Mesa: Bankruptcy wouldn’t affect Hawaii service

A Mesa Air Group Inc. executive said yesterday that a possible bankruptcy filing by the company would not affect go!'s operations in Hawaii.

General Counsel Brian Gillman said after the first day of a Mesa-Delta Air Lines Inc. hearing in Atlanta that "given what's happening with our Delta partnership, we are more committed than ever with our strategy for independent operations in Hawaii."

"A bankruptcy filing would not in any way alter our commitment to the marketplace," he added.

Gillman made his comment yesterday after the first day of a hearing in which Mesa is seeking an injunction to block Delta's decision to end a contract with Mesa subsidiary Freedom Airlines.

In court yesterday, Mesa President and Chief Operating Officer Michael Lotz said that the company will file for bankruptcy protection by July 20 and cut 700 jobs if Delta's termination of a regional flying contract sticks and Mesa can't redeploy unused aircraft.

Lotz told U.S. District Judge Clarence Cooper that Mesa won't be able to make mandatory payments to bondholders and would run the risk of defaulting on aircraft leases without the contract in place.

"We are prepared to file bankruptcy," Lotz said.

Mesa has hired bankruptcy counsel, prepared paperwork for filing under Chapter 11 of the bankruptcy laws in New York and even prepared a bankruptcy press release, Lotz said.

According to its Securities and Exchange Commission filings, Mesa's Hawaii operation lost $26 million between its June 2006 startup and the end of 2007.

Mesa is delinquent with its latest quarterly earnings, which were due out earlier this month.

Mesa has said that the Delta contract amounts to $20 million in monthly revenue, or about 20 percent of its total sales for 2007. Mesa has 5,000 employees overall.

Gillman said he expected the hearing to end either late today or around midday tomorrow.