Mesa Air Files for Bankruptcy

PHOENIX (TheStreet) -- Mesa Air(MESA) finally succumbed to bankruptcy on Tuesday, after trading as a bankruptcy candidate for the past 20 months.

In April 2008, shares traded as high as $2.51, before falling to 44 cents. They have not traded above $1 since then. Since September, they have not traded above 30 cents a share.

CEO Jonathan Ornstein said the company eliminated more than $160 million in debt during the past two years through negotiations with lessors, creditors and others, but it was not enough.

"We are nonetheless faced with an untenable financial situation resulting primarily from our continued lease obligations on aircraft excess to our current requirements," Ornstein said, in a prepared statement.

The Chapter 11 filing in bankruptcy court in New York will enable Mesa to eliminate excess aircraft, realign its business to the marketplace and " will give us the opportunity to reach a more timely conclusion in the litigation with Delta Air Lines in which Mesa is currently seeking damages in excess of $70 million," he said.

Mesa said it will continue to operate normally, operating regional aircraft for US Airways(LCC); Delta(DAL) and United(UAUA). Additionally, Mesa's go!-Mokulele joint venture, an independent Hawaiian inter-island operation, is not included in the filing and will continue to operate its full flight schedule.

Mesa has about 3,500 employees and operates 130 aircraft with approximately 700 daily departures to 127 cities in 41 states, Canada and Mexico.

-- Written by Ted Reed in Charlotte, N.C. .

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