only be able to issue up to 5,385,071 shares of Common Stock to satisfy its Note Repurchase Obligations. As an example, if the trading price of the Company's Common Stock as calculated under either the 2003 Indenture or 2004 Indenture is $0.35 per share, the Company could only issue enough stock to satisfy approximately $1.9 million of its Note Repurchase Obligations, and would be forced to use $92.6 million in cash. The Company is seeking shareholder approval for the issuance of additional shares of Common Stock in the event it elects to use such additional shares to satisfy all or a portion of its Note Repurchase Obligations. As of the date of this proxy, the Company intends to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations.

If the Company uses shares of Common Stock to satisfy its Note Repurchase Obligations, Nasdaq rules require that it not issue securities if it will result in a "change of control" of the Company, without shareholder approval. Under the Nasdaq rules, a "change of control" occurs when a person or group acquires 20% or more of the common stock, or 20% or more of the voting power, of a company upon the completion of an issuance of securities. Without shareholder approval, the Company would be limited to the number of shares of Common Stock it could issue to any person or group to satisfy its Note Repurchase Obligations to that person or group, and would force the Company to use cash to satisfy the remainder of its Note Repurchase Obligations to these parties. The Company is seeking shareholder approval for the issuance of shares of Common Stock that would result in a change of control, in the event that the Company elects to use such additional shares to satisfy all or a portion of its Note Repurchase Obligations, and the payment of its Note Repurchase Obligations results in a noteholder acquiring more than 20% of the Company's Common Stock as a result of the satisfaction of the Note Repurchase Obligations.

Currently, the Company's Articles of Incorporation authorize the Company to issue up to 75,000,000 shares of Common Stock, of which 26,925,359 shares are outstanding as of November 10, 2008. If the Company elects to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations, the Company will have to issue approximately 270,000,000 shares of Common Stock (assuming a price of $0.35 per share for the Company's Common stock) to the Forbearing Holders and the holders of the 2024 Notes, collectively. Without shareholder approval of the amendment to the Articles of Incorporation, as of November 10, 2008, the Company would only be able to issue up to 48,074,641 shares of Common Stock to satisfy its Note Repurchase Obligations. For purposes of example only, if the trading price of the Company's Common Stock as calculated under either the 2003 Indenture or 2004 Indenture is $0.35 per share, the Company would only have authorized capital to issue enough stock to satisfy approximately $16.8 million of its Note Repurchase Obligations and would be forced to use $77.7 million in cash. The Company is seeking shareholder approval for the amendment of its Articles of Incorporation to increase the amount of Common Stock the Company is authorized to issue, which will be necessary in the event the Company elects to issue additional shares of Common Stock to satisfy all or a portion of its Note Repurchase Obligations.As stated above, the Company intends to issue shares of its Common Stock to satisfy all or a portion of its Note Repurchase Obligations.

Q: Who Can Vote

Vote?

A: Shareholders of record as of the close of business on March 3,November 10, 2008 (the “Record Date”"Record Date"), may vote at the AnnualSpecial Meeting and at any adjournment or postponement of the meeting. Each shareholder has one vote for each share of Common Stock held of record on the Record Date. On the Record Date, 26,879,88926,925,359 shares of the Company’s common stock, no par value per share (the “Common Stock”),Company's Common Stock were issued and outstanding.

Q: How You Can Vote

I Vote?

A: All valid proxies received by the Secretary of the Company before the AnnualSpecial Meeting and not revoked will be exercised. All shares represented by proxy will be voted, and where a shareholder specifies by means of his or her proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the specifications so made. If you do not specify on your proxy how you want to vote your shares and authority to vote is not specifically withheld, weyour shares will vote your sharesbe voted as follows: (i) “for”"for" the electionapproval of the persons named in the proxy to serve as directors; (ii) “for” the ratificationissuance of Deloitte & Touche LLP (“Deloitte & Touche”) as the independent registered public accountantssuch number of shares of the Company;Company's Common Stock as may be necessary to repurchase all of its outstanding Senior Notes if the Company is required to repurchase the 2023 Notes or the 2024 Notes in accordance with the Forbearance Agreements or the 2004 Indenture, respectively, and if the Company elects to satisfy all or a portion of its Note Repurchase Obligations by issuing shares of Common Stock ("Proposal No. 1"); (ii) "for" the approval of the issuance, if necessary, of such number of shares of Common Stock as may result in a person, persons, a group, or groups holding more than 20% of the outstanding Common Stock due to the Company issuing shares of Common Stock in satisfaction of all or a portion of its Note

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Repurchase Obligations as provided for in Proposal No. 1 ("Proposal No. 2"); (iii) "for" the amendment of the Company's Articles of Incorporation to increase the number of authorized shares of common stock ("Proposal No. 3"); and (iv) to transact such other business as may properly come before the meeting or any postponement(s) or adjournment(s) thereof. Shareholders who hold their shares in “street name”"street name" (i.e., in the name of a bank, broker or other record holder) must vote their shares in the manner prescribed by their brokers. If you attend the meeting, you may deliver your completed proxy card in person or you may vote by completing a ballot, which will be available at the meeting.

How You

Q: Can I Revoke Your Proxy

My Proxy?

A: You can revoke your proxy at any time before it is exercised in one of three ways:

(1) by delivering to the Secretary of the Company a written instrument of revocation bearing a date later than the date of the proxy.

(2) by duly executing and delivering to the Secretary of the Company a subsequent proxy relating to the same shares.

(3) by attending the meeting and voting in person, provided that the shareholder notifies the Secretary at the meeting of his or her intention to vote in person at any time prior to the voting of the proxy.

Required Votes
• Election of Directors.  The eight (8) nominees for director receiving the highest number of votes FOR election will be elected as directors. This is called a plurality. Abstentions are not counted for purposes of electing directors. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. Votes that are withheld will not be included in the vote tally for the election of directors. Banks and brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name for the election of directors. Shares that are not voted will have no effect on the results of this vote.
• Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm.  The affirmative vote of a majority of shares present in person or represented by proxy is required to ratify

Q: What is the Quorum Requirement of the Meeting?

A: A majority of the outstanding shares of Common Stock on November 10, 2008, constitutes a quorum for voting at this Special Meeting. If you vote, your shares will be part of the quorum. Abstentions and broker non-votes will be counted in determining the quorum, but neither will be counted as votes cast. On November 10, 2008, there were 26,925,359 shares outstanding.

Q: What Vote is Required?

Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2008. Abstentions are counted as “shares present” at the meeting for purposes of determining if a quorum exists. Abstentions and unvoted shares will have the effect of votes against this proposal. Banks and brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. We are not required to obtain the approval of our shareholders to select our independent registered public accounting firm. However, if our shareholders do not ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2008, the Audit Committee of our Board of Directors will reconsider its selection.
Dissenter’sA:Under Nasdaq rules, with respect to Proposals No. 1 and No. 2, and Nevada law, with respect to Proposal No. 3, the affirmative vote of a majority of shares present in person or represented by proxy is required to approve Proposals No. 1, No. 2 and No. 3. Abstentions are treated as "shares present" at the meeting for purposes of determining if a quorum exists but will have no effect on the results of this vote.

Brokers holding shares for beneficial owners must vote these shares according to specific instructions they receive from beneficial owners. If specific instructions are not received, brokers may be precluded from exercising their discretion, depending on the type of proposal involved. Shares as to which brokers have not exercised discretionary authority or received instructions from beneficial owners are considered "broker non-votes," and will be treated as "shares present" for purposes of determining whether there is a quorum, but will have no effect on the result of the vote.

Q: Are there any Dissenter's Rights or Appraisal

Rights?

A: Pursuant to applicable Nevada law, there are no dissenter’sdissenter's or appraisal rights relating to the matters to be acted upon at the AnnualSpecial Meeting.

Q: Who is Soliciting my Proxy to Vote on these Proposals?

A: The Company's Board of Directors is requesting your proxy to vote on these proposals.

Q: What is the Voting Recommendation of the BoardOtherof Directors?

A: The Board recommends a vote "FOR" each of the three proposals.

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Q: Will any other Matters to Be Acted Upon at the Meeting

We doMeeting?

A: The Company does not know of any matters other than the electionproposals relating to; (i) the authorization of directorsthe Company to issue shares of Common Stock to satisfy all or a portion of its Note Repurchase Obligations, if it elects to issues shares of Common Stock to satisfy these obligations, (ii) the authorization of the Company to issue 20% or more of the Company's Common Stock, if necessary, to any person, persons, group, or groups to satisfy all or a portion of its Note Repurchase Obligations, and (iii) the ratificationamendment of independent registered public accountantsthe Company's Articles of Incorporation to increase the number of authorized shares of Common Stock, that are expected to be presented for consideration at the AnnualSpecial Meeting. If any other matters are properly presented at the meeting, the shares represented by proxies will be voted in accordance with the judgment of the personsproxyholder voting those shares.

Solicitation

Q: Who is Paying for this Solicitation?

A: The cost of soliciting proxies, including the cost of preparing and mailing the Notice and Proxy Statement, will be paid by the Company. Solicitation will be primarily by mailing this Proxy Statement to all shareholders entitled to vote at the meeting. Proxies may also be solicited by officers and directors of the Company personally or by telephone or facsimile, without additional compensation. The Company may reimburse brokers, banks and others holding shares in their names for others for the cost of forwarding proxy materials and obtaining proxies from beneficial owners.

Communications with

The Company has engaged the BoardAltman Group, a professional proxy solicitor, to solicit proxies on its behalf. The Company anticipates that the cost for the Altman Group's proxy solicitation services will be approximately $5,500 plus certain additional fees the Company incurs relating to contacting shareholders and out of Directors

Shareholders may communicate withpocket costs.

Q: Who Should I Contact if I Have any Questions?

A: If you have any questions before you vote, please contact the Company's proxy solicitor, The Altman Group, toll- free at 1-800-314-9816, and all members of our Board of Directors by transmitting correspondence by mail or facsimile addressed to one or more directors by name or, for a communication to the entire board, to the Chairman of the Board at the following address and fax number:state that you are calling about Mesa Air Group, Inc.

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PROPOSAL NO. 1 TO BE VOTED ON

ISSUANCEOF SUCH NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK AS MAY BE NECESSARY TO REPURCHASE ALL OF ITS OUTSTANDING SENIOR CONVERTIBLE NOTES DUE 2023 AND SENIOR CONVERTIBLE NOTES DUE 2024 IF THE COMPANY IS REQUIRED BY NOTEHOLDERS TO REPURCHASE SUCH NOTES IN ACCORDANCE WITH THE INDENTURES UNDER WHICH THE NOTES WERE ISSUED AND CERTAIN RELATED CONTRACTUAL AGREEMENTS WITH RESPECT TO THE 2023 NOTES, AND IF THE COMPANY ELECTS TO SATISFY ALL OR A PORTION OF ITS REPURCHASE OBLIGATIONS BY ISSUING SHARES OF ITS COMMON

Background

On June 16, 2003, the Company issued senior convertible notes due June 16, 2023 (the "2023 Notes"),c/o Corporate Secretary, 410 North 44th Street, Suite 100, Phoenix, Arizona 85008; facsimile:(602) 685-4352.

Communications which resulted in gross proceeds of $100.1 million. Pursuant to the indenture dated June 16, 2003 (the "2003 Indenture"), among the Company, certain subsidiaries of the Company as guarantors, and US Bank N.A. as trustee (the "Trustee"), the holders of the 2023 Notes had the right to require the Company to repurchase the 2023 Notes on June 16, 2008 (the "2008 Put Rights") at a price of $397.27 per $1,000 of 2023 Notes plus any accrued and unpaid cash interest.

During May of 2008, the Company and holders of approximately $77.8 million in the aggregate face amount of 2023 Notes (collectively, the "Forbearing Holders") entered into Forbearance Agreements Relating to Senior Convertible Notes Due 2023 (collectively, the "Forbearance Agreements"), pursuant to which the Forbearing Holders agreed to forebear from our shareholdersexercising their 2008 Put Rights. In exchange for this forbearance, the Company agreed to: (i) redeem 25% of the aggregate principal amount of each Forbearing Holder's 2023 Notes (collectively, the "Forbearing Holders 25% Redemptions"), in cash, at a price of $297.95 per $1,000 of 2023 Notes, (ii) issue the Forbearing Holders warrants to onepurchase 25,000 shares of Common Stock for each $1,000,000 in aggregate principal amount of 2023 Notes they agreed to forebear, and (iii) grant each Forbearing Holder the right to require the Company to repurchase all of their 2023 Notes on January 31, 2009 (the "Forbearance Put Rights") at a price of $412.89 per $1,000 of 2023 Notes. As a result of the Forbearing Holders 25% Redemptions, the Company redeemed approximately $19.5 million in aggregate face amount of 2023 Notes held by the Forbearing Holders in May of 2008, which leaves approximately $55.9 million in the aggregate face amount of 2023 Notes subject to the Forbearance Put Rights.

On June 16, 2008, holders of approximately $36.8 million in aggregate face amount of 2023 Notes who did not enter into Forbearance Agreements, exercised their 2008 Put Rights with respect to their 2023 Notes. Pursuant to the terms of the 2003 Indenture, the Company was required to repurchase the 2023 Notes for approximately $14.8 million, which the Company elected to pay for in cash.

On February 10, 2004, the Company issued senior convertible notes due February 10, 2024 (the "2024 Notes"), which resulted in gross proceeds of $100.0 million. Pursuant to the indenture dated February 10, 2004 (the "2004 Indenture"), among the Company, certain subsidiaries of the Company as guarantors, and the Trustee, the holders of the 2024 Notes have the right to require the Company to repurchase the 2024 Notes on February 10, 2009 (the "2009 Put Right") at a price of $583.40 per $1,000 of 2024 Notes, plus any accrued and unpaid cash interest. As a result of prior conversions of the 2024 Notes by holders, and the Company's repurchase of 2024 Notes on the open market, as of November 10, 2008, there were approximately $122.4 million in aggregate face amount of 2024 Notes outstanding.

If all of the Forbearing Holders exercise their Forbearance Put Rights, and all the holders of the 2024 Notes exercise their 2009 Put Right, the Company will be required to repurchase the Forbearing Holders' 2023 Notes for approximately $23.1 million on January 31, 2009, and the outstanding 2024 Notes for approximately $71.4 million on February 10, 2009, with an aggregate total of $94.5 million, in cash, shares of Common Stock or a combination thereof. The Company has the right to elect whether to use cash, shares of Common Stock or a combination thereof to repurchase the 2023 Notes under the Forbearance Put Rights and also the 2024 Notes pursuant to the 2009 Put Rights. If the holders of either, or both of, the 2023 Notes or the 2024 Notes exercise their Forbearance Put Rights or their 2009 Put Rights, respectively, the Company intends to issue shares of Common Stock to satisfy all of its note repurchase obligations.

If the Company uses shares of Common Stock to satisfy all or a portion of its repurchase obligations for either, or both, of the Forbearance Put Rights or the 2009 Put Rights (collectively, the "Note Repurchase Obligations"), Nasdaq rules require that it not issue more than 20% of its Common Stock, in the aggregate, without shareholder approval. Unless the Company obtains shareholder

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approval, it would only be able to issue up to 5,385,071 shares of Common Stock in satisfaction of its Note Repurchase Obligations (based on 26,925,359 shares of Common Stock outstanding). As an example, if the trading price of the Company's Common Stock for purposes of either the 2003 Indenture or 2004 Indenture was $0.35 per share, the Company could issue stock to repurchase approximately $1.9 million of the 2023 Notes or 2024 Notes and would be forced to use $92.6 million in cash to satisfy its remaining Note Repurchase Obligations. The Company is seeking shareholder approval to issue a sufficient number of shares of Common Stock in the event it elects to use shares of Common Stock to satisfy all of its Note Repurchase Obligations. The terms of the 2023 Notes and 2024 Notes are described in greater detail below in the sections entitled "Material Terms of the 2023 Notes" and "Material Terms of the 2024 Notes," respectively.

Why the Company is Seeking Shareholder Approval

In the event that the holders of the Senior Notes request that the Company repurchase their notes, the Company intends to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations. As explained in additional detail below, the Company's ability to use shares of Common Stock to satisfy its Note Repurchase Obligations it is subject to the following limitations:

Applicable NASDAQ Rules

The Marketplace Rules of the NASDAQ Stock Market (the "NASDAQ Rules") require shareholder approval in connection with a transaction for the sale, issuance or potential issuance by the Company of shares of Common Stock (or securities convertible into or exercisable for Common Stock) equal to 20% or more of the Common Stock outstanding before the issuance, when the issuance of the shares is for less than the greater of book or market value of the stock. Based on how the value of shares of Common Stock used in connection with repurchases are calculated under the 2003 Indenture and 2004 Indenture, respectively, and on the current book and market value of our Common Stock, our use of Common Stock to satisfy our Note Repurchase Obligations could result in the issuance of shares for less than the greater of book or market value. As of November 10, 2008, the Company had 26,925,359 shares of Common Stock outstanding. Accordingly, in connection with any repurchase of notes pursuant to our Note Repurchase Obligations, based on recent stock prices, unless the Company obtains shareholder approval, the Company may only issue up to 5,385,071 shares of Common Stock to satisfy its Note Repurchase Obligations without prior shareholder approval.

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The Effect of the Common Stock's Market Price

If the Company uses shares of Common Stock to satisfy all or a portion of its Note Repurchase Obligations, it will be collected and organized by our Corporate Secretary. The Corporate Secretary will forward all communicationsrequired to issue that number of shares equal to the Chairmanquotient obtained by dividing (i) the amount of cash to which the BoardForbearing Holders or the holders of 2004 Notes would have been entitled had the Company elected to the identified director(s) as soon as practicable, although communications that are abusive, in bad taste or that present safety or security concerns may be handled differently. If multiple communications are received on a similar topic, the Corporate Secretary may, in his discretion, forward only representative correspondence.

The Chairman of the Board will determine whether any communication addressed to the entire Board of Directors should be properly addressed by the entire Board of Directorspay all or a committee thereof. If a communication is sent to the Board of Directors or a committee, the Chairman of the Board or the chairman of that committee,specified percentage, as the case may be, will determine whetherof the repurchase price in cash by (ii) the market price of a responseshare of Common Stock. The "market price" of Common Stock means the average of the closing sale price of the Company's Common Stock for the five trading day period ending on the third business day (if the third business day prior to January 31, 2009 and February 10, 2009, respectively, is a trading day or, if not, then on the last trading day) prior to January 31, 2009 with respect to the communication is warranted. If it is determined that a response2023 Notes, or February 10, 2009 with respect to the communication is warranted,2024 Notes, appropriately adjusted to take into account the contentoccurrence, during the five trading day period, of certain events (i.e. stock splits, rights issuances and methodother distributions).

The below table illustrates the effect of the responsemarket price for the Company's Common Stock and the resulting amount of Common Stock that may be coordinated with our counsel.


2

issued without shareholder approval.

Market Price

Number of Shares
issuable without
Shareholder Approval

Maximum Value of Notes that
Newly Issued Common
Stock can Repurchase

   

$0.40

5,385,071

$2,154,028.40

$0.35

5,385,071

$1,884,774.85

$0.30

5,385,071

$1,615,521.30

$0.25

5,385,071

$1,346,267.75

$0.20

5,385,071

$1,077,014.20

$0.15

5,385,071

$807,760.65

$0.10

5,385,071

$538,507.10

ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
General Information
The Company’sCompany cannot predict what the applicable market price will ultimately be, but has used the above table for illustrative purposes. Each increase/decrease of $0.05 per share would result in an increase/decrease of $269,000 in the amount of Senior Notes that the Company could repurchase using Common Stock. The Company has considered the possible impact of a decline in the price of its Common Stock from its current directors are Jonathan G. Ornstein, Daniel J. Altobello, Robert Beleson, Carlos E. Bonilla, Joseph L. Manson, Peter F. Nostrand, Maurice A. Parkerlevel and Richard R. Thayer. Their terms expire uponis seeking approval to issue such number of shares of the electionCompany's Common Stock as may be necessary to repurchase all of 2023 Notes and qualification2024 Notes if the Company is required by the Forbearing Holders and the holders of 2024 Notes to repurchase all of their successors atSenior Notes, and if the Annual Meeting. The Board has nominated eachCompany elects to satisfy all or a portion of these current directors as nominees for election as directors inits Note Repurchase Obligations by issuing shares of Common Stock. Furthermore, the election to be held atprice of the Annual Meeting. The Board intends to vote its proxiesCompany's Common Stock could significantly decline between January 31, 2009, the exercise date of the Forbearing Put Right, and February 10, 2009, the exercise date for the election2009 Put Right.

The below table illustrates the effect of its nominees, for a term to expire at the Company’s 2009 Annual Meeting.

If unforeseen circumstances make it necessarymarket price for the BoardCompany's Common Stock, and the resulting amount of Directors to substitute another person for anyCommon Stock that the Company must issue, if all Forbearing Holders and the holders of the nominees, we will vote your shares “for” that other person, or, if no substitute is selected by the Board prior to or at the Annual Meeting, for a motion to reduce the present membership of the Board to the number of nominees available. We know of no reason why any nominee would be unable or unwilling to accept nomination or election. The information concerning the nominees and their share holdings in the Company has been furnished by the nominees to the Company.
The eight (8) nominees receiving a plurality of votes by shares represented and entitled to vote at the Annual Meeting, if a quorum is present, will be elected as directors of the Company.
The following table sets forth the names and ages of the directors of the Company:
Name
Age
Position
Jonathan G. Ornstein50Chairman of the Board
Daniel J. Altobello66Director
Robert Beleson57Director
Carlos E. Bonilla53Director
Joseph L. Manson58Director
Peter F. Nostrand60Director
Maurice A. Parker62Director
Richard R. Thayer50Director
Directors
Biographical information regarding our directors is set forth below.
Jonathan G. Ornsteinwas appointed President and Chief Executive Officer of the Company effective May 1, 1998. Mr. Ornstein became a director in January 1998. Mr. Ornstein assumed the role of Chairman of the Board in June 1999. On June 21, 2000, Mr. Ornstein relinquished his position as President of2024 Notes require the Company to Michael J. Lotz. From April 1996 until joiningrepurchase all of their Senior Notes, and if the Company as Chief Executive Officer, Mr. Ornstein served as Presidentelects to satisfy its Note Repurchase Obligations solely by issuing shares of Common Stock.

Market Price

Maximum Note
Repurchase Obligation

Number of Shares of Common
Stock that the
Company Must Issue

   

$0.40

$94,500,000

236,000,000

$0.35

$94,500,000

270,000,000

$0.30

$94,500,000

315,000,000

$0.25

$94,500,000

378,000,000

$0.20

$94,500,000

472,000,000

$0.15

$94,500,000

630,000,000

$0.10

$94,500,000

945,000,000

The Company wishes to retain the flexibility to use all cash, all stock or a combination thereof to satisfy its Note Repurchase Obligations in the event that the Forbearing Holders and Chief Executive Officerthe holders of 2024 Notes exercise their Forbearing Put Rights and Chairman2009 Put

10

Rights, respectively. However, in the event that a significant number of Virgin Express S.A./N.V., a European airline. From 1995 to April 1996, Mr. Ornstein served as Chief Executive Officerthe holders of Virgin Express Holdings, Inc. Mr. Ornstein joined Continental Express Airlines, Inc. as President and Chief Executive Officer in July 1994 and, in November 1994, was namedthe Senior Vice President, Airport Services at Continental Airlines, Inc. Mr. Ornstein was previously employed byNotes request that the Company from 1988 to 1994, as Executive Vice President and as President of the Company’s subsidiary, WestAir Holding, Inc.

Daniel J. Altobellohas served as a director ofrepurchase their notes, the Company since January 1998 and is the current Lead Director. Mr. Altobello also serves as a memberintends to issue shares of the Compensation Committee and as an ex-officio non-voting member of the Nominating & Corporate Governance Committee. Mr. Altobello is currently the Chairman of Altobello Family Partners, an investment company and is the retired Director and Chairman of Onex FoodServices, the parent corporation of Caterair International, Inc. and LSG/SKY Chefs. From 1989its Common Stock to 1995, Mr. Altobello served as Chairman, President and Chief Executive Officer of Caterair International Corporation. From 1979 to 1989, he held various managerial positions with the food service management and in-flight catering divisions of Marriott


3

Corporation, including Executive Vice President of Marriott Corporation and President of Marriott Airport Operations Group. Mr. Altobello began his management career at Georgetown University as Vice President of Administration Services. He is a member of the board of directors of Friedman, Billings and Ramsey Group, Inc., Diamond Rock Hospitality Trust and JER Investors Trust, all reporting companies, and an advisory director of Thayer Capital Partners, a private company. He is a trustee of Loyola Foundation, Inc. Mr. Altobello obtained a bachelor of arts in English from Georgetown University and a master of business administration from Loyola College.
Robert Belesonwas elected as a director of the Company in October 2003. Mr. Beleson also serves as Chairman of the Nominating & Corporate Governance Committee and is a member of the Audit Committee. In November 2004, he became the Chief Executive Officer of Christiana Spirits Incorporated and served in that capacity until September 2007. Mr. Beleson is also an equity investor in Christiana Spirits Incorporated and currently serves as its Chairman. Since May 2002, Mr. Beleson has also provided marketing and strategic planning consulting services to select clients in the aviation and wine and spirit industries. This consulting service was formally organized as Brookfield Marketing, L.L.C. on October 1, 2003. From July 2001 to April 2002, he served as Chief Marketing Officer for Avolar, a former division of United Airlines. From March 1996 to December 2000, he served as President of M. Shanken Communications, Inc., New York, New York. From May 1991 to February 1996, he served as Chief Marketing Officer for Playboy Enterprises. Mr. Beleson received a bachelor of science from Cornell University School of Industrial and Labor Relations and a master of business administration from Harvard Business School.
Carlos E. Bonillawas elected as a director of the Company in April 2006. Mr. Bonilla also serves as a member of the Compensation Committee. He is currently Senior Vice President of the Washington Group, a government relations firm and has been with such firm since March 2003. He previously served, from January 2001 until March 2003, as a Special Assistant to President George W. Bush, focusing on a variety of transportation and pension issues. Mr. Bonilla received a bachelor of arts in economics from American University and a master of arts in economics from Georgetown University.
Joseph L. Mansonhas been a director of the Company since July 2001. Mr. Manson also serves as a member of the Nominating & Corporate Governance Committee. Mr. Manson joined the Washington, D.C. office of the law firm Baker & Hostetler LLP as a partner in February 2005. Prior to joining Baker & Hostetler, Mr. Manson was employed with Piper Rudnick LLP (which merged with Verner Liipfert Bernhard McPherson and Hand) since 1974. Mr. Manson received a bachelor of science from the University of Virginia and a doctorate in jurisprudence from Emory University.
Peter F. Nostrandwas elected as a director of the Company in April 2005. Mr. Nostrand also serves as Chairman of the Compensation Committee and is a member of the Audit Committee. He is currently the Chairman Emeritus, SunTrust, Greater Washington where he has served in a variety of functional divisions including International, National, Energy, Commercial and Retail beginning in June 1973. Mr. Nostrand received a bachelor of arts from Amherst College and a master of education from the University of Virginia.
Maurice A. Parkerhas been a director of the Company since November 1998. Mr. Parker has served as Executive Director of Regional Aviation Partners since April 2001. From 1978 to January 1997, Mr. Parker served as a Federal Mediator for the National Mediation Board of the United States government. From 1997 to the present, Mr. Parker has worked as an independent arbitrator, mediator and consultant. Mr. Parker obtained a bachelor of science in technical education from the University of Houston and a doctorate in jurisprudence from South Texas College of Law.
Richard R. Thayerwas elected as a director of the Company in April 2006. Mr. Thayer also serves as Chairman of the Audit Committee and is a member of the Nominating & Corporate Governance Committee. He is currently the Executive Vice President, Finance at Philadelphia Media Holdings LLC and its principal subsidiary Philadelphia Newspapers LLC, publisher of the Philadelphia Inquirer and the Philadelphia Daily News. Prior to joining Philadelphia Media Holdings LLC, he was Managing Director at J.P. Morgan Securities, Inc. He has over twenty-five years experience in the banking and securities industries at J.P. Morgan and its predecessor banks including, Managing Director, in its Restructuring, Syndicated & Leveraged Finance and Global Transportation groups. Mr. Thayer obtained a bachelor of science from the Wharton School, University of Pennsylvania with a dual major in Finance and Marketing.


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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE “FOR” THE ELECTION OF JONATHAN G. ORNSTEIN, DANIEL J. ALTOBELLO,
ROBERT BELESON, CARLOS E. BONILLA, JOSEPH L. MANSON, PETER F. NOSTRAND,
MAURICE A. PARKER AND RICHARD R. THAYER AS DIRECTORS FOR
FISCAL YEAR 2008.
CORPORATE GOVERNANCE
The Board of Directors is responsible for providing oversight of the affairs of the Company for the benefit of stockholders. The Board of Directors has adopted Corporate Governance Guidelines, charters for its Audit, Compensation, Nominating/Corporate Governance and Code of Conduct and Ethics for directors, officers and employees of Mesa Air Group, Inc., its subsidiaries and affiliated companies. You can obtain copies of our current committee charters, codes and policies in the “Corporate Governance” section of our website (www.mesa-air.com) or by writing to our Corporate Secretary at 410 North 44th Street, Suite 100, Phoenix, Arizona 85008. Any substantive amendment to, or waiver from, any provision of the Code of Conduct and Ethics with respect to any director or executive officer will be posted on our website.
Director Selection Criteria.  The Nominating/Corporate Governance Committee of the Board (the“Nominating/Corporate Governance Committee”) recommends nominees for director whose background, knowledge, experience, expertise and perspective will complement the qualifications of other directors and strengthen the Board. The criteria considered by such Committee is discussed in more detail below.
Director Independence.  Each year, the Board reviews the relationships that each director has with the Company. For purposes of making director independence determinations, the Board utilizes the director independence standards set forth in the NASDAQ Marketplace Rules. Only those directors who the Board affirmatively determines have no material relationship with the company, and who do not have any of the categorical relationships that prevent independence under the NASDAQ Marketplace Rules, are considered to be independent directors.
The Board has determined thatsatisfy all of its Note Repurchase Obligations. In the directors, excluding Messrs. Ornstein and Parker (who are considered employees ofevent that the Company) have no material relationships with the Company and qualify as independent directors. The Board concluded that none of these directors possessed the categorical relationships set forth in the NASDAQ Marketplace Rules that prevent independence and had no other business or other relationships with the Company relevant to a determination of their independence.
The Board committees currently consist only of directors who are not employees of the Company and who are “independent” within the meaning of the NASDAQ Marketplace Rules. The members of our Audit Committee also meet the additional NASDAQ and SEC independence and experience requirements applicable specifically to members of the Audit Committee.
Recommendation of Candidates for Director by Stockholders; Direct Nominations by Stockholders.  The Nominating/Corporate Governance Committee will consider, but is not required to approve, recommendations from stockholders concerning the nomination of directors. Recommendations should be submitted in writing to the Corporate Secretary of the Company and state the stockholder’s name and address, the name and address of the candidate, and the qualifications of and other detailed background information regarding the candidate. Recommendations must be received not later than 120 calendar days preceding the date of release of the prior year’s proxy statement. The Nominating/Corporate Governance Committee intends to evaluate candidates recommended by stockholders in the same manner that it evaluates other candidates. The Company has not received any stockholder recommendations of director candidates with regard to the election of directors covered by this proxy statement or otherwise.
Board Meetings.  The Board held nine meetings during the 2007 fiscal year. No director attended less than 75% of the Board meetings while serving as such director, or less than 75% of all committee meetings on which he served as a committee member.


5

Meeting Attendance.  The Company does not have a formal policy regarding attendance by membersobtain shareholder approval of this Proposal, it will not be able to issue more than 5,385,071 shares of Common Stock in connection with any repurchase of the BoardSenior Notes and would be forced to use cash to satisfy the remainder of Directors at our annual meetingits Note Repurchase Obligations. There can be no guarantee that the Company would have adequate cash resources to satisfy the remainder of shareholders, but strongly encourages directorsits Note Repurchase Obligations when they become due.Any such failure to attend. All membershave the ability to issue shares or have adequate cash could result in a default under the Indenture.

Limitation on Stock Issuances

In no event will the Company elect to satisfy its Note Repurchase Obligations by issuing shares of the BoardCommon Stock or a combination of Directors attended the 2007 annual meetingshares of shareholders.

At various times throughout the year non-management directors hold meetings without the presence of management personnel. The Lead Director, Daniel J. Altobello, chairs these meetings.
Board Committees.  The Audit, Nominating/Corporate GovernanceCommon Stock and Compensation committeescash if such election would cause any "person" or "group" (as such terms are the standing committees of the Board. The fiscal year 2007 committees were comprised as follows:
Audit
Nominating/Corporate Governance
Compensation
Richard R. Thayer*Robert Beleson*Peter F. Nostrand*
Peter F. NostrandRichard R. ThayerDaniel J. Altobello
Robert BelesonJoseph L. MansonCarlos E. Bonilla
Daniel J. Altobello, ex-officio
* Chairman
Audit Committee.  The Audit Committee of the Board (the “Audit Committee”) held eight meetings during fiscal 2007. The main function of our Audit Committee, which has been establisheddefined in accordance with Section 3(a)(58)(A)13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is1934) to oversee our accounting and financial reporting processes, internal systems of control, independent auditor relationships andbecome the audits of our financial statements. This committee’s responsibilities include:
• Selecting and hiring our independent auditors;
• Evaluating the qualifications, independence and performance of our independent auditors;
• Approving the audit and non-audit services to be performed by our independent auditors;
• Reviewing the design, implementation, adequacy and effectiveness of our internal controls and our critical accounting policies;
• Overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;
• Reviewing with management any earnings announcements and other public announcements regarding our results of operations;
• Reviewing regulatory filings with management and our auditors; and
• Preparing any report the Securities and Exchange Commission (“SEC”) requires for inclusion in our annual proxy statement.
The Audit Committee acts under a written charter adopted and approved by the Board in May 2000. The Audit Committee Charter was amended in April 2002, July 2004 and November 2006. The revised charter is attached as Exhibit A to this Proxy Statement. The Audit Committee is composed of outside directors who are not officers or employees of the Company or its subsidiaries. In the opinion of the Board and as “independent” is defined under current standards of NASDAQ (including the heightened independence requirements of audit committee members), these directors are independent of management and free of any relationship that would interfere with their exercise of independent judgment as members of this committee. Additionally, the Board has determined that Peter F. Nostrand and Richard R. Thayer, each of the Audit Committee, is an “audit committee financial expert,” as"beneficial owner" (as such term is defined in Item 407(d)(5)(ii)Rule 13d-3 promulgated under the Securities Exchange Act ofRegulation S-K. Messrs. Thayer’s 1934), directly or indirectly through one or more intermediaries, of more than 35% of the voting power of the outstanding voting stock of the Company.

Effect on Outstanding Common Stock

The issuance of shares of Common Stock to satisfy the Company's repurchase obligations with respect to Forbearing Holders' 2023 Notes and Nostrand’s relevant experience is includedthe outstanding 2024 Notes would have a dilutive effect on the Company's earnings per share, and on each shareholder's percentage voting power and reduction of amounts available on liquidation. The actual effect on the holders of Common Stock cannot be ascertained until the shares of Common Stock are issued in the biographical information set forth above.

Nominating/Corporate Governance Committee.  The Nominating/Corporate Governance Committee held three meetings in fiscal 2007. The Nominating/Corporate Governance Committee Charter was adopted in August 2004 and amended in July 2005 and November 2006. The revised charter is attached as Exhibit B to this Proxy Statement. The Nominating/Corporate Governance Committee is responsible for identifying and nominating


6

individuals qualified to serve on the Board and the Committeesfuture. However, such effects might include dilution of the Board, as well as reviewingvoting power.

In addition, such issuance of additional shares of Common Stock by the effective corporate governance policies and procedures and recommending any applicable modifications thereto.

In evaluating the suitability of potential nominees for membership on the Board, the Nominating/Corporate Governance Committee will consider the criteria discussed above, as well as the Board’s current composition, including expertise, diversity, and balance of inside, outside and independent directors, and the general qualifications of the potential nominees, such as:
• Unquestionable integrity and honesty;
• The ability to exercise sound, mature and independent business judgment in the best interests of the shareholders as a whole;
• Recognized leadership in business or professional activity;
• A background and experience that will complement the talents of the other Board members;
• Willingness and capability to take the time to actively participate in Board and Committee meetings and related activities;
• Ability to work professionally and effectively with other Board members and the Company’s management;
• An age to enable the Director to remain on the Board long enough to make an effective contribution; and
• Lack of realistic possibilities of conflict of interest or legal prohibition.
The Committee will also see that all necessary and appropriate inquiries are made into the backgrounds of such candidates. Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating/Corporate Governance CommitteeCompany may also considerpotentially have an anti- takeover effect by making it more difficult to obtain stockholder approval of various actions, such other factors as it may deem to bea merger or removal of management. The increase in the best interestsauthorized shares of the CompanyCommon Stock has not been proposed for an anti-takeover related purpose and its stockholders.
In obtaining the names of possible new nominees, the Committee may make its own inquiries and will receive suggestions from other Directors, stockholders and other sources. All potential nominees must first be considered by the Committee before being contacted as possible nominees and before having their names formally considered by the full Board.
Compensation Committee.  The Compensation Committee of the Board (the “Compensation Committee”) operates under a charter adopted in February 2004 and amended in November 2006 and held five meetings during the 2007 fiscal year. The revised charter is attached as Exhibit C to this Proxy Statement. The Compensation Committee assists the Board of Directors with its overall responsibility relating to compensation and management development, including recommendinghave no knowledge of any current efforts to the Board of Directors for approval the compensation of our Chief Executive Officer, approval of compensation for our other executive officers, administration of our equity-based compensation plans and oversight of our executive development programs. The report of the Compensation Committee appears on page 14 of this Proxy Statement. It is expected that all current committee members will be nominated for re-election to such committees at a Board meeting to be held immediately following the Annual Meeting.
Communication with Directors.  Stockholders may communicate with the Board of Directors by writing to the Board of Directors in care of the Corporate Secretaryobtain control of the Company (or,or to effect large accumulations of its Common Stock.

Material Terms of the 2023 Notes

Interest.Cash interest was payable on the 2023 Notes at a rate of 2.4829% per year on the principal amount at maturity, payable semiannually in arrears on June 16 and December 16 of each year, beginning December 16, 2003, until June 16, 2008. Sine that date, the Company has not paid cash interest on the 2023 Notes prior to maturity, and the 2023 Notes started accruing interest at a rate of 6.25% until maturity.

Maturity. On June 16, 2023, the maturity date of the 2023 Notes, the principal amount of each 2023 Note will be $1,000. Due to prior conversions and redemptions, the aggregate amount due at maturity, including interest accrued from June 16, 2008, will be $55.9 million ($23.1 million current carrying value).

Subsidiary Guarantors; Subordination. Each of the Company's wholly owned domestic subsidiaries is a guarantor of the 2023 Notes on an unsecured basis. The 2023 Notes and the 2023 Note guarantees are senior unsecured obligations and rank equally with the Company's existing and future senior unsecured indebtedness, including but not limited to the 2024 Notes. The 2023 Notes and the 2023 Note guarantees are junior to any of the Company's secured obligations and any of the Company's wholly owned subsidiaries to the extent of the collateral pledged.

Convertibility of the 2023 Notes. The 2023 Notes are convertible into shares of the Company's Common Stock at a conversion rate of 39.727 shares per $1,000 in principal amount at maturity of the notes which equals an initial conversion price of approximately $10.00 per share. This conversion rate is subject to adjustment in certain circumstances. Holders of the 2023 Notes may convert their Notes if: (i) after June 30, 2003, the sale price of the Company's Common Stock exceeds 110% of the accreted conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding quarter; (ii) prior to June 16, 2018, the trading price for the 2023 Notes falls below certain thresholds; (iii) the 2023 Notes have been called for redemption; or (iv) specified corporate transactions occur.

11

Redemption of the 2023 Notes at the stockholder’s option,Company's Option. The Company may redeem the 2023 Notes, in whole or in part, beginning on June 16, 2008, at a redemption price equal to the issue price, plus accrued original issue discount, plus any accrued and unpaid cash interest.

Purchase of the 2023 Notes by the Company at the Option of the Holder. The holders of the 2023 Notes may require the Company to repurchase the 2023 Notes on June 16, 2013 at a price of $540.41 per $1,000 per 2023 Notes plus accrued and unpaid cash interest, if any, and on June 16, 2018 at a price of $735.13 per Note plus accrued and unpaid cash interest, if any.

Events of Default. In the event of a default on the 2023 Notes, the due date of the 2023 Notes may be accelerated if demanded by the Trustee or by holders of at least 25% of the principle amount of the 2023 Notes, subject to rescission of the acceleration by holders of 51% of the 2023 Notes if the rescission would not conflict with any judgment or decree and if all existing events of default have been cured or waived. The due date of the 2023 Notes is automatically accelerated without further action by holders of the 2023 Notes if certain bankruptcy-related events of default occur, subject to rescission of the acceleration as described in the previous sentence.

Registration of 2023 Notes. Pursuant to a specific director) as follows: Boardregistration rights agreement entered into in connection with the 2003 Indenture, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (File No. 333-108490), which became effective on November 24, 2003, covering the resale of Directors,c/o Corporate Secretary, Mesa Air Group, Inc., 410 North 44th Street, Phoenix, Arizona 85008.the 2023 Notes and the underlying Common Stock. The Corporate Secretary will ensure that these communications (assuming theyCompany subsequently amended the shelf registration statement on two occasions, which amendments became effective on February 11, 2004 and November 18, 2004, respectively.

Further Information. The terms of the 2023 Notes are properly markedcomplex and only briefly summarized above. For further information on the 2023 Notes and the rights of the holders of the 2023 Notes, please refer to the Boarddescriptions contained in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, and the 2003 Indenture and the Form of DirectorsNote, which contain a complete statement of the terms and conditions of the 2023 Notes, and are filed as exhibits to such report.

Material Terms of the 2024 Notes

Interest.Cash interest is payable on the 2024 Notes at a rate of 2.115% per year on the principal amount at maturity, payable semiannually in arrears on August 10 and February 10 of each year, beginning August 10, 2004, until February 10, 2009. After that date, the Company will not pay cash interest on the 2024 Notes prior to maturity, and the 2024 Notes will begin accruing interest at a rate of 3.625% until maturity.

Maturity. On February 10, 2024, the maturity date of the 2024 Notes, the principal amount of each 2024 Note will be $1,000. Due to prior conversions and the Company's repurchase of 2024 Notes on the open market, the aggregate amount due at maturity, including interest accrued from February 10, 2009, will be $122.4 million ($71.4 million current carrying value).

Subsidiary Guarantors; Subordination. Each of the Company's wholly owned domestic subsidiaries is a guarantor of the 2024 Notes on an unsecured basis. The 2024 Notes and the 2024 Note guarantees are senior unsecured obligations and rank equally with the Company's existing and future senior unsecured indebtedness, including, but not limited to, the 2023 Notes. The 2024 Notes and the 2024 Note guarantees are junior to any of the Company's secured obligations and any of the Company's wholly owned subsidiaries to the extent of the collateral pledged.

Convertibility of the 2024 Notes. The 2024 Notes are convertible into shares of the Company's Common Stock at a conversion rate of 40.3737 shares per $1,000 in principal amount at maturity of the 2024 Notes which equals an initial conversion price of approximately $14.45 per share. This conversion rate is subject to adjustment in certain circumstances. Holders of the 2024 Notes may convert their 2024 Notes if: (i) after March 31, 2004, the sale price of the Company's Common Stock exceeds 110% of the accreted conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding quarter; (ii) prior to February 10, 2019, the trading price for the 2024 Notes falls below certain thresholds; (iii) the 2024 Notes have been called for redemption; or (iv) specified corporate transactions occur.

Redemption of the 2024 Notes at the Company's Option. The Company may redeem the 2024 Notes, in whole or in part, beginning on February 10, 2009, at a redemption price equal to the issue price, plus accrued original issue discount, plus any accrued and unpaid cash interest.

Purchase of the 2024 Notes by the Company at the Option of the Holder. The holders of the 2024 Notes may require the Company to repurchase the 2024 Notes on February 10, 2009 at a price of $397.27 per $1,000 of 2024 Notes plus accrued and unpaid

12

cash interest, if any, on February 10, 2014 at a price of $540.41 per $1,000 of 2024 Notes plus accrued and unpaid cash interest, if any, and on February 10, 2019 at a price of $735.13 per $1,000 of 2024 Notes plus accrued and unpaid cash interest, if any.

Events of Default. In the event of a default on the 2024 Notes, the due date of the 2024 Notes may be accelerated if demanded by the Trustee or by holders of at least 25% of the principle amount of the 2024 Notes, subject to rescission of the acceleration by holders of 51% of the 2024 Notes if the rescission would not conflict with any judgment or decree and if all existing events of default have been cured or waived. The due date of the 2024 Notes is automatically accelerated without further action by holders of the 2024 Notes if certain bankruptcy-related events of default occur, subject to rescission of the acceleration as described in the previous sentence.

Registration of 2024 Notes. Pursuant to a specific director)registration rights agreement entered into in connection with the 2004 Indenture, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission on May 7, 2004 (File No. 333-115312), which became effective on August 5, 2004, covering the resale of the 2024 Notes and the underlying Common Stock. The Company subsequently amended the shelf registration statement, which amendment became effective on July 20, 2004.

Further Information. The terms of the 2024 Notes are deliveredcomplex and only briefly summarized above. For further information on the 2024 Notes and the rights of the holders of the 2024 Notes, please refer to the Boarddescriptions contained in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004, and the 2004 Indenture and the Form of Directors or2024 Note, which contain a complete statement of the specified director,terms and conditions of the 2024 Notes, and are filed as exhibits to such report.

Shares of Common Stock Issued in Exchange for 2023 Notes and 2024 Notes will be Registered Securities

Pursuant to the case may be.

REPORT OF AUDIT COMMITTEE OF exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "Securities Act"), shares of Common Stock that the Company uses to satisfy our Note Repurchase Obligations for the 2023 Notes and 2024 Notes will be deemed registered securities under the Securities Act upon consummation of the exchange.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL TO APPROVE THEISSUANCE

The Audit Committee assistsOF SUCH NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK AS MAY BE NECESSARY TO REPURCHASE ALL OF ITS OUTSTANDING SENIOR CONVERTIBLE NOTES DUE 2023 AND SENIOR CONVERTIBLE NOTES DUE 2024 IF THE COMPANY IS REQUIRED BY NOTEHOLDERS TO REPURCHASE SUCH NOTES IN ACCORDANCE WITH THE INDENTURES UNDER WHICH THE NOTES WERE ISSUED AND CERTAIN RELATED CONTRACTUAL AGREEMENTS WITH RESPECT TO THE 2023 NOTES, AND IF THE COMPANY ELECTS TO SATISFY ALL OR A PORTION OF ITS REPURCHASE OBLIGATIONS BY ISSUING SHARES OF ITS COMMON

13

PROPOSAL NO. 2 TO BE VOTED ON

THE ISSUANCE, IF NECESSARY, OF SHARES OF THE COMPANY'S COMMON STOCK THAT MAY RESULT IN A PERSON, PERSONS, A GROUP, OR GROUPS ACQUIRING MORE THAN 20% OF THE COMPANY'S OUTSTANDING COMMON STOCK DUE TO THE COMPANY'S ISSUANCE OF SHARES OF COMMON STOCK IN SATISFACTION OF ITS NOTE REPURCHASE OBLIGATIONS

Background

As described in Proposal No. 1, the Board in fulfilling its responsibility for oversightForbearing Holders and all of the internal control, accounting, auditingholders of 2024 Notes will have the right to require the Company to repurchase all of their 2023 Notes on January 31, 2008 and 2024 Notes on February 10, 2009, respectively. The Company has the right to elect whether to use cash, shares of Common Stock or a combination thereof to satisfy these Note Repurchase Obligations, and wishes to retain the flexibility to use all cash, all stock or a combination thereof to satisfy these payment obligations. However, in the event a significant number of the holders of Senior Notes request that the Company repurchase their notes, the Company intends to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations.

The Company is unable to accurately forecast the total amount of its Note Repurchase Obligations, the market price of its Common Stock to be issued to satisfy these repurchase obligations, if the Company elects to issue Common Stock, or how many shares of Common Stock it may have to issue to any person, persons, group or groups to satisfy its Note Repurchase Obligations to particular noteholders. If the Company elects to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations, it may be necessary for the Company to issue a substantial number of shares of Common Stock to certain persons or groups, if these persons or groups hold significant amounts of Senior Notes and exercise their rights to have the Company repurchase their Senior Notes. Under certain circumstances, it is possible, that the Company may have to issue more than 20% of its outstanding Common Stock to a Forbearing Holder or holder of 2024 Notes in order to satisfy the Company's Note Repurchase Obligations to that notehodler.

If the Company does not obtain shareholder approval of this Proposal No. 2, it will not be able to issue more than 20% of its outstanding Common Stock to any particular Forbearing Holder or holder of 2024 Notes in connection with its Note Repurchase Obligations, and would be forced to use cash to satisfy the remainder of its repurchase obligations. There can be no guarantee that the Company would have adequate cash resources to satisfy the remainder of its Note Repurchase Obligations if, or when, they become due.Any such failure to have the ability to issue these shares or have adequate cash could result in a default under either, or both of, the 20003 Indenture or 2004 Indenture.

Why the Company is Seeking Shareholder Approval

In the event that a significant number of the holders of the Senior Notes request that the Company repurchase their notes, the Company intends to issue shares of its Common Stock to satisfy all of its Note Repurchase Obligations. If the Company uses shares of Common Stock to satisfy all or a portion of its Note Repurchase Obligations, Nasdaq Rules require that it not issue securities if it will result in a "change of control" of the Company, without shareholder approval. Under the Nasdaq Rules, a "change of control" occurs when a "person" or "group" (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934) acquires 20% or more of the common stock, or 20% or more of the voting power, of a company upon the completion of an issuance of securities. Without shareholder approval, the Company would be limited to the number of shares of Common Stock it could issue to any particular person or group to satisfy its Note Repurchase Obligations to that person, persons, group or groups, and force the Company to use cash to satisfy the reminder of these Note Repurchase Obligations. If the Company does not have adequate cash resources to make any required cash repurchases of either 2023 Notes or 2024 Notes, the Company may not be able to satisfy all of its Note Repurchase Obligations,in which case the Company could be in default under either, or both, of the 2003 Indenture or 2004 Indenture, and the Company's operations and financial reporting practicescondition could be materially adversely affected.

14

Limitation on Stock Issuances

In no event will the Company elect to satisfy its Note Repurchase Obligations by issuing shares of Common Stock or a combination of shares of Common Stock and cash if such election would cause any "person" or "group" (as such terms are defined in Section 13(d) of the Company.

The Committee regularly meets with managementSecurities Exchange Act of 1934) to considerbecome the adequacy of the Company’s internal controls and the integrity of its financial reporting. The Committee discusses these matters with the Company’s independent registered public accountants and with appropriate Company financial personnel and internal auditors.


7

The Committee regularly meets privately with management, the independent registered public accountants and the internal auditors. The independent registered public accountants have unrestricted access to the Committee.
The Committee retains and, if circumstances warrant, replaces the independent registered public accountants and regularly reviews their performance and independence from management. The Committee also pre-approves all audit and permitted non-audit services and related fees.
The Board of Directors has determined that none of the directors serving on the Committee has a relationship with the Company that may interfere with their independence from the Company and its management. As a result, each director who serves on the Committee is “independent” as required by NASDAQ listing standards (including the heightened independence requirements of audit committee members) and Section 10A of the Exchange Act.
The Board of Directors has adopted a written charter setting out the roles and responsibilities the Committee is to perform. The Board has determined that Peter F. Nostrand and Richard R. Thayer, each of the Audit Committee, is an “audit committee financial expert,” as"beneficial owner" (as such term is defined in Item 407(d)(5)(ii)Rule 13d-3 promulgated under the Securities Exchange Act ofRegulation S-K.
Management has primary responsibility for 1934), directly or indirectly through one or more intermediaries, of more than 35% of the Company’s financial statements andvoting power of the overall reporting process, includingoutstanding voting stock of the Company’s systemCompany.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL TO APPROVE THE ISSUANCE, IF NECESSARY, OFSHARES OF THE COMPANY'S COMMON STOCK THAT MAY RESULT IN A PERSON, PERSONS, A GROUP, OR GROUPS ACQUIRING MORE THAN 20% OF THE COMPANY'S OUTSTANDING COMMON STOCK DUE TO THE COMPANY'S ISSUANCE OF SHARES OF COMMON STOCK IN SATISFACTION OF ITS NOTE REPURCHASE OBLIGATIONS

15

PROPOSAL NO. 3 TO BE VOTED ON

AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK

Background.

Our Articles of internal controls.

Review of Audited Financial Statements
The Audit Committee has reviewedIncorporation currently provide the Company’s financial statements for the fiscal year ended September 30, 2007, as audited by Deloitte & Touche LLP, the Company’s independent registered public accountants, and has discussed these financial statements with management. In addition, the Audit Committee has:
• Discussed with Deloitte & Touche LLP the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (Codification of Statements on Auditing Standards, AU 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.
• Received the written disclosures and the letter from Deloitte & Touche LLP required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees”), as adopted by the PCAOB in Rule 3600T, and has discussed with Deloitte & Touche LLP its independence.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the fiscal year ended September 30, 2007 be included in the Company’s Annual Report onForm 10-K, for filing with the Securitiesauthority to issue up to 77,000,000 shares of stock, of which 75,000,000 shares are designated as Common Stock, no par value per share, and Exchange Commission.
The members2,000,000 are designated as preferred stock, no par value per share. As of November 10, 2008, we had26,925,359 shares of common stock issued and outstanding.

As described in Proposal Number 1, the Audit Committee are not professionally engaged in the practiceForbearing Holders of auditing or accounting. Members of the Audit Committee rely, without independent verification, on the information provided to them2023 Notes and on the representations made by management and the independent registered public accountants. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with accepted auditing standards of the Public Company Accounting Oversight Board, that the financial statements are presented in accordance with accounting principles generally accepted in the United States of America and that the Company’s independent registered public accountants are in fact “independent.”

AUDIT COMMITTEE
Richard R. Thayer, Chairman
Peter F. Nostrand
Robert Beleson


8

RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
(PROPOSAL NO. 2)
Deloitte & Touche LLP has been selected as the Company’s independent registered public accountants for the fiscal year ending September 30, 2008. Shareholder ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accountants is not required by the Company’s Bylaws or otherwise. However, the Board is submitting the selection of Deloitte & Touche LLP for shareholder ratification as a matter of good corporate practice. Deloitte & Touche LLP has audited the Company’s financial statements since 2000. Notwithstanding the selection, the Board, in its discretion, may direct appointment of a new independent accounting firm at any time during the year if the Board feels that such a change would be in the best interests of the Company and its shareholders. A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting with the opportunity to make a statement if he or she so desires and to be available to respond to appropriate questions.
Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accountants for fiscal year 2008 will require the affirmative voteall of the holders of at least2024 Notes will have the right to require the Company to repurchase all of their respective 2023 Notes on January 31, 2008, and 2024 Notes on February 10, 2009. The Company has the right to elect whether to use cash, stock or a majoritycombination thereof to satisfy these Note Repurchase Obligations, and wishes to retain the flexibility to use all cash, all stock or a combination thereof to satisfy its payment obligations. However, in the event that a significant number of the outstandingholders of Senior Notes request that the Company repurchase their notes, the Company intends to issue shares of its Common Stock represented in person or by proxy at the Annual Meeting. Allto satisfy all of the directors and executive officers ofits Note Repurchase Obligations. If the Company have advisedissues shares of its Common Stock to satisfy all its Note Repurchase Obligations, the Company that they will vote theirhave to issue approximately 270,000,000 (based upon a stock price of $0.35 per share) shares of Common Stock “FOR”to the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accountants for fiscal year 2008. IfForbearing Holders and the holders of at least a majority2024 Notes, collectively. As of November 10, 2008, the Company is only authorized to issue 48,074,641 additional shares of Common Stock.

Why the Company is Seeking Shareholder Approval

Without shareholder approval of the outstandingamendment to the Articles of Incorporation, the Company would only be able to issue up to 48,074,641 shares of Common Stock fail to ratifysatisfy its Note Repurchase Obligations. As an example, if the appointmenttrading price of Deloitte & Touche LLPthe Company's Common Stock as calculated under either the 2003 Indenture or the 2004 Indenture was $0.35 per share, the Company would only be authorized to issue enough shares of Common Stock to satisfy approximately $16.8 million of its Note Repurchase Obligations, and would be forced to use $77.7 million in cash. The Company is seeking shareholder approval to amend its Articles of Incorporation to increase the amount of Common Stock the Company is authorized to issue from 70,000,000 to 900,000,000, increasing the likelihood that the Company will be able to satisfy its Note Repurchase Obligations in the event the Company elects to issue additional shares of Common Stock to satisfy these obligations.

Moreover, if the Company does not obtain shareholder approval of this Proposal (assuming approval of both Proposal Number 1 and Proposal Number 2), it will not be able to issue more than 48,074,641 shares of Common Stock in connection with any repurchase of its Senior Notes, and would be forced to use cash to satisfy the remainder of its Note Repurchase Obligations. There can be no guarantee that the Company would have adequate cash resources to satisfy the remainder of its Note Repurchase Obligations when they become due.Any such failure to have the ability to issue shares, or have adequate cash, could result in a default under either, or both, of the 2003 Indenture or 2004 Indenture.

Rights of the shares of Common Stock to be issued

 The additional shares of Common Stock for which authorization is sought will have the same terms and rights as the Company’s independent registered public accountants,shares of Common Stock now authorized. Subject to applicable provisions of law, the Audit Committee will considerproposed additional shares of Common Stock may be issued at such failure at a subsequent meeting oftime and on such terms and conditions as the Audit Committee andboard may determine in its discretion, what actions it should take, if any.

without further approval by the stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
A VOTE “FOR”FOR RATIFICATION OF THE APPOINTMENTAMENDMENT OF
DELOITTE & TOUCHE LLP AS OUR ARTICLES OF INCORPORATION TO INCREASE THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS FOR FISCAL YEAR 2008.

NUMBER OF AUTHORIZED COMMON SHARES. 


9

16

DISCLOSURE OF AUDIT AND NON-AUDIT FEES
Pre-approval Policy
In August 2003, the Audit Committee adopted a Pre-approval Policy (“Policy”) governing the approval of all audit and non-audit services performed by the independent registered public accountants in order to ensure that the performance of such services does not impair the independent registered public accountants.
According to the Policy, the Audit Committee will review and pre-approve the services and fees that may be provided by the independent registered public accountants. The Policy specifically describes the services and fees related to the annual audit, other services that are audit-related, preparation of tax returns and tax related compliance services and all other services that have the pre-approval of the Audit Committee.
Any service to be provided by the independent registered public accountants that has not received general pre-approval under the Policy is required to be submitted to the Audit Committee for approval prior to the commencement of a substantial portion of the engagement. Any proposed service exceeding pre-approved cost levels is also required to be submitted to the Audit Committee for specific approval.
The Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public accountant to management.
Fees
The following table sets forth the aggregate fees billed by Deloitte & Touche LLP for fiscal 2007 and 2006:
                     
     Audit
          
  Audit
  Related
  Tax
  All Other
    
Year
 Fees(1)  Fees(2)  Fees(3)  Fees(4)  Total 
 
2006
 $1,532,000  $125,000  $139,000  $10,000  $1,806,000 
2007
 $2,593,125  $37,650  $200,625  $69,401  $2,900,801 
(1)Includes fees for the annual audit and quarterly reviews. This category also includes fees for the audit of internal controls, as required by Section 404 of the Sarbanes-Oxley Act of 2002.
(2)Includes fees for services for miscellaneous compliance audits and other SEC filings.
(3)Includes fees for annual federal and state income tax compliance services.
(4)All Other Fees consist principally of professional services performed by our independent auditor with respect to certain transactional work contemplated by the Company during fiscal 2007 and in connection with preparing workpapers for retention to comply with a court order in our Aloha Airlines litigation.


10

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of Common Stock as of February 4,November 10, 2008 by (i) each director of the Company, (ii) each of the Company’sCompany's officers named in the Summary Compensation Table (collectively, the “Named"Named Executive Officers”Officers"), (iii) each person who is known by the Company to be the beneficial owner of more than five percent of the Company’sCompany's outstanding Common Stock, and (iv) all directors and executive officers as a group. Except as otherwise indicated below, each person named has sole voting and investment power with respect to the shares indicated.

                 
  Amount and Nature of
       
  Beneficial Ownership       
     Options/
       
     Warrants/
       
     Convertible
       
Name and Address of Beneficial Owner
 Shares(1)  Notes(1)  Total(1)  Percent(1) 
 
Dimensional Fund Advisors Inc.(2)  2,457,498   —   2,457,498   9.0%
1299 Ocean Avenue, 11th Floor
                
Santa Monica, CA 90401                
Donald Smith & Co., Inc.(3)  3,393,181   —   3,393,181   12.5%
152 West 57th Street                
New York, NY 10019                
Heartland Advisors, Inc.(4)  3,151,140   —   3,151,140   11.6%
William J. Nasgovitz                
789 North Water Street                
Milwaukee, WI 53202                
QVT Financial LP(5)  50,912   1,469,887   1,520,799   5.6%
QVT Financial GP LLC                
1177 Avenue of the Americas, 9th Floor                
New York, New York 10036                
Thompson, Siegal & Walmsley, Inc.(6)  2,067,915   —   2,067,915   7.6%
6806 Paragon Place, Suite 300                
Richmond, VA 23230                
Directors
                
Jonathan G. Ornstein(7)  209,770   1,689,846   1,899,616   7%
Daniel J. Altobello(8)  9,221   72,457   81,678   *
Carlos E. Bonilla(8)  3,721   4,515   8,236   *
Joseph L. Manson(8)(9)  2,221   16,214   18,435   *
Robert Beleson(8)  2,221   20,302   22,523   *
Maurice A. Parker(8)  10,721   12,758   23,479   *
Peter F. Nostrand(8)  30,721   12,884   43,605   *
Richard R. Thayer(8)  6,221   4,515   10,736   *
Named Executive Officers
                
Michael J. Lotz(10)  96,492   564,786   661,278   2.4%
George Murnane III  9,101   53,333   62,434   *
William Hoke  —   —         
Michael Ferverda(11)  —   75,000   75,000   *
Brian S. Gillman(12)  8,135   88,000   96,135   *
All directors and executive officers as a group (13 Individuals)
  388,545   2,614,610   3,003,155   11%
 *Less than 1%
(1)Includes options and warrants exercisable or convertible notes convertible on February 4, 2008 or within 60 days thereafter. Number of shares as reported by each company’s Schedule 13G. Holdings of less than 1% are indicated by “*”. Based upon 27,227,141 shares issued and outstanding as of January 11, 2008.
(2)

Amount and Nature of
Beneficial Ownership

Name and Address of Beneficial Owner

Shares(1)

Options/
Warrants/
Convertible
Notes(1)

Total(1)

Percent(1)

Dimensional Fund Advisors Inc. (2)

2,457,498

—

2,457,498

9.0%

     1299 Ocean Avenue, 11th Floor

    

     Santa Monica, CA 90401

    

Donald Smith & Co., Inc. (3)

3,393,181

—

3,393,181

12.5%

     152 West 57th Street

    

     New York, NY 10019

    

Heartland Advisors, Inc. (4)

William J. Nasgovitz

3,151,140

—

3,151,140

11.6%

     789 North Water Street

    

     Milwaukee, WI 53202

    

QVT Financial LP (5)

QVT Financial GP LLC

50,912

1,469,887

1,520,799

5.6%

     1177 Avenue of the Americas, 9th Floor

    

     New York, New York 10036

    

Thompson, Siegal & Walmsley, Inc. (6)

2,067,915

—

2,067,915

7.6%

     6806 Paragon Place, Suite 300

    

     Richmond, VA 23230

    

Directors

    

Jonathan G. Ornstein

241,269

689,846

931,115

3.5%

Daniel J. Altobello

9,221

53,685

62,906

*

Carlos Bonilla

3,721

4,515

8,236

*

Joseph L. Manson

2,221

16,214

18,435

*

Robert Beleson

2,221

20,302

22,523

*

Maurice A. Parker

11,221

12,758

23,979

*

Peter F. Nostrand

30,721

12,884

43,605

*

Richard R. Thayer

6,221

4,515

10,736

*

Named Executive Officers

    

Michael J. Lotz

112,493

564,786

677,279

2.5%

Paul Foley

—

—

—

*

David Butler

—

—

—

*

Michael Ferverda

—

75,000

75,000

*

Brian S. Gillman

11,435

88,000

99,435

*

     

All directors and executive officers as a group (13 Individuals)

430,744

1,542,205

1,973,249

7.3%

___________

* Less than 1%

(1) Includes options and warrants exercisable or convertible notes convertible on November 10, 2008 or within 60 days thereafter. Number of shares as reported by each company's Schedule 13G. Holdings of less than 1% are indicated by "*". Based upon 26,925,359 shares issued and outstanding as of November 10, 2008.

(2) Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on February 9, 2007.


11

(3)Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on February 13, 2007.
(4)Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on August 8, 2007. Heartland Advisors, Inc. shares dispositive power over 3,151,140 shares and voting power over 2,996,140 shares with William J. Nasgovitz, its president and principal shareholder.
(5)Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on September 5, 2007. Includes 1,469,887 shares issuable upon conversion of Mesa’s convertible notes. QVT Financial LP shares voting and dispositive power over these shares with QVT Financial GP LLC, its general partner.
(6)Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on February 12, 2007.
(7)Includes 16,667 restricted shares that will become unrestricted shares on April 1, 2008 and 49,999 options that vest on April 1, 2008.
(8)Includes 1,221 restricted shares that will become unrestricted shares on March 1, 2008.
(9)Includes 1,000 shares held by Barrow Grocery, which is controlled by Mr. Manson.
(10)Includes 11,111 restricted shares that will become unrestricted shares on April 1, 2008 and 33,333 options that vest on April 1, 2008.
(11)Includes 8,333 options that vest on February 15, 2008.
(12)Includes 9,999 options that vest on February 15, 2008 and 3,334 restricted shares that will become unrestricted shares on April 1, 2008.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act, requires the Company’s directors and executive officers, as well as persons beneficially owning more than 10% of the outstanding Common Stock, to file certain reports of ownership with the SEC within specified time periods. Such officers, directors and shareholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of such forms received by it, or written representations from certain reporting persons, the Company believes that between October 1, 2006 and September 30, 2007, all Section 16(a) filing requirements applicable to its officers, directors and 10% shareholders were met.
Compensation Committee Report
The Compensation Committee (the “Committee”) has reviewed and discussed the following Compensation Discussion and Analysis (the “CD&A”) and discussed it with management. Based on its review and discussion with management, the Committee recommended to the Board of Directors that the CD&A be included in this proxy statement and incorporated by reference into the Company’s annual report onForm 10-K. This report is provided by the following independent directors, who comprise the Committee:
Peter F. Nostrand, Chairman
Daniel J. Altobello
Carlos E. Bonilla


12

EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION DISCUSSION & ANALYSIS
The following paragraphs describe the material elements of the Company’s compensation objectives and policies and the application of these objectives and policies to the Company’s executive officers, particularly the individuals named in the Summary Compensation Table on page 22 of this proxy statement. The rules regarding disclosure of executive compensation in proxy statements were modified significantly in 2006. This is our first proxy statement to which the new rules apply. Accordingly, the information in this proxy statement is not directly comparable to the information disclosed in prior years.
The following discussion and analysis should be read in conjunction with the “Summary Compensation Table” and related tables that are presented in this proxy statement.
Executive Summary
The purpose of this compensation discussion and analysis is to provide information about each material element of compensation that we pay or award to, or that is earned by, our named executive officers. For our 2007 fiscal year, our named executive officers were:
• Jonathan G. Ornstein, our Chairman and Chief Executive Officer;
• Michael J. Lotz, our President and Chief Operating Officer and Chief Accounting Officer;
• Michael Ferverda, our Senior Vice President — Operations;
• William Hoke, our interim Chief Financial Officer; and
• Brian S. Gillman, our Executive Vice President and General Counsel.
George Murnane III, our former Executive Vice President and Chief Financial Officer is also a named executive officer in this proxy statement because he was employed by the Company in fiscal 2007 and, therefore, disclosure regarding his compensation is required under SEC regulations. On September 21, 2007, Mr. Murnane was placed on administrative leave. Mr. Murnane’s employment was terminated on November 5, 2007. William Hoke performed Mr. Murnane’s duties while he was on administrative leave and was appointed interim Chief Financial Officer effective with Mr. Murnane’s termination.
The following discussion and analysis addresses and explains the numerical and related information contained in the summary compensation tables and includes actions regarding executive compensation that occurred after the end of our 2007 fiscal year, including the award of bonuses related to 2007 performance, and the approval by our Compensation Committee of amendments to the employment agreements to which some of our named executive officers are a party.
Executive Compensation Philosophy and Objectives
The Company’s executive compensation policies, as endorsed by the Compensation Committee, have been designed to provide a balanced compensation program that will assist the Company in its efforts to attract, motivate and retain talented executives who the Compensation Committee and senior management believe are important to the long-term financial success and growth of the Company. The Company seeks to provide a balanced compensation program consisting of base salaries, cash incentives, equity-based incentives, perquisites and deferred compensation, but to emphasize incentive compensation that will:
• be competitive in the marketplace;
• permit us to attract and retain highly qualified executives;
• encourage extraordinary effort on behalf of the Company;
• reward the achievement of specific financial goals by the Company, which aligns the interests of management with the interests of our stockholders; and
• be financially sound.


13

The Company strives to allocate a significant percentage of total compensation to incentive compensation. The more responsibility executives have over time, the more their pay is determined by the degree to which certain performance goals are reached. We refer to that part of compensation as “at risk” pay and it is a fundamental way in which the Company aligns executive pay with stockholder interests. For example, as described in greater detail below, for our senior executive officers cash incentive bonuses can equal a significant percentage of base salary if maximum performance thresholds are achieved.
This compensation philosophy translates into the following two principles in our executive compensation design:
1. Base salary should decrease as a percentage of total direct compensation as the executive’s responsibilities increase.
As employees move to higher levels of responsibility with more direct influence over the Company’s performance, they have a higher percentage of pay at risk.
2. The ratio of long-term incentive compensation (equity) to short-term incentive compensation (cash) should increase as the executive’s responsibilities increase.
We expect our executives to focus on the Company’s long-term success in achieving profitable growth and generating greater shareholder return. The compensation program is designed to motivate executives to take actions best aligned toward achieving such goals. Executives in positions that most directly affect corporate performance should have as their main priority profitably growing the Company. Receiving part of their compensation in the form of equity reinforces the link between their actions and shareholders’ investment. Equity ownership encourages executives to behave like owners and provides a clear link with shareholders’ interests.
The Company believes that its compensation policies have been, thus far, successful in motivating and retaining its executive officers, as evidenced by the limited turnover in its executive officer ranks in recent years.
Role of the Compensation Committee and Management in Setting Compensation
Role of the Compensation Committee.
The Compensation Committee primarily administers the Company’s cash compensation plans and employee stock option and award plans, and it has the responsibility for recommending the allocation of cash and other compensation, as well as equity awards and discretionary bonuses to senior executive officers of the Company. The entire Board of Directors regularly reviews the Compensation Committee decisions relating to executive compensation. The Compensation Committee consists of three non-employee directors, Messrs. Altobello, Bonilla and Nostrand, all of whom are “independent” according to NASDAQ standards and “disinterested” as required byRule 16b-3 of the Exchange Act.
Role of Management.
At the beginning of each fiscal year, our CEO evaluates the performance of our President; and the CEO and President evaluate the performance of the other executive officers against the strategic operating plan for the prior fiscal year. In addition, the CEO’s and the President’s evaluations of individual performance also focus on executive officers’ leadership abilities, including their professional development and mentoring of their direct reports. This additional evaluation is carried out by evaluating, on a quarterly basis, each executive officer’s performance against a set of performance factors mutually set and agreed upon by the executive officer and the CEO or President, as the case may be.
The CEO and President then develop compensation recommendations for the other executive officers. Factors that are weighted in making individual target compensation recommendations include:
• the performance review conducted by the CEOand/or the President;
• value of the job in the marketplace;
• relative importance of the position within the Company;


14

• individual tenure and experience; and
• individual contributions to the Company’s results.
The CEO or President review of an executive officer’s performance with respect to his or her performance factors is not directly tied to the executive officer’s compensation. Such reviews, however, heavily influence the CEO’sand/or President’s assessment of an executive officer’s readiness for the types of responsibilities typically associated with a particular position. Once an executive officer’s role and responsibilities are defined, “value of the job in the marketplace” and “relative importance of the position within the executive ranks” are the most determinative factors in setting the proper compensation plan for that executive officer, adjusted to take into consideration the executive officer’s tenure and experience.
At the Committee’s regularly scheduled meeting in November, the Committee reviews and considers the CEO and President’s compensation recommendations for each executive officer. The other executive officers, except as described above, do not play a role in setting executive officer compensation.
Compensation Methodologies; Role of Consultants and Benchmarking
The Compensation Committee periodically assembles, with the assistance of independent executive compensation consultants, competitive market information about executive compensation from a periodic review of companies included in a peer group, other competitive market compensation information, executive compensation trends, our business needs, and our financial performance compared to peers. The Committee reviews this competitive information together with performance assessments of our executives and recommendations provided by the CEO and President. The Committee obtained such information from Frederick W. Cooke & Co. (“FWC”) in April 2004 and utilized such information in setting the compensation for Messrs. Ornstein and Lotz when the Company entered into their respective employment agreements.
Generally, the Committee’s goal is to set executive officers’ compensation levels to fall within the median to upper quintiles of surveyed companies, with guaranteed salary levels to remain reasonably consistent with median to upper quintile rates. For fiscal 2007, based on Company performance, total compensation for all of the named executive officers was at or above the market median.
In determining what it believes to be market median for executive positions, the Committee obtained information from FWC regarding competitive market compensation data available from the proxy statements of peer group companies selected by the Committee. The peer group utilized for setting the compensation for Messrs Ornstein and Lotz in their 2004 employment agreements consisted of publicly traded regional and national air carriers that are headquartered in the United States with whom the Company competes for employees with similar skills.
Our management worked with FWC to make specific recommendations to the Committee with regard to compensation based upon the market data and management’s assessment of the performance of each individual executive officer (other than the CEO). For the CEO, the Committee conducts the performance assessment. Compensation amounts realized from past years and prior year equity awards are generally not considered in the current year’s determination of each individual’s compensation package. The impact of tax or accounting treatments for particular forms of compensation also are generally not considered, except to the extent they reflect industry norms.
The Compensation Committee reviews and approves on an annual basis the evaluation process and compensation structure for the Company’s senior officers. The Committee evaluates, with the CEO’s and President’s input, the Company’s other executive officers and approves the annual compensation, including salary, bonus, incentive and equity compensation, for such officers. The Committee also provides oversight of management’s decisions concerning performance and compensation of other Company officers. The Committee generally meets in the first quarter of each year to review and recommend changes to annual and incentive compensation.


15

Compensation Program Design and Elements of Compensation
The principal components of compensation for our named executive officers are:
• base salary and benefits;
• short-term cash incentive compensation;
• long-term equity-based compensation;
• perquisites;
• severance and change in control plans; and
• retirement benefits in the form of deferred compensation.
Base Salary and Benefits
Base salary and broad-based benefits, which are not at risk, are designed to attract and retain executives by providing fixed compensation based on competitive market practice, relative to the skills, experience and expected contributions of each executive officer of the Company.
Base salaries for Messrs. Ornstein, Lotz and Gillman are set in their respective employment agreements, which are described below in the “Employment and Change of Control Arrangements” section. The base salaries for Messrs. Ferverda and Hoke were set based on a review of comparative market information for similar situated positions in the airline industry, and Mr. Murnane’s base salary was set forth in an employment agreement. Our Compensation Committee reviews base salaries annually and targets base pay for executive officers at the median to upper quintiles of the comparison groups and adjusts, as appropriate, for tenure, performance and variations in actual position responsibilities from position descriptions in the comparison groups. We took into account compensation levels payable to executives in our industry and reviewed executive compensation information with regard to comparably-sized companies. We further considered the increasingly active market (and correspondingly increased cash and equity compensation levels) for executives with established track records, and potential costs to the Company if replacement management executives were required. We also took into account information concerning employment opportunities with third parties available to our named executive officers, and the importance of retaining their services in areas such as operational leadership and continuing interactions with stakeholders. We continue to consider market conditions with respect to the compensation of all of our executives.
The approved 2007 base salaries, as compared to 2006 salaries, include the following for the named executive officers:
• Jonathan G. Ornstein, Chairman and Chief Executive Officer — $450,000 (2006 — $450,000);
• Michael J. Lotz, President and Chief Operating Officer — $400,000 (2006 — $400,000);
• Brian S. Gillman, our Senior Vice President and General Counsel — $160,000 (2006 — $150,000)
• Michael Ferverda, our Senior Vice President — Operations — $100,000 (2006 — $99,808); and
• William Hoke, our interim Chief Financial Officer — $140,000 (2006 — Mr. Hoke commenced employment in March 2007).
Mr. Murnane, our former Executive Vice President and Chief Financial Officer, received a base salary of $250,000 in 2007, as compared to a base salary of $237,308 in 2006.
Our named executive officers are also eligible to participate in employee benefit plans generally available to our employees, including medical, health, life insurance and disability plans. Our named executive officers are also eligible to participate in the Company’s 401(k) plan, and receive Company matching contributions, which are generally available to our employees. Information concerning perquisites, which, by definition, are not generally available to our employees are described in greater detail below.


16

Short-Term Cash Incentive Compensation
The Compensation Committee views cash incentive compensation as a means of closely tying a significant portion of the total potential annual cash compensation for executives to the financial performance of the Company. Our cash incentive compensation plans are designed to reward individuals for the achievement of certain defined financial objectives of the Company, namely earnings per share growth.
Incentive bonuses for Messrs. Ornstein and Lotz, and formerly Mr. Murnane, which are set forth in their respective employment agreements, are payable quarterly and set at a prescribed percentage of base salary, based upon the year over year percentage growth in earnings per share (“EPS”) of the Company. EPS was selected to align incentive compensation with corporate EPS goals and because the Compensation Committee believes investors may focus on EPS growth when valuing the Company’s common stock. Under the employment agreements, earnings per share is defined as gross profit (loss) before taxes and one-time non-recurring items, divided by basic outstanding shares. The following table summarizes incentive bonuses that were potentially payable to each of Messrs. Ornstein, Lotz and Murnane in fiscal 2007.
                 
    % Change
 Quarterly
  Annual
  Actual
 
Name
 Bonus Level EPS Amount  Amount  Amount 
 
Jonathan G. Ornstein, Minimum Positive $13,125  $52,500  $52,500 
Chairman and Chief Threshold 5% $26,250  $105,000  $-0- 
Executive Officer Target 10% $52,500  $210,000  $-0- 
  Maximum 15% $105,000  $420,000  $-0- 
Michael J. Lotz, Minimum Positive $10,000  $40,000  $40,000 
President and Chief Threshold 5% $20,000  $80,000  $-0- 
Operating Officer Target 10% $40,000  $160,000  $-0- 
  Maximum 15% $80,000  $320,000  $-0- 
George Murnane III, Minimum Positive $10,000  $40,000  $30,000 
former Executive Vice President and Threshold 5% $20,000  $80,000  $-0- 
Chief Financial Officer Target 10% $30,000  $120,000  $-0- 
  Maximum 15% $45,000  $180,000  $-0- 
In fiscal 2007, our GAAP EPS declined from $1.01 in fiscal 2006 to $(2.63), primarily attributable to a non-cash impairment charge recorded during the second quarter of fiscal 2007 totaling approximately $37.7 million on a pre-tax basis and loss contingency charge of $86.9 million on a pretax basis during the fourth quarter of fiscal 2007. Notwithstanding this full year decline, our EPS improved in the first quarter of fiscal 2007 over the comparable periods in fiscal 2006. As a result, Messrs. Ornstein, Lotz and Murnane received cash bonuses during fiscal 2007 of $52,500, $40,000 and $30,000, respectively.
Mr. Gillman’s employment agreement also provides for an incentive bonus equal to a minimum of 30% of his base salary, payable quarterly, if the Company is profitable. In addition, Mr. Gillman is eligible to receive an additional discretionary cash bonus in the aggregate of 31% to 100% of Mr. Gillman’s salary at such time that the Board of Directors grants similar bonuses to other executives of the Company. Mr. Gillman’s total compensation, including bonus levels, was set to provide a total compensation package commensurate with similarly situated executives. In fiscal 2007, Mr. Gillman received an incentive bonus of $91,407 for the same reason described above with respect to Messrs. Ornstein and Lotz.
Mr. Hoke is not a party to an employment agreement with the Company. In accordance with his offer letter, Mr. Hoke is entitled to a guaranteed bonus of $60,000 and received a signing bonus of $15,000. In subsequent fiscal years Mr. Hoke will be eligible to receive a bonus of up to $80,000 based on the profitability of the Company and his individual performance.
Similarly, Mr. Ferverda is not a party to an employment agreement. He is eligible to receive a bonus of up to $80,000 based on the profitability of the Company and his individual performance.
The Company also, at times, pays discretionary cash bonuses to its named executive officers. In fiscal 2007, the Company did not pay any discretionary cash bonuses to its named executive officers.


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Long-Term Equity Based Compensation
The purpose of the Company’s long-term incentive compensation plan is to provide a substantial equity incentive for our executive officers to manage the business for the long-term, complementing the annual bonus that rewards performance in a particular year, and to reward them for the performance of the Company and its common shares over multi-year periods. The Committee awards long-term compensation in the form of annual non-qualified stock option grants, and beginning in fiscal year 2006, restricted stock awards (in lieu of option grants). The Company believes granting restricted stock in lieu of stock options results in less dilution to existing shareholders, enables the Company to utilize its existing option plans longer (because the Company grants less restricted shares than options), and more accurately depicts the expense associated with such benefit. The Committee has not established any long-term incentive programs that are settled in cash because the Committee believes that stock settled programs offer better alignment between the interests of our executive officers and our shareholders.
Equity Plans
The Company has two active equity compensation plans — the Key Officer Stock Option Plan and the 2005 Employee Stock Incentive Plan. The Key Officer Stock Option Plan provides for options to be issued to the Chief Executive Officer and President at set dates for prescribed amounts.
The 2005 Employee Stock Incentive Plan permits the issuance of incentive and non-qualified stock options, restricted stock and performance shares, which are performance bonuses payable in either cash or shares. All employees of the Company or its subsidiaries, including the named executive officers, are eligible to participate in the plan, and awards are issued at the discretion of the Compensation Committee upon recommendation by the Chief Executive Officer. Options granted under the 2005 Employee Stock Incentive Plan are issued at the weighted average price of common stock on the date of grant, generally vest at the rate of one-third per year commencing one year after the grant date, have a10-year term and are subject to standard option provisions, including the requirement of continued employment and provisions to deal with termination of employment due to retirement, death or disability. Shares of restricted stock granted under the plan are issued at the weighted average price of common stock on the date of grant and typically vest in one-third increments over a three-year period.
Equity Awards
Although the employment agreements for Messrs. Ornstein, Lotz, Murnane and Gillman provide for annual option grants, each of these individuals entered into a restricted stock agreement with the Company pursuant to which each agreed to forego their respective option grants in favor of annual restricted stock grants. Messrs. Ornstein, Lotz, Murnane and Gillman are, and Murnane was, entitled to receive an amount of restricted stock equal to the net value of options to which each such person was otherwise entitled. In 2007, Messrs. Ornstein, Lotz, Murnane, and Gillman received 50,000, 33,333, 20,000, and 10,000 shares of restricted stock, respectively. The 20,000 shares of restricted stock granted to Mr. Murnane were cancelled prior to becoming unrestricted shares as a result of his termination on November 5, 2007.
Messrs. Ferverda and Hoke do not have employment agreements with the Company. In 2007, they each received restricted stock grants of 10,000 shares.
Health and Welfare
The Committee has provided named executive officers with the same health and welfare benefits it provides all its other US-based employees; including medical, dental and vision coverage, life and disability insurance, and, as discussed above, a defined contribution plan (401(k)). Messrs. Ornstein, Lotz, and Gillman also have the option to participate in the Company’s Deferred Compensation Plan.
Other Compensation Plans and Perquisites
Retirement Plans
The Company provides opportunities for all employees to save for retirement in three benefit plans: a voluntary defined contribution plan (401(k)), an employee stock purchase plan and a deferred compensation plan. A


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deferred compensation plan is also made available to Messrs. Ornstein, Lotz and Gillman pursuant to the terms of their respective employment agreements. These plans are designed to provide competitive retirement benefits.
401(k)
The Company maintains a defined contribution retirement plan for all its eligible employees in the United States under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”).
The 401(k) Plan offers the named executive officers and all other employees the opportunity to contribute up to 85% of their annual salary and bonus up to a specified maximum. In addition, the Company makes a matching contribution to each employee equal to 30% of an employee’s contributions, with a cap of 10% of such employee’s annual compensation. The rules of the Internal Revenue Code limit the compensation that may be used in applying any deferral election or matching contribution. In 2007, that limit was $225,000 (the “IRS Cap”).
Perquisites
The Company provides executive officers with a limited number of perquisites that the Company and the Committee believe are reasonable and consistent with its overall compensation program, and necessary to remain competitive. The Committee periodically reviews the level of perquisites provided to the named executive officers. Costs associated with these perquisites are included under “All Other Compensation” in the Summary Compensation Table.
Retirement Benefits — Deferred Compensation
The Company offers the 2005 Mesa Air Group, Inc. Deferred Compensation Plan to provide certain members of management with the opportunity to save for retirement and accumulate wealth in a tax-efficient manner beyond what is available under the Company’s 401(k) retirement savings plan. The Compensation Committee believes that the deferred compensation plan motivates and assists in the retention of key employees by providing them with greater flexibility in structuring the timing of their compensation payments. The deferred compensation plan is an important retention and recruitment tool for the Company, as the companies with which we compete for executive talent typically provide a similar plan to their senior employees.
The employment agreement for Mr. Ornstein requires the Company to make annual deferred compensation payments to an account for the benefit of Mr. Ornstein in an amount equal to his base salary ($450,000 in 2007) at the time of contribution. The employment agreement for Mr. Lotz requires the Company to make annual deferred compensation payments to an account for the benefit of Mr. Lotz in an amount equal to his base salary ($400,000 in 2007) at the time of contribution into a deferred compensation account for the benefit of Mr. Lotz. Following the November 20, 2007 amendments that are described in greater detail below, the employment agreement for Mr. Gillman requires the Company to contribute $50,000 each year into a deferred compensation account for the benefit of Mr. Gillman. All of these contributions are made on March 1st of each year. Messrs. Hoke and Ferverda do not participate in any deferred compensation plans.
Severance and Change in Control Payments
It is our belief that the interests of shareholders will be best served if the interests of our senior management are aligned with them, and providing change of control benefits should eliminate, or at least reduce, any reluctance of senior management to pursue potential change of control transactions that may be in the best interests of shareholders. The salary multiple of the change of control benefits and use of the single trigger change of control benefits were determined after considering market data. In addition, the difference in salary multiples between executives was selected based on internal equities and demands of the job as well as the ability of the specific executive to find a similar position following a change of control. Relative to the overall value of the Company, the Compensation Committee believes these potential change of control benefits are reasonable. The cash components of any change of control benefits are paid lump-sum and are based upon a multiple of base salary plus bonus as described under the section entitled “Employment Agreements and Change of Control” with respect to each named executive officer entitled to such benefits.


19

Stock Ownership Guidelines
The Board has established share ownership guidelines for its members. Each non-employee member of the Board is strongly encouraged to hold shares of the Company’s common stock having an acquisition value equal to one-year’s retainer, with such ownership to be achieved within fives years of joining the Board.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally prohibits a public company from taking an income tax deduction for compensation over one million dollars paid to the Chief Executive Officer and its four other highest paid executive officers unless certain conditions are met. While the anticipated tax treatment of base and incentive compensation is given some weight in making compensation decisions, the Compensation Committee has not adopted a policy of limiting awards of compensation to amounts that would be deductible under Section 162(m) because the Compensation Committee believes that awards of compensation which would not comply with the Section 162(m) requirements may at times further the long-term interests of the Company and its stockholders.
Summary Compensation Table
The following table sets forth information concerning the compensation of our Chief Executive Officer and Chief Financial Officer, as well as the three next highest paid executive officers of the Company (the “Named Executive Officers”) as of September 30, 2007.
                                     
                    Change in
       
                    Pension Value
       
                    and
       
                    Nonqualified
       
                 Non-Equity
  Deferred
  All Other
    
Name and
          Stock
  Option
  Incentive Plan
  Compensation
  Compensation
    
Principal Position
 Year  Salary(1)  Bonus  Awards(4)  Awards  Compensation  Earnings  (5)  Total 
 
Jonathan G. Ornstein,  2007  $450,000  $52,000  $111,884   —   —   —  $53,897  $667,781 
Chairman and Chief
Executive Officer		                                    
Michael J. Lotz,  2007  $400,000  $40,000  $74,587   —   —   —  $43,129  $557,716 
President and Chief
Operating Officer		                                    
Brian S. Gillman,  2007  $150,000  $91,407  $22,381   —   —   —  $3,136  $266,924 
Executive Vice
President and General Counsel		                                    
Michael Ferverda,  2007  $90,173  $81,694   —   —   —   —  $2,966  $174,833 
Senior Vice President -
Operations		                                    
George Murnane III,  2007  $247,000  $30,000  $44,755   —   —   —  $3,186  $324,941 
former Executive Vice President and Chief Financial Officer(2)                                    
William Hoke, Vice  2007  $140,000  $33,333   —   —   —   —   —  $173,333 
President of
Finance and Interim
Chief Financial Officer(3)		                                    
(1)Messrs. Ornstein and Lotz deferred a portion of their respective salaries under the Mesa Air Group, Inc. 2005 Deferred Compensation Plan, which is included in the Nonqualified Deferred Compensation Table on page 27. Messrs. Ornstein, Lotz, Gillman and Ferverda also contributed a portion of their salaries to the Company’s 401(k) Plan.
(2)Mr. Murnane’s employment with the Company terminated effective November 5, 2007. Amounts reflected in this table were paid pursuant to the terms of Mr. Murnane’s employment agreement and occurred prior to his termination from the Company.


20

(3)Mr. Hoke began his employment with the Company in March 2007 and began serving as acting Chief Financial Officer on September 21, 2007, when the Company’s prior Chief Financial Officer was placed on administrative leave. He was appointed interim Chief Financial Officer effective November 5, 2007. Mr. Hoke’s bonus amount includes a $15,000 signing bonus.
(4)This column represents the dollar amount recognized for financial statement reporting purposes with respect to fiscal year 2007 for the fair value of the restricted shares granted in fiscal 2007 as well as in prior fiscal years, in accordance with the Statement of Financial Accounting Standards No. 123R (“SFAS 123R”). The amounts shown include the impact of estimated forfeitures related to service-based vesting conditions. For additional information, refer to note 1 of the footnotes to the Company’s financial statements included in itsForm 10-K for the fiscal year ended September 30, 2007, as filed with the SEC. See the Grants of Plan-Based Awards Table for information on awards made in fiscal 2007. These amounts reflect the Company’s accounting expense for these awards, and do not correspond to the actual value that will be recognized by the named executive officers. The number of restricted shares awarded to Messrs. Ornstein, Lotz, Gillman, Ferverda and Hoke in 2007 are 50,000, 33,333, 10,000, 10,000 and 10,000, respectively. The restrictions on Messrs. Ornstein, Lotz and Gillman’s restricted shares will lapse in equal one-third increments over a three-year period beginning April 1, 2008. The restrictions on Mr. Ferverda’s restricted shares will lapse in equal one-third increments over a three-year period beginning August 8, 2008. The restrictions on 5,000 of Mr. Hoke’s restricted shares will lapse in equal one-fifth increments over a five-year period beginning April 11, 2008 and the restrictions on Mr. Hoke’s other 5,000 restricted shares will lapse in equal one-fifth increments over a five-year period beginning August 8, 2007.
(5)The compensation represented by the amounts for 2007 set forth in the All Other Compensation column for the named executive officers are detailed in the following table.
                 
     Company
       
  Life Insurance
  Contributions to
       
  and
  Retirement Benefit
     Nonaccountable
 
Name
 Disability Premiums  Plan  Travel Benefits  Expense Allowance 
 
Jonathan G. Ornstein $8,451  $3,115  $18,858  $23,473 
Michael J. Lotz  3,825   3,208   8,890   27,206 
Brian S. Gillman  —   3,136   —   — 
Michael Ferverda  —   2,966   —   — 
George Murnane III  —   3,186   —   — 
William Hoke  —   —   —   — 
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2007
The following table shows additional information regarding all grants of plan-based awards made to our named executive officers for the year ended September 30, 2007.
                                         
                       All Other
  All Other
    
                       Stock
  Option
    
                       Awards:
  Awards:
  Exercise
 
                       Number of
  Number of
  or Base
 
     Estimated Future Payouts Under
  Estimated Future Payouts Under
  Shares of
  Securities
  Price of
 
     Non-Equity Incentive Plan Awards(1)  Equity Incentive Plan Awards  Stock or
  Underlying
  Option
 
  Grant
  Threshold
  Target
     Threshold
  Target
  Maximum
  Units
  Options
  Awards
 
Name
 Date  ($)  ($)  Maximum ($)  (#)  (#)  (#)  (#)(2)  (#)  ($/Sh) 
 
Jonathan G. Ornstein  10/1/06  $105,000  $210,000  $420,000   —   —   —   50,000   —   — 
Michael J. Lotz  10/1/06  $80,000  $160,000  $320,000   —   —   —   33,333   —   — 
Brian S. Gillman  10/1/06  $44,204  $45,677
to
$147,346		  $147,346   —   —   —   10,000   —   — 
Michael Ferverda  10/1/06  $20,000  $20,000
to
$80,000		  $80,000   —   —   —   10,000   —   — 
George Murnane III  10/1/06  $80,000  $120,000  $180,000   —   —   —   20,000   —   — 
William Hoke  10/1/06  $60,000(3) $60,000  $60,000   —   —   —   10,000   —   — 


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(1)As discussed in the CD&A under “Short-Term Cash Incentive Compensation,” the potential payout at threshold level is pegged at achieving a 5% year over year change in EPS for the applicable period, a 10% change in EPS at the target level, and a 15% change in EPS at the maximum level for Messrs. Ornstein and Lotz. The potential payout for Mr. Gillman at the threshold level is based on the Company being profitable in the applicable quarterly period. Messrs. Ferverda and Hoke are entitled to receive quarterly bonuses of up to $20,000 based on the Company’s profitability and their individual performance.
(2)The restrictions on Messrs. Ornstein, Lotz and Gillman’s restricted shares will lapse in equal one-third increments over a three-year period beginning April 1, 2008. The restrictions on Mr. Ferverda’s restricted shares will lapse in equal one-third increments over a three-year period beginning August 8, 2008. The restrictions on 5,000 of Mr. Hoke’s restricted shares will lapse in equal one-fifth increments over a five-year period beginning April 11, 2008 and the restrictions on Mr. Hoke’s other 5,000 restricted shares will lapse in equal one-fifth increments over a five-year period beginning August 8, 2007.
(3)Pursuant to Mr. Hoke’s offer letter, he is entitled to a guaranteed bonus of $60,000 during his first year of employment with the Company.
OUTSTANDING EQUITY AWARDS AT SEPTEMBER 30, 2007
The following table summarizes the equity awards we have made to each of the named executive officers that were outstanding as of September 30, 2007.
                                         
                    Stock Awards 
                             Equity
 
  Option Awards        Equity
  Incentive Plan
 
           Equity
              Incentive
  Awards:
 
           Incentive Plan
              Plan Awards:
  Market or
 
           Awards:
           Market
  Number of
  Payout Value
 
     Number of
  Number of
  Number of
           Value of
  Unearned
  of Unearned
 
     Securities
  Securities
  Securities
        Number of
  Shares or
  Shares, Units
  Shares, Units
 
     Underlying
  Underlying
  Underlying
        Shares or Units
  Units of
  or Other
  or Other
 
  Option
  Unexercised
  Unexercised
  Unexercised
  Option
  Option
  of Stock That
  Stock That
  Rights That
  Rights That
 
  Grant
  Options (#)
  Options (#)
  Unearned
  Exercise
  Expiration
  Have Not
  Have Not
  Have Not
  Have Not
 
Name
 Date  Exercisable  Unexercisable  Options (#)  Price($)  Date  Vested (#)  Vested ($)  Vested (#)  Vested ($) 
 
Jonathan G. Ornstein  6/13/1998   1,000,000   —   —  $8.25   6/13/2008   —   —   —   — 
   4/1/2000   112,533   —   —  $6.25   4/1/2010   —   —   —   — 
   10/17/2001   66,313   —   —  $5.50   10/17/2011   —   —   —   — 
   4/1/2002   150,000   —   —  $11.13   4/1/2012   —   —   —   — 
   11/20/2002   61,000   —   —  $4.90   11/20/2012   —   —   —   — 
   4/1/2004   150,000   —   —  $8.25   4/1/2014   —   —   —   — 
   4/1/2005   100,001   49,999(1)  —  $6.90   4/1/2015   —   —   —   — 
   7/14/2006   —   —   —   —   —   33,003(2) $146,533   —   — 
   4/1/2007   —   —   —   —   —   50,000(3) $222,000   —   — 
Brian S. Gillman  12/29/2000   58,000   —   —  $6.72   12/29/2010   —   —   —   — 
   2/15/2005   20,001   9,999(4)  —  $7.40   2/15/2015   —   —   —   — 
   7/14/2006   —   —   —   —   —   6,600(5) $29,304   —   — 
   4/1/2007   —   —   —   —   —   10,000(6) $44,400   —   — 
Michael J. Lotz  12/28/1998   100,000   —   —  $6.00   12/28/2008   —   —   —   — 
   6/22/2000   100,000   —   —  $5.25   6/22/2010   —   —   —   — 
   10/17/2001   39,786   —   —  $5.50   10/17/2011   —   —   —   — 
   1/2/2002   100,000   —   —  $7.88   1/2/2012   —   —   —   — 
   11/20/2002   25,000   —   —  $4.90   11/20/2012   —   —   —   — 
   1/2/2004   100,000   —   —  $12.56   1/2/2014   —   —   —   — 
   4/1/2005   66,667   33,333(7)  —  $6.90   4/1/2015   —   —   —   — 
   7/14/2006   —   —   —   —   —   22,002(8) $97,689   —   — 
   4/1/2007   —   —   —   —   —   33,333(9) $147,999   —   — 
Michael Ferverda  10/2/2001   20,000   —   —  $4.04   10/2/2011   —   —   —   — 
   11/20/2002   30,000   —   —  $4.90   11/20/2012   —   —   —   — 
   2/15/2005   16,667   8,333(10)  —  $7.40   2/15/2015   —   —   —   — 
   8/8/2007   —   —   —   —   —   10,000(11) $44,400   —   — 
George Murnane III(14)  2/15/2005   53,333   27,777   —  $7.40   2/15/2015   —   —   —   — 
William Hoke  4/11/2007   —   —   —   —   —   5,000(12) $22,200   —   — 
   8/8/2007   —   —   —   —   —   5,000(13) $22,200   —   — 
(1)Assuming continued employment with the Company, these options will vest on April 1, 2008.


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(2)Assuming continued employment with the Company, restrictions on 16,502 and 16,501 of these shares of restricted stock will lapse on July 14, 2008 and 2009, respectively
(3)Assuming continued employment with the Company, restrictions on 16,667, 16,667 and 16,666 of these shares of restricted stock will lapse on April 1, 2008, 2009 and 2010, respectively.
(4)Assuming continued employment with the Company, these options will vest on February 15, 2008.
(5)Assuming continued employment with the Company, restrictions on 3,300 and 3,300 of these shares of restricted stock will lapse on July 14, 2008 and 2009, respectively.
(6)Assuming continued employment with the Company, restrictions on 3,334, 3,333 and 3,333 of these shares of restricted stock will lapse on April 1, 2008, 2009 and 2010, respectively.
(7)Assuming continued employment with the Company, these options will vest on April 1, 2008.
(8)Assuming continued employment with the Company, restrictions on 11,001 and 11,001 of these shares of restricted stock will lapse on July 14, 2008 and 2009, respectively.
(9)Assuming continued employment with the Company, restrictions on 11,111, 11,111 and 11,111 of these shares of restricted stock will lapse on April 1, 2008, 2009 and 2010, respectively.
(10)Assuming continued employment with the Company, these options will vest on February 15, 2008.
(11)Assuming continued employment with the Company, restrictions on 3,334, 3,333 and 3,333 of these shares of restricted stock will lapse on August 8, 2008, 2009 and 2010, respectively.
(12)Assuming continued employment with the Company, restrictions on 1,000 of these shares of restricted stock will lapse on April 11, 2008, 2009, 2010, 2011 and 2012, respectively.
(13)Assuming continued employment with the Company, restrictions on 1000 of these shares of restricted stock will lapse on August 8, 2008, 2009, 2010, 2011 and 2012, respectively.
(14)Mr. Murnane’s options expire 90 days following his termination.
OPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR 2007
The following table shows information regarding option exercises and vesting of stock awards for each named executive officer during the year ended September 30, 2007.
                 
  Option Awards  Stock Awards 
  Number of
     Number of
    
  Shares
     Shares
    
  Acquired
  Value Realized
  Acquired
  Value Realized
 
  on Exercise
  on Exercise
  on Vesting
  on Vesting
 
Name
 (#)  ($)  (#)  ($)(1) 
 
Jonathan G. Ornstein  —   —   95,887  $706,941 
Michael J. Lotz  —   —   74,381  $549,717 
Brian S. Gillman  —   —   3,301  $22,315 
Michael Ferverda  —   —   —   — 
George Murnane III  —   —   6,601  $44,623 
William Hoke  —   —   —   — 
(1)The aggregate dollar amount realized upon the vesting of restricted stock is calculated based on the NASDAQ Global Select Market closing price for the Company’s common stock on the vesting date of each award.
NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2007
Under the terms of the employment agreements for certain of the Company’s executive officers, on March 31st of each year the Company is required to contribute an amount equal to such executive’s then existing base salary to an account for the benefit of the executive under the Company’s Deferred Compensation Plan. Participants may choose from a selection of one or more investment funds designated by the Deferred Compensation Committee in which the deferred amount is then deemed to be invested. The deferred compensation and the


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amount earned are generally assets, and the obligation to distribute the amounts according the participants’ designation is a general obligation of the Company. There is no penalty on any scheduled withdrawals at any age. The following table shows a summary of all nonqualified contributions to and nonqualified deferred compensation received by each of the named executive officers for the year ended September 30, 2007. The account balances as of year end include amounts earned by the executive prior to 2007 and voluntarily deferred.
                     
  Executive
  Registrant
     Aggregate
  Aggregate Balance
 
  Contributions in
  Contributions in
  Aggregate Earnings
  Withdrawals/
  at Last
 
  Last FY
  Last FY
  in Last FY
  Distributions
  FYE
 
Name
 ($)  ($)  ($)  ($)  ($) 
 
Jonathan G. Ornstein  -0-  $450,000   -0-   -0-  $2,162,031.91 
Michael J. Lotz  -0-  $400,000   -0-   -0-  $1,923,433.36 
Brian S. Gillman  -0-   -0-   -0-   -0-   -0- 
Michael Ferverda  -0-   -0-   -0-   -0-   -0- 
George Murnane III  -0-  $50,000   -0-   -0-  $142,615.04 
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
The Chief Executive Officer, the President and Chief Operating Officer and the Vice President and General Counsel have each entered into an employment agreement with the Company, and the Compensation Committee approved amendments to each such agreement on November 20, 2007. The former Executive Vice President and Chief Financial Officer also had entered into an employment agreement with the Company.
Chief Executive Officer Employment Agreement
Effective as of March 31, 2004, Jonathan G. Ornstein and the Company entered into an employment agreement, in which Mr. Ornstein agreed to serve as the Chief Executive Officer of the Company for a term of five (5) years ending March 30, 2009. On November 20, 2007, the Compensation Committee approved extending the term of this agreement to March 30, 2012. The material terms of this agreement are described in detail below.
Base Salary
Under Mr. Ornstein’s agreement, he will receive an annual base salary of not less than $300,000 effective March 31, 2004, which amount shall be increased by $75,000 on the first and second anniversary dates. The base salary is subject to annual discretionary increases upon review by the Board and, subject to Mr. Ornstein’s consent, may be reduced under circumstances in which the Company has suffered severe financial losses and has imposed cuts in salary of other officers on an across-the-board basis.
Cash Incentive Bonus
Mr. Ornstein is entitled to an annual cash incentive bonus, paid quarterly, based on performance criteria described above, which bonus, on an annual basis, may range from $52,500 to $420,000. Additionally, the Board may approve discretionary bonuses. Mr. Ornstein’s agreement also provided for the payment of a retention bonus in the amount of $1,860,000, payable on the date of his employment agreement.
Deferred Compensation
Upon execution of the agreement and on a monthly basis thereafter during the term of the agreement, the Company is obligated to contribute an amount equal to Mr. Ornstein’s base salary, as deferred compensation, to an account for the benefit of Mr. Ornstein.
Equity Compensation
Mr. Ornstein’s employment agreement also provided for an initial grant of stock options to purchase 150,000 shares of common stock, with the options vesting in one-third increments over a three-year period, and additional annual option grants of not less than 150,000 shares throughout the term of the agreement. The


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exercise price for each option is determined by the market price for the common stock on the date the option is granted, and the terms are governed by the Key Officer Stock Option Plan. On July 14, 2006, Mr. Ornstein entered into a restricted stock agreement with the Company whereby he received 49,505 shares of restricted stock of the Company in lieu of receiving 150,000 options for the contract year beginning April 1, 2006. The amount of restricted stock was based on the net value of the 150,000 options on the date of grant and vest in one-third increments over a three-year period.
Mr. Ornstein’s employment agreement also provided for an initial grant of 238,156 shares of restricted common stock, vesting in one-third increments over a three-year period beginning on March 31, 2005.
Benefits and Perquisites
Mr. Ornstein is entitled to participate in all employee benefit and welfare programs, plans and arrangements and to receive fringe benefits, such as dues and fees for professional organizations and associations, to the extent such programs, plans, arrangements and benefits are from time to time available to the Company’s executive personnel. In addition, under Mr. Ornstein’s employment agreement, the Company is also obligated to:
• pay the premiums on a term life insurance policy for Mr. Ornstein providing for a $5,000,000 benefit;
• reimburse Mr. Ornstein for usual relocation expenses if he is required to relocate outside of Maricopa County in Arizona;
• reimburse Mr. Ornstein for business expenses in accordance with the Company’s policies;
• pay Mr. Ornstein $3,000 a month for discretionary business investigation purposes;
• use reasonable efforts to obtain for Mr. Ornstein and his immediate family (spouse, children and spouses and children of children) the right to fly on a complimentary basis on the aircraft of other airlines;
• provide complimentary travel to Mr. Ornstein and his immediately family on the Company aircraft, during the life of each such person;
• provide to Mr. Ornstein, for his personal or business use and at no cost to Mr. Ornstein, any Company aircraft for up to 100 flight hours per calendar year;
• reimburse Mr. Ornstein for his out-of-pocket expenses incurred in connection with the retention by Mr. Ornstein of professional income tax, estate planning and investment advisory services up to a maximum of $10,000 in 2004 and $5,000 per year thereafter; and
• provide security services as are reasonably necessary for the protection of Mr. Ornstein’s life and property, and the lives and property of Mr. Ornstein’s immediate family.
If any payments received by Mr. Ornstein under his employment agreement are treated as excess parachute payments and are subjected to the excise tax imposed by Section 4999 of the Internal Revenue Code, Mr. Ornstein is also entitled to receive “gross up” payments sufficient to cover the excise tax.
Disability and Death Benefits
The agreement provides that upon Mr. Ornstein’s disability, as defined in the agreement, he will receive, on a monthly basis, his base salary, plus an annualized amount equal to his historical bonuses. The Company will make such disability payments for as long as the disability lasts, up to the later of 48 months or the term of Mr. Ornstein’s agreement (currently March 30, 2012), and payments will continue to be made even if they extend beyond the term of the agreement. The Company is required to fund a portion of the payments with disability insurance.
In addition, upon Mr. Ornstein’s death or disability, the Company is obligated to pay for amounts earned through the last effective date of his employment, including base salary, incentive bonus, expenses, benefits and for the benefits or perquisites enumerated above. In addition, Mr. Ornstein or his estate, as applicable, can convert all vested restricted stock units outstanding in accordance with the restricted stock award agreement and exercise all vested unexercised stock options and warrants outstanding.


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Other Severance Benefits
Mr. Ornstein’s employment agreement also provides him with certain benefits upon termination, which vary based on the reason of termination.
If the Company terminates Mr. Ornstein for “Cause,” or if Mr. Ornstein terminates his employment for any reason other than disability, death or “Good Reason,” in general, Mr. Ornstein will not be entitled to any additional severance payments beyond amounts earned through the last effective date of his employment, but all vested restricted shares can be converted (with all unvested restricted stock units continuing to vest) and all vested unexercised options and warrants outstanding can be exercised. “Cause” is defined as any of (i) Mr. Ornstein’s willful misconduct with respect to the Company’s business that results in a material detriment to the Company, (ii) Mr. Ornstein being convicted of, or entering a plea of no contest, with respect to a felony offense or (iii) in general, the continued failure by Mr. Ornstein to perform his job duties following notice and an opportunity to cure.
Mr. Ornstein may terminate the agreement following the occurrence of an event constituting “Good Reason.” “Good Reason” is defined as the occurrence of any of the following circumstances: (i) any change by the Company in Mr. Ornstein’s title, or any significant diminishment in his function, duties or responsibilities, (ii) any reduction in Mr. Ornstein’s salary, bonus opportunity or benefits (other than across the board reductions), (iii) relocation of Mr. Ornstein’s principal place of employment greater than 50 miles from its current location or (iv) any material uncured breach of the agreement by the Company.
If Mr. Ornstein’s employment is terminated by Mr. Ornstein for “Good Reason,” then, in addition to receiving payments for amounts earned but not paid through the last effective date of Mr. Ornstein’s employment:
• the Company is required to pay Mr. Ornstein an amount equal to three times his combined annual salary and bonus;
• all of Mr. Ornstein’s non-vested restricted stock units and options would immediately vest; and
• the Company must maintain in full force and effect, for Mr. Ornstein and his eligible beneficiaries, all general benefits for a period of 36 months, unless substantially equivalent benefits are available from another employer.
If Mr. Ornstein’s employment is terminated by the Company without “Cause” or there is a “Change in Control” (known as “single trigger” payments) the following occurs:
• the Company is required to pay Mr. Ornstein an amount equal to six times his combined annual salary and bonus;
• all of Mr. Ornstein’s non-vested restricted stock units and options would immediately vest; and
• the Company must maintain in full force and effect, for Mr. Ornstein and his eligible beneficiaries, all general benefits for a period of 36 months, unless substantially equivalent benefits are available from another employer.
A “Change of Control” is generally defined as (i) “person,” as used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended, acquiring 30% or more of the voting power of the Company’s outstanding voting securities, (ii) a change of 60% or more of the Company’s Board of Directors other than by stockholder vote, (iii) consummation of a merger or other disposition transaction of the Company or (iv) the sale or disposition of any material route system operated by the Company.
In addition, the Company has agreed to enter into a consulting agreement with Mr. Ornstein, which will become effective when he leaves the Company for any reason. The consulting agreement will provide for Mr. Ornstein’s retention as a consultant for a period of 7 years from its effective date at the rate of $200,000 per year. Under the terms of the Consuling Agreement, the Company must use its reasonable efforts to obtain for the benefit of Mr. Ornstein and his immediate family (i.e., spouse, children, and the spouse and children of any of his children), the right to fly on a complimentary basis on the aircraft of other airlines, on a positive space basis. The Company is also required to provide to Mr. Ornstein and his immediate family, during the life of each such


26

individual, the right to fly on a complimentary basis on any aircraft operated by the Company or any affiliate at any time (subject to reasonable and customary rules regarding availability), on a positive space basis.
President and Chief Operating Officer and Chief Accounting Officer Employment Agreement
Effective as of March 31, 2004, Michael J. Lotz and the Company entered into a new employment agreement, in which Mr. Lotz agreed to serve as the President and Chief Operating Officer of the Company for a term of five (5) years ending March 30, 2009. On November 20, 2007, the Compensation Committee approved extending the term of this agreement to March 30, 2012.
The terms of Mr. Lotz’s employment agreement are substantially similar to the terms of Mr. Ornstein’s employment agreement, except as follows:
• Mr. Lotz’s annual base salary will start at $250,000, increasing by $75,000 on the first and second anniversary dates;
• Mr. Lotz will be entitled to an incentive bonus that may range from $40,000 to $320,000 annually, and Mr. Lotz received a one-time retention bonus of $1,485,000;
• Mr. Lotz is entitled to generally the same benefits and perquisites as Mr. Ornstein, except that the Company is only required to maintain a term life policy with a $2,000,000 benefit for Mr. Lotz and Mr. Lotz is only entitled to 50 hours of use of Company aircraft per year;
• Mr. Lotz received an initial grant of stock options to purchase 100,000 shares of common stock (with the options vesting in one-third increments over a three-year period) and was entitled to receive additional annual option grants of 100,000 shares throughout the term of the agreement, and Mr. Lotz entered into a restricted stock agreement with the Company whereby he received 33,003 shares of restricted stock of the Company in lieu of receiving 100,000 options for the contract year beginning January 1, 2006;
• Mr. Lotz received an initial grant of 190,141 shares of restricted common stock, with the stock vesting in one-third increments over a three-year period beginning on March 31, 2005; and
• Mr. Lotz’s consulting agreement provides for payments at a rate of $150,000 per year over a seven year period and the same airline flight benefits described above for Mr. Ornstein.
Executive Vice President and General Counsel Employment Agreement
Upon his appointment as Vice President and General Counsel in 2001, Mr. Gillman and the Company entered into an employment agreement, which was replaced with a new agreement on April 30, 2005. The Compensation Committee approved amendments to Mr. Gillman’s agreement on November 20, 2007.
Under Mr. Gillman’s agreement, Mr. Gillman receives a minimum base salary of $135,000, which increased to $190,000 effective November 15, 2007. Mr. Gillman’s agreement provides for cash and non-cash compensation and he is eligible to receive quarterly bonuses of varying minimum amounts ranging from 30% to 100% of his base salary. Mr. Gillman’s agreement also provides for a minimum annual option grant of 20,000 shares throughout the term of the agreement, which for 2005 and thereafter was set at 30,000 shares. On July 14, 2006, Mr. Gillman entered into a restricted stock agreement with the Company whereby he received 9,901 shares of restricted stock of the Company in lieu of receiving 30,000 options for the contract year beginning April 30, 2006. The amount of restricted stock was based on the net value of the 30,000 options on the date of grant and vest in one-third increments over a three-year period.
On November 20, 2007, the Compensation Committee approved adding a provision entitling Mr. Gillman to, upon the execution of the amendment and on each March 31 thereafter during the term of the agreement, deferred compensation in the amount of $50,000.
Mr. Gillman is also entitled to fringe benefits including, but not limited to, medical and other insurance benefits and positive space airline travel benefits on the Company’s airline. The Company is also required to use commercially reasonable efforts to obtain from other airlines the same travel benefits as the Company provides to its other executives.


27

Upon Mr. Gillman’s death, Mr. Gillman’s estate will be entitled to only such base salary and bonus earned, but not yet paid, as would have otherwise been payable to Mr. Gillman. Upon Mr. Gillman’s temporary disability, Mr. Gillman is entitled to receive base salary plus any cash bonus earned, less benefits received through disability insurance. Upon permanent disability, Mr. Gillman is entitled to receive, for a minimum of 24 months, base salary plus an amount equal to the minimum bonus to which Mr. Gillman would otherwise be entitled, less premiums paid by the Company for disability insurance that inures to the benefit of Mr. Gillman.
Mr. Gillman is also entitled to certain limited severance benefits. If Mr. Gillman terminates his employment other than for “Good Reason” by providing 90 days prior notice, he will be entitled to receive only the base salary payable through the end of the month in which the 90 day period ends. “Good Reason” includes (i) the assignment of Mr. Gillman to duties substantially inconsistent with his positions or a substantial reduction of his duties, (ii) the removal of any of Mr. Gillman’s titles, (iii) any breach by the Company of Mr. Gillman’s employment agreement, (iv) a “Change of Control” or (v) the relocation of Mr. Gillman or his office, facilities or personnel to a metropolitan area with less than 1,000,000 people. A “Change of Control” is defined as (i) a change of control that would otherwise be required to be reported to the Securities and Exchange Commission on a Current ReportFebruary 9, 2007.

(3) Based solely onForm 8-K, (ii) the acquisition by a person of beneficial ownership of securities comprising 25% or more ofmost recently available Schedule 13G filed with the Securities and Exchange Commission on February 13, 2007.

17

(4) Based solely on the most recently available Schedule 13G filed with the Securities and Exchange Commission on August 8, 2007. Heartland Advisors, Inc. shares dispositive power over 3,151,140 shares and voting power ofover 2,996,140 shares with William J. Nasgovitz, its president and principal shareholder.

(5) Based solely on the Company’s outstanding securities, (iii) a sale of all or substantially all ofmost recently available Schedule 13G filed with the Company’s assets, (iv) the Company adopting a plan of dissolution or liquidation or (v) the Company engaging in a merger such that less than 75% of the existing shareholders of the Company are shareholders of the Company following the merger.

Under the employment agreement, Mr. Gillman can terminate his employment at any point up to one year after an event constituting “Good Reason”Securities and Mr. Gillman will be entitled to the sum of (i) three times his base salary, (ii) the highest annual bonus amount received by Mr. Gillman during the preceding three years, (iii) deferred compensation payments that would have otherwise been payable had employment not been terminated, (iv) any other cash or other bonus earned prior to the date of termination but not yet paid and (v) tax gross up payments necessary to discharge tax liabilities.
If the Company terminates Mr. Gillman’s employment for “Good Cause,” Mr. Gillman is entitled only to base salary earned prior to the effective date of the termination but not yet paid and any cash bonus compensation earned but not paid prior to the effective date of the termination. “Good Cause” includes (i) personal dishonesty, (ii) willful misconduct, (iii) breach of fiduciary duty involving personal profit, (iv) intentional failure to perform stated duties, (v) willful violation of material law, rule or regulation resulting in the Company’s detriment or reflecting upon the Company’s integrity or (vi) a material breach by Mr. Gillman of his employment agreement.
If the Company terminates Mr. Gillman’s employment without “Good Cause,” Mr. Gillman is entitled to a lump sum cash payment equal to the sum of (i) the base salary and (ii) the highest annual bonus received by Mr. Gillman during the preceding three years, or the minimum amount of any similar bonus then in effect if greater, plus any other cash or other bonus compensation earned prior to the date of such termination pursuant to the terms of all incentive compensation plans then in effect and additional payments necessary to discharge tax liabilities.
Former Executive Vice President and Chief Financial Officer Employment Agreement
Effective December 31, 2005 the Company entered into a new employment agreement with its former Chief Financial Officer, George Murnane III. Under the terms of the employment agreement, Mr. Murnane agreed to serve as Executive Vice President and Chief Financial Officer of the Company for a term of five (5) years ending December 30, 2010. Mr. Murnane was terminated for causeExchange Commission on NovemberSeptember 5, 2007. As a resultIncludes 1,469,887 shares issuable upon conversion of this “for cause” termination, Mr. Murnane is not entitled to any severance compensation.


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Mesa's convertible notes. QVT Financial LP shares voting and dispositive power over these shares with QVT Financial GP LLC, its general partner.

POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT
The table below outlines(6) Based solely on the potential payments to Messrs. Ornstein, Lotzmost recently available Schedule 13G filed with the Securities and Gillman upon the occurrence of certain termination triggering events assuming a hypothetical effective date of termination of September 30, 2007 and after giving effect to the amendments to their respective employment agreements that were approved by the Compensation Committee on November 20, 2007: For purposes of the calculations below, we have used a share value of $4.44 per share, which was the closing price of our common stock on September 28, 2007. The actual amounts to be paid out can only be determined at the time of such executive’s termination from the Company.
                         
  Cash
  Equity-Based
  Consulting
  Benefits
       
Triggering Event
 Severance  Compensation  Contract(1)  Continuation(2)  Other(3)  Total(4) 
 
Jonathan G. Ornstein
                        
Termination Without Cause/ Change of Control $8,488,224  $146,533(5) $1,400,000  $31,816  $565,740  $10,632,313 
Termination For Good Reason $6,299,112  $146,533(5) $1,400,000  $31,816  $565,740  $8,443,201 
Disability $2,918,816   —   —   —  $565,740  $3,484,556 
Death  —   —   —   —  $5,000,000(9) $5,000,000 
Michael J. Lotz
                        
Termination Without Cause/ Change of Control $7,344,657  $245,687(6) $1,050,000  $31,816  $266,700  $8,938,860 
Termination For Good Reason $5,498,991  $245,687(6) $1,050,000  $31,816  $266,700  $7,093,194 
Disability $2,460,878   —   —   —  $266,700  $2,727,578 
Death  —   —   —   —  $2,000,000  $2,000,000 
Brian S. Gillman
                        
Termination Without Good Cause $919,851(7) $73,704(8)  —   —   —  $993,555 
Termination For Good Reason $919,851(7) $73,704(8)  —   —   —  $993,555 
Termination Other than For Good Reason $47,499   —   —   —   —  $47,499 
Disability $1,111,500   —   —   —   —  $1,111,500 
(1)The Company is obligated to enter into consulting agreements with Messrs. Ornstein and Lotz following their departure from the Company for any reason. Each such agreement has a term of seven years and provides for annual consulting payments of $200,000 and $150,000, respectively.
(2)Messrs. Ornstein and Lotz are entitled to the continuation of health and welfare benefits for a period of 36 months following their termination in certain circumstances. The amounts in this column reflect an estimate of the value of such benefits based on amounts paid in fiscal 2007.
(3)The Company is required to use its reasonable efforts to obtain for Messrs. Ornstein and Lotz and their immediate families (spouse, children and spouses and children of children) the right to fly on a complimentary basis on the aircraft of other airlines during the term of their respective7-year consulting agreements. In addition, the Company is required to provide complimentary travel to each of Messrs. Ornstein and Lotz and their immediate family on Company aircraft, during the life of each such person. Under the SEC’s regulations, we are required to disclose a reasonable estimate applicable to this benefit. Accordingly, we have used the value of the travel benefits for such executives in fiscal 2007 ($18,858 and $8,890 for Messrs Ornstein and Lotz, respectively), increased such amounts by 100% and multiplied that figure by 15 years to arrive at the figure in the above table.


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(4)Total excludes estimated taxgross-up payments of approximately $2,179,480 and $1,946,888 payable to Messrs. Ornstein and Lotz, respectively, upon termination from the Company. Actual amounts will differ depending on the timing of the termination and reason therefor.
(5)Estimated value based on the sum of the (i) difference between exercise price of $6.90 per share and $4.44 per share value as of September 28, 2007, multiplied by 49,999 unvested stock options held by the executive as of such date, and (ii) $4.44 per share value multiplied by 33,003 restricted shares held by the executive as of such date. No value was attributed to out-of-the- money options.
(6)Estimated value based on the sum of the (i) difference between exercise price of $6.90 per share and $4.44 per share value as of September 28, 2007, multiplied by 33,333 unvested stock options held by the executive as of such date, and (ii) $4.44 per share value multiplied by 55,335 restricted shares held by the executive as of such date. No value was attributed to out-of- the-money options.
(7)Assumes highest federal and state income tax rates forgross-up payment.
(8)Estimated value based on the sum of the (i) difference between exercise price of $7.40 per share and $4.44 per share value as of September 28, 2007, multiplied by 9,999 unvested stock options held by the executive as of such date, and (ii) $4.44 per share value multiplied by 16,600 restricted shares held by the executive as of such date. No value was attributed to out-of-the-money options.
(9)Amount reflects death benefit under existing life insurance policy maintained by the Company for the benefit of the executive.
DIRECTOR COMPENSATION
Fees
The following fees were paid to Directors who were not employees of the Company during fiscal 2007. Directors who are full-time employees of the Company receive no additional compensation for serving as directors. Board members also are reimbursed for all expenses associated with attending Board or Committee meetings.
     
Annual Retainer $15,000 
Fee for each Board meeting $1,000 
Fee for each telephonic Board meeting $500 
Fee for each Committee meeting $1,000 
Lead Director Retainer $10,000 
Compensation Committee Chairman Retainer $10,000 
Audit Committee Chairman Retainer $20,000 
Additionally, members of the Compensation and the Nominating/Corporate Governance Committee receive $750 for each in-person meeting and the Chairman of the Nominating/Corporate Governance Committee receives an annual retainer of $10,000 per year.
Incentive Plan
The Board of Directors adopted an amended and restated Director Incentive Plan on December 15, 2006, which Director Incentive Plan was ratified by the Company’s stockholdersExchange Commission on February 6,12, 2007.
Under the amended and restated Director Incentive Plan, each non-employee director receives a standard grant of restricted common stock comprised of a number of shares of restricted stock as determined by the Compensation Committee of the Board of Directors. Each non-employee director will receive the standard grant of restricted common stock on March 1st of each year. Upon being appointed a non-employee director after March 1st, such director is granted a pro-rata portion of the standard grant of restricted common stock and receives a standard grant of restricted common stock pursuant to the plan on March 1st of each succeeding year. The amount of pro-rata options granted to each new non-employee director is calculated by dividing the number of days prior to March 1 by the number of days in the calendar year and multiplying the quotient by the standard restricted stock award as was determined by the Compensation Committee for the relevant year.


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Other Benefits
Each non-employee director, and certain family members of such director, receives free travel on Mesa Airlines and free or reduced-fare travel on certain other partner air carriers at no cost to the Company or the director. The Company believes that the directors’ use of free air travel is “de minimis” and did not maintain any records of non-employee directors’ travel during fiscal 2007.
A summary of compensation paid to our non-employee directors in fiscal 2007 is as follows:
                             
  Director Compensation Table — Fiscal Year 2007 
              Change in
       
  Fees
           Pension
       
  Earned
           Value and
       
  or
        Non-Equity
  Nonqualified
       
  Paid in
  Stock
  Option
  Incentive Plan
  Deferred
  All Other
    
  Cash
  Awards
  Awards
  Compensation
  Compensation
  Compensation
  Total
 
Name
 ($)  ($)(1)  ($)  ($)  Earnings  ($)  ($) 
 
Daniel J. Altobello $39,250  $27,509   —   —   —   —  $66,759 
Robert Beleson $41,750  $27,509   —   —   —   —  $69,259 
Carlos E. Bonilla $27,000  $27,509   —   —   —   —  $54,509 
Joseph L. Manson $25,250  $27,509   —   —   —   —  $52,759 
Peter F. Nostrand $43,500  $27,509   —   —   —   —  $71,009 
Maurice A. Parker(2) $1,000   —   —   —   —   —  $1,000 
Richard R. Thayer $50,750  $27,509   —   —   —   —  $78,259 
(1)Each non-employee director received a grant of 3,663 shares of restricted stock on March 1, 2007. The value in this column is based on grant date fair value determined pursuant to FAS 123R.
(2)Mr. Parker’s status as a non-employee director changed in fiscal 2007. Accordingly, he was not eligible to receive such fees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year 2007, the Compensation Committee consisted of Messrs. Altobello, Bonilla and Nostrand. None of the members of the committee held any executive officer position or other employment with the Company prior to or during such service.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to September 2006, the Company provided reservation services toEurope-By-Air, Inc. The Company billedEurope-By-Air approximately $53,000 and $57,000 for these services during fiscal 2006 and 2005, respectively. The Company did not have any billings in fiscal year 2007. Mr. Ornstein is a major shareholder ofEurope-By-Air. In September 2006,Europe-By-Air stopped using the Company’s reservation services.
The Company uses the services of the law firms of Baker & Hostetler and Piper Rudnick (formerly Verner Lipfert Burnhard McPherson and Hand) for labor related legal services. The Company paid the firms an aggregate of $0.2 million, $0.3 million and $0.3 million for legal-related services in fiscal 2007, 2006 and 2005, respectively. Mr. Joseph Manson, a member of the Company’s Board of Directors, is a partner with Baker & Hostetler and a former partner with Piper Rudnick.
In fiscal 2001, the Company established Regional Airline Partners (“RAP”), a political interest group formed to pursue the interests of regional airlines, communities served by regional airlines and manufacturers of regional airline equipment. RAP has been involved in various lobbying activities related to maintaining funding for the Essential Air Service program under which the Company operates the majority of its Beechcraft 1900 aircraft. Mr. Maurice Parker, a member of the Company’s Board of Directors, is the Executive Director of RAP. During fiscal 2007, 2006 and 2005, the Company paid RAP’s operating costs totaling approximately $250,000, $284,000 and $312,000, respectively. Included in these amounts are the wages of Mr. Parker, which amounted to $113,000, $119,000 and $120,000 in fiscal 2005, 2006 and 2007, respectively. Since inception, the Company has financed 100% of RAP’s operations.


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The Company will enter into future business arrangements with related parties only where such arrangements are approved by a majority of disinterested directors and are on terms at least as favorable as available from unaffiliated third parties.
Shareholder Proposals for Action at the Company’sCompany's Next Annual Meeting

A shareholder proposal for shareholder action at the Company's next Annual Meeting of Shareholders to be held in 2009, must be received by the Company’sCompany's Secretary at the Company’sCompany's offices no later than November 2, 2008, in order to be included in the Company’sCompany's proxy statement and form of proxy for that meeting. Such proposals should be addressed to the Corporate Secretary, Mesa Air Group, Inc., 410 North 44th Street, Suite 100, Phoenix, Arizona 85008. If a shareholder proposal is introduced at the 2009 Annual Meeting of Shareholders without any discussion of the proposal in the Company’sCompany's proxy statement, and the shareholder does not notify the Company on or before March 3, 2009, as required by the Securities and Exchange Commission’sCommission's Rule 14(a)-4(c)(1), of the shareholder’sshareholder's intent to raise such proposal at the Annual Meeting of Shareholders, then proxies received by the Company for the 2009 Annual Meeting will be voted by the persons named as such proxies in their discretion with respect to such proposal. Notice of such proposal is to be sent to the above address.

Annual Report
The 2007 Annual Report, which was mailed to shareholders with

Householding of Proxy Statement

Some banks, brokers and other nominee record holders may be participating in the practice of "householding" proxy statements. This means that only one copy of this proxy statement contains financial and other information about our activities, but is not incorporated into this proxy statement and is notmay have been sent to be considered a part of these proxy soliciting materials.

multiple stockholders in your household. The Company will provide upon written request, without charge to each shareholder of record as of the Record Date,promptly deliver a separate copy of the Company’s annual report onForm 10-K for the fiscal year ended September 30, 2007, as filed with the SEC. Any Exhibits listed in theForm 10-K also will be furnished upon requestits proxy statement to you if you call or write it at the Company’s expense. Any such request should be directed to the Company’s Corporate Secretary at the Company’s executive offices atfollowing address or phone number: Mesa Air Group, Inc., 410 North 44th Street, Suite 100, Phoenix, Arizona 85008.
Incorporation by Reference
Notwithstanding anything85008, 602-685-4000. If you would like to receive separate copies of annual reports and proxy statements in the contrary set forth in any of our previous filings underfuture, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact the securities laws that might incorporate future filings, including this Proxy Statement, in whole or in part,Company at the Compensation Committee Report, the Audit Committee Report, the content ofwww.mesa-air.com, including the charters of the committees of our Board of Directors, our Corporate Governance Guidelines, our Nominating/Corporate Governance Committee Charter, our Audit Committee Charter, our Compensation Committee Charterabove address and our Code of Conduct, included or referenced in this Proxy Statement shall not be incorporated by reference into any such filings.
phone number.

Voting by Proxy

In order to ensure that your shares will be represented at the AnnualSpecial Meeting, please sign and return the enclosed Proxy in the envelope provided for that purpose, whether or not you expect to attend. Any shareholder may, without affecting any vote previously taken, revoke a written proxy by giving notice of revocation to the Company in writing or by executing and delivering to the Company a later dated proxy.

By Order of the Board of Directors

-S- JONATHAN G. ORNSTEIN

Jonathan G. Ornstein,


Chairman of the Board and Chief Executive Officer


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18

EXHIBIT A
MESA AIR GROUP, INC.
AUDIT COMMITTEE CHARTER
The role and responsibilities of the Audit Committee of the Board of Directors (the “Committee”) of Mesa Air Group, Inc. (the “Company”) are as follows:
Role
The Committee’s role is to act on behalf of the Company’s Board of Directors (the “Board”) and oversee all aspects of the Company’s control, reporting and audit functions, except those specifically related to the responsibilities of another standing committee of the Board. The Committee’s role includes a particular focus on the qualitative aspects of financial reporting to shareholders and on Company processes for the management of business/financial risk and for compliance with significant applicable legal, ethical and regulatory requirements.
The role also includes coordination with other Board committees and maintenance of strong, positive working relationships with management, external and internal auditors, counsel, and other Committee advisors.
Although the Committee has the responsibilities set forth in this Charter, management is responsible for preparing the Company’s financial statements and the independent registered public accountant is responsible for auditing those financial statements. It is not the duty of the Committee to plan or conduct the audit or to determine that the Company’s financial statements are complete and accurate or are in accordance with generally accepted accounting principles. Nothing in this Charter changes, or is intended to change, the responsibilities of management or the independent registered public accountant. Moreover, nothing in this Charter is intended to increase the liability of the members of the Committee beyond that which existed before this Charter or amendments thereto were approved by the Board.
Membership
Committee membership shall consist of at least three Board members who qualify as independent within the meaning of the Company’s Corporate Governance Guidelines and satisfy the experience and, as affirmatively determined by the Board, the independence requirements of the National Association of Securities Dealers, Inc. (“NASD”) applicable to audit committee members (including, with respect to the chairperson of the Committee, any special requirements applicable to chairpersons of audit committees), as in effect from time to time when and as required by the NASD.
Committee members shall have: (1) knowledge of the primary industries in which the Company operates, (2) the ability to read and understand fundamental financial statements, including a balance sheet, income statement, statement of cash flow and key performance indicators; and (3) the ability to understand key business and financial controls. One member, preferably the chairperson, should have the knowledge of financial reporting including applicable regulatory requirements, and accounting or related financial management expertise. The Committee shall have access to its own counsel and other advisors at the Committee’s sole discretion.
Committee members shall be nominated and approved annually by the full Board. The Committee members shall elect the Committee chairperson.
Operating Activities
The Committee shall fulfill its responsibilities within the context of the following activities:
I.  Continuous Activities — General
1. Provide an open avenue of communication between the independent registered public accountants, members of senior management, Internal Audit and the Board of Directors.


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2. The Committee shall, on an annual basis, review, assess and report to the Board on the independence of the independent registered public accountant, taking into account the opinions of members of management and the Company’s internal audit function and including an analysis of all non-audit services provided by the independent registered public accountant and the effect, if any, on such independence. In this connection, the Committee shall seek to obtain a written statement from the independent registered public accountant delineating all relationships between the registered public accountant and the Company consistent with Independence Standards Board Statement No. 1, “Independence Discussions with Audit Committees.” Additionally, the Committee should seek to maintain an active dialogue with the independent registered public accountant with respect to disclosed relationships or services that may impact auditor objectivity or independence and should take, or recommend to the full Board, appropriate action to ensure the independence of the independent registered public accountant. The Committee will also establish clear hiring policies for employees or former employees of the independent registered public accountant.
3. The internal audit function shall be responsible to senior management, but have a direct reporting responsibility and an effective line of communication to the Board through the Committee.
4. Inquire of management, the independent registered public accountant and the Director of Internal Audit about significant risks or exposures and ensure that the yearly audit plan addresses such risk.
5. Review with the independent registered public accountants and the Director of Internal Audit the coordination of the audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of audit resources.
6. Consider and review with the Director of Internal Audit, and the independent registered public accountants:
(a) The adequacy of internal controls, including computerized system controls and security.
(b) Findings and recommendations of the independent registered public accountants and Internal Audit and the related management responses.
(c) Significant findings during the year, including the status of previous audit recommendations.
(d) Any difficulties encountered in the course of audit work including any restrictions on the scope of activities or access to required information.
(e) Any changes required in the planned scope of the Internal Audit plan.
(f) The Internal Audit Department charter, budget and staffing.
7. Meet four times per year or more frequently as circumstances require, either in person or telephonically. The Committee may ask members of management or others to attend meetings and provide pertinent information as necessary.
8. Meet at least annually with the independent registered public accountants, the Director of Internal Audit and management, including the Chief Financial Officer, in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately with the Audit Committee.
9. The Committee shall review with management and the outside registered public accountant the audited financial statements to be included in the Company’s Annual Report onForm 10-K (or the Annual Report to Shareholders if distributed prior to the filing ofForm 10-K) and review and consider with the outside registered public accountants the matters required to be discussed by Statement of Auditing Standards (“SAS”) No. 114 andRule 2-07 ofRegulation S-X.
10. As a whole, or through the Committee Chair, the Committee shall review with the outside registered public accountants the Company’s quarterly reports to be filed with the Securities and Exchange Commission and the matters required to be discussed by SAS No. 114 andRule 2-07; this review will occur prior to the Company’s filing of theForm 10-Q.
11. The Committee shall review and discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies.


A-2

12. Report periodically to the Board of Directors on significant results of the foregoing activities.
II.  Continuous Activities — Re: Reporting Specific Policies
1. Advise financial management and the independent registered public accountants that they are expected to provide a timely analysis of significant current financial reporting issues and practices and other supporting documentation requested by the Committee, for its meetings and deliberations.
2. Require that financial management and the independent registered public accountants discuss with the audit committee their qualitative judgments about the appropriateness, not just the acceptability, of accounting principles and financial disclosures used or proposed to be adopted by the Company and, particularly about the degree of aggressiveness or conservatism of its accounting principles and underlying estimates.
3. Inquire as to the registered public accountants’ independent qualitative judgments about appropriateness, not just the acceptability, of accounting principles and the clarity of the financial disclosure practices used or proposed to be adopted by the Company.
4. Inquire as to the registered public accountants’ views about whether management’s choice of accounting principles are conservative, moderate or aggressive from the perspective of income, asset, and liability recognition, and whether those principles are common practice in the industry.
5. Discuss with the registered public accountants the reasonableness and appropriateness of changes in accounting principles and disclosure practices.
III.  Scheduled Activities
1. The Committee shall, on an annual basis, review, assess and report to the Board on the performance and qualifications of the independent registered public accountant and the audit partner. In this respect, the Committee shall seek to obtain a report by the independent registered public accountant describing the firm’s internal quality control procedures and any material issues raised by the most recent internal quality control review, or peer review, of the firm or by any inquiry or investigation by any governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues.
2. The Committee shall recommend the selection of the independent registered public accountants for approval by the Board, approve compensation for the independent registered public accountants, and review and approve the discharge of the independent registered public accountants.
3. Review and approve, in consultation with the independent registered public accountants, the internal audit scope and plan.
4. Review and approve, in consultation with the independent registered public accountants, the independent audit scope and plan.
5. Review with management and the independent registered public accountants the results of annual audits and related comments:
(a) Any significant changes required in the independent registered public accountants’ audit plans.
(b) Any difficulties or disputes with management encountered during the course of the audit.
(c) Other matters related to the conduct of the audit which are to be communicated to the Audit Committee under Auditing Standards Generally Accepted in the United States of America.
6. Review the results of the annual audits of member reimbursements, director and officers’ expense accounts and management perquisites prepared by Internal Audit.
7. Arrange for the independent registered public accountants to be available to the full Board at least annually to help provide a basis for the board to recommend the appointment of the registered public accountants.


A-3

8. Discuss with the registered public accountants the reasonableness of significant estimates made by management.
9. Review and update the Committee’s Charter annually and recommend any proposed changes for approval by the full Board.
10. The Committee shall prepare such reports regarding matters within the scope of the Committee’s role and responsibilities as maybe required to be included in the Company’s annual proxy statement or other public filings under applicable rules and regulations.
11. The Committee shall review and assess, on an annual basis, the Company’s code of ethical conduct and significant conflicts of interest and related-party transactions.
12. The Committee shall establish and maintain procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters. The Committee shall also establish and maintain procedures for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
13. The Committee shall review, discuss and assess at least annually its own performance as well as the role and responsibilities of the Committee, seeking input from senior management, the full Board and others. Changes in the roleand/or responsibilities of the Committee as outlined in this Charter, if any, shall be recommended to the full Board for approval.
IV.  When Necessary Activities
1. Review and concur in the appointment, replacement, reassignment or dismissal of the Director of Internal Audit.
2. Review and approve requests for any management consulting engagement to be performed by the Company’s independent registered public accountants and be advised of any other study undertaken at the request of management that is beyond the scope of the audit engagement letter.
3. The Committee shall review and assess SEC inquiries and the results of examinations by other financial regulatory authorities in terms of important findings, recommendations and management’s response.
4. Conduct or authorize investigations into any matters within the scope of the Committee’s responsibilities. The Committee shall be empowered to retain independent counsel and other professionals to assist in the conduct of any investigations.


A-4

EXHIBIT B
MESA AIR GROUP, INC.
NOMINATING/CORPORATE GOVERNANCE COMMITTEE CHARTER
COMMITTEE MEMBERSHIP
The Corporate Governance/Nominating Committee of the Board of Directors of the Company shall consist of at least three Directors. The members of the Committee and its Chair shall be appointed by the Board and may be removed by the Board at its discretion. All members of the Committee shall, in the Board’s judgment, meet the applicable independence requirements of the National Association of Securities Dealers, Inc. (“NASD”).
THE COMMITTEE’S PURPOSE
The purpose of the Corporate Governance/Nominating Committee is to assist the Board in identifying qualified individuals to become Board members, nominate Directors to serve on and to chair the Board Committees, periodically review director compensation and benefits, and recommend to the Board any improvements to the Company’s corporate governance guidelines as it deems appropriate. The Committee shall also assist the Board in continuing education, new director orientation and assessment of board effectiveness.
COMMITTEE AUTHORITY AND RESPONSIBILITIES
The authority and responsibilities of the Corporate Governance/Nominating Committee are:
1. To lead the search for individuals qualified to become members of the Board. In obtaining the names of possible new nominees, the Committee may make its own inquiries and will receive suggestions from other Directors, stockholders and other sources. All potential nominees must first be considered by the Committee before being contacted as possible nominees and before having their names formally considered by the full Board.
2. To evaluate the suitability of potential nominees for membership on the Board, taking into consideration the Board’s current composition, including expertise, diversity, and balance of inside, outside and independent directors, and considering the general qualifications of the potential nominees, such as:
(a) Unquestionable integrity and honesty;
(b) The ability to exercise sound, mature and independent business judgment in the best interests of the shareholders as a whole;
(c) Recognized leadership in business or professional activity;
(d) A background and experience that will complement the talents of the other Board members
(e) Willingness and capability to take the time to actively participate in Board and Committee meetings and related activities;
(f) Ability to work professionally and effectively with other Board members and the Company’s management;
(g) An age to enable the Director to remain on the Board long enough to make an effective contribution;
(h) Lack of realistic possibilities of conflict of interest or legal prohibition.
and see that all necessary and appropriate inquiries are made into the backgrounds of such candidates.
3. To recommend to the Board the number and names of proposed nominees for election as Director at the Annual Meeting of Shareholders and, in the case of a vacancy on the Board, the name of an individual to fill the vacancy.


B-1

4. To monitor trends and best practices in corporate governance, periodically review the corporate governance guidelines and recommend changes as it deems appropriate in those guidelines, in the corporate governance provisions of the Company’s By-Laws, and in the policies and practices of the Board, including:
(a) Retirement age and resignation policies;
(b) Other board service, conflict of interest issues and other affiliations;
(c) Schedule, agendas and conduct of executive sessions.
5. To annually review and make recommendations to the Board regarding its process for evaluating the effectiveness of the Board and its Committees. The Committee shall oversee the annual assessment of board effectiveness and report to the Board.
6. To periodically review and make recommendations to the Board regarding new Director orientation and Director continuing education.
7. To annually recommend to the Board following the annual meeting of shareholders, committee membership and chairs and review periodically with the Board Committee rotation practices.
COMMITTEE MEETINGS. SUPPORT AND EVALUATION
The Corporate Governance/Nominating Committee shall meet at least two times a year, or more often as circumstances require, keep minutes of its proceeding and report regularly to the Board.
The Corporate Governance/Nominating Committee may invite to its meetings any director, officer of the Company or such other person as it deems appropriate to assist it in performing its responsibilities, and has the authority to retain independent search or other consultants to assist it in identifying potential Director nominees, and to terminate any such search, in its sole discretion, and to approve related fees and other retention provisions.
The Corporate Governance/Nominating Committee shall conduct and present to the Board an annual performance evaluation of the Committee. The Committee shall review annually the adequacy of this charter and recommend any changes that it deems appropriate to the Board for approval.


B-2

EXHIBIT C
MESA AIR GROUP, INC.
COMPENSATION COMMITTEE CHARTER
The Compensation Committee of the Board of Directors of Mesa Air Group, Inc. will consist of a minimum of three (3) directors. Members of the Committee will be appointed by the Board of Directors and may be removed by the Board of Directors in its discretion. All members of the Committee will be independent directors, and will satisfy the proposed NASDAQ standard for independence for members of the Compensation Committee.
The purpose of the Committee will be to carry out the Board of Directors’ overall responsibility relating to executive compensation.
In furtherance of this purpose, the Committee will have the following authority and responsibility.
1. To assist the Board in developing and evaluating potential candidates for executive positions, including the chief executive officer, and to oversee the development of executive succession plans.
2. To review and approve on an annual basis the corporate goals and objectives with respect to compensation for the chief executive officer. The Committee will evaluate at least once a year the chief executive officer’s performance in light of these established goals and objectives. Based upon these evaluations, the Committee will review the chief executive officer’s annual compensation, including salary, bonus, incentive and equity compensation.
3. To review and approve on an annual basis the evaluation process and compensation structure for the Company’s senior officers. The Committee will evaluate with the CEO the performance of the Company’s senior executive officers and will approve the annual compensation, including salary, bonus, incentive and equity compensation, for such senior executive officers. The Committee will also provide oversight of management’s decisions concerning the performance and compensation of other Company officers.
4. To review the Company’s incentive compensation and other equity plans and recommend changes in such plans to the Board as needed. The Committee will have and will exercise all the authority of the Board of Directors with respect to the administration of such plans.
5. To maintain regular contact with the leadership of the Company. This should include review of data from the employee survey.
6. To prepare and publish an annual executive compensation report in the Company’s proxy statement.
The Committee will have authority to retain such compensation consultants, outside counsel and other advisors as the Committee may deem appropriate in its sole discretion. The Committee will have sole authority to approve related fees and retention terms.
The Committee will report its actions and any recommendations to the Board after each Committee meeting and will conduct and present to the Board an annual performance evaluation of the Committee. The Committee will review at least annually the adequacy of this charter and recommend any proposed changes to the Board for approval.


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MESA AIR GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MESA AIR GROUP, INC. FOR THE ANNUALSPECIAL MEETING OF SHAREHOLDERS

The undersigned shareholder of Mesa Air Group, Inc., a Nevada corporation (the “Company”"Company"), hereby acknowledges receipt of the Notice of AnnualSpecial Meeting of Shareholders, dated March 14,November [__], 2008, and hereby appoints Jonathan G. Ornstein or Brian S. Gillman and each of them, proxies and attorneys-in-fact, with full power of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the AnnualSpecial Meeting of Shareholders of MESA AIR GROUP, INC. to be held at the Company’s offices,Company's headquarters, which are located at 410 N.North 44th Street, Suite 160,100, Phoenix, Arizona 85008, on April 17,December 22, 2008 at 10:00 a.m., Arizona time, and at any adjournment(s) or postponement(s) thereof, and to vote all shares of Common Stock that the undersigned would be entitled to vote if then and there personally present, on the matters set forth below.

1. THE ISSUANCE OF SUCH NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK AS MAY BE NECESSARY TO REPURCHASE ALL OF ITS OUTSTANDING SENIOR CONVERTIBLE NOTES DUE 2023 AND SENIOR CONVERTIBLE NOTES DUE 2024 IF THE COMPANY IS REQUIRED BY NOTEHOLDERS TO REPURCHASE SUCH NOTES IN ACCORDANCE WITH THE INDENTURES UNDER WHICH THE NOTES WERE ISSUED AND CERTAIN RELATED CONTRACTUAL AGREEMENTS WITH RESPECT TO THE 2023 NOTES, AND IF THE COMPANY ELECTS TO SATISFY ALL OR A PORTION OF ITS REPURCHASE OBLIGATIONS BY ISSUING SHARES OF ITS COMMON STOCK.

1.

[ ]

FOR

ELECTION OF DIRECTORS

[ ]

AGAINST

[ ]

ABSTAIN

2. THE ISSUANCE, IF NECESSARY, OF SHARES OF THE COMPANY'S COMMON STOCK THAT MAY RESULT IN A PERSON, PERSONS, A GROUP, OR GROUPS ACQUIRING MORE THAN 20% OF THE COMPANY'S OUTSTANDING COMMON STOCK DUE TO THE COMPANY'S ISSUANCE OF SHARES OF COMMON STOCK IN SATISFACTION OF ITS NOTE REPURCHASE OBLIGATIONS.

[ ]

o

FOR

[ ]

FOR all nominees listed below (except as marked to the contrary below):
Jonathan G. Ornstein, Daniel J. Altobello, Robert Beleson, Carlos E. Bonilla, Joseph L. Manson, Peter F. Nostrand, Maurice A. Parker and Richard R. Thayer

AGAINST

o

[ ]

WITHHOLD AUTHORITY to vote for all nominees listed above

ABSTAIN

INSTRUCTIONS: To withhold authority to vote for any individual nominee, write that nominee’s name in the space provided below:

3. THE AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 75,000,000 SHARES TO 900,000,000 SHARES.

2.

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FOR

RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

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AGAINST

o     FOR               o     AGAINST               o

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ABSTAIN

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR”"FOR";(i) THE ELECTIONissuance of shares of the Company's common stock to repurchase all of its outstanding Senior Convertible Notes due 2023 and Senior Convertible Notes due 2024 in accordance with thOse certain FORBEARANCE AGREEMENTS RELATING to Senior Convertible Notes due 2023 and the Indenture dated February 10, 2004, RESPECTIVELY, (ii) THE issuance, if necessary, OF THE NOMINEES NAMED ABOVE AND “FOR” THE PROPOSAL TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS, shares of the Company's common stock That RESULT in a person or groups ACQUIRING more than 20% of the Company's OUTSTANDING Common Stock Due to the Company's repurchase of its outstanding Senior Convertible Notes due 2023 and Senior Convertible Notes due 2024,(iii) Amendment of the Company's articles of incorporation to increase the number of shares of AUTHORIZED common stock the company may issue from 75,000,000 SHARES to 900,000,000 Shares,AND AS SAID PROXIES DEEM ADVISABLE ON SUCH MATTERS AS MAY COME BEFORE THE MEETING.

Dated: ______________, 2008

Dated:, 2008
Please sign exactly as your name appears on the front of this Proxy Card. When shares are held in common or in joint tenancy, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by an authorized person.

SIGNATURES:


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Please return in the enclosed, postage-paid envelope.

I Will ________ Will not ______ attend the Meeting.