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Modification of Parts and Maintenance Agreements

The parties have agreed to certain amendments to the parts and maintenance agreements which allow the Company to reduce monthly fees paid under such agreements as the number of aircraft in its CRJ200 & ERJ145 fleet is decreased. Additionally, these amendments enable the Company to terminate the respective parts and maintenance agreements without penalty, if it disposes of an entire aircraft type.

Exchange of 2023 Notes for Common Stock

AAR has also agreed to exchange its 2023 Notes with aggregate principal amount at maturity of $6.1 million for 15 million shares of the Company's common stock. Following the closing of this transaction, the Company will have 175,217,249 shares outstanding. After giving effect to this transaction, the Company will have outstanding $15.6 million in aggregate principal amount at maturity of 2023 Notes. The issuance of the common stock in the exchange, which is expected to close on or about November 4, 2009, is exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) and Section 4(2) thereof.

"Our agreement with AAR provides much needed flexibility to Mesa as we restructure the composition of our fleet and continue to find ways to increase cost efficiency. We thank AAR for its continuing support and service provided to the Company. We are also pleased to have retired an additional $6.1 million of our 2023 Notes," said Jonathan Ornstein, Chairman and CEO of Mesa Air Group, Inc.

Mesa currently operates 136 aircraft with approximately 800 daily system departures to 126 cities, 40 states, Canada, 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 3,700 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005.

http://www.mesa-air.com

SOURCE Mesa Air Group, Inc.

http://www.mesa-air.com

Jonathan Ornstein, chairman and CEO of Mesa Air Group, said: "We face a challenging period during the next few quarters and will strive to mitigate the impact of the termination of aircraft under our code-share agreement with United Airlines.

"The lease terms covering four of these aircraft expire on April 30, 2010, while the remaining six aircraft have lease terms beyond April 30, 2010."

http://www.datamonitor.com

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Under the terms of the agreement, Mesa will own 75% of the units and Mokulele shareholders will own the remaining 25% stake. Additionally, current Mokulele shareholders will be obligated to fund up to $1.5 million to capitalize the joint venture.

The joint venture will combine the jet routes currently flown by both Mesa and Republic. Under the agreement, E170 routes currently operated by Republic will be transitioned to jet service provided by Mesa Airlines.

Deal Type    Partnership
Sub-Category Joint Venture
Deal Status  Announced: 2009-10-13

Deal Participants

Partner 1 (Company) Mesa Air Group, Inc.
Partner 2 (Company) Republic Airways Holdings, Inc.