810332--1/15/2008--MESA_AIR_GROUP

related topics

{cost, operation, labor}

{operation, international, foreign}

{cost, regulation, environmental}

{competitive, industry, competition}

{operation, natural, condition}

{personnel, key, retain}

{financial, litigation, operation}

{regulation, change, law}

{stock, price, share}

{system, service, information}

If our code-share partners or other regional carriers experience events that negatively impact their financial strength or operations, our operations also may be negatively impacted. Our code-share partners may expand their direct operation of regional jets thus limiting the expansion of our relationships with them. If the holders of our 6.25% Senior Convertible Notes Due 2023 exercise their right to require the Company to redeem their notes, our liquidity could be adversely affected or we may issue additional stock, which would dilute existing stockholders. If we experience a lack of labor availability or strikes, it could result in a decrease of revenues due to the cancellation of flights. Increases in our labor costs, which constitute a substantial portion of our total operating costs, will cause our earnings to decrease. If new airline regulations are passed or are imposed upon our operations, we may incur increased operating costs and experience a decrease in earnings. lf additional security and safety measures regulations are adopted, we may incur increased operating costs and experience a decrease in earnings. If our operating costs increase as our aircraft fleet ages and we are unable to pass along such costs, our earnings will decrease. Our fleet expansion program has required a significant increase in our leverage. Reduced utilization levels of our aircraft under the revenue-guarantee agreements would adversely impact our revenues and earnings. If we incur problems with any of our third-party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services. We are at risk of loss and adverse publicity stemming from any accident involving any of our aircraft. If we become involved in any material litigation or any existing litigation is concluded in a manner adverse to us, our earnings may decline. Our business would be harmed if we lose the services of our key personnel. We may experience difficulty finding, training and retaining employees. We may be unable to profitably operate our Hawaiian airline, which could negatively impact our business and operations. We have experienced significant operating and cash losses in certain areas of operations which could negatively impact our business and operations. Risks Related to Our Joint Venture in China Chinese laws and regulations governing Kunpeng s current business operations are sometimes vague and uncertain. Any changes in such Chinese laws and regulations may have a material and adverse effect on Kunpeng s business. Controversies affecting China s trade with the United States may negatively affect our operations. Kunpeng s labor costs are likely to increase as a result of changes in Chinese labor laws. Whether Kunpeng will receive preferential tax treatment under Chinese law is currently unclear. If Kunpeng does not receive such preferential tax treatment, its profitability may be negatively impacted. Fluctuations in exchange rates of the Renminbi, or RMB, could adversely affect the value of and dividends, if any, payable on shares of Kunpeng s registered capital or otherwise impact our operations and profitability. The ability of Kunpeng to make profit distributions to us may be restricted due to foreign exchange control regulations of China. Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences. Risks Related to Our Industry If competition in the airline industry increases, we may experience a decline in revenue. The airline industry is heavily regulated.

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810332--1/15/2008--MESA_AIR_GROUP_INC