MAIR Holdings Inc. said Thursday its Big Sky subsidiary has received a notice of default and demand for payment of $4.8 million from Mesa Airlines Inc.
According to a filing with the Securities and Exchange Commission, Mesa attests that Big Sky is in default of lease agreements for 10 planes. Big Sky estimates that the amount remaining due under the leases is about $4.1 million. Though the carrier ceased operating flights in March, Big Sky said in the filing that it has continued to make lease payments due to Mesa.
Mesa also said it plans to draw on the $1.9 million letter of credit that MAIR established with Mesa in 2005.
In response, MAIR and Big Sky have filed a lawsuit against Mesa in federal court contending that Mesa has not suffered any financial damages. The complaint requests, among other things, that any funds Mesa draws on the letter of credit be placed in a trust until the court determines the proper amount of damages to be awarded.
A Mesa representative was not immediately available for comment.
Big Sky Transportation Co. was the primary remaining business unit of Minneapolis-based MAIR after it sold bankrupt Mesaba Airlines to Northwest Airlines Corp. last year. MAIR said in December it planned to liquidate itself.
MAIR shares rose 3 cents to $3.29 in morning trading. Mesa shares tumbled 7 cents, or 7.3 percent, to 89 cents, after hitting a new low of 85 cents earlier in the session.
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