Thursday, September 30, 2010

Mesa Air Bankruptcy Shows What's Wrong With Bankruptcy?

Well, I don't necessarily agree that "all" that is wrong with bankruptcy is shown in this case. However, I do think that it's crappy that the same management team that drove, or flew, Mesa into the ground are going to stay on board in their same positions.



Maybe I'm oversimplifying this whole thing, but I do think that if you're the person in charge of a company that goes bankrupt, then maybe you shouldn't get to keep your job.

Amplify’d from www.bnet.com

Mesa was not out of money, and in fact it says it has funded the reorganization with cash on hand as well as operating revenues and some asset sales. No outside money was needed. So what was needed? A vehicle to dump all the extra airplanes and other random assets that management no longer wanted.


Before the bankruptcy filing, Mesa owned 44 airplanes and leased another 134. During bankruptcy, Mesa abandoned 21 of its owned aircraft and rejected 96 leases (13 were leased again under an amended contract). The new Mesa now will operate a mere 77 airplanes, much to the dismay of all those lessors who are now stuck with homeless planes.

See more at www.bnet.com
 

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