Mesa Air trying to acquire Independence
Jonathan J. Higuera
The Arizona Republic
Dec. 16, 2005 12:00 AM
For the second time in three years, Phoenix-based Mesa Air Group is bidding to acquire Independence Air, the East Coast-based low-fare carrier that landed in bankruptcy court last month.
While neither Mesa Air Group nor Flyi Inc., the parent company of Independence, would comment on specific bids, Mesa Air is among the companies making an offer for the troubled regional airline. Independence made a splash in the market two years ago when it transformed from a feeder carrier into an independent operator offering fares as low as $29 one way from its hub at Washington Dulles International Airport.
Observers said that if Mesa Air Group were successful, it likely would return Independence to its roots as a regional feeder carrier. advertisement
Mesa Air has turned around its financial fortunes in the past two years as a regional feeder carrier for US Airways, Delta Airlines and United Airlines.
Shortly after filing for Chapter 11 bankruptcy in November, Independence Air officials said they would accept bids in three categories: a wholesale ownership change, a large capital infusion from investors, and partial acquisition of some part of the company.
A spokesman said the company has bidders in each category.
"We believe creditor value would be maximized by maintaining the airline as a going concern," Flyi spokesman Rick DeLisi said. "The final decision will be in the hands of the creditor committee."
Mesa Air Group President Jonathan Ornstein had no comment.
In 2003, Flyi, then known as Atlantic Coast Airways, went to court to fend off a hostile takeover attempt by Mesa Air. Mesa's bid was about $512 million. It is unknown how much any bidder is offering this time around.
Virgin Atlantic Airways is another possible bidder.
The winning bid could be announced soon because Independent reported in bankruptcy filings that it had only $24 million in available cash. Also in the filings, Independence reported liabilities of $455 million and assets of $378 million.
Earlier this week, the company announced it was cutting service Jan. 5 to Chicago; Buffalo, N.Y.; Jacksonville, Fla.; and Manchester, N.H.
That move will reduce its workforce by about 50, to 2,700 employees. It also will reduce daily flights to 170 serving 33 cities. Last spring, it served 47 cities.
In the fiscal year ending Sept. 30, Mesa Air Group reported net income of $56.8 million and revenues of $1.13 billion. It also reported a cash balance of $280.4 million. After posting losses in 2001 and 2002, the regional carrier has gone on to become one of the country's largest regional airlines.
Jonathan J. Higuera
The Arizona Republic
Dec. 16, 2005 12:00 AM
For the second time in three years, Phoenix-based Mesa Air Group is bidding to acquire Independence Air, the East Coast-based low-fare carrier that landed in bankruptcy court last month.
While neither Mesa Air Group nor Flyi Inc., the parent company of Independence, would comment on specific bids, Mesa Air is among the companies making an offer for the troubled regional airline. Independence made a splash in the market two years ago when it transformed from a feeder carrier into an independent operator offering fares as low as $29 one way from its hub at Washington Dulles International Airport.
Observers said that if Mesa Air Group were successful, it likely would return Independence to its roots as a regional feeder carrier. advertisement
Mesa Air has turned around its financial fortunes in the past two years as a regional feeder carrier for US Airways, Delta Airlines and United Airlines.
Shortly after filing for Chapter 11 bankruptcy in November, Independence Air officials said they would accept bids in three categories: a wholesale ownership change, a large capital infusion from investors, and partial acquisition of some part of the company.
A spokesman said the company has bidders in each category.
"We believe creditor value would be maximized by maintaining the airline as a going concern," Flyi spokesman Rick DeLisi said. "The final decision will be in the hands of the creditor committee."
Mesa Air Group President Jonathan Ornstein had no comment.
In 2003, Flyi, then known as Atlantic Coast Airways, went to court to fend off a hostile takeover attempt by Mesa Air. Mesa's bid was about $512 million. It is unknown how much any bidder is offering this time around.
Virgin Atlantic Airways is another possible bidder.
The winning bid could be announced soon because Independent reported in bankruptcy filings that it had only $24 million in available cash. Also in the filings, Independence reported liabilities of $455 million and assets of $378 million.
Earlier this week, the company announced it was cutting service Jan. 5 to Chicago; Buffalo, N.Y.; Jacksonville, Fla.; and Manchester, N.H.
That move will reduce its workforce by about 50, to 2,700 employees. It also will reduce daily flights to 170 serving 33 cities. Last spring, it served 47 cities.
In the fiscal year ending Sept. 30, Mesa Air Group reported net income of $56.8 million and revenues of $1.13 billion. It also reported a cash balance of $280.4 million. After posting losses in 2001 and 2002, the regional carrier has gone on to become one of the country's largest regional airlines.