Mesa Air Group (MAG), more commonly known as Mesa Airlines owes its current success to its humble beginnings. The airline was founded as “Mesa Air Shuttle” by the husband and wife duo of Larry and Janine Risley in 1982 flying a five-seat Piper Saratoga between the windy mesa of Farmington, New Mexico and Albuquerque. (Mesa, 2015) Since those simple beginnings, Mesa has experienced the full gambit of airline success and failure. From rapid expansion to filing Chapter 11 bankruptcy to restructuring its business model, Mesa Airlines has postured itself to stay one of the prominent regional airlines in the United States. During the formative years of the airline, Mesa’s vision was to provide more frequent service to smaller towns in need of …show more content…
They provided customers in need of a service cheaper than their competitors and sometime by providing the only option from airports not serviced by other carriers. The airlines expansion was rapid. In 1984, the airline received its first Essential Air Service (EAS) contract after taking delivery of its first of five 15 passenger Beechcraft 99 aircraft. (Mesa 2015) By 1987, the airline was able to expand its fleet to a total of 11 aircraft with 187 employees and complete its Initial Public Offering (IPO) to be traded on the NASDAQ exchange. From 1989 until 1992, the company grew primarily through an aggressive expansion program by purchasing other struggling airlines and by becoming codeshare partners with the major airlines at that time. In 1990 and 1991, Mesa was able to purchase Aspen Airways and Air Midwest. Those purchases along with other agreements gave Mesa Airlines codeshare agreements with United Airlines, US Airways and America West Airlines. (2015) This expansion had many positive end results for the airline. Due to its growth, the airline moved its headquarters from Farmington, New Mexico to Phoenix, Arizona. Additionally, the airline began purchasing newer aircraft, the Canadair CRJ 200. By the end of 1992, after only 10 years of existence, the airline grew from one aircraft serving only two cities to 38 aircraft serving 63 cities. (2015). This …show more content…
As debts continued to rise and revenue due to increased fuel costs declined, the airline was unable to meet their financial obligations. With the need to reduce their debt by over $160 million became untenable out of court, the company filed for bankruptcy in an attempt to have the courts help in restructuring their debt. (Keeton, 2010) The bankruptcy negotiation lasted 14 months and marred the airline financially, which caused them to have to abort their joint venture in China. One of the main outcomes of the bankruptcy proceedings was the restructuring of Mesa’s fleet. Due to its rapid expansion, Mesa operated to many types of aircraft with too high of operating costs. The airline retired all but one of its 50-seat CRJ200 aircraft, which were not cost effective in today’s market. (Gilbertson, 2010) Once the CRJ200s were retired, the airline purchased newer 100 seat CRJ900 and Embraer 175 (ERJ-175) aircraft providing more revenue per flight than their older fleet. Though the airline has been through financial hardships their future continues to look bright as a major regional airline in the United