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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission File Number 0-15495
MESA AIR GROUP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 85-0302351
- -------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3753 Howard Hughes Parkway, Suite 200, Las Vegas 89109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 892-3773
--------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
On July 31, 1998 the Registrant had outstanding 28,362,866 shares of Common
Stock.
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PART 1. FINANCIAL INFORMATION
Item 1.
MESA AIR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
June 30 June 30
1998 1997 1998 1997
-------- --------- --------- ---------
Operating revenues:
Passenger $ 96,621 $ 126,823 $ 334,456 $ 368,735
Freight and other 2,902 2,620 9,259 7,529
-------- --------- --------- ---------
Total operating revenues 99,523 129,443 343,715 376,264
-------- --------- --------- ---------
Operating expenses:
Flight operations 38,283 48,421 134,012 136,104
Maintenance 20,512 23,626 67,043 66,401
Aircraft and traffic servicing 14,041 21,305 57,493 63,111
Promotion and sales 14,214 20,066 49,451 55,642
General and administrative 6,306 5,682 21,832 18,418
Depreciation and amortization 6,205 8,571 20,753 25,596
Other operating items -- -- 40,443 --
-------- --------- --------- ---------
Total operating expenses 99,561 127,671 391,027 365,272
-------- --------- --------- ---------
Operating income (loss) (38) 1,772 (47,312) 10,992
-------- --------- --------- ---------
Non-operating income (expense):
Interest expense (5,190) (7,025) (18,233) (20,618)
Interest income 369 418 1,232 1,463
Other 498 742 5,091 1,019
-------- --------- --------- ---------
Total non-operating income (expense) (4,323) (5,865) (11,910) (18,136)
-------- --------- --------- ---------
Loss before income taxes (4,361) (4,093) (59,222) (7,144)
Income tax benefit -- (1,590) (2,511) (2,776)
-------- --------- --------- ---------
Net loss $ (4,361) $ (2,503) $ (56,711) $ (4,368)
======== ========= ========= =========
Average common and common equivalent
shares outstanding 28,350 28,295 28,316 28,269
======== ========= ========= =========
Net loss per common and
common equivalent share $ (0.15) $ (0.09) $ (2.00) $ (0.15)
======== ========= ========= =========
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MESA AIR GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
June 30 September 30
1998 1997
-------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 50,416 $ 57,232
Marketable securities -- 8,690
Receivables, primarily traffic 30,226 53,852
Income tax refund receivable 7,523 6,999
Expendable parts and supplies, net 34,463 31,377
Prepaid expenses and other current assets 11,383 8,553
-------- --------
Total current assets 134,011 166,703
Property and equipment, net 334,962 440,890
Lease and equipment deposits 11,784 10,354
Intangibles, net 20,998 22,071
Other assets 5,467 9,848
-------- --------
Total assets $507,222 $649,866
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt and capital leases $ 13,563 $ 31,786
Accounts payable 27,477 21,884
Air traffic liability 10,595 6,785
Accrued compensation 2,473 7,025
Other accrued expenses 29,599 30,662
-------- --------
Total current liabilities 83,707 98,142
Long-term debt and capital leases, excluding current portion 245,857 338,199
Deferred credits and other liabilities 59,847 34,837
Deferred income taxes -- 1,600
Stockholder's equity:
Preferred stock of no par value, 2,000,000 shares -- --
authorized; no shares issued and outstanding
Common stock of no par value, 75,000,000 shares authorized; 101,836 101,361
28,362,249 and 28,294,584 shares issued and outstanding
Retained earnings 15,975 72,686
Unrealized gain on marketable securities, net -- 3,041
-------- --------
Total stockholder's equity 117,811 177,088
-------- --------
Total liabilities and stockholder's equity $507,222 $649,866
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MESA AIR GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended June 30
1998 1997
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(56,711) $ (4,368)
Adjustments to reconcile net loss to
net cash flows from operating activities:
Depreciation and amortization 20,753 25,596
Provision for other operating items 40,443 --
Amortization and write-off of deferred credits (15,433) (1,296)
Stock bonus plan -- 349
Provision for doubtful accounts 1,027 --
Gain on sale of securities (4,544) --
Other 2,759 --
Changes in assets and liabilities:
Receivables 22,599 (10,018)
Expendable parts and supplies (3,086) (2,369)
Prepaid expenses and other current assets (2,830) (4,059)
Accounts payable 5,594 5,408
Other accrued liabilities (5,615) (7,537)
-------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES: 4,956 1,706
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital retirements (6,443) (5,498)
Proceeds from sale of property and equipment 17,624 1,803
Proceeds from sale of marketable securities 11,102 1,000
Other assets (1,292) 4,811
Lease and equipment deposits (1,430) (888)
-------- --------
NET CASH FLOWS FROM INVESTING ACTIVITIES: 19,561 1,228
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt and obligations
under capital leases (31,808) (13,050)
Proceeds from issuance of common stock 475 122
Proceeds from deferred credits -- 230
-------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES: (31,333) (12,698)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS: (6,816) (9,764)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 57,232 54,720
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 50,416 $ 44,956
======== ========
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1998 1997
------------------- --------------------
Cash paid during the period for:
Interest $ 18,233 $ 20,618
Income taxes ___ 1,286
Mesa did not purchase any property or equipment upon which debt was assumed
during the nine-month period ended June 30, 1998. Mesa purchased property and
equipment totaling approximately $37.0 million upon which debt of approximately
$35.9 million was assumed in the nine-month period ended June 30, 1997. During
the three month period ended June 30, 1998, Mesa sold 22 aircraft for $78.7
million which was debt assumed by the acquirer.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three-month and nine-month periods ended June
30, 1998 are not necessarily indicative of the results that may be
expected for the year ending September 30, 1998.
These condensed consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and
footnotes included in the annual report for the year ended September 30,
1997.
2. The condensed consolidated financial statements include the accounts of
Mesa Air Group, Inc. and its wholly owned subsidiaries Mesa Airlines,
Inc., WestAir Holding, Inc., Air Midwest, Inc., Mesa Leasing, Inc., MAGI
Insurance, Ltd., MPD, Inc., and FCA, Inc. All significant intercompany
balances and transactions have been eliminated in consolidation. See
discussion of WestAir Holding, Inc. in the "Liquidity and Capital
Resources" section of this report.
3. Income tax benefit in the nine-month period ended June 30, 1998 has been
recognized only to the extent of previously recorded deferred tax
liability.
4. Legal Proceedings:
See, "Part II., Item 1."
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Item 2.
MESA AIR GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Mesa Air Group, Inc. and its subsidiaries (collectively referred to herein as
"Mesa" or the "Company") is a regional airline operating as America West
Express, Mesa Airlines, US Airways Express and, through May 31, 1998, United
Express (see, "Other Events--United Airlines") serving 113 cities in 29 states,
Canada and the District of Columbia. At June 30, 1998, Mesa utilized a fleet of
107 aircraft with approximately 1,000 daily departures.
Mesa's long-term strategy is to profitably service routes not directly served by
major air carriers and to supplement service of major carrier code partners on
certain routes. The Company evaluates market demand and utilizes its fleet of
aircraft to meet that demand. Code-sharing agreements with certain of the major
air carriers provide benefits from the name recognition, reservation systems,
marketing and promotional efforts of those carriers. Mesa operates a fleet of
new and efficient aircraft and performs much of its own maintenance and overhaul
work.
Historically, the Company has relied on generating much of its revenues by use
of a "through fare" arrangement with its major code-sharing partners. A "through
fare" is a combined fare offered to passengers who connect to Mesa from a major
code-sharing partner and vice versa. Mesa is paid a pro rata portion of the
"through fare." As an alternative to the pro rate arrangements, the Company, in
certain markets, has utilized fee per departure arrangements. A fee per
departure arrangement allows the Company to obtain a fee based on a proprietary
formula for each flight operated. The Company seeks to obtain fee per departure
arrangements in those markets where it deems the arrangement more favorable than
a pro rate agreement.
The following tables set forth year-to-year comparisons for the periods
indicated below:
OPERATING DATA
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Three Months Ended Nine Months Ended
June 30 June 30
1998 1997 1998 1997
------------------ ------------------ ------------------ ------------------
Passengers 1,199,004 1,748,216 4,242,013 4,866,198
Available seat miles (000) 530,652 642,527 1,793,078 1,832,185
Revenue passenger miles (000) 303,238 359,644 984,364 1,015,334
Load factor 57.1% 56.0% 54.9% 55.4%
Yield per revenue passenger mile 31.9(cent) 35.3(cent) 34.0(cent) 36.3(cent)
Revenue per available seat mile 18.8(cent) 20.1(cent) 19.2(cent) 20.5(cent)
Operating cost per available seat mile 18.8(cent) 19.9(cent) 21.8(cent) 19.9(cent)
Average stage length (miles) 194 170 184 170
Number of aircraft in fleet 132 186 132 186
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Three Months Ended Nine Months Ended
June 30 June 30
1998 1997 1998 1997
------------------ ------------------ ------------------ ------------------
Gallons of fuel consumed (000) 15,539 19,299 53,135 55,956
Block hours flown 104,369 147,747 376,799 424,370
Departures 104,739 156,473 378,006 450,940
FINANCIAL DATA
--------------
Three Months Ended June 30, 1998 Versus Three Months Ended June 30, 1997
- ------------------------------------------------------------------------
Three Months Ended June 30
--------------------------
1998 1997
---------------------------------- ----------------------------------
Cost per Percent of total Cost per Percent of total
ASM operating revenues ASM operating revenues
----------- ------------------ ----------- ------------------
Flight operations 7.2(cent) 38.5% 7.6(cent) 37.4%
Maintenance 3.9(cent) 20.6% 3.7(cent) 18.2%
Aircraft and traffic servicing 2.6(cent) 14.2% 3.3(cent) 16.5%
Promotion and sales 2.7(cent) 14.3% 3.1(cent) 15.5%
General and administrative 1.2(cent) 6.4% 0.9(cent) 4.4%
Depreciation and amortization 1.2(cent) 6.2% 1.3(cent) 6.6%
Other operating items 0.0(cent) 0.0% 0.0(cent) 0.0%
--------- --------- --------- ---------
Total operating expenses 18.8(cent) 100.0% 19.9(cent) 98.8%
Interest expense 1.0(cent) 5.2% 1.1(cent) 5.4%
Nine Months Ended June 30, 1998 Versus Nine Months Ended June 30, 1997
- ----------------------------------------------------------------------
Nine Months Ended June 30
-------------------------
1998 1997
--------------------------------- ---------------------------------
Cost per Percent of total Cost per Percent of total
ASM operating revenues ASM operating revenues
----------- ------------------ ---------- ------------------
Flight operations 7.5(cent) 39.0% 7.4(cent) 36.2%
Maintenance 3.7(cent) 19.5% 3.6(cent) 17.6%
Aircraft and traffic servicing 3.2(cent) 16.7% 3.5(cent) 16.8%
Promotion and sales 2.7(cent) 14.4% 3.0(cent) 14.8%
General and administrative 1.2(cent) 6.4% 1.0(cent) 4.9%
Depreciation and amortization 1.2(cent) 6.0% 1.4(cent) 6.8%
Other operating items 2.3(cent) 11.7% 0.0(cent) 0.0%
--------- --------- ------------ ---------
Total operating expenses 21.8(cent) 113.8% 19.9(cent) 97.1%
Interest expense 1.0(cent) 5.2% 1.1(cent) 5.5%
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OPERATIONS
Operating Revenues:
Operating revenues decreased by $29.9 million to $99.5 million in the quarter
ended June 30, 1998 from $129.4 million in the quarter ended June 30, 1997. The
revenue decrease was primarily due to a 31.4 % decrease in passengers carried.
Available seat miles ("ASMs") decreased by 17.4 %, and the load factor increased
from 56.0% during the June 30, 1997 quarter to 57.1% for the current quarter.
The primary reason for the decrease in ASM's was the discontinuation of the
Company's United Airlines Express ("United") operations. (See Other Events-
United Operations.)
Operating revenues decreased by $32.5 million to $343.7 million for the
nine-month period ended June 30, 1998 from $376.3 million for the nine-month
period ended June 30, 1997. This decrease was primarily due to the decrease in
the number of passengers carried in this period as compared to the nine months
ended June 30, 1997 as explained above, including the cessation of the United
Express operations and independent jet operations in Ft. Worth, Texas. The
independent jet operation was discontinued in February 1998 (See "Other
Events--Independent Jet Operation").
Operating Expenses:
Flight Operations:
- -----------------
Flight operations costs decreased by $10.1million to $38.3 million for the
quarter ended June 30, 1998 from the quarter ended June 30, 1997 and decreased
by $2.1 million to $134.0 million for the nine-month period ended June 30, 1998
from the nine-month period ended June 30, 1997. The primary cause of the
decrease for the quarter ended June 30, 1998 from the prior year's comparable
quarter was the reduction in ASM's previously noted. Flight operations expense
on a cost per ASM basis decreased to 7.2(cent) per seat mile for the quarter
ended June 30, 1998 from 7.6(cent) for the quarter ended June 30, 1997 due to
lower fuel costs. For the nine months ended June 30, 1998, the increase in cost
per ASM over the nine-month period ended June 30, 1997 were caused by a $3.4
million increase in pilot salaries, a $5.7 million increase in lease costs for
deployment of the CRJ aircraft into the Company's fleet, and a $2.9 million
increase in pilot training and lodging, all of which was partially offset by a
decrease in fuel costs of $2.8 million.
Maintenance Expense:
- -------------------
Maintenance expense decreased by $3.1million in the quarter ended June 30, 1998
to $20.5 million from $23.6 million in the same quarter of the previous fiscal
year and increased by $.6 million in the nine-month period ended June 30, 1998
to $67.0 million from $66.4 million for the nine-month period ended June 30,
1997. The decrease for the quarter ended June 30, 1998 was due to the reduction
in ASM's partially offset by maintenance of a greater number of CRJ aircraft for
the period from the prior year and higher costs of operating under increased
regulatory oversight as a Part 121 carrier. The increase for the nine-month
period ended June 30, 1998 was primarily due to a provision of $1.1 million in
uncollectible warranty and insurance claims, a $0.5 million increase as a result
of the higher cost of operating under greater regulatory oversight, and
maintenance of a greater number of CRJ aircraft.
Aircraft and Traffic Service Expense:
- ------------------------------------
Aircraft and traffic service expense decreased by $7.3 million to $14.0 million
during the quarter ended June 30, 1998 from $21.3 million in the comparable
quarter of the previous fiscal year. Aircraft and traffic service expense
decreased by $5.6 million to $57.5 million for the nine-month period ended June
30, 1998 from $63.1 million for the nine-month period ended June 30, 1997. The
decrease for the
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quarter ended June 30, 1998 was primarily due to reduced ASM's
and additional rent and landing fee reductions due to the closure of the
Company's United Express operations in Denver, which has some of the highest
rents and landing fees in the Company's system. The decrease for the nine-month
period ended June 30, 1998 was due to reduced ASM's, partially offset by
increased charges for reaccommodation and lost baggage costs from flight
cancellations caused by crew scheduling difficulties and training delays.
Promotion and Sales:
- -------------------
Promotion and sales expense decreased $6.0 million to $14.2 million for the
quarter ended June 30, 1998 and decreased by $6.2 million to $49.5 million for
the nine-month period ended June 30, 1998 over the three-month and nine-month
periods ended June 30, 1997, respectively. The primary reason for these
decreases was a significant decline in the number of passengers carried and a
reduction in commissions paid to travel agents, as a result of fewer passengers
and a lower commission rate.
General and Administrative Expense:
- ---------------------------------
General and administrative expense increased by $.6 million for the three-month
period ended June 30, 1998 to $6.3 million as compared to the quarter ended June
30, 1997 and increased by $3.4 million to $21.8 million for the nine-month
period ended June 30, 1998 as compared to the nine-month period ended June 30,
1997. The primary causes of the increase for the quarter ended June 30, 1998
were $0.4 million increase in health insurance claims, and $0.2 million increase
in property and casualty insurance. The primary causes of the increase for the
nine-month period ended June 30, 1998 was a $0.6 million increase in amounts
paid to employees as part of the employee performance bonus plan, a $1.3 million
increase in the amount of health insurance claims paid during the period, a $0.6
million increase in property taxes, and a $0.3 million increase in property and
casualty insurance.
Depreciation, Amortization and Interest Expense:
- -----------------------------------------------
Depreciation and amortization decreased by $2.4 million to $6.2 million for the
quarter ended June 30, 1998 as compared to the quarter ended June 30, 1997 and
by $4.8 million to $20.8 million for the nine-month period ended June 30, 1998
from the comparable periods in the prior year. The primary reason for these
decreases in depreciation and amortization was the writedown of the Denver
system intangible assets as of September 30, 1997. Interest expense declined by
$1.8 million to $5.2 million during the quarter ended June 30, 1998 from $7.0
million during the similar period in the prior fiscal year and by $2.4 million
to $18.2 million for the nine-month period ended June 30, 1998 from the
comparable period in the prior year. The decrease was due to lower outstanding
principal loan balances as a result of the retirement of aircraft.
Other Operating Items:
- ---------------------
During the nine-months ended June 30, 1998, the Company recognized a $4.0
million loss provision related to the discontinuation of its independent jet
operations in Ft. Worth, Texas. The Company also recognized a $2.5 million loss
provision related to anticipated settlement costs of a shareholder class action
lawsuit. See, Part II, Item 1. "Legal Proceedings." The Company also recognized
a $33.9 million loss provision related to the discontinuation of service under
the Mesa Airlines, Inc. ("MAI") code-sharing agreement with United Airlines,
Inc. ("UAL"). See, "Other Events--United Airlines."
Other Non-Operating Income:
- --------------------------
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In January 1998, Mesa sold its remaining investment in America West Airlines,
Inc. ("AWA") comprised of 100,000 Class A shares, 200,000 Class B shares and
warrants to purchase approximately 800,000 Class B shares. Mesa received cash of
approximately $11.1 million and recognized non-operating income of approximately
$4.5 million on the sale of these securities.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance of $50.4 million at June 30, 1998 included $2.4
million of cash restricted for the issuance of letters of credit, and $11.5
million held by WestAir Commuter Airlines, Inc. ("WestAir").
Mesa had receivables of $30.2 million at June 30, 1998 which consisted primarily
of amounts due from code-sharing partner US Airways, Inc. ("US Airways"). Under
the terms of the US Airways code-sharing agreement, Mesa receives a substantial
portion of its revenues through the Airline Clearing House. Historically, the
Company has enjoyed cash flow sufficient to meet its needs. However, UAL has
terminated all of its code-sharing agreements with the Company. Such action
could have a material negative impact on the financial position and cash flow of
the Company, particularly if the Company cannot re-deploy its United Express
aircraft on other operating routes, or alternatively, sell the aircraft or
return them to the lessors. Management's belief that the Company will have
adequate cash flow to meet its operating needs is a forward-looking statement.
The Company may have less cash flow than anticipated in the event of a
substantial decrease in the number of routes allocated to MAI under its
code-sharing agreements with US Airways and America West Airlines, failure to
sell, dispose of, or redeploy its assets associated with United Express
operations in a timely manner, reduced levels of passenger revenue, additional
taxes or costs of compliance with governmental regulations, fuel cost increases,
increase in competition, increase in interest rates, general economic conditions
and unfavorable settlement of existing or potential litigation.
On March 1, 1998, the Company's $20 million secured line of credit expired under
its terms and the bank declined to renew it. The Company has been approved by
another financial institutions to provide a secured $20 million line of credit.
There is presently no balance outstanding under this line of credit.
As of June 30, 1998, Mesa was not in compliance with some of the secured debt
covenants required by a bank credit agreement; however, the bank has waived
compliance with such covenants. The Company believes it will either maintain
compliance or obtain waivers of compliance with its present debt covenants
through September 30, 1998. Management's belief that it will maintain compliance
with its present debt covenants is a forward-looking statement. Compliance may
be adversely impacted in the event of the termination or renegotiation of one or
more code-sharing agreements, a substantial decrease in the number of routes
allocated to MAI under its code-sharing agreements with US Airways, failure to
dispose of or redeploy assets associated with its United Express operations,
reduced levels of passenger revenue, additional taxes or costs of compliance
with governmental regulations, fuel cost increases, increase in competition,
increase in interest rates, general economic conditions and settlement of
existing or potential litigation.
At June 30, 1998, the Company had aggregate indebtedness of approximately $259.4
million payable to various parties under promissory notes issued in connection
with the purchase of aircraft. The notes have interest rates ranging from 6.66%
to 7.87% with maturities through December 2011. In addition, the Company has
significant lease obligations on other operating and non-operating aircraft.
These leases are classified as operating leases and therefore are not reflected
as liabilities in the accompanying balance sheet. At June 30, 1998, 67 aircraft
were leased by the Company with terms extending through
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June 2016. Total lease expense for the nine-month period ended June 30, 1998
amounted to $31.8 million.
Mesa has ordered 32 CRJ aircraft for use in its AmericaWest Express operation in
Phoenix, Arizona, as USAirways Express on the East Coast and in other markets
that management believes have the potential for profitable operations. As of
June 30, 1998, the Company had received sixteen of the 32 CRJ aircraft on order
and expects to take delivery of the remaining 16 aircraft by the end of 1999.
The Company has options for an additional 16 CRJ aircraft with a delivery
schedule of one per month beginning June 2000. The value of these 32 CRJ
aircraft is approximately $640 million. The expected delivery schedule of
aircraft is a forward-looking statement which could significantly differ based
on manufacturer's delivery delays, among other factors.
The Company's wholly owned subsidiary, WestAir Holding, Inc. ("WHI"), owns
WestAir Commuter Airlines, Inc. ("WestAir"), a certificated air carrier and
Regional Aircraft Services, Inc. ("RAS"), an aircraft equipment repair service
company. WestAir had a total of 22 Embraer Brasilia aircraft leased from various
lessors along with the 21 Jetstreams which are currently parked and not being
utilized in WestAir's operations. WestAir made lease payments for all 43
aircraft only through May 31, 1998, the expiration date of WestAir's
code-sharing agreement with UAL. Failure to make lease payments constituted a
default under the lease agreements. The aircraft lessors have the right to
exercise liens each lessor has on particular aircraft.
If the aircraft provide insufficient collateral for the remaining lease
payments, it is the belief of management that while the various lessors may seek
recovery of any deficiency from WestAir (or WHI, as the various lease contracts
permit) that they will have no right to seek any recovery of deficiencies from
Mesa Air Group, Inc. Management's belief that the various aircraft lessors will
have no right of recovery against Mesa Air Group, Inc. itself is a
forward-looking statement which could materially differ based on the
interpretation of lease agreements and other documents entered into between
WestAir and/or WHI and the lessors by a court or an arbitrator, as the case may
be.
WestAir's operations are being liquidated due to the expiration of the UAL
code-sharing agreement. The remaining assets and liabilities of WHI and its
subsidiaries are included in the consolidated financial statements of Mesa Air
Group, Inc. as of June 30, 1998. It is unlikely that any assets of WestAir will
remain for distribution to WHI and, ultimately, Mesa Air Group, Inc.
Management of the Company recognizes the need to ensure its operations will not
be adversely impacted by Year 2000 software failure and that the Company's
computer systems and applications must function properly beyond 1999. The
Company is conducting the analysis necessary to determine the potential Year
2000 risk and until completion of such analysis will not know the cost to the
Company of potential Year 2000 software failure. Although the Company cannot
presently estimate the costs associated with Year 2000 software failure, such
costs will be expensed as incurred.
The Company recognizes that its business is reliant upon the systems and
applications of third parties and will conduct an assessment of the potential
risks. However, there can be no assurance that the systems and applications of
other parties upon which the Company's business relies will be converted on a
timely basis. The Company's business, financial condition, or results of
operations could be materially adversely affected by the failure of its systems
and applications or the failure of those systems operated by other parties to
properly operate or manage dates beyond 1999.
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OTHER EVENTS
United Airlines, Inc.
As a result of termination by UAL of the West Air and MAI Code-Sharing
Agreements on April 22 and May 31, 1998 respectively, the Company incurred a
loss provision totaling $106 million to provide for costs to dispose of certain
aircraft, equipment, and other costs to shut down the entire United Express
system. Should the Company fail to locate purchasers for its excess Beechcraft
1900D aircraft or redeploy its Dash 8-200 aircraft utilized in the MAI United
Express system in a timely manner, the $106 million loss provision may be
inadequate and subject to a material increase. The Company anticipates flying
the Dash 8-200 aircraft under an agreement with AWA (see America West Airlines,
Inc. discussion). Management of the Company believes that it will incur
approximately $15 to $20 million of net cash expenditures during the 12-month
period subsequent to May 31, 1998 as a result of the termination of its MAI and
WestAir code-sharing agreements. WestAir spent approximately $1.7 million in the
period from June 1, 1998 through July 31, 1998 on wind down activities. The
estimated net cash expenditure is a forward-looking statement which could
materially change as a result of the ultimate cost to park the WestAir fleet, or
the failure to sell or dispose of excess aircraft in a timely manner.
US Airways, Inc.
Mesa has entered into a marketing agreement with US Airways in which it will
initially operate 12 CRJ aircraft in its USAirways Express operation. The
Company began USAirways Express CRJ service on January 19, 1998, with flights
between Philadelphia, Pennsylvania and Birmingham, Alabama; St. Louis, Missouri;
Cincinnati, Ohio; and Newburgh, New York. Other cities to be served include
Charlotte, North Carolina; Washington, D.C.; Toronto, Canada; Little Rock,
Arkansas; Charleston, West Virginia; Raleigh Durham, North Carolina; Boston,
Massachusetts; Milwaukee, Wisconsin; White Plains, New York; and Tallahassee,
Florida. All of this service is to be provided pursuant to a fee per departure
arrangement. There are 12 CRJ aircraft operating in the US Airways Express
system as of August 1, 1998.
America West Airlines, Inc.
The terms of the Company's code-sharing agreement with AWA provide for a minimum
controllable flight completion factor for any consecutive two-month period.
Primarily as a result of flight crew shortages in December 1997 and January
1998, MAI's controllable flight completion factor fell below the minimum and AWA
issued the Company a notice of termination. In early February 1998, MAI resolved
its crew shortages with AWA and its controllable completion factor exceeded the
minimum requirement in February 1998 through April 1998. Subsequent to the
termination by AWA of the code-sharing agreement, AWA and Mesa entered into an
interim agreement to continue Mesa operations as America West Express through
September 10, 1998.
The Company entered into a new six-year agreement with AWA to provide expanded
regional airline service as America West Express. The new agreement calls for
the addition of eleven 37-passenger turboprop aircraft and ten regional jets by
the end of 1999, with options to continue to expand both fleets in the year 2000
and 2001. This will more than double the size of the America West operation over
the next twelve months. The Company will be compensated for these markets under
a modified fee per departure arrangement.
13
14
The following table lists the aircraft owned and leased by Mesa for scheduled
operations as of June 30, 1998:
NUMBER OF AIRCRAFT
Passenger
---------------------------------------------------------
Type of Aircraft Owned Leased Total Operating Capacity
On June 30,
1998
------------- -------------- --------------- -------------- ---------------
Beechcraft 1900 86 10 96 80 19
Embraer Brasilia -- 8 8 4 30
Dash 8-200 -- 12 12 7 37
CRJ -- 16 16 16 50
------------- -------------- --------------- --------------
Total 86 46 132 107
------------- -------------- --------------- --------------
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
During 1994, seven shareholder class action complaints were filed
in the United States District Court for the District of New Mexico
against Mesa, certain of its present and former corporate officers
and directors, its independent auditor, and certain underwriters
who participated in Mesa's June 1993 public offering of Common
Stock. During October 1995, the court certified a class consisting
of persons who purchased Mesa stock between January 28, 1993 and
August 5, 1994. These complaints were consolidated by court order,
and, after the court granted in part a motion to dismiss in May
1996, a third amended consolidated complaint was filed alleging
that during the class period the defendants caused or permitted
Mesa to issue publicly misleading financial statements and other
misleading statements in the registration statement for the June
1993 public offering, annual and quarterly reports to
shareholders, press releases and interviews with securities
analysts.
In May 1998, the Company entered into a memorandum of
understanding with the plaintiffs to settle the litigation. While
the Company and its corporate officers and directors believe they
have substantial and meritorious defenses against the plaintiff's
allegations and have defended their position vigorously, they have
agreed to a settlement to avoid ongoing litigation. The memorandum
of understanding provides for a total of $8 million to be paid to
the class plaintiffs on behalf of the defendants. The Company will
pay a substantial portion of this settlement. The settlement still
must be approved by the Court following notification of the Class.
The Company intends to utilize funds reserved for the defense of
the case as its contribution towards the settlement.
In June 1997, UAL filed a complaint in the United States District
Court for the Northern District of Illinois against two
subsidiaries of the Company, Mesa Airlines, Inc. ("MAI") and
WestAir, seeking a judicial declaration of the parties' rights and
obligations under two separate written agreements, pursuant to
which MAI and WestAir allegedly agreed to provide certain airline
transportation services to UAL including the provision of
scheduled air transportation services in certain areas of the
United States under the service mark "United Express." UAL
contends that, under these agreements, UAL has the right to
14
15
"increase, decrease, or in any other way adjust the flight
frequencies, or markets, or both" in certain airports currently
serviced by WestAir and/or MAI. In January 1998, UAL amended its
complaint to include damages related to MAI's purported breach of
contract to provide specified levels of service in certain
cities. MAI and WestAir dispute the principal contentions in
UAL's complaint, and unless a satisfactory negotiated resolution
is achieved, intend to defend their position vigorously.
Furthermore, MAI and WestAir believe that UAL has breached its
code-sharing agreements with the respective entities and have
filed a counterclaim seeking to recover the substantial damages
to the business of MAI and WestAir which have been incurred.
In addition, Mesa and WestAir have counter claimed against UAL
and SkyWest Airlines. SkyWest was contracted to be Mesa's
successor on the West Coast. The complaint alleges that SkyWest
unlawfully interfered with Mesa's and WestAir's contracts with
UAL. It further alleges improper conduct on the part of UAL and
SkyWest in terminating markets under the Mesa agreement and in
leading to the non-renewal of the WestAir agreement. The Company
is seeking substantial damages against each defendant.
In July 1998, Jet Acceptance Corporation ("Jet Acceptance") filed
suit against Mesa and WestAir in the United States District Court
for the Northern District of California. The suit seeks damages
from WestAir for non-payment of leases for Jetstream 31 aircraft
leased by WestAir and also claims damages against Mesa for
alleged fraudulent conveyances and the receipt of illegal
dividends. Jet Acceptance claims damages in the amount of
approximately $16.5 million. Jet Acceptance seeks to hold Mesa
liable for the WestAir leases on an "alter ego" or "piercing the
corporate veil" theory. Mesa denies the allegations. Jet
Acceptance has applied for and received a court-ordered
attachment of WestAir's assets. The Company intends to vigorously
defend this suit.
Mesa is also a party to legal proceedings and claims which arise
during the ordinary course of business.
In the belief of management, based upon information at this time,
the ultimate outcome of all the proceedings and claims pending
against Mesa other than those with UAL and Jet Acceptance
referred to above is not expected to have a material adverse
effect on Mesa's consolidated financial position. It is too early
to determine the impact on Mesa's financial position of the
litigation with UAL and Jet Acceptance.
The belief that UAL has breached its code-sharing agreements with
MAI and WestAir and the belief that the ultimate outcome of
certain of the proceedings and claims pending against Mesa will
favorably be resolved are forward-looking statements which could
materially differ as a result of the determination of a judge or
jury.
Item 5. The Company expects to hold its next annual meeting in March 1999.
Shareholder proposals to be included in the Company's proxy
materials and form of proxy must be received by the Company no
later than September 30, 1998. To be included, proposals must be
proper under law and comply with the rules and regulations of the
U.S. Securities and Exchange Commission. Shareholders desiring to
present proposals at the 1999 annual meeting that are
15
16
not to be included in the Company's proxy materials and form of
proxy must provide the Company with notice no later than December
1, 1998.
Item 6. Exhibits and Reports on Form 8-K
(A) Documents filed as part of this report:
1. Reference is made to consolidated financial statement schedules in
item 8 hereof.
2. Reports on Form 8-K
None
3. Exhibits
Please see the attached Exhibit Index for a list of the exhibits that
are either filed as part of this report or are incorporated herein by
reference from documents previously filed with the Securities and
Exchange Commission.
17
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the duly
authorized undersigned.
MESA AIR GROUP, INC.
Registrant
Date: August 14, 1998 /s/ Blaine M. Jones
-----------------------
Blaine M. Jones
Chief Financial Officer
(Principal Accounting Officer)
22
18
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
2.1 Plan and Agreement of Merger of Mesa Air Filed as Exhibit 2.1 to Registrant's Form 10-K
Group, Inc. into Mesa Holding, Inc. dated for the fiscal year ended September 30, 1996,
September 16, 1996 incorporated herein by reference
3.1 Articles of Incorporation of Mesa Air Filed as Exhibit 3.1 to
Inc. dated May 28, 1996 Registrant's Form 10-K Holdings, for
the fiscal year ended September 30, 1996,
incorporated herein by reference
3.2 Bylaws of Mesa Air Group, Inc., as amended Filed as Exhibit 3.2 to Registrant's Form 10-K
for the fiscal year ended September 30, 1996,
incorporated herein by reference
4.1 Form of Common Stock certificate Filed as Exhibit 4.5 to Amendment No. 1 to
Registrant's Form S-18, Registration No.
33-11765 filed March 6, 1987, incorporated
herein by reference
4.2 Form of Common Stock certificate (issued Filed as Exhibit 4.8 to Form S-1, Registration
after November 12, 1990) No. 33-35556 effective December 6, 1990,
incorporated herein by reference
4.8 Form of Employee Non-Incentive Stock Option Filed as Exhibit 4.12 to Registrant's Form 10-K Plan,
dated as of June 2, 1992 for the fiscal year ended September 30, 1992,
Commission File No. 33-15495, incorporated
herein by reference
4.9 Form of Non-Incentive Stock Option issued Filed as Exhibit 4.13 to Registrant's Form 10-K for
under Mesa Airlines, Inc. Employee Non- the fiscal year ended September 30, 1992,
Incentive Stock Option Plan, dated Commission File No. 33-15495, incorporated herein
as of June 2, 1992 by reference
4.10 Form of Mesa Airlines, Inc. Outside Filed as Exhibits 4.1, 4.2 and 4.3 to
Directors Stock Option Plan, dated as of Registration No. 33-09395 effective August 1,
March 9, 1993 1996
19
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
4.11 Form of Stock Option issued under Mesa Filed as Exhibit 4.4 to Registration No.
Airlines, Inc. Outside Director's Stock 33-09395 effective August 1, 1996
Option Plan, dated as of March 9, 1993
4.12 Form of Mesa Airlines, Inc. Additional Filed as Exhibit 4.5 to Registration No.
Outside Directors Stock Option Plan dated as 33-09395 effective August 1, 1996
of December 9, 1994
4.13 Form of Non-Qualified Stock Option Issued Filed as Exhibit 4.6 to Registration No.
Under Mesa Airlines, Inc. Additional Outside 33-09395 effective August 1, 1996
Directors' Stock Option Plan
4.14 Form of Mesa Air Group, Inc. Restated and Filed as Exhibit 4.1 to Registration No.
Amended Employee Stock Option Plan dated 33-02791 effective April 24, 1996
April 23, 1996
4.15 Form of Non-Qualified Stock Option issued Filed as Exhibit 4.2 to Registration No.
under Mesa Air Group, Inc. Restated and 33-02791 effective April 24, 1996
Amended Employee Stock Option Plan dated
April 23, 1996
4.16 Form of Qualified Stock Option issued under Filed as Exhibit 4.3 to Registration No.
Mesa Air Group, Inc. Restated and Amended 33-02791 effective April 24, 1996
Employee Stock Option Plan dated April 23,
1996
10.17 Agreement between Beech Aircraft Corporation Filed as Exhibit 10.30 to Form S-1,
and Mesa Airlines, Inc., dated April 30, 1990 Registration No. 33-35556 effective December 6,
1990, incorporated herein by reference
10.18 Sublease Agreement between Air Midwest, Inc. Filed as Exhibit 10.32.1 to Form S-1,
and Mesa Airlines, Inc., dated April 27, Registration No. 33-35556 effective December 6,
1990 for Embraer Brasilia aircraft 120.180 1990, incorporated herein by reference
10.20 Agreement between Air Midwest, Inc. and Mesa Filed as Exhibit 10.32.3 to Form S-1,
Airlines, Inc., dated February 27, 1990, for Registration No. 33-35556 effective December 6,
purchase of four Embraer Brasilia aircraft 1990, incorporated herein by reference
10.21 Letter Agreement between McDonnell Douglas Filed as Exhibit 10.32.4 to Form S-1,
Finance Corporation, Air Midwest, Inc. and Registration No. 33-35556 effective December 6,
Mesa Airlines, Inc., dated March 19, 1990, 1990, incorporated herein by reference
as amended, regarding lease and sublease of
four Embraer Brasilia aircraft
10.22 Sublease Agreement between Air Midwest Inc. Filed as Exhibit 10.32.5 to Form S-1,
and Mesa Airlines, Inc., dated July 26, Registration No. 33-35556 effective December 6,
1990, for Embraer Brasilia aircraft 120.193 1990, incorporated herein by reference
10.23 Lease Agreement between McDonnell Douglas Filed as Exhibit 10.32.6 to Form S-1,
Finance Corporation and Mesa Airlines, Inc., Registration No. 33-35556 effective December 6,
dated July 26, 1990, for Embraer Brasilia 1990, incorporated herein by reference
aircraft 120.193
10.24 Sublease Agreement between Air Midwest Inc. Filed as Exhibit 10.32.7 to Form S-1,
and Mesa Airlines, Inc., dated September 26, Registration No. 33-35556 effective December 6,
1990, for Embraer Brasilia aircraft 120.203 1990, incorporated herein by reference
20
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
10.25 Lease Agreement between McDonnell Douglas Filed as Exhibit 10.32.8 to Form S-1,
Finance Corporation and Mesa Airlines, Inc., Registration No. 33-35556 effective December 6,
dated September 26, 1990, for Embraer 1990, incorporated herein by reference
Brasilia aircraft 120.203
10.27 Expanded Partner Agreement between United Filed as Exhibit 19.3 to Registrant's Form 10-Q
Air Lines, Inc., and Mesa Airlines, Inc., for the quarterly period ended June 30, 1990,
dated February 15, 1990 Commission File No. 0-15495, incorporated
herein by reference
10.29 Form of Directors' and Officers' Filed as Exhibit 10.41 to Form S-1,
Indemnification Agreement Registration No. 33-35556 effective December 6,
1990, incorporated herein by reference
10.31 Agreement Relating to the Settlement of Filed as Exhibit 10.45 to Form S-1,
Interline Accounts through Airlines Clearing Registration No. 33-35556 effective December 6,
House, Inc., between Airlines Clearing 1990, incorporated herein by reference
House, Inc. and Mesa Airlines, Inc., dated
September 2, 1981
10.32 Agreement between Beech Aircraft Corporation Filed as Exhibit 10.42 to Form 10-K for fiscal
and Mesa Airlines, Inc., dated September 18, year ended September 30, 1991, Commission File
1991 No. 0-15495, incorporated herein by reference
10.33 Agreement between US Airways, Inc. and Air Filed as Exhibit 10.43 to Form 10-K for fiscal
Midwest, Inc. year ended September 30, 1991, Commission File
No. 0-15495, incorporated herein by reference
10.34 Agreement between US Airways, Inc. and Filed as Exhibit 10.44 to Form 10-K for fiscal
FloridaGulf Airlines, Inc. year ended September 30, 1991, Commission File
No. 0-15495, incorporated herein by reference
10.35 Sublease agreement between Trans States Filed as Exhibit 10.45 to Form 10-K for fiscal
Airlines, Inc. and Air Midwest, Inc. year ended September 30, 1992, Commission File
No. 0-15495, incorporated herein by reference
10.37 Agreement between Beech Aircraft Filed as Exhibit 10.47 to Form 10-K for fiscal
Corporation, Beech Acceptance Corporation, year ended September 30, 1992, Commission File
Inc. and Mesa Airlines, Inc., dated August No. 0-15495, incorporated herein by reference
21, 1992
10.38 Agreement between America West Airlines, Filed as Exhibit 10.48 to Form 10-K for fiscal
Inc. and Mesa Airlines, Inc. year ended September 30, 1992, Commission File
No. 0-15495, incorporated herein by reference
10.39 Agreement between United Air Lines, Inc. and Filed as Exhibit 10.49 to Form 10-K for fiscal
WestAir Commuter Airlines, Inc. (WestAir) year ended September 30, 1992, Commission File
No. 0-15495, incorporated herein by reference
10.40 Plan and Agreement to Merge between Mesa Filed as Exhibit A to Form S-4 Registration No.
Airlines, Inc., Mesa Acquisition Corporation 33-45638, effective April 17, 1992,
and WestAir Holding, Inc., dated February 7, incorporated herein by reference
1992
10.41 Certificate of Public Convenience and Filed as Exhibit 10.1(a) to WestAir Holding,
Necessity for WestAir Commuter Airlines, Inc. Inc.'s Registration Statement on Form S-1,
Commission File No. 33-24316, incorporated
herein by reference
10.42 Air Carrier Operating Certificate for WestAir Filed as Exhibit 10. to WestAir Holding, Inc.'s
Registration Statement on Form S-1, Commission
File No. 33-24316, incorporated herein by
reference
21
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
10.46 Original Agreement to Lease dated as of Filed as Exhibit 10.44 to WestAir Holding,
April 27, 1987 between NPA, Inc. ("NPA") and Inc.'s Registration Statement on Form S-1,
British Aerospace, Inc. ("BAe") with a Commission File No. 33-24316, incorporated
Letter to FG Holdings, Inc. ("FGH") dated herein by reference
March 11, 1988 and Amendment No. 1 to
Agreement to Lease dated as of March 3, 1988
between BAe and FGH
10.47 Side Letter Agreement to NPA from JACO dated Filed as Exhibit 10.48 to WestAir Holding,
June 4, 1987 Inc.'s Registration Statement on Form S-1,
Commission File No. 33-24316, incorporated
herein by reference
10.49 Employment Agreement dated as of Filed as Exhibit 10.51(b) to WestAir Holding,
September 1, 1988 between WestAir and Inc.'s Registration Statement on Form S-1,
Maurice J. Gallagher Jr. Commission File No. 33-24316, incorporated
herein by reference
10.50 Aviation Land and Building Lease and Filed as Exhibit 10.164 to the Pre-effective
Agreement between City of Fresno, California Amendment No. 1, filed October 19, 1988, to
and WestAir dated January 7, 1986 WestAir Holding, Inc.'s Registration Statement
on Form S-1, Commission File No. 33-24316,
incorporated herein by reference
10.51 Airport Operating Permit between Airport Filed as Exhibit 10.67 to WestAir Holding,
Commission of City and County of San Inc.'s Registration Statement on Form S-1,
Francisco and WestAir Commission File No. 33-24316, incorporated
herein by reference
10.58 Promissory Note to Textron for spare parts Filed as Exhibit 10.80 to WestAir Holding,
as executed by WestAir, dated December 30, Inc.'s Form 10-K dated December 31, 1988,
1988 Commission File No. 33-24316, incorporated
herein by reference
10.59 Agreement to lease Jetstream model 3101 Filed as Exhibit 2.1 to WestAir Holding, Inc.'s
aircraft and Jetstream model 3201 Form 8-K filed June 8, 1989, Commission File
aircraft between BAe and WestAir, dated No. 33-24316, incorporated herein by reference
May 11, 1989
10.60 Amendment to Agreement to Lease dated May Filed as Exhibit 10.38 to WestAir Holding,
11, 1989 between WestAir and BAe, dated Inc.'s Form 10-K for the year ended
February 15, 1990 December 31, 1989, Commission File No. 33-24316,
incorporated herein by reference
10.61 Amended and Restated Stock Purchase Filed as Exhibit 10.42(a) to WestAir Holding,
Agreement, dated September 30, 1991 among Inc.'s Form 10-K for the year ended December
WestAir Holding, Inc., WestAir Commuter 31, 1991, Commission File No. 33-24316,
Airlines, Inc. and Atlantic Coast Airlines, incorporated herein by reference
Inc., relating to the sale of the Atlantic
Coast division of WestAir Commuter Airlines,
Inc.
10.65 Agreement of Purchase and Sales of Assets by Filed as Exhibit 10.90 to Mesa Airlines, Inc.
and among Crown Airways, Inc., Phillip R. Form 10-K for the year ended September 30,
Burnaman, A. J. Beiga and Mesa Airlines, 1994, Commission File No. 0-15495
Inc., dated as of December 16, 1993
10.66 Supplemental Agreement No. 9/03/94 Filed as Exhibit 10.66 to Mesa Airlines, Inc.
Beechcraft 1900 D Airliner Acquisition Form 10-K for the year ended September 30,
Master Agreement between Mesa Airlines, 1994, Commission File No. 0-15495
Inc., Beech Aircraft Corporation and Beech
Acceptance Corporation, Inc., dated as of
September 23, 1994
22
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
10.67 Form of Lease Agreement between Beech Filed as Exhibit 10.67 to Mesa Airlines, Inc.
Acceptance Corporation, Inc. and Mesa Form 10-K for the year ended September 30,
Airlines, Inc., negotiated September 30, 1994, Commission File No. 0-15495
1994 for all prospective 1900 D Airliner
leases.
10.68 Asset Purchase Agreement dated July 29, 1994 Filed as Exhibit 10.68 to Mesa Airlines, Inc.
among Pennsylvania Commuter Airlines, Inc., Form 10-K for the year ended September 30,
dba Allegheny Commuter Airlines, US Airways 1994, Commission File No. 0-15495
Leasing and Services, Inc., and Mesa
Airlines, Inc.
10.69 Letter Agreement in Principle dated as of Filed as Exhibit 10.69 to Mesa Airlines, Inc.
October 16, 1994 among Air Wisconsin, Inc., Form 10-K for the year ended September 30,
United Air Lines Inc. and Mesa Airlines, 1994, Commission File No. 0-15495
Inc. (Certain portions deleted pursuant to
request for confidential treatment)
(Referred to erroneously as Exhibit 10.94 in
letter asking for confidential treatment to
Securities and Exchange Commission dated
12-23-94 from Chapman & Culture)
10.70 Subscription Agreement between AmWest Filed as Exhibit 10.70 to Mesa Airlines, Inc.
Partners, L.P. and Mesa Airlines, Inc. dated Form 10-K for the year ended September 30,
as of June 28, 1994 1994, Commission File No. 0-15495
10.71 Omnibus Agreement Filed as Exhibit 10.71 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.72 Aircraft Purchase and Sale Agreement Filed as Exhibit 10.72 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.73 Expendable and Rotable Spare Parts and Sale Filed as Exhibit 10.73 to Mesa Air Group, Inc.
Agreement Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.74 United Express Agreement Amendment Filed as Exhibit 10.74 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.75 Side Letter Agreement Filed as Exhibit 10.75 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.76 First Amendment to Omnibus Agreement Filed as Exhibit 10.76 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.77 Operating Lease Agreement Filed as Exhibit 10.77 to Mesa Air Group, Inc.
Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
10.78 Item 3. Legal Proceedings - Form 10-K dated Filed as Exhibit 10.78 to Mesa Air Group, Inc.
September 30, 1994 Form 10-Q for the quarter ended December 31,
1994, Commission File No. 0-15495
23
EXHIBIT
NUMBER DESCRIPTION REFERENCE
------ ----------- ---------
10.79 Purchase Agreement B95-7701-PA-200 between Filed as Exhibit 10.79 to Mesa Air Group, Inc.
Bombardier Inc. and Mesa Airlines, Inc. Form 10-Q for the quarter ended March 31, 1995,
Commission File No. 0-15495
10.81 Letter of Understanding between Mesa Air Filed as Exhibit 10.81 to Mesa Air Group, Inc.
Group, Inc. and Raytheon Aircraft Company Form 10-Q for the quarter ended March 31, 1996,
(RAC) dated April 12, 1996. Commission File No. 0-15495
10.82 Supplemental Agreement No. 05/22/96, Filed as Exhibit 10.82 to Mesa Air Group, Inc.
Beechcraft 1900D Airliner Acquisition Master Form 10-Q for the quarter ended March 31, 1997,
Agreement between Mesa Air Group, Inc., Commission File No. 0-15495
Raytheon Aircraft Company and Raytheon
Aircraft Credit Corporation
10.83 Bombardier Regional Aircraft Division Filed as Exhibit 10.83 to Mesa Air Group, Inc.
Purchase Agreement CRJ-0351 between Form 10-Q for the quarter ended December 31,
Bombardier Inc. and Mesa Air Group, Inc. 1996, Commission File No. 0-15495
10.84 Aircraft Option Exercise B97-7701-RJTL-3492L Filed as Exhibit 10.84 to Mesa Air Group, Inc.
dated as of August 15, 1997 between Mesa Air Form 10-K for the fiscal year ended
Group, Inc. and Bombardier Inc. (Request September 30, 1997, Commission File No. 0-15495.
for confidential treatment submitted to SEC.)
10.85 Bombardier Regional Aircraft Division Filed as Exhibit 10.85 to Mesa Air Group, Inc.
Settlement Agreement B97-7701-RJTL-3493L Form 10-K for the fiscal year ended
dated as of August 15, 1997 between Mesa Air September 30, 1997, Commission File No. 0-15495.
Group, Inc. and Bombardier Inc. (Request
for confidential treatment submitted to SEC.)
10.86 Service Agreement dated as of November 11, Filed as Exhibit 10.86 to Mesa Air Group, Inc.
1997 between Mesa Airlines, Inc. and US Form 10-K for the fiscal year ended
Airways, Inc. (Request for confidential September 30, 1997, Commission File No. 0-15495.
treatment submitted to SEC.)
10.87 Letter Agreement dated as of March 26, 1998 Filed as Exhibit 10.87 to Mesa Air Group, Inc.
between Mesa Airlines, Inc. and America West Form 10-Q for the quarter ended March 31,
Airlines, Inc. (Request for confidential 1998, Commission File No. 0-15495.
treatment submitted to SEC.)
10.88 Employment Agreement dated as of March 13, Filed as Exhibit 10.88 to Mesa Air Group, Inc.
1998, between Mesa Air Group, Inc. and Form 10-Q for the quarter ended March 31,
Jonathan G. Ornstein 1998, Commission File No. 0-15495.
10.89 Form of Employment Agreement dated as of Filed as Exhibit 10.89 to Mesa Air Group, Inc.
January 5, 1998 entered into by and between Form 10-Q for the quarter ended March 31,
Mesa Air Group, Inc. and Gary E. Risley, W. 1998, Commission File No. 0-15495.
Stephen Jackson, J. Clark Stevens and
various other officers of the Company and
its subsidiaries
10.90 Letter Agreement dated as of February 4, Filed as Exhibit 10.90 to Mesa Air Group, Inc.
1998 between Mesa Air Group, Inc. and Larry Form 10-Q for the quarter ended March 31,
L. Risley 1998, Commission File No. 0-15495.
10.91 Code Share and Revenue Sharing Agreement Filed herewith
between Mesa Airlines, Inc. and America
West Airlines, Inc. (Request for confidential
treatment submitted to SEC.)
27 Financial Data System Filed herewith