1
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
[ X ] For the quarterly period-ended December 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File Number 0-15495
MESA AIR GROUP, INC.
(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.)
410 North 44th Street, Suite 700, Phoenix, Arizona 85008
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (602)- 685-4000
Indicate by checkmark 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 last 90 days.
Yes X No
On January 31, 2001, the registrant had outstanding 31,931,784 shares of Common
Stock.
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INDEX
PART I - FINANCIAL INFORMATION
Page No.
--------
Item 1. Financial Statements (unaudited)
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Unaudited Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities and Use of Proceeds 15
Item 3. Quantitative and Qualitative Disclosures about Market Risk 15
Item 4. Submission of Matters to vote for Security Holders 15
Item 5. Other Matters 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
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PART 1. FINANCIAL INFORMATION
Item 1.
MESA AIR GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
-------------------------------
December 31, December 31,
2000 1999
--------- ---------
Operating revenues:
Passenger $ 129,826 $ 108,711
Freight and other 1,769 2,242
--------- ---------
Total operating revenues 131,595 110,953
--------- ---------
Operating expenses:
Flight operations 66,729 50,254
Maintenance 24,101 18,964
Aircraft and traffic servicing 13,775 13,194
Promotion and sales 6,953 8,212
General and administrative 6,548 6,516
Depreciation and amortization 3,769 4,666
--------- ---------
Total operating expenses 121,875 101,806
--------- ---------
Operating income 9,720 9,147
--------- ---------
Other income (expense):
Interest expense (4,110) (4,584)
Interest income 458 862
Other income 3,360 3,236
--------- ---------
Total other income (expense) (292) (486)
--------- ---------
Income before income taxes and cumulative effect of
accounting change 9,428 8,661
Income taxes 3,720 --
--------- ---------
Income before cumulative effect of accounting change 5,708 8,661
Cumulative effect of accounting change, net of $0 applicable
income taxes -- 18,085
--------- ---------
Net income $ 5,708 $ 26,746
========= =========
Income per common share - basic:
Income before cumulative effect of accounting change $ 0.19 $ 0.25
Cumulative effect of accounting change, net -- 0.53
--------- ---------
Net income $ 0.19 $ 0.78
========= =========
Income per common share - diluted:
Income before cumulative effect of accounting change $ 0.18 $ 0.25
Cumulative effect of accounting change, net -- 0.53
--------- ---------
Net income $ 0.18 $ 0.78
========= =========
See accompanying notes to consolidated financial statements
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MESA AIR GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31, September 30,
2000 2000
-------- --------
ASSETS
Current Assets:
Cash and cash equivalents $ 12,651 $ 26,403
Marketable securities 14,340 7,681
Receivables, primary traffic 38,264 41,719
Inventories 34,326 27,716
Aircraft held for sale 31,240 31,149
Prepaid expenses and other current assets 6,688 9,140
Deferred income taxes 8,527 8,527
-------- --------
Total current assets 146,036 152,335
Property and equipment, net 191,374 185,909
Lease and equipment deposits 23,062 22,857
Intangibles, net 9,806 10,014
Deferred income taxes 1,102 4,822
Other assets 9,927 8,990
-------- --------
Total assets $381,307 $384,927
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 45,673 $ 45,673
Accounts payable 21,679 25,741
Air traffic liability 3,518 3,445
Accrued compensation 2,130 3,056
Other accrued expenses 15,545 15,264
-------- --------
Total current liabilities 88,545 93,179
Long-term debt, excluding current portion 134,088 135,533
Deferred credits and other liabilities: 11,039 11,641
-------- --------
Total liabilities 233,672 240,353
-------- --------
Stockholders' equity:
Common stock of no par value, 75,000,000 shares
authorized; 31,833,628 and 32,286,303
shares issued and outstanding, respectively 110,112 112,759
Retained earnings 37,523 31,815
-------- --------
Total stockholders' equity 147,635 144,574
-------- --------
Total liabilities and stockholders' equity $381,307 $384,927
======== ========
See accompanying notes to consolidated financial statements
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MESA AIR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
---------------------------------
December 31, December 31,
2000 1999
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,708 $ 27,280
Adjustments to reconcile net income to net cash flows provided by
operating activities:
Depreciation and amortization 3,769 4,666
Cumulative effect of change in accounting principle -- (18,085)
Deferred income taxes 3,720 --
Amortization of deferred credits (339) 7,108
Provision for obsolete inventory (500) --
Provision for doubtful accounts 27 24
Unrealized (loss) gain on investment securities (1,370) (710)
Changes in assets and liabilities:
Receivables 3,428 (2,068)
Inventories (6,110) (2,459)
Prepaid expenses and other current assets 2,361 5,809
Accounts payable (4,062) (2,132)
Other accrued liabilities (572) (8,827)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES: 6,060 10,606
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (6,891) (2,224)
Net (purchases) sales of investment securities (5,289) 2,100
Change in other assets (3,072) 4,016
Other -- (410)
Lease and equipment deposits (205) (298)
------- -------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES: (15,457) 3,184
-------- -------
(Continued)
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MESA AIR GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principle payments on long-term debt (1,445) (5,132)
Proceeds from issuance of common stock 48 10
Common stock purchased and retired (2,695) (507)
Change in deferred credits (263) --
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (4,355) (5,629)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (13,752) 8,161
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 26,403 52,905
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,651 $ 61,066
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of amounts capitalized $ 4,110 $ 4,050
Cash paid for income taxes 541
SUPPLEMENTAL NON-CASH INFORMATION:
Reversal of accrued maintenance due to change in accounting method $ 18,085
Sale of Property in exchange for debt reduction 2,100
See accompanying notes to consolidated financial statements
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MESA AIR GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business and Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America 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
accounting principles generally accepted in the United States of America
for a complete set of financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the results for the unaudited
three-month periods have been made. Operating results for the three-month
period ended December 31, 2000, are not necessarily indicative of the
results that may be expected for the fiscal year ending September 30, 2001.
These consolidated financial statements should be read in conjunction with
the Company's consolidated financial statements and notes thereto included
in the Company's annual report on Form 10K for the fiscal year ended
September 30, 2000.
The consolidated financial statements include the accounts of Mesa Air
Group, Inc. and its wholly owned subsidiaries, Mesa Airlines, Inc., WestAir
Holdings, Inc., Air Midwest, Inc., CCAIR, Inc., Mesa Leasing, Inc., MAGI
Insurance, Ltd., Regional Aircraft Services, Inc., the Ritz Hotel
Management Corporation and MPD, Inc. All significant intercompany balances
and transactions have been eliminated in consolidation.
2. New Accounting Standards
Effective October 1, 1999, the Company elected to change its method of
accounting for engine and airframe maintenance costs on its CRJ aircraft
and engine maintenance on its DeHavilland Dash 8-200 aircraft from the
accrual method to the direct expense method. Under the accrual method,
maintenance costs were accrued to expense on the basis of estimated future
costs and estimated cycles or flight hours between major maintenance
events. Implementation of the change necessitated the write-off of
previously recorded accrued amounts. Effective October 1, 1999, the Company
began expensing these maintenance costs as incurred. The cumulative effect
of the change for prior years was a favorable adjustment of $18.1 million,
net of tax. Due to the valuation allowance at October 1, 1999, there is no
tax effect related to the cumulative effect of the change.
3. Segment Reporting
The Company has adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." The statement requires disclosures
related to components of a company for which separate financial information
is available that is evaluated regularly by a company's chief operating
decision maker in deciding the allocation of resources and assessing
performance. The Company is engaged in one line of business, the scheduled
and chartered transportation of passengers, which constitutes nearly all of
its operating revenues.
4. Marketable Securities
The Company has a cash management program that provides for the investment
of excess cash balances primarily in short-term money market instruments,
intermediate-term debt instruments and common equity securities of
companies operating in the airline industry.
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," requires that all applicable investments be classified as
trading securities, available for sale securities or held to maturity
securities. All of the Company's investments are classified as trading
securities during the periods presented and accordingly, are carried at
market value with changes in value reflected in current period operations.
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From time to time, the Company enters into short positions on common equity
securities when management believes that the Company may capitalize on
downward moves in particular securities. The Company marks short positions
to market at each reporting period with changes in value reflected in
current period earnings. Included in marketable securities are liabilities
related to short positions on common equity securities of $7.0 million and
$3.0 million at December 31, 2000 and September 30, 2000, respectively.
Unrealized gains and (losses) relating to trading securities held at
December 31, 2000 and September 30, 2000 were $1.4 million and ($0.5)
million, respectively.
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Item 2. 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") is an independently owned regional airline serving 142 cities in 36
states, the District of Columbia, Canada and Mexico. Mesa operates a fleet of
131 aircraft and has approximately 1,100 daily departures.
Mesa's airline operations are conducted by three regional airlines utilizing
hub-and-spoke systems. Mesa Airlines, Inc. ("MAI"), a wholly owned subsidiary of
Mesa, operates as America West Express under a code sharing agreement with
America West Airlines, Inc. ("America West") and as USAirways Express under
code-sharing agreements with USAirways, Inc. ("USAirways") and also operates an
independent division, Mesa Airlines, from a hub in Albuquerque, New Mexico. Air
Midwest, Inc., a wholly owned subsidiary of Mesa, also operates under a
code-sharing agreement with USAirways and flies as USAirways Express. CCAIR,
Inc. ("CCAIR"), a wholly owned subsidiary of Mesa, which was acquired during
1999, operates under a code-share agreement with USAirways that permits CCAIR to
operate under the name USAirways Express and to charge their joint passengers on
a combined basis with USAirways.
Approximately 96% of Mesa's consolidated revenues for the quarter ended December
31, 2000, were derived from operations associated with code-sharing agreements
with America West and USAirways. All of MAI's America West Express operations
and USAirways Express jet operations are on a fee per departure basis. For the
quarter ended December 31, 2000, approximately 61% of Mesa's airline revenues
were derived from fee per departure contractual arrangements. The percentage of
revenue generated under fee per departure agreements is expected to increase in
the future as Mesa adds additional regional jets to its America West Express and
USAirways Express operations. The Company's code-sharing agreement with America
West expires in 2007. The Company's code-sharing agreements with USAirways
expire on various dates from 2003 through 2005, with the regional jet agreement
expiring in 2008. Mesa derives the remainder of its passenger revenues from a
combination of local fares, through fares and joint fares.
During fiscal 2001 several significant events have occurred:
In October 2000, the Company and US Airways amended the US Airways regional jet
service agreement to expand the number of regional jets under contract from 28
to 32 and extend the term to 2008. The Company and US Airways also amended
prorate agreements covering Kansas City, Pittsburgh, and Philadelphia, New
Orleans, and Tampa/Orlando. The Kansas City agreement was extended from 2000 to
2005 and amended to eliminate the ability of either party to terminate the
agreement without cause and permit the Company to add additional code share
partners in Kansas City. The other four prorate agreements were extended by one
year over their previous expiration dates.
In November 2000, the Company and America West amended their Contract Agreement
to expand the number of regional jets operated from 17 to 22 and extend the term
of the agreement for regional jets from 2004 to 2007.
In November 2000, the Company entered into a non-binding letter of intent with
Midwest Express Airlines, Inc. ("Midwest Express") to add the Midwest Express
code to the Company's operations in Kansas City. The anticipated start date for
the arrangement is the second quarter of fiscal 2001. The agreement will cover
13 cities already served by ten Beechcraft 1900D aircraft out of Kansas City.
In December 2000, the Company reached agreement with Fleet Capital for a $35
million line of credit, collateralized by the Company's inventory and
receivables. The agreement, which expires in December 2003, has provisions that
allow the expansion of available credit to $50 million by adding new lenders.
The Company will use the facility for general working capital purposes.
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The following tables set forth quarter - to - quarter comparisons for the
periods indicated below:
OPERATING DATA
Three Months Ended
--------------------------------
December, December,
2000 1999
--------- ---------
Passengers 1,224,003 1,097,771
Available seat miles (000's) 812,579 720,722
Revenue passenger miles (000's) 451,025 371,318
Load factor 55.5% 51.5%
Yield per revenue passenger mile (cents) 29.2 29.9
Revenue per available seat mile (cents) 16.0 15.4
Operating cost per available seat mile (cents) 15.1 14.3
Average stage length (miles) 266 244
Number of operating aircraft in fleet 131 137
Gallons of fuel consumed 21,418,565 19,339,018
Block hours flown 100,663 100,743
Departures 83,673 88,474
FINANCIAL DATA
Three Months Ended
---------------------------------------------------------------
December 31, 2000 December 31, 1999
---------------------------- ----------------------------
Costs per % of total Costs per % of total
ASM (cents) Revenues ASM (cents) Revenues
------------ --------- ---------- ---------
Flight operations 8.21 50.7% 6.97 45.3%
Maintenance 2.97 18.3% 2.63 17.1%
Aircraft and traffic servicing 1.70 10.5% 1.83 11.9%
Promotion and sales 0.86 5.3% 1.14 7.4%
General and administrative 0.81 5.0% 0.90 5.9%
Depreciation and amortization 0.46 2.9% 0.65 4.2%
Total operating expenses 15.00 92.6% 14.13 91.8%
Interest expense 0.51 3.1% 0.64 4.1%
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RESULTS OF OPERATIONS
Operating Revenues:
Operating revenues increased by $20.6 million (18.6 %) for the quarter ended
December 31, 2000 as compared to the quarter ended December 31, 1999. This
increase was primarily due to the increase in capacity, as measured by available
seat miles ("ASM's"), in the Mesa system. ASM's increased by 12.7% for the
quarter ended December 31, 2000 over the same period in 1999. The increase in
ASM's was a result of the number of regional jets added to the fleet, which have
additional seats and fly longer stage lengths. Passenger traffic measured by
revenue passenger miles ("RPM's"), representing one passenger carried one mile,
increased by 21.5%. Passenger load factor increased from 51.5% to 55.5%, yield
(passenger revenue per RPM) decreased by 0.7 cents to 29.2 cents in the first
quarter of 2001. The airline industry has a history of fare and traffic
volatility. The regional jet aircraft, which are generally faster and flown over
a longer stage length than the turboprop aircraft, typically generate lower
revenue and cost per ASM. Because Mesa expects to operate increasing number of
regional jet aircraft in the future, overall revenue per ASM and cost per ASM
are expected to decrease in the future.
Operating Expenses
Flight Operations
Flight operations expense increased by 32.8% to $66.7 million (8.21 cents per
ASM) for the quarter ended December 31, 2000, from $50.3 million (6.97 cents per
ASM) from the comparable period in 2000 primarily due to an increase in capacity
(ASM's) and higher fuel costs.
Maintenance Expense
Maintenance expense increased by 27.1% to $24.1 million (2.97 cents per ASM) for
the quarter ended December 31, 2000, from $19.0 million (2.63 cents per ASM) for
the comparable period in 1999. Increased maintenance costs are primarily the
result of an increase in available capacity, which drives maintenance events.
Aircraft and Traffic Service Expense
Aircraft and traffic servicing costs increased by 4.4% to $13.8 million (1.70
cents per ASM) for the quarter ended December 31, 2000 from $13.2 million (1.83
cents per ASM) during the comparable quarter of the previous fiscal year. This
change is also a result of an increase in flying activity.
Promotion and Sales
Promotion and sales expense decreased 15.3% to $7.0 million (0.86 cents per ASM)
for the quarter ended December 31, 2000 from $8.2 million (1.14 cents per ASM)
from the prior year's comparable quarter. Mesa's contract with America West and
our Jet Contract with USAirways eliminates booking fees and travel agency
commissions being charged directly to Mesa and as such, these costs per ASM are
expected to decline as the America West Express operation grows.
General and Administrative Expense
General and administrative expenses of $6.5 million were relatively the same as
prior year (0.81 cents per ASM and 0.90 cents per ASM for the quarters ended
December 31, 2000 and 1999, respectively. The decrease on an ASM basis is due to
increased capacity (ASM's) without a corresponding increase in general and
administrative expenses.
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Depreciation and Amortization
Depreciation and amortization decreased by 19.2% to $3.8 million (0.46 cents per
ASM) for the quarter ended December 31, 2000 as compared to $4.7 million (0.65
cents per ASM) for the quarter ended December 31, 1999. The decrease is
primarily due to the disposal of Beech 1900 aircraft in the fourth quarter of
Fiscal 2000.
Non-Operating Items
For the quarter ended December 31, 2000, Mesa recognized $3.1 million in
investment related gains.
LIQUIDITY AND CAPITAL RESOURCES
Mesa's cash and cash equivalents and marketable securities as of December 31,
2000 totaled $27.0 million. Mesa's net cash flow from operations totaled
approximately $9.6 million during the three months ended December 31, 2000.
Mesa's cash and cash equivalents and marketable securities are intended to be
used for working capital, capital expenditures and acquisitions. In addition,
the Company has a $35 million line of credit facility with Fleet Capital. There
were no amounts outstanding on the line as of December 31, 2000.
Mesa had receivables of approximately $38.3 million at December 31, 2000, which
consisted primarily of amounts due from code-sharing partners America West and
USAirways and passenger ticket receivables due through the Airline Clearing
House. Under the terms of the USAirways agreement, Mesa receives a substantial
portion of its revenues through the clearing house. Historically, Mesa has
generated adequate cash flow to meet its needs.
In October 1999, Mesa settled various disputed claims it had against BRAD
regarding Bombardier's obligation to accept trade-in Brasilia aircraft and the
availability of 16 additional rolling option CRJs. Under this settlement, Mesa
is to receive $9 million ($8.5 million cash, $.5 million credit), $7.1 million
of which has been received to date, the remainder of which was received
subsequent to the end of the quarter.
Management's belief that Mesa will have adequate cash flow to meet its operating
needs is a forward-looking statement. Actual cash flow could materially differ
from this forward looking statement as a result of many factors, including the
termination of one or more code-sharing agreements; failure to sell, dispose, or
redeploy excess aircraft in a timely manner; a substantial decrease in the
number of routes allocated to MAI under its code-sharing agreements with
USAirways; reduced levels of passenger revenue, additional taxes or costs of
compliance with governmental regulations; fuel cost increases; increases in
competition; increases in interest rates and general economic conditions. Mesa
has minimal market risk with respect to market risk instruments such as foreign
currency exchange risk and commodity price risk. Mesa is subject to interest
rate risk with respect to current and future aircraft financing.
In December 1999, the Company's Board of Directors authorized the Company to
repurchase up to 10%, approximately 3.4 million shares, of the outstanding
shares of its Common Stock. In January 2001, the Board approved the repurchase
by the Company of up to an additional one million shares of its Common Stock. As
of February 6, 2001, the Company has acquired approximately 2.5 million shares
of Common Stock for approximately $13.6 million leaving approximately 1.9
million shares available for repurchase under the current Board authorizations.
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AIRCRAFT
The following table lists the aircraft owned and leased by Mesa for scheduled
operations as of December 31, 2000:
Operating on Passenger
Type of Aircraft Owned Leased Total December 31, 2000 Capacity
---------------- ----- ------ ----- ----------------- --------
Canadair Regional Jet -- 32 32 32 50
Embraer Regional Jet -- 12 12 12 50
BeechCraft 1900D 51 10 61 52 19
Jet Stream Super 31 -- 14 14 14 19
Dash 8-100 -- 10 10 9 37
Dash 8-200 -- 12 12 12 37
Embraer EMB-120 -- 7 7 -- 30
----- ----- ----- -----
51 97 148 131
PENDING DEVELOPMENTS
ERJ Program
In January 2000, Mesa entered into an agreement with Empresa Brasiliera de
Aeronautica SA ("Embraer") to acquire 36 50-passenger Embraer ERJ-145 regional
jets. Deliveries began late in the third quarter of fiscal 2000 and will
continue through late fiscal 2002. Mesa also has options for an additional 64
aircraft with the right to convert deliveries into 37-seat ERJ 135's. Mesa
introduced the ERJ-145 aircraft into revenue service early in the third quarter
of fiscal 2000 as USAirways Express. Mesa intends to move the CRJ regional jets
currently flying as USAirways Express to America West Express and replace them
with the ERJ-145's as deliveries take place. As of February 8, 2001, the
Company has taken delivery of 12 of these aircraft, which have been financed as
operating leases. In conjunction with this purchase agreement, Mesa has placed
an $11.8 million deposit with Embraer, which is included with lease and
equipment deposits.
CRJ Program
In August 1996, the Company entered into an agreement with Bombardier Regional
Aircraft Division ("BRAD") to acquire 16 CRJ 50-passenger jet aircraft. The
agreement also granted the Company an option to acquire an additional 16 jet
aircraft and provided for additional rolling options to acquire a third block of
16 aircraft. In fiscal 1997, the Company exercised options to purchase 16 of the
32 CRJ aircraft reserved under the option provisions of the BRAD purchase
agreement. In connection with the 32 CRJ aircraft, all are currently under
permanent financing as operating leases with terms of 16-1/2 to 18-1/2 years.
Beechcraft 1900D
During fiscal 1999, the Company announced its intention to dispose of 30 excess
B1900 aircraft. As of September 30, 2000, the Company had disposed of 17 of such
aircraft, and is actively seeking proposals for the disposition of the remaining
13 B1900 aircraft. Under an agreement with Raytheon Aircraft Corporation, the
Company has the right to sell to Raytheon six B1900 aircraft in October 2001 and
five B1900 aircraft in October 2002.
This form 10-Q filing, and particularly this Pending Developments section,
contains certain statements including, but not limited to, information regarding
the replacement, deployment and acquisition of certain
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numbers and types of aircraft, and projected expenses associated therewith;
costs of compliance with FAA regulations and other rules and acts of Congress;
the passing of taxes, fuel costs, inflation, and various expenses to the
consumer; the relocation of certain operations of Mesa; the resolution of
litigation in a favorable manner, and certain projected financial obligations.
These statements, in addition to statements made in conjunction with the words
"expect," "anticipate," "intend," "plan," "believe," "seek," " estimate," and
similar expressions, are forward-looking statements within the meaning of the
Safe Harbor provision of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements relate to future events or the future financial performance of Mesa
and only reflect Management's expectations and estimates. The following is a
list of factors, among others, that could cause actual results to differ
materially from the forward-looking statements: changing business conditions in
certain market segments and industries; an increase in competition along the
routes Mesa operates or plans to operate; material delays in completion by the
manufacturer of the ordered and yet-to-be-delivered aircraft; changes in general
economic conditions; changes in fuel prices; changes in regional economic
conditions; Mesa's relationship with employees and the terms of future
collective bargaining agreements; the impact of current and future laws,
Congressional investigations and governmental regulations affecting the airline
industry and Mesa's operations; bureaucratic delays; amendments to existing
legislation; consumers unwilling to incur greater costs for flights; unfavorable
resolution of negotiations with municipalities for the leasing of facilities;
and risks associated with litigation outcomes. One or more of these or other
factors may cause Mesa's actual results to differ materially from any
forward-looking statement. Mesa is not undertaking any obligation to update any
forward-looking statements contained in this Form 10-Q.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Mesa is a party to legal proceedings and claims, which arise in the
ordinary course of business.
Although the ultimate outcome of these pending lawsuits cannot be
determined at this time, Mesa believes, based upon currently available
information, that the ultimate outcome of all the proceedings and claims
pending against Mesa is not expected to have a material adverse effect on
Mesa's consolidated financial position. Mesa's belief regarding the
outcome of all pending proceedings and claims is a forward-looking
statement.
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in the Company's market risk since
September 30, 2000.
Item 4. Submission of Matters to vote for Security Holders
Not applicable
Item 5. Other Matters
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
(10.1) Amendment to the Employment Agreement dated as of March 22,
2000 between Mesa Air Group, Inc. and you Jonathan Ornstein
(10.2) Amendment to the Employment Agreement dated as of March 22,
2000 between Mesa Air Group, Inc. and Michael J. Lotz
(B) Reports on form 8-K
The Company filed a report on Form 8-K dated October 16, 2000
disclosing a definitive agreement with Raytheon Aircraft Company and
Raytheon Aircraft Credit Corporation for the sale of sixteen
Beechcraft 1900D aircraft to Raytheon on September 29, 2000. No
financial statements were filed as a part of the report.
The Company filed a report on Form 8-K dated November 2, 2000
regarding its position in Mesaba Holdings on November 1, 2000. No
financial statements were filed as a part of the report.
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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
undersigned thereunto duly authorized.
MESA AIR GROUP, INC.
By: /s/ Jeff P. Poeschl
Jeff P. Poeschl
Vice President - Finance
(Principal Accounting Officer)
Dated: February 14, 2001
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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(10.1) Amendment to the Employment Agreement dated as of March
22, 2000 between Mesa Air Group, Inc. and you Jonathan
Ornstein
(10.2) Amendment to the Employment Agreement dated as of March
22, 2000 between Mesa Air Group, Inc. and Michael J.
Lotz