Mesa Air Group

Mesa Air Group

MESA logo
Company type	Public (NASDAQ: MESA)
Industry	Aviation
Founded	1982
Headquarters	Phoenix, Arizona, USA
Key people	Jonathan G. Ornstein, Chairman & CEO Michael J. Lotz, President & COO George Murnane III, Executive Vice President and Chief Financial Officer Michael Ferverda, Senior Vice President — Operations Brian S. Gillman, Vice President, General Counsel and Secretary F. Carter Leake, Senior Vice President — Planning
Revenue	$1.136 million USD (2005)
Number of employees	~5,000 (2005)
Website	www.mesa-air.com

Mesa Air Group (Nasdaq: MESA) is a Phoenix, Arizona-based holding company founded in 1982 whose principle subsidiaries operate as regional air carriers. As of September 30, 2005 Mesa operated a fleet of 182 aircraft, 36 turboprops and 146 regional jets, providing commuter, charter and freight service to more than 182 domestic and international cities. Approximately 99% of the company’s consolidated passenger revenues are derived from operations associated with code-share agreements. These code-share agreements allow an airline the use of its code-share partner’s flight designator code to identify flights and fares in computer reservation systems, permit use of logos, service marks, aircraft paint schemes and uniforms similar to the code-share partner’s and provide coordinated schedules and joint advertising. The financial arrangement with Mesa’s code-share partners involves either a revenue-guarantee or pro-rate arrangement. Under the terms of revenue-guarantee code-share agreements, the major carrier controls marketing, scheduling, ticketing, pricing and seat inventories. The code sharing airline receives a guaranteed payment based upon a fixed minimum monthly amount plus amounts related to departures and block hours flown in addition to direct reimbursement of expenses such as fuel, landing fees and insurance. Under the terms of pro-rate code-share agreements, he code sharing airline receives an allocated portion of each passenger’s fare and pays all of the costs of transporting the passenger.

Mesa operates under code-share agreements for the following airlines:

• America West Airlines as America West Express, operated by Mesa Airlines with Bombardier CRJ 900, Bombardier CRJ 200, and Dash 8 aircraft under a revenue-guarantee code-share agreement
• US Airways as US Airways Express, operated by Mesa Airlines with Bombardier CRJ 200 and Embraer ERJ-145 equipment under a revenue-guarantee code-share agreement, and by Air Midwest with Beech 1900D aircraft under a pro-rate code-share agreement
• United Airlines as United Express, operated by Mesa Airlines with Bombardier CRJ 700, Bombardier CRJ 200, and Dash 8 aircraft under a revenue-guarantee code-share agreement
• Delta Air Lines as Delta Connection, operated by Freedom Airlines with Embraer ERJ-145 aircraft' under a revenue-guarantee code-share agreement
• Midwest Airlines additionally codeshares on Air Midwest's US Airways Express flights at Kansas City under a pro-rate code-share agreement
• Mesa also operates its own service under the Mesa Airlines brand, operated by Air Midwest with Beech 1900D aircraft

As of FY2005 the Mesa Air Group and its subsidiaries employed over 5,000 people.

Subsidiaries

• Mesa Airlines, Inc.
• Air Midwest, Inc.
• Freedom Airlines, Inc.
• MPD, Inc. operates training programs for student pilots in conjunction with San Juan College in Farmington, New Mexico and Arizona State University in Tempe, Arizona
• Regional Aircraft Services, Inc. performs aircraft component repair, certain overhaul services, and ground handling services, primarily to Mesa subsidiaries
• MAGI Insurance, Ltd. Is a Barbados, West Indies based captive insurance company
• Ritz Hotel Management Corp. manages the company’s Phoenix area hotel property used for crew training accommodations
• Mesa Air Group-- Aircraft Inventory Management, LLC purchases, distributes and manages Mesa’s inventory of spare rotable and expendable parts

History

In 1982 Larry Risley founded Mesa in Farmington, New Mexico with the purchase of the company's first airplane. The company expanded and grew over the next fifteen years, acquiring several competing regional air carriers in the process.

In 1990 Mesa acquired Aspen Airways, (an operator for United Express).

In 1991 Mesa acquired Air Midwest, (an operator for USAir Express).

In 1991 Mesa opened a division FloridaGulf Airlines, (an operator for USAir Express).

In 1993 Mesa acquired WestAir, (an operator for United Express).

In 1994 Mesa acquired assets of Crown Airways, and set up a new division, Liberty Express, (an operator for USAir Express).

In August of 1996, Mesa agreed to purchase 21 Bombardier CRJ-200 aircraft.

In 1997 and 1998, financial problems ended Mesa's partnership with United Airlines. Jonathan Ornstein, the company's former Executive Vice President and President of its Westair Holding, Inc. subsidiary, returned to Mesa to help the struggling carrier. His goal was to restore the confidence of Mesa's passengers, airline partners, regulatory authorities and shareholders. Under his leadership, Jonathan created a new corporate identity, inked a new six-year deal with codeshare partner America West, moved the company's headquarters from Farmington, N.M., to Phoenix, Arizona, and oversaw a comprehensive operational and financial restructuring, which paved the way for Mesa's return to profitability.

In 1999 Mesa acquired CCAir, (an operator for US Airways Express).

In June of 1999, Mesa agreed to purchase 46 Embraer ERJ-145 aircraft with an option to acquire 45 additional aircraft.

In May of 2001, Mesa agreed to purchase 15 CRJ-700 aircraft and 25 CRJ-900 aircraft. Mesa served as the launch customer for the CRJ-900. Mesa set up subsidiary Freedom Airlines to operate the larger jets.

In 2004 Mesa acquired assets of Midway Airlines, (an operator for US Airways Express).

In May of 2005, Mesa announced that subsidiary Freedom Airlines will begin operating up to 30 ERJ-145 aircraft for Delta Air Lines under the Delta Connection banner.

In September of 2005 Mesa announced it's plans to establish an independent inter-island Hawaiian airline with service expected to begin in the 1st quarter of 2006.

Fleet

Data as of December 31, 2005.

Mesa Air Group Fleet

Type	Number	Seats	Orders/Options
Canadair CRJ-200	56	50	0/0
Canadair CRJ-700	15	64	0/1121
Canadair CRJ-900	38	86	7/1121
ERJ-145	36	50	0/45
Beechcraft 1900D	352	19	0/0
De Havilland Canada Dash 8	16	37	0/0

¹7 firm orders and 112 total options for CRJ-700/900 aircraft

²14 of Mesa's B1900D aircraft are leased to other carriers, 1 B1900 was taken out of service due to damage

Mesa Angels Foundation

Mesa Air Group, Inc. sponsors the Mesa Angels Foundation which provides financial assistance to those Mesa employees and immediate family members in critical financial need due to extraordinary circumstances such as medical emergencies, natural disasters or other unforeseen life-changing events. Mesa Angels Foundation also supports charitable organizations through donations in the communities Mesa serves.

Directors

As of 2005, the directors of Mesa Air Group are:

• Jonathan G. Ornstein, Chairman/CEO
• Daniel J. Altobello
• Robert Beleson
• Ronald R. Fogleman
• Joseph L. Manson
• Peter Nostrand
• Maurice A. Parker

External links

• Yahoo! - Mesa Air Geoup Company Profile
• Mesa Air Group Home Page