Mesa (Go!) Has 6 Problems Too Many!

A reader asked yesterday:

“…Will GO airlines still be flying July 9… as I have tickets for the 8 and 9th. It makes it difficult to plan to island hop this summer…don’t want to get stuck some place.” (Stacy)

This great question got me thinking that Stacy is probably not the only person wondering about Mesa and Go! and what to do.

Here’s the long and the short of it:

Mesa (Go!’s parent) has a list of problems too long to manage in this tenuous air travel environment. These include:

1. Failed Delta agreement. Last week Mesa got a preliminary injunction to stop Delta from terminating their regional contract. Delta is appealing and their lawsuit continues. Mesa previously said it will likely file bankruptcy by July 20 and cut 700 jobs if it loses its Delta deal.
2. Pending Aloha lawsuit. While Aloha went bankrupt in April, their lawsuit against Mesa for misusing confidential information remains very much alive. Also in April, Mesa agreed to pay $52.5 million to settle a similar suit with Hawaiian Airlines.
3. Potential NASDAQ delisting. Mesa is currently at risk of delisting for not filing its latest quarterly 10Q report on time.
4. Default on senior debt. Last month Mesa received notice of default from U.S. Bank National Association related to the company’s Senior Convertible Notes due 2023. Mesa must make good on the debt by July 21.
5. 50-seat inefficient aircraft. Mesa has a large (60 plane) fleet of inefficient small regional jets. These are becoming a noose around their neck because they use almost as much fuel as 70-100 passenger jets, greatly increasing Mesa’s fuel costs above their competition.
6. Low stock price. Mesa’s stock price yesterday closed at $.066. At such a low value, it greatly reduces Mesa’s ability to raise cash.

So to answer Stacy’s timely question:

If I were a betting person, since we’re only talking 5 weeks from now, I’d say that Stacy is okay to fly Go! on July 9.  Beyond that, however, I would not personally buy Go! tickets if at all avoidable.

What to do with and without Go!:

1. Fly Hawaiian or take the Superferry (to Maui) until things with Mesa are more clear.
2. Consider buying travel insurance to protect you in the event of carrier default (we are going to see more of these).
3. If Go! goes, and you purchased tickets with a credit card, your money will be refunded.
4. Stay tuned. We’ll keep our ear to the ground vis-a-vis Mesa.