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                                                                   Exhibit 10.27




                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                               GEORGE MURNANE, III

                                       AND

                              MESA AIR GROUP, INC.










                          DATED AS OF DECEMBER 6, 2001
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                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of
December 6, 2001 by and between Mesa Air Group, Inc., a Nevada corporation (the
"Company"), and George Murnane, III ("Executive").

                                    RECITALS

WHEREAS, the Company wishes to offer and Executive has agreed to accept
employment with Mesa Air Group, Inc.

WHEREAS, the parties wish to memorialize the terms and conditions of such
employment in this employment agreement dated as of December 6, 2001.

                                    ARTICLE I

                                 DUTIES AND TERM

         1.1      EMPLOYMENT. In consideration of their mutual covenants and
other good and valuable consideration, the receipt, adequacy and sufficiency of
which are acknowledged, the Company agrees to hire Executive, and Executive
agrees to remain in the employ of the Company, upon the terms provided in this
Agreement.

         1.2      POSITION AND RESPONSIBILITIES.

                  (a)      Executive shall serve as the Executive Vice President
of the Company. Executive agrees to perform services, not inconsistent with his
position, as are from time to time assigned to him by the Chief Executive
Officer, President or Board of Directors of the Company.

                  (b)      During the period of his employment under this
Agreement, Executive shall devote substantially all of his business time,
attention, skill and efforts to the faithful performance of his duties under
this Agreement, but Executive shall have the right to engage in personal
business and to participate in charitable and civic activities, during normal
business hours and otherwise, as long as such business and activities do not
unreasonably interfere with Executive's duties to the Company. Notwithstanding
the foregoing, nothing contained herein shall prohibit the Executive to continue
in his capacity as a Director at International Airline Support Group, Inc. and
North-South Airways, Inc.

         1.3      TERM. The term of Executive's employment under this Agreement
shall commence on December 6, 2001, and shall continue, unless sooner
terminated, until December 6, 2005.


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         1.4      LOCATION. During the period of his employment under this
Agreement, Executive shall not be required, except with his prior written
consent (which may be withheld in his discretion), to relocate his principal
place of employment outside Maricopa County, Arizona. Required travel on the
Company's business shall not be deemed a relocation so long as Executive is not
required to provide his services under this Agreement outside of Maricopa
County, Arizona, for more than 50% of his working days during any consecutive
six-month period.

                                   ARTICLE II
                                  COMPENSATION

         For all services rendered by Executive in any capacity during his
employment under this Agreement, including, without limitation, services as a
director, officer or member of any committee of the Board of the Company or of
the board of directors of any subsidiary of the Company, the Company shall
compensate Executive as set forth in this Article II.

         2.1      BASE SALARY. The Company shall pay to Executive an annual base
salary of not less than $145,000 (the "Base Salary") during the term of this
Agreement. Executive's Base Salary shall be paid every other week in equal
installments. The Base Salary shall be reviewed annually by the Board or a
committee designated by the Board, and the Board or such committee may, in its
discretion, increase the Base Salary. Notwithstanding the foregoing, beginning
December 6, 2002, the Company shall increase the Base Salary effective each
January 1 during the term of this Agreement, by an amount which is at least
equal to the percentage increase in the Consumer Price Index, all items, Urban
Wage Earners and Clerical Workers, for the Phoenix-Mesa, AZ (MSA) from January
of the immediately prior year to January of the then current year. Subject to
the consent of Executive (which consent shall not be unreasonably withheld), the
Company may reduce the Base Salary under circumstances in which the Company has
suffered severe financial losses and has imposed cuts in salary of other
officers on an across the board basis, but any such reduction may not be at a
greater percentage than the reduction imposed on any other officer unless
otherwise agreed by the Executive.

         2.2      BONUS PAYMENT. The Company shall establish in each fiscal year
during the term of this Agreement an executive bonus plan to provide incentive
compensation to Executive. During the period of Executive's employment under
this Agreement, Executive shall be entitled to the bonus payments with a minimum
annual payment of $40,000 and a maximum payment of $180,000. Such bonus payments
shall be computed according to the terms set forth in Exhibit A, and
incorporated herein. Any bonus payable to Executive under the plan described
herein is referred to as an "Incentive Bonus." Any Incentive Bonuses will be
paid on a quarterly basis, not later than 45 days after the end of each fiscal
quarter (or 90 days after the end of any fiscal year), based on the Company's
financial statements in its Form 10-Q or Form 10-K, as the case may be; payments
made with respect to any fiscal quarter other than the last fiscal quarter of a
fiscal year of the Company will be made on an estimated basis (based on
annualized results), and the parties will account to one another and make
appropriate payment adjustments promptly after the financial statements for any
fiscal year become available. The Company in its discretion may pay bonuses to
Executive in addition to the Incentive Bonuses set forth herein.


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         2.3      STOCK OPTIONS.

                  (a)      The Company confirms the grant to Executive,
effective as of December 6, 2001, of options to purchase 150,000 shares of stock
at an exercise price equal to the market value of the Company's common stock on
December 6, 2001 ($6.36), under the terms of the existing stock option plan. In
addition, as of December 6 of each year during the term of this Agreement (or
the next business day if December 6 of any year is not a business day), the
Company shall issue options to purchase not fewer than 40,000 shares of common
stock of the Company (adjusted appropriately for any stock dividend, stock
split, spin-off, reorganization, or similar transaction), under a new stock
option plan the terms of which are described in Section 2.3(c). All stock
options granted under this Agreement shall vest equally over a three (3) year
period.

                  (b)      During the term of this Agreement and thereafter so
long as any stock option granted to Executive by the Company remains outstanding
(whether such stock option was granted prior to or after the date of this
Agreement), the Company shall loan to Executive an amount equal to the aggregate
exercise price of any such stock option, with such loan to be made upon
Executive's giving of notice to the Company that he is exercising a stock option
and desires to have the Company loan to him the exercise price of such stock
option. Any such loan shall be on a full recourse basis, shall be payable within
60 days, and shall be on such other terms as are reasonably acceptable to
Executive but that in any event are no more favorable to Executive than would be
available to Executive from an unrelated third party. The proceeds from any such
loan shall be used to pay the exercise price of the pertinent stock options.

                  (c)      If Executive is terminated without Cause, Executive
terminates his employment for Good Reason, or Executive dies or becomes Totally
Disabled, then all previously granted stock options shall immediately vest and
the expiration date for exercise of such stock options shall be a date not
earlier than ten years from the grant of the stock option.

         2.4      ADDITIONAL BENEFITS.

                  (a)      GENERAL BENEFITS. During the term of this Agreement,
Executive shall be entitled (i) to participate in all employee benefit and
welfare programs, plans and arrangements (including, without limitation,
pension, profit sharing, supplemental pension and other retirement plans,
insurance, hospitalization, medical and group disability benefits, travel or
accident insurance plans) and (ii) to receive fringe benefits, such as dues and
fees of professional organizations and associations, in each case under (i) and
(ii) to the extent that such programs, plans, arrangements, and benefits are
from time to time available to the Company's executive personnel (the programs
and benefits in (i) and (ii) are referred to as "General Benefits"). During the
period of his employment under this Agreement, the Company shall continue to
provide the General Benefits to Executive at a level which shall in no event be
less, in any material respect, than the General Benefits made available to
Executive by the Company as of the date of this Agreement. Subject to the
consent of Executive (which consent shall not be unreasonably


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withheld), the Company may reduce the General Benefits under circumstances in
which the Company has suffered severe financial losses and has imposed
reductions in coverage of the General Benefits of other officers on an across
the board basis, but any such reduction may not be disproportionately greater
than the reduction imposed on any other officer.

                  (b)      DEATH BENEFIT. The Company shall promptly (and in any
event not later than 60 days after this Agreement is executed) obtain term life
insurance on the life of Executive such that the aggregate death benefit under
existing and new policies totals $2,000,000; such insurance shall be obtained
under one or more policies from insurers reasonably acceptable to Executive. As
long as Executive is employed by the Company, (i) the Company shall pay the
premiums on the policy (or policies) and shall maintain the policy (or policies)
in full force and effect, and (ii) Executive shall have the exclusive right to
designate the beneficiary under such policy (or policies). The Company shall
assign the policy (or policies) to Executive, without any cost to Executive,
effective immediately after Executive ceases to be an employee of the Company,
regardless of the reason for Executive's termination of employment. The Company
shall not pledge or otherwise encumber the policy (or policies) at any time.

                  (c)      DISABILITY BENEFITS. The Company shall provide
Executive with the following disability benefits:

                           (i)      During any period of disability, illness or
         incapacity during the term of this Agreement which renders Executive at
         least temporarily unable to perform the services required under this
         Agreement, Executive shall receive the Base Salary payable under
         Section 2.1 plus any cash bonus compensation earned pursuant to the
         provisions of this Agreement or any incentive compensation plan then in
         effect but not yet paid, less any cash benefits received by him under
         any disability insurance carried by or provided by the Company. Upon
         Executive's Total Disability (as defined below), which Total Disability
         continues during the payment periods specified in this Section, the
         Company shall pay to Executive, on a monthly basis, for the period
         specified below, an amount (the "Disability Payment") equal to (A)
         one-twelfth of the sum of (1) Executive's Base Salary in effect
         immediately prior to the time such Total Disability occurs, plus (2) an
         amount equal to the greater of (x) the Threshold Bonus or (y) one half
         of the sum of (i) the bonuses (whether Incentive Bonuses or other
         bonuses) that have been paid to Executive with respect to the two
         fiscal years immediately preceding the fiscal year in which the Total
         Disability occurs, and (ii) the bonuses (whether Incentive Bonuses or
         other bonuses) that have been accrued with respect to the two fiscal
         years immediately preceding the fiscal year in which the Total
         Disability occurs but have not been paid (or if Executive has been
         employed by the Company for less than two full fiscal years at the time
         of such Total Disability, then an amount equal to the sum of such paid
         and accrued bonuses with respect to the fiscal year immediately
         preceding the fiscal year in which the Total Disability occurs), which
         payments shall be due in full regardless of any compensation paid to
         Executive as a result of his employment by any other person after the
         date that Total Disability occurs, (B) reduced by the amount of any
         monthly payments under any policy of disability income insurance paid
         for by the Company (including the policy described in Section
         2.4(c)(ii)) which payments are received during the time when any
         Disability Payment is being made


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         to Executive following Executive's Total Disability. The Company shall
         pay the Disability Payment to Executive in equivalent installments, at
         the same time or times as would have been the case for payment of Base
         Salary if Executive had not become Totally Disabled and had remained
         employed by the Company, and such payments shall continue until the
         later of the expiration of the term of this Agreement and 48 months,
         except that the Company's obligation to make such payments shall cease
         upon the death of Executive or if Executive ceases to be Totally
         Disabled. Upon Executive's Total Disability, except as provided in this
         Agreement, all rights of Executive under this Agreement shall
         terminate.

                           (ii)     In order to provide a ready source of funds
         with which to pay the benefits provided for in clause (1) above, if
         Executive becomes disabled (determined in accordance with the policy
         described below) during the term of this Agreement and such disability
         extends beyond 180 days, then Executive shall be paid the benefits
         provided for under the disability insurance policy issued by UNUM Life
         Insurance Company (Policy #IBD 060676), which the Company agrees to
         maintain in full force and effect during the term of this Agreement.
         The Company promptly (and in any event not later than 60 days after
         this Agreement is executed) shall cause such policy to be amended to
         the extent necessary to cause Executive to be eligible for disability
         payments for a minimum of four years from the date of such disability
         (that is, providing for 3 -1/2 years of coverage, taking into account
         the 180-day coverage provided by the Company directly under Section
         2.4(c)(i)), and to increase the amount payable to a minimum of $33,333
         per month. To the extent the Company is unable to cause such policy to
         be so amended, then the Company shall be obligated to provide such
         payments to Executive directly. Such coverage shall apply regardless of
         whether such four-year period extends beyond the term of this
         Agreement.

                  (d)      RELOCATION EXPENSES. Company shall compensate
Executive's moving expenses in the following manner:

                           (i)      Company shall compensate Executive for
         reasonable expenses incurred in moving his residence from Atlanta, GA
         to Phoenix, AZ.

                           (ii)     If during the term of this Agreement, if
         Executive's principal place of employment is relocated outside Maricopa
         County, Arizona, in accordance with Section 1.4, the Company shall
         reimburse Executive for all usual relocation expenses incurred by
         Executive and his household in moving to the new location, including,
         without limitation, moving expenses and rental payments for temporary
         living quarters in the area of relocation for a period not to exceed
         six months, real estate brokerage commissions incurred by Executive in
         the sale of his then existing principal residence, and loan financing
         charges and closing costs incurred in connection with the acquisition
         and financing of a new residence. In addition to the Relocation
         Expenses described herein, Executive shall receive interim living
         expenses pending his relocation to Phoenix.

                  (e)      REIMBURSEMENT OF BUSINESS EXPENSES. During the term
of this Agreement, the Company shall, in accordance with standard Company
policies, pay, or reimburse


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Executive for, all reasonable travel and other expenses incurred by Executive in
performing his obligations under this Agreement.

                  (f)      VACATIONS. During the term of this Agreement,
Executive shall be entitled to vacations with pay, and to such personal and sick
leave with pay, in accordance with the policy of the Company as may be
established from time to time by the Company and as applies to other executive
officers of the Company. In no event shall Executive be entitled to fewer than
four weeks' annual vacation. Unused vacation days may be carried over from one
year to the next in the maximum amount of four weeks' annual vacation; that is,
to the extent that vacation days to which Executive is entitled remain unused,
such unused vacation days will cumulate and be useable in any subsequent year,
but no more than four weeks' of annual vacation in the aggregate can be carried
over from one year to the next. Any vacation days which remain unused at the end
of a fiscal year that are in excess of such four weeks' annual vacation shall
expire and shall thereafter no longer be useable by Executive, but the Company
shall compensate Executive for any such unused vacation days in accordance with
the formula set forth in Section 4.1(b). Similarly, any unused paid holidays may
be carried over from one year to the next but not in excess of an aggregate of
five days of paid holidays may be carried over from one year to the next; to the
extent any paid holidays remain unused at the end of a fiscal year that are in
excess of such five paid holidays, such paid holidays shall expire and shall
thereafter no longer be useable by Executive, but the Company shall compensate
Executive for any such unused paid holidays in accordance with the formula set
forth in Section 4.1(b).

                  (g)      DIRECTOR FEES. During the term of this Agreement,
Executive shall not be entitled to be paid any fees for attendance at meetings
of the Board of Directors or any committee of the Board of Directors (or the
board or committee of the board of any subsidiary).

                  (h)      AIRLINE PASSES. During the term of this Agreement the
Company shall use its reasonable efforts to obtain for the benefit of Executive
and Executive's immediate family (Executive's spouse, Executive's children, and
the spouse and children of any of Executive's children), the right to fly on a
complimentary basis on the aircraft of other airlines, on a positive space
basis. Such efforts shall include negotiating in good faith with other carriers
for such rights and offering reciprocal rights to the executives (and their
immediate family members) of such other carriers. The Company shall provide to
Executive and Executive's immediate family, during the life of each such
individual, the right to fly on a complimentary basis on any aircraft operated
by the Company or any affiliate at any time (subject only to reasonable and
customary rules regarding availability), on a positive space basis. The Company
shall use its best efforts to cause any successor or subsequent successor to the
business or assets of the Company to grant such rights as to all routes operated
by such successor (or subsequent successor) and any of its affiliates.

                  (i)      PROFESSIONAL SERVICES. During the term of this
Agreement, the Company shall reimburse Executive for his out-of-pocket costs
incurred in connection with the retention of professionals by Executive to
provide Executive with income tax, estate planning, and investment


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advisory services. The maximum amount of reimbursable expenses for such purposes
shall be $5,000 for each calendar year during the term of this Agreement. The
Company shall reimburse Executive for such costs promptly after Executive
submits an invoice to Company. In order to preserve Executive's rights to
confidentiality, Executive may satisfy the requirement of submitting an invoice
by providing the Company with a copy of the facing page of the invoice showing
the fees and expenses for the services rendered and the general nature of the
services rendered but without any detail concerning the substance of the
services rendered.

                  (j)      EXECUTIVE SECURITY. During the term of this
Agreement, the Company shall provide to Executive such security services as is
reasonably necessary for the protection of the life and property of Executive
and Executive's immediate family members.

         2.5      PAYMENT OF EXCISE TAXES . If any payment received by Executive
under this Agreement or under the Consulting Agreement provided for in Section
4.3(i), as a result of or following any termination of employment under this
Agreement is subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986 (as amended from time to time, the "Code"), or any
successor or similar provision of the Code (the "Excise Tax"), the Company shall
pay Executive an additional cash amount (the "Gross Up") such that the net
after-tax amount received by Executive under this Agreement is the same as if
the Excise Tax had not applied to any payments made under this Agreement. The
Company shall pay such amounts promptly after the calculation referred to in
Section 2.6 has been made.

         2.6      CERTAIN ADJUSTMENT PAYMENTS . For purposes of determining the
Gross Up, Executive shall be deemed to pay the federal income tax at the highest
marginal rate of taxation (currently 39.6%) in the calendar year in which the
payment to which the Gross Up applies is to be made. The determination of
whether such Excise Tax is payable and the amount of the Excise Tax shall be
made upon the opinion of a national accounting firm selected by Executive and
reasonably acceptable to the Company. If such opinion is not finally accepted by
the Internal Revenue Service upon audit or otherwise, then appropriate
adjustments shall be computed (with interest at the rate required to be paid by
Executive under the Code and with Gross Up, if applicable) by such tax counsel
based upon the final amount of the Excise Tax so determined, and (a) any
additional amount due Executive as a result of such adjustment shall be paid to
Executive by the Company in cash in a lump sum within 30 days after such
computation, or (b) any amount due the Company as a result of such adjustment
shall be paid to the Company by Executive in cash in a lump sum within 30 days
after such computation.

                                   ARTICLE III
                            TERMINATION OF EMPLOYMENT

         3.1      DEATH OR RETIREMENT OF EXECUTIVE . Executive's employment
under this Agreement shall automatically terminate upon the death or Retirement
of Executive.

         3.2      BY EXECUTIVE . Executive shall be entitled to terminate his
employment under this Agreement by giving Notice of Termination to the Company:


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                  (a)      for Good Reason;

                  (b)      at any time without Good Reason.

         3.3      BY COMPANY . The Company shall be entitled to terminate
Executive's employment under this Agreement by giving Notice of Termination to
Executive:

                  (a)      in the event of Executive's Total Disability;

                  (b)      for Cause; and

                  (c)      at any time without Cause.


                                   ARTICLE IV
                   COMPENSATION UPON TERMINATION OF EMPLOYMENT

         If Executive's employment under this Agreement is terminated prior to
December 31, 2005 (or if the provisions of clause (y) of Section 4.3 apply),
then except for any other rights or benefits specifically provided for in this
Agreement following his period of employment, the Company shall be obligated to
provide compensation and benefits to Executive only as follows:

         4.1      UPON TERMINATION FOR DEATH OR TOTAL DISABILITY . If
Executive's employment under this Agreement is terminated by reason of his death
or Total Disability, the Company shall:

                  (a)      pay Executive (or his estate) any Base Salary which
has accrued but not been paid as of the termination date (the "Accrued Base
Salary");

                  (b)      pay Executive (or his estate) for unused vacation
days and paid holidays accrued as of the termination date in an amount equal to
his Base Salary multiplied by a fraction the numerator of which is the number of
accrued unused vacation days and paid holidays, and the denominator of which is
260 (the "Accrued Vacation Payment");

                  (c)      reimburse Executive (or his estate) for expenses
incurred by him prior to the date of termination which are subject to
reimbursement pursuant to this Agreement (the "Accrued Reimbursable Expenses");

                  (d)      provide to Executive (or his estate) any accrued and
vested benefits required to be provided by the terms of any Company-sponsored
benefit plans or programs (the "Accrued Benefits"), together with any benefits
required to be paid or provided in the event of Executive's death or disability
under applicable law;

                  (e)      pay Executive (or his estate) any Incentive Bonus or
other bonus with respect to a prior fiscal quarter which has accrued but has not
been paid;


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                  (f)      pay Executive (or his estate) any payment under the
Deferred Compensation Plan which has accrued but has not been paid to the
account provided for in such plan;

                  (g)      pay Executive the amounts due under Section 2.4; and

                  (h)      permit Executive (or his estate) to exercise all
vested unexercised stock options (including stock options which by their terms
become exercisable upon death or disability) and warrants outstanding at the
termination date in accordance with the terms of the plans and agreements
pursuant to which such options or warrants were issued.

         4.2      UPON TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE WITHOUT
GOOD REASON . If Executive's employment is terminated by the Company for Cause,
or if Executive terminates his employment with the Company prior to December 6,
2005, other than (x) upon Executive's death or Total Disability or (y) for Good
Reason, the Company shall:

                  (a)      pay Executive the Accrued Base Salary;

                  (b)      pay Executive the Accrued Vacation Payment;

                  (c)      reimburse Executive for the Accrued Reimbursable
Expenses;

                  (d)      provide Executive the Accrued Benefits, together with
any benefits required to be paid or provided under applicable law;

                  (e)      pay Executive any accrued Incentive Bonus or other
bonus with respect to a prior fiscal quarter which has accrued but has not been
paid;

                  (f)      permit Executive to exercise all vested unexercised
stock options and warrants outstanding at the termination date in accordance the
terms of the plans and agreements pursuant to which such options and warrants
were issued.

         4.3      UPON TERMINATION BY THE COMPANY WITHOUT CAUSE, OR BY EXECUTIVE
FOR GOOD REASON. If Executive's employment is terminated by the Company without
Cause, or if Executive's employment is terminated by Executive for Good Reason,
or upon a Change in Control of the Company, the Company shall:

                  (a)      pay Executive the Accrued Base Salary;

                  (b)      pay Executive the Accrued Vacation Payment;


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                  (c)      reimburse Executive the Accrued Reimbursable
Expenses;

                  (d)      provide Executive the Accrued Benefits, together with
any benefits required to be paid or provided under applicable law;

                  (e)      pay Executive any Incentive Bonus or other bonus with
respect to a prior fiscal quarter which has accrued but has not been paid;

                  (f)      pay Executive, the greater of: (1) such salary and
bonus payments, calculated at the Threshold level, due under the remaining term
of the contract, or (2) salary and bonus payment, calculated at the minimum
level, equal to 2 years of service to the Company.

                  (g)      maintain in full force and effect, for Executive's
and his eligible beneficiaries continued benefit, all of the General Benefits,
for a period of 24 months following the termination date of his employment under
this Agreement, except to the extent that, as to any such General Benefit,
Executive receives the substantial equivalent of such General Benefit as a
result of his employment with another employer after his termination date. If
Executive's continued participation in any General Benefit is not permitted
under the terms of the plan, program or arrangement under which the General
Benefit was provided to the Executive by the Company, the Company shall arrange
to provide Executive with the General Benefit substantially similar to the
General Benefit which Executive would have been entitled to receive under such
plan, program or arrangement;

                  (h)      Executive shall have the right to exercise all
unexercised stock options and warrants outstanding at the termination date in
accordance with the terms of the plans and agreements pursuant to which such
options and warrants were issued, including the provisions of Section 2.3(c).

         4.4      UPON TERMINATION BY THE COMPANY OR RESIGNATION BY THE
EXECUTIVE, FOLLOWING A CHANGE IN CONTROL OF THE COMPANY. If Executive's
employment is terminated by the Company following a Change in Control of the
Company, or resignation from the Company by the Executive within the first
ninety (90) days following a Change in Control, the Company shall:

                  (a)      pay Executive the Accrued Base Salary;

                  (b)      pay Executive the Accrued Vacation Payment;

                  (c)      reimburse Executive the Accrued Reimbursable
Expenses;

                  (d)      provide Executive the Accrued Benefits, together with
any benefits required to be paid or provided under applicable law;


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                  (e)      pay Executive any Incentive Bonus or other bonus with
respect to a prior fiscal quarter which has accrued but has not been paid;

                  (f)      in the event of a Change in Control of the Company,
Executive shall be entitled to receive payment representing 4 years of salary
and bonus, calculated at the minimum level, with an agreed minimum payment of at
least one million dollars ($1,000,000);

                  (g)      maintain in full force and effect, for Executive's
and his eligible beneficiaries continued benefit, all of the General Benefits,
for a period of 24 months following the termination date of his employment under
this Agreement, except to the extent that, as to any such General Benefit,
Executive receives the substantial equivalent of such General Benefit as a
result of his employment with another employer after his termination date. If
Executive's continued participation in any General Benefit is not permitted
under the terms of the plan, program or arrangement under which the General
Benefit was provided to the Executive by the Company, the Company shall arrange
to provide Executive with the General Benefit substantially similar to the
General Benefit which Executive would have been entitled to receive under such
plan, program or arrangement; and

                  (h)      Executive shall have the right to exercise all
unexercised stock options and warrants outstanding at the termination date in
accordance with the terms of the plans and agreements pursuant to which such
options and warrants were issued, including the provisions of Section 2.3(c).

         4.5      CALL RIGHTS.

                  (a)      Upon any termination of employment under Section 4.1
or Section 4.3, the Company shall have the right to redeem any stock option,
whether vested or unvested, that is held by Executive as of the date of such
termination and that is designated by the Company in a notice to Executive (a
"Call Election"), at a price equal to 100% of the Black-Scholes Value of such
stock option.

                  (b)      The Black-Scholes Value for any option shall be
determined using the Black-Scholes formula but in any event shall be not less
than the Market Price for the common stock on the date the Call Election is made
(the "Calculation Date"), less the exercise price under the stock option. The
Black-Scholes Value shall be calculated by an independent major investment
banking firm selected by the Company, subject to the approval of Executive; if
Executive does not approve the firm selected by the Company, then the
Black-Scholes Value shall be the average of the amount calculated by the firm
selected by Executive and a major investment banking firm selected by the
Company. The Black-Scholes Value shall be calculated as of the Calculation Date,
and any unvested options for this purpose shall be treated as if fully vested.
The Company shall bear the cost of the firm or firms that conduct the
Black-Scholes valuation. In determining the Black-Scholes Value of any option,
the following rules will apply:

                           (i)      The time to maturity of any option will be
         equal to the period beginning on the Calculation Date and ending on the
         final expiration date of the option


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         (the "Option Life"), without regard to any analysis of the effect, or
         likelihood of occurrence, of any event that might cause the expiration
         date to occur sooner.

                           (ii)     The "risk free rate" as to any option will
         be determined as of the Calculation Date, by the U.S. Treasury YTM,
         with a maturity approximately equal to the Option Life, as stated by
         the Federal Reserve.

                           (iii)    The volatility factor will be based on an
         historical sampling of daily stock prices over a period of not less
         than 24 months from the valuation date, and not more than 120 months
         from the valuation date, whichever period yields the highest value.

                           (iv)     No illiquidity or other discount will be
         applied to the value determined by application of the Black-Scholes
         formula, whether by reason of the fact that the options are not
         publicly traded or otherwise.

                  (c)      Unless Executive consents, the Company shall not
         exercise a Call Election to the extent that the Company would be
         unable, without violating the provisions of the General Corporation Law
         of Nevada or the fraudulent conveyance laws of any state, to pay any
         amount due to Executive under Section 4.4(a); if Executive consents to
         the exercise of a Call Election by the Company under such
         circumstances, then, to the extent that the Company is unable, without
         violating the provisions of the General Corporation Law of Nevada, to
         pay any amount due Executive under Section 4.4(a), the Company's
         obligation to make such payment shall be deferred, but only until the
         legal restriction lapses, at which time the payment shall be due, and
         in any event, all amounts that otherwise would have been payable but
         for such restriction shall bear interest at the rate provided for in
         Section 6.11, from the date such payments would have been payable (but
         for such legal restriction) until the date they actually are made.

                  (d)      All payments due by the Company in connection with
         any Call Election are payable within 10 business days after the Call
         Election is made.

                  (e)      Any stock option redeemed by the Company under
         Section 4.4(a) shall be cancelled.


                                    ARTICLE V
                              RESTRICTIVE COVENANTS

         5.1      CONFIDENTIAL INFORMATION AND MATERIALS. Executive agrees that
during the course of his employment with the Company, he has obtained and shall
likely obtain in the future "Confidential Information." "Confidential
Information" is information concerning the Company which the Company attempts to
keep confidential, has not been publicly disclosed by the Company, is not a
matter of common knowledge in the airline industry, and was not known by
Executive prior to his employment by the Company, including certain information
relating to the business plans, marketing plans or programs, forecasts,
statistics relating to routes and markets,


                                       12
<PAGE>
contracts, customers, compensation arrangements, and business opportunities.
Executive agrees that the Confidential Information is proprietary to the
Company.

         5.2      GENERAL KNOWLEDGE. The general skills and experience gained by
Executive during Executive's employment or engagement by the Company, and
information publicly available without breach of any duty owed by any person to
the Company or generally known within the airline industry, is not considered
Confidential Information. Executive is not restricted from working with a person
or entity which has independently developed information or materials similar to
the Confidential Information, but in such a circumstance, Executive agrees not
to disclose the fact that any similarity exists between the Confidential
Information and the independently developed information and materials, and
Executive understands that such similarity does not excuse Executive from the
non-disclosure and other obligations in this Agreement.

         5.3      EXECUTIVE OBLIGATIONS AS TO CONFIDENTIAL INFORMATION AND
MATERIALS. During Executive's employment or engagement by the Company, Executive
shall have access to the Confidential Information and shall occupy a position of
trust and confidence with respect to the Confidential Information and the
Company's affairs and business. Executive agrees to take the following steps to
preserve the confidential and proprietary nature of the Confidential
Information:

                  (a)      NON-DISCLOSURE. During and for a period of two years
after Executive's Employment or engagement by the Company, Executive shall not
use, disclose or otherwise permit any person or entity access to any of the
Confidential Information other than as required in the performance of
Executive's duties with the Company and other than is required to be disclosed
by law or by any court, administrative agency, or arbitration panel.

                  (b)      PREVENT DISCLOSURE. During and for a period of two
years after Executive's Employment or engagement by the Company, except as
provided in Section 5.3(a), Executive shall take all reasonable precautions to
prevent disclosure of the Confidential Information to unauthorized persons or
entities, other than is required to be disclosed by law or by any court,
administrative agency, or arbitration panel.

                  (c)      RETURN ALL MATERIALS. Upon termination of Executive's
employment or engagement by the Company for any reason whatsoever, or earlier if
requested by the Company, Executive shall deliver to the Company all tangible
materials embodying the Confidential Information, including any documentation,
records, listings, notes, data, sketches, drawings, memoranda, models, accounts,
reference materials, samples, machine-readable media and equipment which in any
way relate to the Confidential Information and shall not retain any copies of
any of the above materials.


                                       13
<PAGE>
                                   ARTICLE VI
                                  MISCELLANEOUS

         6.1      DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:

                  (a)      "Accrued Base Salary" - as defined in Section 4.1(a);

                  (b)      "Accrued Benefits" - as defined in Section 4.1(d);

                  (c)      "Accrued Reimbursable Expenses" - as defined in
Section 4.1(c);

                  (d)      "Accrued Vacation Payment" - as defined in Section
4.1(b);

                  (e)      "Base Salary" - as defined in Section 2.1;

                  (f)      "Board" - shall mean the Board of Directors of the
Company;

                  (g)      "Cause" shall mean the occurrence of any of the
following:

                           (i)      Executive's willful misconduct with respect
         to the Company's business which results in a material detriment to the
         Company;

                           (ii)     Executive is convicted of, or enters a plea
         of nolo contendere with respect to, a felony offense; or

                           (iii)    the continued failure or refusal by
         Executive, other than by reason of Executive's disability, to perform
         the duties required of him by this Agreement, which failure or refusal
         is material and is not cured within 45 days following receipt by
         Executive of written notice from the Board specifying the factors or
         events constituting such failure or refusal, except that, as to any
         failure or refusal that is curable but cannot reasonably be cured
         within such 45-day period, no Cause shall be deemed to have occurred
         unless Executive fails to take reasonable steps to cure such failure or
         refusal within such 45-day period, and furthermore, no failure of
         Executive to satisfy any goals, forecasts, or other financial or
         business criteria established by the Company, standing alone, shall
         constitute Cause.

                  (h)      "Change of Control" shall mean and shall be deemed to
have occurred if:

                           (i)      After the date of this Agreement, any
         "person" (as such term is used in Sections 13(d) and 14(d)(2) of the
         Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
         any successor provision), or any other persons who the Board of
         Directors determines in good faith is acting as a group, becomes the
         beneficial owner


                                       14
<PAGE>
         (within the meaning of Rule 13d-3 under the Exchange Act or any
         successor provision) directly or indirectly of securities of the
         Company representing 30% or more of the combined voting power of the
         Company's then outstanding securities ordinarily having the right to
         vote at an election of directors;

                           (ii)     Individuals who, as of the date of this
         Agreement, constitute the Board (the "Incumbent Board") cease for any
         reason to constitute at least 60% of the members of the Board, except
         that any person who becomes a member of the Board subsequent to the
         date of this Agreement whose election, or nomination for election by
         the Company's stockholders was approved by a vote of at least 60% of
         the members then comprising the Incumbent Board (other than an election
         or nomination of an individual whose initial assumption of office is in
         connection with an actual or threatened election contest relating to
         the election of directors of the Company) shall be, for purposes of
         this Agreement, considered as though such person were a member of the
         Incumbent Board; or

                           (iii)    Consummation of

                                    (A) a reorganization, merger, consolidation,
                           or sale or other disposition of all or substantially
                           all of the assets of the Company, in each case, with
                           or to a corporation or other person or entity

                                             (1) of which persons who were the
                                    holders of each class of the Company's
                                    capital stock immediately prior to such
                                    transaction do not receive voting
                                    securities, as a result of their ownership
                                    of such capital stock immediately prior to
                                    such transaction, that constitute both

                                             (x) more than 51% of each class of
                                    capital stock and

                                             (y) more than 51% of the combined
                                    voting power of the outstanding voting
                                    securities entitled to vote generally in the
                                    election of directors of the reorganized,
                                    merged, consolidated or purchasing
                                    corporation (or in the case of a
                                    non-corporate person or entity, functionally
                                    equivalent voting power), or

                                             (2) 80% of the members of the Board
                                    of which corporation (or functional
                                    equivalent in the case of a non-corporate
                                    person or entity) were not members of the
                                    Incumbent Board at the time of the execution
                                    of the initial agreement providing for such
                                    reorganization, merger, consolidation or
                                    sale;

                                    (B) the sale or other disposition of any
                           material route system operated by the Company or any
                           subsidiary (regardless of how such sale or
                           disposition is effected); for this purpose a route
                           system is "material" if the gross revenues
                           attributable to such route system exceed or would
                           exceed


                                       15
<PAGE>
                           50% of the Company's gross revenues on a consolidated
                           basis or if the gross profits reasonably attributable
                           to such route system exceed or would exceed 50% of
                           the gross profits of the Company on a consolidated
                           basis, either

                                             (x) for the fiscal year of the
                                    Company immediately prior to the sale or
                                    disposition or

                                             (y) based on reasonable
                                    projections, for the fiscal year in which
                                    the sale or disposition occurs; or

                                    (C) a liquidation or dissolution of the
                           Company.

                  (i)      "Confidential Information" - as defined in Section
5.1;

                  (j)      "Continued Benefits" - as defined in Section 4.3(g);

                  (k)      "Good Reason" shall mean the occurrence of any of the
following:

                           (i)      Any change by the Company in Executive's
         title, or any significant diminishment in Executive's function, duties
         or responsibilities from those associated with his functions, duties or
         responsibilities as of December 31, 2001;

                           (ii)     Any material breach of this Agreement or any
         other agreement between the Company and Executive (and for purposes of
         this Agreement, any default by the Company to make any payment or to
         provide any fringe benefit shall be considered material) which remains
         uncured for a period of 10 days after Executive gives the Company
         notice of such breach specifying in reasonable detail the event(s)
         constituting such breach;

                           (iii)    Except with Executive's prior written
         consent, relocation of Executive's principal place of employment to a
         location outside of Maricopa County, Arizona, or requiring Executive to
         travel on the Company's business more than is required by Section 1.4;
         or

                  (l).     "Incentive Bonus" - as defined in Section 2.2;

                  (m)      "Market Price" means the officially quoted closing
price of the common stock of the Company, as reported by the principal exchange
on which the common stock of the Company is traded for the date in question. If
there are no transactions on such date, the Market Price shall be determined as
of the immediately preceding date on which there were transactions. If no such
prices are reported on such exchange, then Market Price shall mean the average
of the high and low sale prices for the common stock of the Company (or if no
sales prices are reported, the average of the high and low bid prices) as
reported by a quotation system of general circulation to brokers and dealers. If
the common stock of the Company is not traded on any


                                       16
<PAGE>
exchange or in the over-the-counter market, the Market Price of the common stock
of the Company on any date shall be determined in good faith by the parties.

                  (n)      "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision of this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated. Each Notice of Termination shall be delivered at least 30 days prior
to the effective date of termination;

                  (o)      "Prime Rate" means the prime rate announced by The
Wall Street Journal from time to time.

                  (p)      "Retirement" shall mean normal retirement at age 65;

                  (q)      "Threshold Bonus" shall mean a cash bonus equal to
$80,000 (which is based on the "Threshold" level of bonus under "Bonus Level
Fiscal 2002" as set forth in Exhibit A).

                  (r)      "Total Disability" or "Totally Disabled" shall mean
Executive's failure substantially to perform his duties under this Agreement on
a full-time basis for a period exceeding 180 consecutive days or for periods
aggregating more than 180 days during any twelve-month period as a result of
incapacity due to physical or mental illness, or the occurrence or existence of
a condition that would permanently render Executive unable to substantially
perform his duties under this Agreement on a full-time basis. If there is a
dispute as to whether Executive is or was physically or mentally unable to
perform his duties under this Agreement, such dispute shall be submitted for
resolution to a licensed physician selected by Executive but subject to the
reasonable approval of the Company. If such a dispute arises, Executive shall
submit to such examinations and shall provide such information as such physician
may request, and the determination of the physician as to Executive's physical
or mental condition shall be binding and conclusive.

         6.2      KEY MAN INSURANCE. In addition to the insurance policy
described in Section 2.4(c), the Company shall have the right, in its sole
discretion, to purchase "key man" insurance on the life of Executive. The
Company shall be the owner and beneficiary of any such policy. If the Company
elects to purchase such a policy, Executive shall take such physical
examinations and supply such information as may be reasonably requested by the
insurer.

         6.3      SUCCESSORS, BINDING AGREEMENT. This Agreement shall be binding
upon and run to the benefit of the Company, its successors and assigns, and
shall inure to the benefit of and be enforceable by Executive's personal or
legal representatives, beneficiaries, designees, executors, administrators,
heirs, distributees, devisees and legatees.

         6.4      MODIFICATION; NO WAIVER. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties to this
Agreement. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against


                                       17
<PAGE>
the enforcement of any provision of this Agreement, except by written instrument
by the party charged with such waiver or estoppel. No such written waiver shall
be deemed a continuing waiver unless specifically stated in such waiver, and
each such waiver shall operate only as to the specific term or condition waived
and shall not constitute a waiver of such term or condition for the future or as
to any other term or condition.

         6.5      SEVERABILITY. The covenants and agreements contained in this
Agreement are separate and severable and the invalidity or unenforceability of
any one or more of such covenants or agreements, if not material to the
employment arrangement that is the basis for this Agreement, shall not affect
the validity or enforceability of any other covenant or agreement contained in
this Agreement. If, in any judicial proceeding, a court shall refuse to enforce
one or more of the covenants or agreements contained in this Agreement because
the duration thereof is too long, or the scope thereof is too broad, it is
expressly agreed between the parties to this Agreement that such duration or
scope shall be deemed reduced to the extent necessary to permit the enforcement
of such covenants or agreements.

         6.6      NOTICES. All the notices and other communications required or
permitted under this Agreement shall be in writing and shall be delivered
personally or sent by registered or certified mail, return receipt requested, to
the parties to this Agreement at the following addresses:

                           If to the Company, to it at:

                           Mesa Air Group, Inc.
                           410 North 44th Street, Suite 700
                           Phoenix, AZ  85008
                           Attn:    Chairman of Board of Directors and
                                    General Counsel

                           If Executive, to him at:

                           410 N. 44th Street, Suite 700
                           Phoenix, AZ 85008

Notices hall be deemed to have been given and received upon personal delivery or
three business days after having been deposited, if sent by registered or
certified mail.

         6.7      ASSIGNMENT. This Agreement and any rights under this Agreement
shall not be assignable by either party without the prior written consent of the
other party except as otherwise specifically provided for in this Agreement.

         6.8      ENTIRE UNDERSTANDING. This Agreement (together with any
Exhibits incorporated as a part of this Agreement) constitutes the entire
understanding between the parties to this Agreement and no agreement,
representation, warranty or covenant has been made by either party except as
expressly set forth in this Agreement.


                                       18
<PAGE>
         6.9      EXECUTIVE'S REPRESENTATIONS. Executive represents and warrants
that neither the execution and delivery of this Agreement nor the performance of
his duties under this Agreement violates the provisions of any other agreement
to which he is a party or by which he is bound.

         6.10     INTEREST ON PAST DUE AMOUNTS; ATTORNEYS FEES. All amounts
under this Agreement that are not paid when due shall bear interest at the rate
of 4% per annum above the Prime Rate, from the date such payments were due until
paid. In addition, any party who breaches this Agreement shall be obligated to
pay the reasonable attorneys fees and costs incurred by the other party in
seeking to enforce the terms of this Agreement.

         6.11     GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE STATE OF ARIZONA
APPLICABLE TO CONTRACTS EXECUTED AND WHOLLY PERFORMED WITHIN SUCH STATE.

                                        Mesa Air Group, Inc. (Company)


                                        By:      /S/ Michael Lotz
                                           -----------------------------------
                                        Title:   President
                                              --------------------------------



                                                 /S/ George Murnane III
                                        --------------------------------------
                                        George Murnane, III (Executive)


                                       19
<PAGE>
                                    EXHIBIT A
                                 INCENTIVE BONUS

<TABLE>
<CAPTION>
        Bonus Level                  % Change                   Quarterly                   Annual
      Fiscal 2002 (1)               in EPS (2)                 Amount (3)                 Amount (4)
      ---------------               ----------                 ----------                 ----------
<S>                                 <C>                        <C>                        <C>
          Minimum                    Positive                   $ 10,000                  $  40,000
         Threshold                      5%                      $ 20,000                  $  80,000
          Target                       10%                      $ 30,000                  $ 120,000
          Maximum                      15%                      $ 45,000                  $ 180,000
</TABLE>


Note 1 - For each fiscal year only the % Change in EPS will be reviewed. The
         % Change in EPS will not be greater than the initial year.

Note 2 - EPS is defined as gross profit/loss before taxes and one-time
         non-recurring items divided by basic outstanding shares. These
         percentages will change annually but not be greater than the initial
         year.

Note 3 - The Quarterly Amount will be paid for each of the first three fiscal
         quarters based on the 10Q financial reports filed with the SEC. Then
         Annual Amount will be paid for the fourth quarter less any amounts paid
         for the first three quarters based on the 10K financial reports filed
         with the SEC. These amounts will not be decreased over the term of the
         agreement.

Note 4 - These amounts will not be decreased over the term of the agreement.


                                        i
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            PAGE
<S>                                                                                                         <C>
 ARTICLE I - DUTIES AND TERM.............................................................................     1
          I.1     Employment.............................................................................     1
          1.2     Position and Responsibilities..........................................................     1
          1.3     Term...................................................................................     1
          1.4     Location...............................................................................     2

 ARTICLE II - COMPENSATION...............................................................................     2
          2.1     Base Salary............................................................................     2
          2.2     Bonus Payment..........................................................................     2
          2.3     Stock Options..........................................................................     3
          2.4     Additional Benefits....................................................................     3
          2.5     Payment of Excise Taxes................................................................     7
          2.6     Certain Adjustment Payments............................................................     7

 ARTICLE III - TERMINATION OF EMPLOYMENT.................................................................     7
          3.1     Death or Retirement of Executive.......................................................     7
          3.2     By Executive...........................................................................     8
          3.3     By Company.............................................................................     8

 ARTICLE IV - COMPENSATION UPON TERMINATION OF EMPLOYMENT................................................     8
          4.1     Upon Termination for Death or Total Disability.........................................     8
          4.2     Upon Termination by Company for Cause or by
                  Executive Without Good Reason..........................................................     9
          4.3     Upon Termination by the Company Without
                  Cause, or by Executive for Good Reason.................................................     9
          4.4     Upon Termination by the Company or Resignation
                  by the Executive, following a Change of Control
                  of the Company.........................................................................    10
          4.5     Call Rights............................................................................    11

 ARTICLE V - RESTRICTIVE COVENANTS.......................................................................    12
          5.1     Confidential Information and Materials.................................................    12
          5.2     General Knowledge......................................................................    13
          5.3     Executive Obligations as to Confidential Information and Materials.....................    13

 ARTICLE VI - MISCELLANEOUS..............................................................................    14
          6.1     Definitions............................................................................    14
          6.2     Key Man Insurance......................................................................    17
          6.3     Successors, Binding Agreement..........................................................    17
</TABLE>


                                       ii
<PAGE>
<TABLE>
<S>                                                                                                         <C>
          6.4     Modification; No Waiver................................................................    17
          6.5     Severability...........................................................................    18
          6.6     Notices................................................................................    18
          6.7     Assignment.............................................................................    18
          6.8     Entire Understanding...................................................................    18
          6.9     Executive's Representations............................................................    19
          6.10    Interest on Past Due Amounts; Attorneys Fees...........................................    19
          6.11    Governing Law..........................................................................    19
</TABLE>


                                      iii