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Mesa Air Group, Inc. Securities Class Action Lawsuit

Case Summary

Company Name
Mesa Air Group, Inc.
Stock Symbol
MESA
Class Period
Purchasers of Mesa Air Group securities pursuant to the Company’s August 10, 2018 initial public offering
Court
District of Arizona

Notice of Lead Plaintiff Deadline for Shareholders in the Mesa Air Group, Inc. Securities Class Action Lawsuit

Robbins Geller Rudman & Dowd LLP announces that a securities class action lawsuit has been filed in the District of Arizona on behalf of purchasers of Mesa Air Group, Inc. (NASDAQ:MESA) securities pursuant to Mesa Air’s August 10, 2018 initial public offering (“IPO”).  The case is captioned Lowthorp v. Mesa Air Group, Inc., No. 20-cv-00648, and is assigned to Judge Douglas L. Rayes.  The Mesa Air securities class action lawsuit charges Mesa Air, certain of its officers and directors, and the underwriters of its IPO with violations of the Securities Act of 1933.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Mesa Air securities pursuant to the IPO to seek appointment as lead plaintiff in the Mesa Air securities class action lawsuit.  A lead plaintiff acts on behalf of all other class members in directing the Mesa Air securities class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Mesa Air securities class action lawsuit.  An investor’s ability to share in any potential future recovery of the Mesa Air securities class action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Mesa Air securities class action lawsuit or have questions concerning your rights regarding the Mesa Air securities class action lawsuit, please visit our website by clicking here or contact Brian Cochran at 800/449-4900 or 619/231-1058, or via e-mail at bcochran@rgrdlaw.com.  Lead plaintiff motions for the Mesa Air securities class action lawsuit must be filed with the court no later than June 1, 2020.

Mesa Air is the holding company for Mesa Airlines, Inc., which provides regional air carrier services under capacity purchase agreements (“CPA”) with American Airlines (“American”) and United Airlines.

On or about July 13, 2018, Mesa Air filed a Registration Statement on Form S-1 with the U.S. Securities and Exchange Commission in connection with the IPO.  The Registration Statement in combination with subsequent amendments and the Prospectus for the IPO filed on August 10, 2018 (together, the “Offering Documents”) were used to sell 11 million shares of Mesa Air common stock to the investing public at $12.00 per share.

The Mesa Air securities class action lawsuit alleges that the Offering Documents made false and misleading statements and/or failed to disclose the following adverse information regarding Mesa Air’s business and operations that defendants were aware of at the time of the IPO: (1) Mesa Air's operational performance was poor and below industry standards; (2) Mesa Air had a shortage of qualified mechanics and maintenance personnel; (3) Mesa Air had an inadequate number of spare aircraft and parts;  (4) Mesa Air did not have a strong track record of reliable performance; (5) then-existing “risks” had already materialized; and (6) Mesa Air knew of undisclosed adverse trends and uncertainties at the time of the IPO.

On January 31, 2019, Mesa Air announced that its Board had ratified Mesa Airlines’ entry into a term sheet with American which set forth amendments to the American CPA, effective February 1, 2019.  The amendments included following:

  • the conversion of two aircraft under the CPA to operational spares, resulting in a decrease in the number of guaranteed revenue-generating aircraft operated by Mesa Air for American from 64 to 62;
  • new and revised operational performance criteria imposed by American, which if not met could result in up to six additional aircraft being removed from the American CPA;
  • if Mesa Air failed to comply with the new and revised operational performance criteria, American would have the unilateral right to permanently withdraw one aircraft from the CPA, up to two aircraft from the CPA in any calendar month, and up to six aircraft in total; and
  • if Mesa Air failed to comply with the new and revised operational performance criteria on two or more occasions, then upon the second occurrence and each subsequent failure, American would have the unilateral right to permanently withdraw six aircraft from the CPA. 

Then, in both May and August 2019, Mesa Air reported disappointing quarterly results that fell below consensus estimates.  In addition, the Company admitted that it did not meet the performance criteria required under the amended CPA with American.  In turn, American had elected to remove four aircraft from its CPA with Mesa Air, resulting in a decrease in the number of guaranteed revenue-generating aircraft operated by Mesa Air for American from 64 to 60.  Since the IPO, the price of Mesa Air stock has fallen significantly.  By March 30, 2020, Mesa Air stock was trading at just above $3 per share, a decline of 74% from the price it was sold at in the IPO.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations, and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.

Contact:

            Robbins Geller Rudman & Dowd LLP
            Brian E. Cochran, 800-449-4900
            bcochran@rgrdlaw.com

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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