Struggling US regional airline company Mesa Air Group remains at risk of de-listing on the Nasdaq stock exchange, needing to show that its share price can consistently close higher than $1.
The Phoenix-headquartered parent of Mesa Airlines on 6 May disclosed that it had transferred its common stock to a tier of the Nasdaq stock market with less stringent financial and liquidity requirements.
Mesa stock has transferred from the Nasdaq Global Select Market to the Nasdaq Capital Market – basically, from the tier with the highest minimum qualifications to the one with the lowest. It will continue trading uninterrupted under the symbol “MESA”, according to a filing with the US Securities and Exchange Commission.
In November, Mesa received a notice of non-compliance with the Nasdaq’s listing rules because its share price had closed below $1 for 30 consecutive business days. The company was granted an 180-day grace period in which to regain its standing, which passed on 1 May without success.
Being newly listed on the Nasdaq Capital Market grants Mesa another 180-day grace period. Its stock price needs to close higher than $1 for 10 consecutive business days in order to meet the minimum requirement. The grace period ends on 28 October.
If that deadline passes without proof of compliance, Mesa would face de-listing and a likely appeals process, including a hearing.
”The company intends to closely monitor the closing bid price for its shares of common stock and consider all available options to timely remedy the bid price deficiency,” Mesa says, adding that it can ”give no assurance that it will regain or demonstrate compliance” during the second grace period.
Mesa previously risked de-listing because it had not filed an end-of-year report for the period ending 30 September. After months of delays, the company filed its fiscal fourth-quarter earnings report in late January.
Chief executive Jonathan Ornstein told FlightGlobal that the discrepancy arose due to poor monitoring of a loan that had been transferred from a bank to United Airlines during its transition to flying its Bombardier CRJ900s on behalf of the US major.
Mesa previously operated those aircraft on behalf of American Airlines. That relationship was severed in December 2022 in favour of a five-year capacity purchase agreement with United.
Mesa has since struggled both financially and operationally, and in recent months has not flown enough block hours to cover costs.
