Mesa Air Group Announces Successful Restructuring of Its Senior Convertible Notes Due 2023

PHOENIX, Feb. 3 /PRNewswire-FirstCall/ -- MESA AIR GROUP, INC. (Nasdaq: MESA) is pleased to announce the outcome of the put rights for its Senior Convertible Notes Due 2023 (the “2023 Notes�), which matured on January 31, 2009 (the “Put Date�). The outstanding face value of the 2023 Notes prior to the Put Date was $52.1 million ($21.5 million put value). $21.7 million ($9.0 million put value) of the 2023 Notes’ face value was not put to the Company and remains outstanding. In satisfaction of its put obligation for the remaining face value of the 2023 Notes, approximately $30.4 million ($12.6 million put value), the Company issued in aggregate:

1. $1.8 million in cash;
2. 11.9 million shares of the Company’s common stock, no par value (the “Common Stock�); and
3. $1.0 million in aggregate principal amount of the Company’s new 8% senior unsecured notes due 2012 (the “2012 Notes�).

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The issuance of the Common Stock and 2012 Notes, which is expected to close on or around February 10, 2009, is exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) and Section 4(2) thereof.

The remaining and outstanding face value of the 2023 Notes, approximately $21.7 million ($9.0 million put value as of January 31), may be put to the Company no earlier than June 16, 2013. At that time, we may pay the purchase price in cash or shares of our common stock or in a combination of cash and shares of our common stock.

The closing of the transactions contemplated by these separate agreements remains subject to certain conditions, including, without limitation, the negotiation of mutually acceptable definitive agreements. No assurances can be given that these transactions will close or that the capital structure described above will not change prior to February 10, 2009.

“We are pleased to have reached agreements with a significant portion of our note holders under terms, which we believe are in the best interest of all parties. We have also come to an agreement with a majority of the holders of our Senior Convertible Notes Due 2024 and continue to have discussions with the remaining 2024 note holders. The terms of the agreements require significantly less shares of common stock to be issued than we originally anticipated. We remain optimistic that the company will be successful in the long term,� said Jonathan Ornstein, Chairman and CEO of Mesa Air Group, Inc.

This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or expected.

Mesa currently operates 159 aircraft with over 800 daily system departures to 124 cities, 38 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go!. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners.

Website: www.mesa-air.com