Mesa (MESA) is currently negotiating with two Chinese airlines to provide regional jet feeder service. "They can be assumed to be the more entreprenuerial operators," said CEO Jonathan Ornstein, who expects to launch such operations by the mid point or the end of next year. Mesa hopes to close a deal in the first quarter 2007. Ornstein said they have been surprised at the speed with which they want to get things done. "This will bring a lot of challenges but we would be going to a country with 1.5 billion people and fewer RJs than we have operating now at Phoenix," said Ornstein, "so we think there is a lot of opportunity there."

The company missed its fiscal performance estimates for the fouth quarter owing to increased maintenance and training expenses associated with its Freedom operation as a Delta Connection. Pilot training costs alone exceeded expectations by $2.5 million dollars, while maintenance costs exceeded plan by $7.8 million. Net income for the fiscal year was $34.0 million, a significant drop from $56.9 million in the year-ago period, on operating revenues of $1.3 billion. Total operating revenues for 2006 increased $200.9 million, or 17.7 percent, primarily the result of year-over-year increases in reimbursable expenses and increases in its regional jet fleet. As of September 30, the company's cash, marketable securities and debt investments were approximately $238.8 million.

Mesa experienced fourth quarter after tax earnings of $4.8 million on operating revenues of $362.5 million. Total operating revenues for the fourth quarter of 2006 increased $53.4 million, or 17.3 percent, primarily as the result of increased cost reimbursements under its revenue-guarantee contracts. Net income for the fourth quarter was $4.8 million, down significantly from $15.0 million or the same period of fiscal 2005.