Mesa Air Group has amended its 2020 loan and guarantee agreement with Jefferies Capital Services, LLC, the successor in interest to the US Department of the Treasury, extending the loan's maturity to November 28, 2025, with an option for a 30-day extension. The facility originated under the federal COVID-19 loan program and was originally due in October 2025.
Under the amendment, Jefferies agreed to reduce the interest rate to 0% for 90 days, waive collateral coverage and minimum liquidity tests through maturity, and cut the principal by USD12.3 million upon full repayment. Mesa Air Group also deposited cash and pledged an aircraft engine as additional collateral, according to a company statement.
In its second-quarter report, Mesa Air Group disclosed that it had sold eleven CRJ900s and twenty-one spare engines, generating gross proceeds of USD28.9 million, to repay part of the same loan. As previously reported by ch-aviation, the carrier drew USD195 million of the USD200 million available under the arrangement.
The amendment provides short-term financial flexibility as Mesa Air Group continues to progress with its planned all-stock merger with Republic Airways Holdings, scheduled to close on November 19 following shareholder approval two days prior.
Mesa Airlines (YV, Phoenix Sky Harbor) currently operates sixty E175s under a capacity purchase agreement with United Airlines. The fleet will be combined with that of Republic Airways (YX, Indianapolis International), which operates 218 E170s, according to ch-aviation data.
For now, the two airlines will continue to operate independently pending the issuance of a single operating certificate. The US Department of Transportation has authorised them to consolidate at the corporate level, an arrangement that can be unwound if the certificate transfer is not ultimately approved.
