Tuesday, 16 February 2021

Mesa Air Group Reports First Quarter Fiscal 2021 Results

The Mesa Air Group, Inc.the regional airline that  provides scheduled flight service to 116 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as Cargo services out of Cincinnati/Northern Kentucky International Airport, has reported its latest results.

As of December 31, 2020, Mesa operated a fleet of 159 aircraft with approximately 420 daily departures and 3,200 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights.

Highlights for the quarter:

  • $18.9 million in pretax income and positive cash flow
  • Signed 5-year extension with American Airlines for 40 aircraft
  • Received $195 million loan under the CARES Act
  • Launched cargo operations for DHL with two 737-400F aircraft
  • Placed 12 new E-175 aircraft into service with United Airlines
  • Continued improvement in operational performance
  • No furloughs despite expiration of Payroll Support Program (PSP)

 

Mesa's Q1 2021 results reflect net income of $14.1 million, or $0.39 per diluted share, compared to net income of $10.8 million, or $0.31 per diluted share for Q1 2020. Mesa's Q1 2021 pre-tax income was $18.9 million, compared to $10.8 million for Q1 2020. Mesa's Q1 2021 adjusted pre-tax income1 was $18.0 million, compared to $14.3 million for Q1 2020. Mesa Q1 2021 results include, per GAAP, the deferral of $5.2 million of revenue, all of which was billed and paid by American and United during the quarter and will be recognized over the remaining terms of the contracts. The primary reason for the $3.7 million increase in adjusted pre-tax income from Q1 2020 to Q1 2021 was $11.3 million of benefit from the Payroll Support Program (“PSP”) under the CARES Act offset by the $5.2 million of deferred revenue and the impact of a 26% reduction in Contract Revenue related to reduced flying as a result of COVID-19.

Additionally, Mesa's Adjusted EBITDA1 for Q1 2021 was $47.4 million, compared to $47.4 million in Q1 2020, and Adjusted EBITDAR1 was $57.5 million, compared to $58.8 million in Q1 2020.

1 See Reconciliation of non-GAAP financial measures

“While 2020 has been a challenging year for the industry, we were pleased to remain profitable and cash flow positive throughout the pandemic. In addition, we implemented a number of important strategic initiatives with our partners at American, United, and DHL. Lastly and importantly, we avoided employee furloughs despite the expiration of the PSP program,” said Jonathan Ornstein, Mesa’s Chairman and CEO. Brad Rich, Chief Operating Officer added, “Working closely with our partners and front-line employees, we added more regional aircraft, launched our 737 cargo operation, and improved overall reliability in our key contractual operational performance metrics.”

December quarter details:

Contract Revenue decreased by $44.6 million or 26% to $127.2 million in Q1 2021 as compared to Q1 2020 primarily as a result of the reduced block hours as a result of COVID-19. Contract Revenue increased by $29.8 million or 31% as compared to our prior quarter primarily as a result of increased block hours. Total operating expense decreased by $33.5 million, or 21.3%, to $123.4 million in Q1 2021 as compared to Q1 2020. The primary reason for the decrease was a $15.7 million lower flight operations expense due to reduced flying as a result of COVID-19 and $11.3 million benefit received through the PSP under the CARES Act. The Company recognized the benefit received through the PSP under the CARES Act as an offset to payroll expenses in Flight Operations, Maintenance and General and Administrative expense.

Fleet:

All of our operating revenue in the three months ended December 31, 2020 was derived from operations associated with our American and United Capacity Purchase Agreements and DHL Flight Services Agreement. For the three months ended December 31, 2020, 53% of our aircraft in scheduled service were operated for United, 46% for American and 1% was operated for DHL.

 

 

 

 


 

 








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