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Subsequent Events | 3 Months Ended
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Dec. 31, 2018
Subsequent Events [Abstract] |
Subsequent Events |
16. | Subsequent Events
On January 28, 2019, the Company entered into a Term Loan Agreement (the "Term Loan") pursuant to which the lenders committed to lend to the Company term loans in the aggregate principal amount of $91,200,000. Borrowings under the Term Loan will bear interest at LIBOR plus 3.10%. This interest rate applicable to the Term Loan is significantly lower than the Company's Spare Engine Facility (defined below), which the Term Loan refinances and replaces. The Spare Engine Facility accrued interest at LIBOR plus 7.25% plus a Yield Enhancement of 1.50% applied to scheduled principal repayments. The Term Loan has a term of five years, with principal and interest payments due monthly over the term of the loan in accordance with an amortization schedule. Proceeds from the Term Loan were used to (1) repay amounts outstanding under its spare engine financing facility entered into in fiscal year 2017 (the "Spare Engine Facility"); (2) pay prepayment fees under the Spare Engine Facility; (3) pay accrued and unpaid interest expenses; and (4) finance six engines acquired in 2018. The obligations under the Term Loan are secured by a first priority lien on 27 aircraft engines (21 used engines securing the obligations under the Spare Engine Facility and the six new and used engines acquired by the Company in calendar year 2018) and related collateral, including engine warranties and proceeds of the foregoing. On January 29, 2019, the Board of Directors of the Company ratified the entry by its wholly owned subsidiary, Mesa Airlines, into a term sheet (the "Term Sheet") with American Airlines, Inc. ("American"), which sets forth certain proposed amendments to the American Capacity Purchase Agreement. The parties agreed that the Term Sheet will remain in effect until the earliest to occur of the following: (1) the execution a definitive amendment to the American Capacity Purchase Agreement; (2) the date American provides a withdrawal notice with respect to six additional aircraft in connection with the Company's failure to meet certain performance criteria (as discussed below); (3) the date the Company exercises its option to withdraw aircraft from the American Capacity Purchase Agreement (as discussed below); and (4) the expiration or termination of such Capacity Purchase Agreement. The amendments to the American Capacity Purchase Agreement include the following:
| ▪ | The conversion of two aircraft to be utilized by Mesa Airlines as operational spares in Mesa's sole discretion throughout its system, resulting in a decrease in the number of aircraft operated by the Company under the American Capacity Purchase Agreement from 64 to 62, effective April 1, 2019. American has agreed to make certain additional monthly payments to the Company related to the two aircraft during the period April 2019 through December 2020.
| ▪ | The parties also agreed to new and revised operational performance criteria under the American Capacity Purchase Agreement, which if exceeded, will result in the payment of additional incentive compensation to Mesa Airlines and, if not met, could result in up to six additional aircraft being removed from the American Capacity Purchase Agreement (as discussed below). The new and revised performance criteria will be measured on a rolling 60-day period (effective May 1, 2019) and 45-day period (effective September 1, 2019 and thereafter).
| ▪ | The parties agreed that if at any time during the term of the Term Sheet the Company fails to comply with such revised/new operational performance metrics (as determined over the applicable rolling measurement periods), American will have the right to permanently withdraw one aircraft from the American Capacity Purchase Agreement and may not in any event withdraw more than two aircraft in any calendar month or six aircraft in total.
| ▪ | In addition to American's rights, if at any time during the term of the Term Sheet the Company fails to comply with an applicable performance metric on two or more occasions, then upon the second occurrence and each subsequent failure, the Company has the right, exercisable in its discretion, to elect to permanently withdraw six aircraft from the American Capacity Purchase Agreement.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
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