Ramon Lopez/WASHINGTON DC
Mesa Air Group has settled all claims by aircraft and equipment lessors against Mesa's defunct WestAir subsidiary for about $15 million.
WestAir had operated United Express service for United Airlines until the partnership was dissolved on 31 May, making 43 leased aircraft idle. Jonathan Ornstein, Mesa president and chief executive, says: "This is truly a sad ending for what was once a great airline-The cancellation by United of its partnership with WestAir, which led to the dissolution of the company and the loss of over 1,200 jobs, is still difficult for us to comprehend."
Mesa Air Group reports a net loss of $53.4 million for the fiscal year ending 30 September. Fourth quarter income of $3.3 million on revenues of $80 million was because of a $5.3 million tax benefit. Without the tax write-off, the fourth quarter net loss would have amounted to $2 million.
Revenues fell by 41% in the latest financial quarter. The number of passengers plummeted by 54% to fewer than 1 million, reflecting the loss of Mesa's codeshare deal with United at Denver.
Ornstein says 1998 was marked by "the sudden loss of 40% of our revenue, expensive new regulatory requirements, $250 million of excess aircraft, and nonexistent employee morale." He adds "the worst is behind us" because of the support of America West and US Airways. "This is not to say the company is fixed-I believe we will continue to see improvement."
Mesa will increase its regional jet operations while deciding what to do with its 19-seat turboprops. "With an estimated $3 million loss resulting from our 19-seat aircraft operations in the past quarter alone, these issues must be resolved or we will be forced to reassess our commitment to this fleet type," Ornstein says.
Meanwhile, Mesa hopes to complete its merger with Charlotte, North Carolina-based CCAir early next year for $60 million.
Source: Flight International
