Mesa Air won court approval on Thursday for its bankruptcy reorganisation plan, clearing the way for the regional carrier to emerge from Chapter 11 protection next month.
The approval by US Bankruptcy Judge Martin Glenn came two weeks after Mesa and its Freedom Airlines unit resolved litigation with Delta Air Lines.
The litigation stemmed from Delta's 2008 effort to end Freedom's status as a Delta Connection carrier.
In a statement, Mesa said the reorganisation allowed it to end more than 100 unnecessary aircraft leases and financings, eliminating about USD$700 million of leases and USD$50 million of debt from its balance sheet.
Glenn, in his order, called the terms of the reorganisation "fair, just, and reasonable under the circumstances."
Mesa expects to emerge from Chapter 11 as a private company and issue new notes, common stock and warrants to creditors.
The company had filed for bankruptcy protection on January 5, 2010, hoping to use the restructuring process to reduce its fleet and make it easier to settle with Delta.
Mesa said it has 76 aircraft and also operates as US Airways Express and United Express under contracts with US Airways and United Continental Holdings respectively.