Mesa Air Group, Inc. (NASDAQ: MESA) has announced it expects to receive USD 92.5 million in assistance under the Payroll Support Program as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the company said.
The funds can only be used for the continuation of payment of employee wages, salaries, and benefits for the period April 1, 2020, to September 30, 2020. The company is finalizing the agreements with the Treasury Department and expects it will be completed shortly.
The company has agreed to certain conditions under the program, such as: prohibitions against involuntary furloughs and reductions in employee pay rates and benefits through September 30, 2020; the elimination of share repurchases and dividends until September 30, 2021; and limits on executive compensation until March 24, 2022. Because the amount of payroll support is less than USD 100 million, the company will not be required to enter into a loan or equity agreement with the Treasury Department.
The company is also considering applying for federal loans through a separate program under the CARES Act.
Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 135 cities in 39 states, the District of Columbia, Canada, Mexico, Cuba and the Bahamas. As of March 31st, 2020, Mesa operated a fleet of 145 aircraft with an average of approximately 662 daily departures and 3,600 employees.