As negotiations for an improved contract continue, we wanted to take this

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2 2 MAG Contract Comparison Introduction As negotiations for an improved contract continue, we wanted to take this opportunity to reflect on the progress that has been made, reiterate the goals we are working toward, and review the environment in which we are now bargaining. The current blue book is coming up on its fifth year of implementation. While we made some significant strides toward raising the bar with our 2008 contract, the industry has evolved further with the signing of several new contracts. This was to be expected, and is the nature of pattern bargaining. Our hourly pay rates, which now fall below industry average, are prime examples. The numbers speak for themselves. As such, improving these rates is a top priority of your MEC and Negotiating Committee. There has also been quite a bit of industry turmoil over the last five years and things are still shaking out. The volatility had many airlines in and out of bankruptcy while others engaged in a merger or other type of transaction, or ceased operations altogether. Most industry analysts predict additional industry consolidation at the regional level. Our company was not immune: Mesa Air Group (MAG) entered into Chapter 11 bankruptcy to restructure its operations in January 2010 and emerged approximately one year later. Hundreds of our pilots were furloughed, downgraded, and/or displaced from their domiciles. In many cases, captains downgrading to first officers due to the dramatic fleet reduction absorbed as much as a $34,000 pay cut. Together, we remained strong. Your MEC assumed an active role on the Unsecured Creditors Committee throughout the Chapter 11 process. We protected our pilots rights aggressively and successfully kept our contract fully intact throughout this painful restructuring process. Your MEC continues working vigilantly to protect and enhance the careers of all Mesa pilots and is using innovative methods to fulfill this mission. In 2012, for example, the MAG pilot Negotiating Committee and MEC leaders secured contract improvements for the entire pilot group via our ongoing Section 6 negotiations, through the immediate implementation of 11 contract sections that had already been agreed to by ALPA and management. In addition, your Grievance Committee secured more than $325,000 in 2012 for MAG pilots whose contractual rights had been violated by management. A pre-grievance system is also in place in an effort to resolve issues before filing a formal grievance. In the past, MAG pilots were unfairly characterized as being at the bottom of the industry in terms of wages and working conditions. Such a characterization was never accurate or factual. This comparison document illustrates the gains ALPA made in our 2008 contract and the already-implemented sections from our current negotiations, as well as emphatically shows that we are no longer at the bottom of the industry. Our intent in providing our pilots with this updated contract comparison is for you to have the most up-to-date and factual information. There have been many changes in pilot contracts both positive and negative at MAG and at other regional carriers over the past two years. This document illustrates several areas where the MAG contract must be improved, and we will highlight some of the areas where we are focusing our attention on at the bargaining table. Your MEC continues working vigilantly to protect and enhance the careers of all Mesa pilots...

3 Scope summer To begin, let s look at one of the most important sections of any contract. The success of any negotiations can often be measured not by what you gain, but by what you keep. As we know all too well, scope is the most vital section of any contract and it is with good reason that it is the first section of any contract. It defines our work and protects us from whipsawing. Remembering the history of our scope clause is equally important. During a time when we had no scope protection, MAG set out to circumvent our contract and our union by creating an alter-ego carrier. In a matter of months, MAG management closed down CCAir; hundreds of our fellow pilots were on the streets without jobs. Meanwhile, MAG management launched an alterego carrier, Freedom Airlines, and began transferring Mesa flying and jobs over to Freedom. It was not uncommon for a Phoenix-based flight crew to arrive at their gate only to find out that the flight was now assigned to a Freedom crew. At the time, Freedom was taking delivery of up to four aircraft per month. If allowed to continue at that rate, Freedom could have taken over the entire Phoenix hub in a few months. Within a couple of years, it could have taken over the entire Mesa operation and we would have been shut down like our CCAir brethren. Make no mistake: Freedom Airlines and the pilots complicit in its inception cost us dearly. Our MEC leadership at the time was forced to make a very difficult decision. They had to forgo significant financial gains during our Section 6 negotiations at that time in order to not only capture the Freedom flying, but also return our CCAir brethren to work. This was the first and only time in ALPA history that pilots from an airline that had ceased to operate were integrated into an active carrier s seniority list. It was the right thing to do. As a defense against scope clauses throughout the industry, airline management teams set up what are known as holding companies. For example, United Continental Holdings Inc. (UCH) is the holding company that owns United Airlines. United s pilots work under a contract that is tied to United Airlines, not UCH. Therefore, their scope clause binds only United Airlines, not UCH. Another example is TSA. Their scope provision only ties TSA, not their holding company. Taking a page from the Mesa playbook, TSA s holding company formed an alter-ego carrier called GoJet. The result was the same bloodbath we experienced in TSA jobs were being transferred to GoJet, and their negotiations stalled for quite some time before the parties reached an agreement in Yet another example is SkyWest. Their holding company also owns ExpressJet Airlines, which is in the process of merging two ALPA carriers, ASA and XJT neither of which have a scope clause tying SkyWest a perfect recipe for whipsawing the SkyWest pilots, a nonunion carrier, against the ALPA pilots at ASA and XJT. Simply put, we are the only carrier in the industry major or regional that owns the holding company. Our scope clause expressly ties Mesa Air Group, our holding company, to the terms of the collective bargaining agreement and is bar none the strongest in the industry. Simply put, we are the only carrier in the industry major or regional that owns the holding company.

4 4 MAG Contract Comparison Pay Many things, besides just pay rates, have an effect on how much we are paid. Line guarantee, work rules, cancellation pay, scheduled/actual pay, and minimum guarantee are just a few that play a determining factor in how much we get paid. By making improvements in these areas during the last round of bargaining, Mesa s payroll increased by approximately $6,000 per pilot per year. One area, however, still needs improvement. Our pay rates are well below industry average. Though we were once in the cone of industry average, we have fallen behind in recent years due to the signing of some new pilot contracts. The charts to the right and on pages 5 8 provide a quick look at our current rates, and how they compare to other regional carriers. At Mesa, pay rates were negotiated for turboprops, seat jet aircraft, seat jet aircraft, and > 76 seat jet aircraft <= 86,000 lbs. The rates listed are for comparison purposes only. Hourly Rate Hourly Rate >76 Seat TurboJet Captain Rate Rates Effective: July 1, 2013 $130 $120 $110 $100 $90 $80 $70 $60 $50 $ Chautauqua Seat Jet Skywest CRJ 900 Equivalent *Trans States has a MRJ90 (79-96 seat override); Mesa operates >76 seat jets for US Airways $60 $50 $40 $30 $20 Mesa >76 Seat, <=86 lbs Jet >76 Seat TurboJet First Officer Rates Effective: July 1, 2013 TransStates MRJ 90 (79-96 seats) Override* $10 $ Chautauqua Seat Jet Skywest CRJ 900 Equivalent Mesa >76 Seat, <=86 lbs Jet TransStates MRJ 90 (79-96 seats) Override* *Trans States has a MRJ90 (79-96 seat override); Mesa operates >76 seat jets for US Airways

5 summer Seat TurboJet Captain Rate Rates Effective: July 1, 2013 $125 $115 $105 Hourly Rate $95 $85 $75 $65 $ ARW Seat Jet ASA Seat Jet Chautauqua Seat Jet Eagle Seat Jet GoJet Seat Jet Horizon Seat Jet Mesa Seat Jet PSA CRJ Blend Skywest CRJ 700 Equivalent Trans States Seat Jet Compass seat Jet Endeavor Air Seat Jet Seat TurboJet First Officer Rate Rates Effective: July 1, 2013 $55 $50 $45 Hourly Rate $40 $35 $30 $25 $ ARW Seat Jet ASA Seat Jet Chautauqua Seat Jet Eagle Seat Jet GoJet Seat Jet Horizon Seat Jet Mesa Seat Jet PSA CRJ Blend Skywest CRJ 700 Equivalent Trans States Seat Jet Compass seat Jet Endeavor Air Seat Jet

6 6 MAG Contract Comparison 50 Seat TurboJet Captain Rate Rates Effective: July 1, 2013 $110 $100 Hourly Rate $90 $80 $70 $60 $ ARW CL-65 ASA Seat Turbojet Chautauqua Seat Jet Eagle Seat Turbojet (Wtd. Avg.) Express Jet EMB145 Mesa Seat Jet Endeavor Air Seat Jet PSA Seat Jet Skywest Turbojet 50 seats or less TSA ERJ145 (44-50 Seat Jet) 50 Seat TurboJet First Officer Rate Rates Effective: July 1, 2013 $50 $45 Hourly Rate $40 $35 $30 $25 $ ARW CL-65 ASA Seat Turbojet Chautauqua Seat Jet Eagle Seat Turbojet Express Jet EMB145 Mesa Seat Jet Endeavor Air Seat Jet PSA Seat Jet Skywest Turbojet 50 seats or less TSA ERJ145 (44-50 Seat Jet)

7 summer Large Turboprop Captain Rate Rates Effective: July 1, 2013 $120 $100 Hourly Rate $80 $60 $40 $20 $ ASA ATR72 Eagle Seat Turboprop Horizon Seat Turboprop Island Air ATR72 Mesa Seat Turboprop Endeavor Air Seat Turboprop Large Turboprop First Officer Rate Rates Effective: July 1, 2013 $50 $45 $40 Hourly Rate $35 $30 $25 $20 $ ASA ATR72 Eagle Seat Turboprop Horizon Seat Turboprop Island Air ATR72 Mesa Seat Turboprop Endeavor Air Seat Turboprop

8 8 MAG Contract Comparison Small Turboprop Captain Rate Rates Effective: July 1, 2013 $100 $90 $80 Hourly Rate $70 $60 $50 $40 $ Great Lakes Seat Turboprop Mesa Seat Turboprop Piedmont Dhc Piedmont DHC Endeavor Seat Turboprop Commutair Dash Commutair Dash Skywest EMB 120 Silver Airways seats Small Turboprop First Officer Rate Rates Effective: July 1, 2013 $45 $40 Hourly Rate $35 $30 $25 $20 $ Great Lakes Seat Turboprop Mesa Seat Turboprop Piedmont DHC-8-100/200/300 Endeavor Seat Turboprop Commutair D8-200 Commutair D8-300 Skywest EMB 120 Silver Airways20-39 seats

9 summer Minimum Monthly Guarantee Minimum guarantee is another vital protection when it comes to maintaining our pay. Mesa is slightly above average with a minimum monthly guarantee of Most other regionals are at 75 hours per bid period. Lineholder Minimum Monthly Guarantee Hours Mesa converted from 13 Bid Periods SkyWest: EMB Guarantee 80 Hrs Reserve - Minimum Monthly Guarantee Hours Trans States to increase to 75 on 8/1/2013 Mesa converted from 13 Bid Periods

10 10 MAG Contract Comparison Minimum Pay Per Duty Period In terms of minimum pay per duty period, Mesa s reserve pilots are in line with the industry at 3.9 hours. For lineholders, however, there is no minimum pay per duty period provision in our current contract. This is an area that our negotiators are working to improve. Minimum Pay Per Duty Period Hours / Duty Period (Decimal Format) ARW: Min Day first or last day exempt, does not apply w/cdo's XJT: 2 Hrs Min Day, 3 Hrs for Layover Chautauqua: 4 Hrs Reserve ONLY, 5 Hrs Hot Reserve HZN: 1 Duty Period GLA: 3.75 Hrs Reserve ONLY EGL: Value of a day (for Pay), 3.9 Hrs Reserve/Composite Mesa: 3.9 Hrs Reserve ONLY GoJet, and Trans States Not Specified in Contract CommutAir: 3 Hrs-LH, 4.0 Hrs or duty completed-reserve

11 Duty/Trip Time Ratios summer Our current contract does not contain duty/trip rigs. Air Wisconsin, ASA, Horizon, and SkyWest are the only regional carriers with some type of duty or trip rigs. While our contract is on par with the rest of the regional industry in this area, it is something that our negotiators continue to explore. Duty/Trip Time Ratios Duty Time Ratio Trip Time Ratio 1:2 1:2 1:4 1:4 Air Wisconsin - 1 for 2 duty rig (not on CDO), 1 for 4 trip rig (not on CDO) ASA and SkyWest 1 for 1 duty rig over 12 hours Piedmont 1 for 4 trip rig (modified min day) No Duty/Trip Rigs: Chautauqua, CommutAir, Compass, Eagle, ExpressJet, Great Lakes, GoJet, Silver Airways, Island Air, Mesa, Endeavor, PSA and Trans States

12 12 MAG Contract Comparison Deadhead Most carriers pay deadheads at 50 percent (including Mesa) or at 100 percent. There are a few, as you can see in the chart below, that pay it at 75 percent. Deadhead 100% 100% 100% 100% 100% 100% 100% 100% 80% 75% 75% 75% 75% 75% 60% 40% 50% 50% 50% 50% 50% 50% 20% 0% CommutAir: 50% scheduled or actual block on CAL/UAL flights; scheduled block for other carriers Endeavor Air: 75% of scheduled or block time, whichever greater Eagle: 50%; Snaps back to 75% on 1/1/2017 Trans States: 75%; increases to 100% at DOS+3 ( If PBS is implemented prior to DOS+3, moves to 100%)

13 summer Premium Pay Premium pay at Mesa is in line with the industry and above the current average. Premium Pay 160% 140% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 120% 100% 80% 120% 100% 60% 40% 20% See Notes See Notes See Notes See Notes 0% ASA - Premium Pay 150%, Premium pay for CRJ 700/900 at 200% Chautauqua - Overtime Pay: performs duty on a scheduled day 4 hrs, Early Report Pay of $10, Holiday Pay (4 Hours) EGL - Pay for Open Time at 120%, 150% for Critical Coverage days XJT- Red Flagged Open Time- Only picked up by LH on Day off (150%) GLA - Holidays shall be designated as paid holidays -rate of 3.75 hours HZN - 150% premium if Open Time posted as "150%" PDT - When a pilot is entitled to premium pay, shall receive 4 hrs of pay PSA - Critical coverage pay at 150% for scheduled or actual, but no less than 4 hours Endeavor Air 150% for Red Flagged Trips only. No premium pay for Trips added until such added Pay Credit is utilized to offset the amount of Pay Credit dropped due to Trip drops Silver Airways - Open Time on Day off at 100% or 4 Hrs, Holiday work receives extra Vacation Day SkyWest If not called in sick day before, day of, or day after a holiday paid at 4:18/day, OVERTIME: paid at a rate of (1 ½) X rate. Trans States - Line holders: Greater of 4 hrs or 150% (above guarantee), Reserves: Greater of 4 hours or 125% (toward guarantee) Per Diem Mesa has the secondlowest per diem rate in the industry at $1.39. The next rate above us is $1.45 at Silver Airways and CommutAir. American Eagle and ExpressJet have the highest per diem rate at $1.80. $2.00 $1.75 $1.50 Hourly Per Diem - Expense Money $1.65 $1.65 $1.60 $1.45 $1.55 $1.80 $1.80 $1.35 $1.55 $1.45 $1.75 $1.39 $1.75 $1.70 $1.70 $1.65 $1.65 $1.25 $1.00 TSA: $1.80 at 8/1/2015 MAG and EGL: Adjusted Annually CMT: $1.50 on 6/1/14 PDT: $1.70 on 1/1/2014 PSA: $1.70 on 10/1/2014; $1.75 on 4/1/2016, $1.80 on 10/1/2017

14 14 MAG Contract Comparison Sick Leave Sick-leave accrual rates are an important component to pay protection. There are as many accrual schemes in the industry as there are airlines. Some airlines have a flat accrual rate, while others step up the accrual rates per years of service. The following chart illustrates the accrual rate for a five-year employee. In this manner, we can best cross-compare our rates. Sick Leave Pay Rates 4.50 Reserve Sick Pay Hours See Notes 3.95 See Notes See Notes See Notes See Notes 3.00 Sick Leave Paid at Scheduled Flying ASA, Compass, Eagle, ExpressJet, Great Lakes, GoJet, Silver Airways, Mesa (ALL Paid 100% on 1st Day), Piedmont, Endeavor Air, PSA, SkyWest, Trans States Sick Leave Paid at Scheduled Flying or Trips missed Air Wisconsin Scheduled Flying or Reserve Scheduled Day Horizon, Island Air CommutAir Paid at scheduled value for work missed, pilot missing entire month receives minimum guarantee Chautauqua 4.0 Hrs for each day taken

15 summer Sick Leave Accrual Carrier Accrual Max Accrual Air Wisconsin 3.5 Hrs/Month 375 Hrs ASA 2.75 Hrs/Month (Yrs 0-4), 3.0 Hrs/Month (Yrs 4-7), 3.25 Hrs/Month (Yrs 7-10), 3.5 Hrs/Month (Yrs 10+) 500 Hrs Chautauqua 4.0 Hrs/Month None CommutAir 2.5 Hrs/Month (30 Hrs/Yr) Not Specified Compass 3.0 Hrs/Month (0-4 Yrs), 3.5 Hrs/Month (5+ Yrs) 450 Hrs Eagle PTO Sick Accrual of PTO at 2.5 Hrs/Month. Pilots can use PTO for vacation, sick, PVDs, PO, unpaid fatigue. Supplemental sick remains 200 Hrs. Supplemental Sick ExpressJet 5.0 Hrs/Month 640 Hrs Great Lakes 0.94 Hrs/Month (0-3 Yrs of Service), 1.56 Hrs/Month (4+ Yrs of Service) None GoJet 2.0 Hrs/Month (Less than 2 Yrs of Service), 3.0 Hrs/Month (2+ Yrs of Service) 300 Hrs Silver Airways 4.0 Hrs/Month 120 Hrs Horizon 3.0 Hrs/Month 90 Hrs Island Air 7.6 Hrs/Month 480 Hrs (Less than 5 Yrs of Service), 720 Hrs (5+ Yrs Service) Mesa 1.52 Hrs/Month (0-1 Yrs), 2.17 Hrs/Month (2-4 Yrs), 3.0 Hrs/Month (5+ Yrs) None Piedmont 4 Hrs/Month None Endeavor Air 2.5 Hrs/Month None PSA 3.5 Hrs/Month (0-5 Yrs), 4.0 Hrs/Month (5+ Yrs) 485 Hrs SkyWest /Hr (90 days), 0.027/Hr (2 Yrs), /Hr (5+ Yrs) 240 Hrs Trans States 2.0 Hrs/Month (0-2 Yrs), 3.0 Hrs/Month (2-5 Yrs), 4.0 Hrs/Month (6+ Yrs) *Sick leave not paid until after 1 Yr of Service 300 Hrs

16 16 MAG Contract Comparison Vacation Mesa is in line with the industry for vacation pay and accrual. At Mesa, all vacation is currently paid at the 50 seat rate. Vacation Pay Rates 5.00 Hours Prorated against guarantee 3.00 Value of Trips Scheduled to CommutAir: 19.0/week (2.7/day) Eagle: PTO system now in place; PTO Bank used for vacation & sick Horizon: 3.75 hrs for RSV, 3.92 hrs composite Lineholder Piedmont: 4 hrs RSV only SkyWest: Pilots may choose a daily vacation rate between 2:30 and 4:00 credit hrs/day in increments of 6 minutes. When the pilot does not elect to choose a daily vacation rate, a rate of 2:54 credit hours per day will be used. Vacation Accrual Vacation Days Air Wisconsin ASA Chautauqua CommutAir Compass Eagle PTO Express Jet Great Lakes GoJet Silver Airways Horizon Island Air Mesa Piedmont Endeavor Air* PSA Skywest Trans States Eagle switching to a PTO system which will cover vacation and sick time together. Vacation blocks are 3.0 hours per day. * PCL: Reduction of 1 week of vacation for all pilots in 2013.

17 Quality of Life Quality of life is a vague term that can mean very different things to different people. In a nutshell, the majority of our matrix concerning quality of life can be classified as scheduling. Many of the issues we face today are a result of inadequate staffing. As the company is working to recruit and train more pilots, which will in turn bring back greater schedule flexibility for our pilots, we re going to focus this section on days off and JAs/reassignments. summer Minimum Days Off When we measured our minimum days off with the rest of the industry during the last round of bargaining, our reserve pilots lagged the industry by a significant amount. In fact, we were dead last in the industry. Today, we are in line with the rest of the industry. Minimum Lineholder Days off per Month *ASA, Island Air, and Trans States 11 days in a 30 day month, 12 days in a 31 day month SkyWest 10 days off in a 30 day month, 11 in a 31 day month Horizon 11.3 days are converted from #bid period Endeavor Air includes immovable days (3 days minimum)

18 18 MAG Contract Comparison Minimum Reserve Days off per Month ExpressJet 11 days in a 30 day month, 12 in a 31 day month Island Air and SkyWest 10 days off in a 30 day month, 11 in a 31 day month Horizon 10.4 days are converted from #bid period Reassigned, Junior Assigned No one wants to be reassigned or junior assigned. The impact this has on our lives and families is immeasurable. This is why we continue to work toward removing this contentious section from our contract. Currently, the only carrier in the industry that doesn t allow junior assignments is Republic. In our last negotiations, we were successful in developing a solution to help mitigate disruptions in our schedules. MAG ALPA negotiators achieved what no other carrier has achieved in their contracts: strict limitations to the company s ability to reassign pilots and steep financial penalties if it is done incorrectly. With an improper reassignment comes a 200 percent premium. This, coupled with line guarantee, has introduced cost-benefit analysis to everyday crew tracking. Management is financially incentivized to reassign pilots correctly. The decisions made by Crew Tracking now affect the bottom line. In our previous contract, the company faced no penalty for reassigning pilots from a seven-hour, productive day to a one-hour turn. Today, it costs the company six hours of pay. And if it is later proven to be improper, it would carry a 200 percent premium Additionally, ALPA and the company meet on a monthly basis to review every improper reassignment claim. In the past, crew trackers were simply putting out fires by ensuring that all flying such as the one-hour turn was covered without any financial repercussions. Because it now costs the company, they are less apt to making those knee-jerk decisions. Mesa Air Group is the only carrier in the industry that places such restrictions on reassignments. We are also the only carrier that places a premium of 200 percent for improper reassignments. Finally, we are the only carrier that has a junior-available clause in our contract; all other carriers either have a junior-manning or a junior-assignment clause. Our pilots are the ultimate decision makers regarding availability. If indeed you do accept a junior available assignment, know that we are leading the industry with our 200 percent premium.

19 Conclusion As you can see from this overview, we have a lot of work ahead of us to get our contract where it needs to be. Through the very nature of pattern bargaining, other groups have leapfrogged ahead in areas that we may have led just a few short years ago with the signing of our 2008 contract. One thing, however, is clear: Other carriers can no longer point at Mesa and accuse us of bringing the industry down. In the area of pay, we have the foundation for a pay system that will yield the highest results. There s no place to build but up. Our quality of life has improved drastically through more control of our own schedules, along with more efficient scheduling practices. And our scope continues to protect our jobs and our future. The Mesa Air Group pilots have made significant progress with each of our contracts. We expect to do the same in our current negotiations despite the industry around us still being in flux. There are many challenges ahead, and by being an informed, unified group, we can achieve our collective bargaining goals. summer In the area of pay, we have the foundation for a pay system that will yield the highest results. There s no place to build but up.

20 SEPTEMBER 2013