Mesa Air Group reports third quarter results

Mesa Air Group has reported third quarter fiscal 2024 financial and operating results this week, showing total operating revenues of $110.8 million, United Express contract revenue 8.0% higher year-over-year.  Pre-tax loss of $20.7 million, net loss of $19.9 million, adjusted net loss1 of $9.4 million2, adjusted EBITDAR1 of $10.6 million.

United CPA and Fleet Update:

• Extended increased block-hour rate on E-175 flying in current United CPA through August 31, 2025
• At United’s request, agreed to accelerate transition of fleet to all E-175s by March 1, 2025
• United to reimburse costs up to $14 million associated with transition
• United to purchase two CRJ-700s formerly leased to a third party for total proceeds of $11.0 million, $4.5 million of which will pay down the related outstanding obligations
• Mesa and United remain in discussions for an enhanced CPA to support long-term profitability
  

Additional Updates:

• During June quarter, entered agreements to sell 23 CF34-8C engines for total proceeds of $33.5 million, $29.0 million of which will pay down U.S. Treasury debt
• Completed all asset transactions to eliminate RASPRO finance lease obligation
• Generated $9.6 million from sale of approximately 2.3 million common shares of Archer Aviation, Inc. (“Archer”), originally acquired for $5.0 million, with Mesa still retaining up to approximately 1.17 million unvested equity warrants4 in Archer

“While we were pleased to experience an 8.0% increase in United Express contract revenue, our third-quarter block-hours were negatively impacted by a lag as we removed CRJ-900s from our contractual fleet and trained pilots to fly our E-175s,” said Jonathan Ornstein, Chairman and CEO. “We generated positive adjusted EBITDAR for the second straight quarter given improving fleet mix and cost control. We continue to monetize our surplus assets and will direct proceeds toward reducing the related obligations and, as a result, interest expense. We were modestly operating cash flow-positive during the third quarter.

“Importantly, we have extended the increased block-hour rate in our CPA with United into next year. United has also agreed to reimburse Mesa for expenses associated with the transition to fully flying E-175 aircraft. The updated financial terms and our ongoing planning with United is critical as we rebuild our E-175 fleet utilization and margin runway through fiscal year 2025. We currently have the pilot resources to fly increased E-175 block hours, and have started the process of recalling pilots from furlough in anticipation of improved aircraft utilization.

“While we are not yet providing a forecast for fiscal year 2025, our focus continues to be on increasing utilization and maintaining overall operational performance,” continued Ornstein. “As we transition into flying all E-175s, we will look to drive additional efficiencies from operating a single fleet type. We will also continue to consider longer-term financial and strategic opportunities to enhance the business.”

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1 See Reconciliation of GAAP versus non-GAAP Disclosures
2 Adjusted net loss primarily excludes $10.0 million of losses from accounting treatment of assets held for sale
3 Excludes cancellations due to weather and air traffic control
4 Vesting subject to Archer aircraft certification and the order and delivery of a specified number of aircraft

Third Quarter Fiscal 2024 Details

Total operating revenues in Q3 2024 were $110.8 million, a decrease of $3.9 million, or 3.4%, from $114.7 million for Q3 2023. Contract revenue increased $1.2 million, or 1.3%, to $95.6 million, compared to $94.4 million in Q3 2023, driven by higher E-175 block-hour rates with United Airlines despite 3.3% fewer block hours. This increase was partially offset by higher deferred revenue in Q3 2024 and the wind-down of the DHL contract.

Pass-through revenue decreased by $5.1 million, or 25.3%, driven by lower pass-through maintenance expense. Mesa’s Q3 2024 results include, per GAAP, the deferral of $2.3 million in revenue, versus the recognition of $1.8 million of previously deferred revenue in Q3 2023. The remaining deferred revenue balance of $12.4 million will be recognized as flights are completed over the remaining term of the United contract.

Total operating expenses in Q3 2024 were $119.8 million, a decrease of $35.1 million, or 22.7%, versus Q3 2023. This decrease primarily reflects a $22.6 million lower asset impairment loss. In addition, maintenance expense decreased by $6.8 million primarily due to lower labor and pass-through costs, and flight operations expense was $6.1 million lower due to decreases in pilot wages and training costs. Depreciation and amortization expense decreased $5.6 million primarily due to the retirement and sale of CRJ aircraft and engines.

Mesa’s Q3 2024 results reflect a net loss of $19.9 million, or $(0.48) per diluted share, compared to a net loss of $47.6 million, or $(1.17) per diluted share, for Q3 2023. Mesa’s Q3 2024 adjusted net loss was $9.4 million, or $(0.23) per diluted share, versus an adjusted net loss of $27.2 million, or $(0.67) per diluted share, in Q3 2023.

Mesa’s adjusted EBITDA1 for Q3 2024 was $8.9 million, compared to an adjusted EBITDA loss of $1.8 million for Q3 2023. Adjusted EBITDAR was $10.6 million for Q3 2024, compared to an adjusted EBITDAR loss of $0.9 million for Q3 2023.

Third Quarter Fiscal 2024 Operating Performance

Mesa to defer trainees and furlough 12 pilots.....

Mesa Air Group announced the furlough of 12 pilots and training deferrals for 41 pilot trainees, effective July 12, 2024. These actions are the result of significantly reduced attrition among Mesa’s active pilot workforce. The Company currently anticipates this will save approximately $750,000 per month in operating expenses.

“Over the last two years, attrition at Mesa often exceeded 25 pilots per month due to the pilot shortage created by the FAA’s implementation of the ‘1,500-hour rule’,” said Jonathan Ornstein, Mesa Chairman and CEO. “As a result, we undertook significant efforts to increase our pilot hiring, including our Mesa Pilot Development (MPD) program. However, attrition has fallen more precipitously than expected at Mesa in the past few months, in part due to the slowdown or cessation of hiring across most airlines. In addition, we believe the industry-wide pipeline will continue to improve as pilots previously denied the opportunity to fly commercially due to the lack of 1,500 hours finally achieve requisite flight time.

“While we deeply regret these actions, we expect reduced attrition and a more stable pilot force will enable us to increase our Embraer-175 block hours with United,” continued Ornstein. “Based on our current outlook, we anticipate starting to recall pilots by the end of the year. Additionally, once our pilot pipeline has recalibrated, we will resume hiring pilot trainees based on anticipated attrition levels.”

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Mesa Air Group's latest operational results....

Mesa Air Group has released details of its first quarter fiscal 2024 financial and operating results which show the company had total operating revenues of $118.8 million.  Its pre-tax loss of $57.0 million, is adjusted to net loss of $21.8 million.  Mesa reports that its block hours for the period was 46,658, an approximate 5% increase over the fourth quarter of 2023.  

Jonathan Ornstein, Chairman and CEO, said, “While it has been a long road, we have successfully completed the majority of our surplus CRJ asset sales. Over the past 19 months, we have finalized approximately $390 million of CRJ asset sales, which we used to pay down approximately $265 million of debt. We are in discussions with multiple parties to address the remaining surplus assets.

Ornstein continued, “In addition to the progress we have made on debt reduction and the block-hour rate increase we negotiated with United, another significant reason for our optimism moving forward is the substantial reduction in attrition across our work groups, especially pilots. Pilot attrition has improved sequentially over the past several months, and our attrition for May 2024 is less than half of what it was a year ago. Combined with increased monthly pilot training output, we expect to see lower training expenses and better utilization of our fleet, which should lead to improved operational performance and financial results. Additionally, we are pleased to report that our Mesa Pilot Development time-building program achieved profitability in its first year of operations and has already provided Mesa with new-hire first officers. It is currently our intent to source all future new-hire pilots from Mesa Pilot Development.

“For the second fiscal quarter of 2024, we expect to report an adjusted net profit for the first time in ten quarters. We also expect to generate breakeven cash flow for the remainder of the fiscal year. As our business turns the corner, we can focus on longer-term strategic opportunities to enhance shareholder value as well as job security and career advancement for our people.”

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First Quarter Fiscal 2024 Details

Mesa Air Group Enters New Agreements with United Airlines for Improved Operating and Financing Terms and Provides Update on CRJ-900 Asset Sale Program

Mesa Air Group, and  United Airlines have agreed to amend its capacity purchase agreement and certain credit agreements between the parties to significantly improve Mesa’s operating income and liquidity over the next twelve months. The Company also issued an update on its efforts to sell excess CRJ-900 assets to reduce debt and bolster liquidity.

United Agreements Highlights:

Increased block-hour rate in United CPA, retroactive to October 1, 2023 through December 31, 2024, projected to generate approximately $63.5 million in incremental revenue over next twelve months

Extinguishment of $12.6 million of outstanding United bridge loan and revolving credit facility debt in exchange for Mesa’s vested equity investment in privately held Heart Aerospace, originally purchased for $5.0 million; Mesa retains 222,222 unvested “penny” warrants1 in Heart

Release as collateral of Mesa’s equity investment in Archer Aviation common stock, comprising 2.27 million vested shares and 1.17 million unvested “penny” warrants1

CRJ-900 Asset Sale Program Update:

Since September 2023, Mesa sold or entered into agreements to sell excess CRJ-900 aircraft and related engines for combined gross proceeds of $198.0 million, which has been and will be used to pay down $174.3 million in debt:

Sold 7 CRJ-900 NextGen aircraft for gross proceeds of $71.2 million

Sold 7 remaining of 11 CRJ-900s previously contracted for sale for gross proceeds of $21.0 million

Entered into agreements to sell 15 CRJ-900 airframes and 65 CF34-8C5 engines to various third parties for total gross proceeds of $105.8 million

Jonathan Ornstein, Chairman and CEO, said, “Following exhaustive negotiations over the past year, we reached several agreements with United that will increase rates per block-hour to long-sought market levels and provide additional liquidity. We believe these new agreements, combined with our CRJ-related asset sales, will enable Mesa to generate substantial incremental contract revenue and improve margins. While the situation remains challenging, this stability is critical as we continue to restore our pilot capabilities, drive increased fleet utilization, and step up block-hour production.

“Without a doubt, the past twelve months concluded a year of restructuring for Mesa’s operations and finances, culminating with the significantly improved agreement with United. We appreciate United’s support, and we are very thankful and proud of our pilots, flight attendants, mechanics, dispatchers, financial personnel, and support staff for their patience and diligent work to facilitate this complex process. I am confident we have the dedicated people to be a strong regional operation for United and for the over six million passengers we safely flew last year.”

1 Exercisable upon certain conditions 

Independent Pilot Development program launched by Mesa Airlines

Mesa Air Group, announced this week the launch of its Independent Pilot Development program (IPD), which will offer pilots “pay as you go” opportunity to build required flight time quickly, economically, and efficiently in brand-new Pipistrel Alpha 2 aircraft.

Unlike traditional time-building programs, IPD offers airline training materials, advanced computerized-based training, and pilot mentors, giving pilots a competitive advantage in the commercial aviation job market. IPD is designed to accelerate the time needed to achieve the required hours under the FAA’s mandated “1,500-hour rule”. IPD gives pilots a preferred interview with Mesa, or the ability to choose to work for any airline once they have reached 1,500 hours.

The program is available to any pilot who has obtained their commercial pilot certificate and instrument rating. Pilots are required to purchase a minimum of 50-hour blocks at $60 hour. Rates include fuel and are based on two-pilot flight deck occupancy.

To join the program, the following are required:

FAA Commercial Pilot Certificate

Multi-instrument rating with a minimum of 25 hours

Maintain 25 hours of flying time a month, and pilots may choose to fly up to 8 hours a day, based on availability

Mesa Airlines launches $20,000 direct-entry captain referral incentive ....

Mesa Airlines is launching a one-of-a-kind Direct-Entry Captain Referral Program, offering a $20,000 incentive to anyone who successfully refers a qualified pilot for employment with the company as a Captain.

To be considered for the position, the referred pilot must meet the following requirements:

Have at least 1,000 hours of qualifying commercial air carrier operating experience

Airline Transport Pilot License (ATP)

Must have flown 100 hours within the previous 12 months

“We are thrilled to launch this program as a way to reward anyone willing to help us grow and attract new talent to our company,” said Jonathan Ornstein, Chairman and CEO of Mesa Airlines. “We are looking for motivated and qualified pilots who want to join our family and grow with us as we expand our operations. This is a wonderful opportunity to advance your career, have a direct flow to United through their Aviate program, and earn a generous bonus at the same time.”

The successful Direct-Entry Captain will receive the following benefits:

Participants will transition to United through Aviate after flying 1600 Pilot in Command hours at Mesa

A $110,000 signing bonus paid at the completion of their training

A 1 for 1 longevity match based on qualifying experience at any Part 121 or Part 135 carrier. This will allow candidates to earn up to $215 per flight hour and accrue vacation at a much higher rate

All Mesa benefits including 401(k), dental, vision, medical and travel

 

Mesa Air Group Reports Third Quarter Fiscal 2023 Results

Mesa Air Group, has released its third quarter fiscal 2023 financial and operating results.

Fiscal Third Quarter Update:

• Total operating revenues of $114.7 million
• Pre-tax loss of $50.3 million, net loss of $47.6 million or $(1.17) per diluted share
• Adjusted net loss1 of $27.2 million or $(0.67) per diluted share
• Adjusted net loss excludes $21.2 million, primarily a $30.5 million impairment loss on assets
• Paid down $27 million of debt with engine sale proceeds
  

Jonathan Ornstein, Chairman and CEO, said, “As expected, Fiscal 2023 has been a transformative year as we ended our agreement with American Airlines and transitioned all of our regional capacity to United. While we are pleased with the progress we have made in some areas, we have more work to do in others. One of our key initiatives remains the disposition of excess CRJ-900 aircraft and related assets. To date, we have entered into agreements to sell 18 excess CRJ-900s, four of which we closed earlier this year, with the remaining 14 expected to close by calendar-year end. We are currently in active negotiations for the sale of additional aircraft. We also continue to focus on maximizing aircraft utilization with our existing pilot resources through more productive scheduling of our fleet in cooperation with United.”

Mr. Ornstein continued, “The CRJ-900 transition from American to United was a complex process and our people have done an amazing job. With little incremental regional capacity available industry-wide, we were pleased to fly almost half a million passengers for United on our CRJ fleet during our third quarter. With United’s continued support, we believe, based on current pilot staffing outlook, we will be at United’s target block-hour utilization rate by the end of fiscal-year 2024.

“Mesa has been a long-time Express carrier for United, and we believe United will ensure we remain an integral part of their regional portfolio. While Mesa’s primary service to United is providing valuable feed traffic, we also assist in the creation of future United pilots through our participation in Aviate, help maintain competitiveness among their regional portfolio, and share co-investments in advanced aviation technology and electric aircraft. In return, United has been an invaluable partner, helping us create additional liquidity through a number of initiatives, which we expect will continue through to the completion of our transformation and return to profitability.”

Mesa Air total operating revenues topped $121.8 million for the first quarter.

Mesa Air Group, Inc. has released details of its second quarter fiscal 2023 financial and operating results this week.  Some of the key figures show the regional airline had total operating revenues of $121.8 million and a pre-tax loss of $37.2 million, net loss of $35.1 million. 

The company initiated CRJ-900 transition to United Airlines in March, with last American Airlines flight operated on April 3rd and reduced its debt by approximately $80 million primarily with proceeds from asset sales.

Jonathan Ornstein, Chairman and CEO, said, “While our financial results reflect the ongoing transition of CRJ flying to United, we believe these actions will prove to be the right long-term strategic decision for the company. We began operating CRJ-900 flights for United Airlines in March, representing the culmination of months of diligent preparation and coordination between Mesa and United teams. We have already started to realize significantly improved pilot retention and attraction as a result of our expanded agreement with United. While we were ultimately more conservative in the timing of our transition than we had projected through second-quarter end, we have now transitioned 24 CRJ-900s.”

Fiscal Second Quarter Details:

Total operating revenues in Q2 2023 were $121.8 million, a decrease of $1.4 million, or 1.1%, from $123.2 million for Q2 2022. Contract revenue decreased $8.2 million, or 7.3%. These decreases were driven by deferred revenue and lower block hours, partially offset by higher United block-hour rates for new pilot payscales. Pass-through revenue, driven by maintenance and property taxes, increased by $6.8 million. Mesa’s Q2 2023 results include, per GAAP, the deferral of $5.7 million, versus the recognition of $0.8 million of previously deferred revenue in Q2 2022. The remaining deferred revenue balance of $24.5 million will be recognized as flights are completed over the remaining term of the United contract.

Mesa's latest results

Mesa Air Group, Inc. this week reported first-quarter fiscal 2023 financial and operating results.

Fiscal First Quarter Update:

• Total operating revenues of $147.2 million
• Pre-tax loss of $10.0 million, net loss of $9.1 million or $(0.25) per diluted share
• Adjusted net loss1 of $4.3 million or $(0.12) per diluted share
• Adjusted net loss excludes a $3.7 million impairment related to intangible assets and $1.7 million related to investments in equity securities
• As previously reported, closed on United Airlines, American Airlines, and aircraft-related transactions
• Subsequent to quarter end, closed sale of 8 remaining CRJ-550s to United Airlines

Jonathan Ornstein, Chairman and CEO, said, “The first quarter was an important one for Mesa, as we executed several key agreements that will materially enhance our operational and financial position and alleviate significant issues that we have faced. While block hour production continued to be challenged by the industry-wide pilot shortage during the quarter, we believe all the pieces are in place to begin restoring capacity across our fleets. We are preparing for the transition of our CRJ-900 operation to United next month. Our pilot pipeline continues to strengthen and pilot attrition has remained significantly lower since we have enhanced our payscales and expanded our participation in the Aviate program with United.”

Fiscal First Quarter Details:

Total operating revenues in Q1 2023 were $147.2 million, a decrease of $0.6 million (0.4%) from $147.8 million for Q1 2022. Contract revenue decreased $8.4 million, or 6.2%. These decreases were driven by lower block hours, offset by increased block-hour revenue for new pilot payscales. Mesa’s Q1 2023 results include, per GAAP, the recognition of $5.3 million, versus the recognition of $4.2 million of previously deferred revenue in Q1 2022. The remaining deferred revenue balance of $18.8 million will be recognized as flights are completed over the remaining terms of the contracts.

Mesa’s Adjusted EBITDA1 for Q1 2023 was $21.8 million, compared to $17.0 million in Q1 2022, and Adjusted EBITDAR1 was $25.9 million for Q1 2023, compared to $26.6 million in Q1 2022.

Mesa’s Q1 2023 results reflect a net loss of $9.1 million, or $(0.25) per diluted share, compared to a net loss of $14.3 million, or $(0.40) per diluted share for Q1 2022. Mesa’s Q1 2023 adjusted net loss1 was $4.3 million, or $(0.12) per diluted share, versus an adjusted net loss1 of $9.3 million, or $(0.26) per diluted share, in Q1 2022. The year over year increase in adjusted net income of $5.0 million was primarily due to increased block-hour revenue for new pilot payscales and lower maintenance, D&A, and aircraft rent expenses, partially offset by higher expenses for flight operations due to increased costs for training and employee wages.

Operationally, the Company ran a controllable completion factor of 99.4% for American and 99.9% for United during Q1 2023. This is compared to a controllable completion factor of 97.7% for American and 98.3% for United during Q1 2022. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.9% for American and 99.2% for United during Q1 2023. This is compared to a total completion factor of 95.8% for American and 95.8% for United during Q1 2022.

For Q1 2023, 50% of the Company’s total revenue was derived from our contracts with United, 45% from American, 3% from DHL, and 2% from leases of aircraft to a third party.

Mesa Airlines is launching a new direct-entry captain position

Mesa Airlines is launching a Direct-Entry Captain Position for highly qualified candidates with a 24-month flow to United Airlines. Qualifications are as follows:

Airline Transport Pilot License (ATP).

A minimum of 1,000 hours of Part 121.436 qualifying experience.

Must have flown 100 hours within the previous 12 months.

Current FAA First Class Medical Certificate.

Must pass a security background check and FAA-mandated drug test.

With the launch of the Direct-Entry Captain Position to United, Mesa will offer highly qualified candidates the most competitive overall package in terms of compensation and career opportunity, including:

$110,000 sign-on bonus paid in full at the completion of training.

Longevity match program for pilots who have worked for any Part 121 or Part 135 carrier.

Earning potential between $150 to $215 a flight hour as a Captain at Mesa before transitioning to United.

Multiples bases to choose from, including Phoenix, Houston, Washington Dulles, Dallas, Louisville, and Denver.

Jonathan Ornstein, Chairman and CEO of Mesa said, “This program provides an incredible opportunity for Captain qualified candidates to have a direct flow to United’s flight deck and advance their career goals in just two years. United is the fastest growing, best positioned and most employee-friendly airline in America.”

Mesa to end American Airlines 0-erations while it expands deal with United Airlines

Mesa to Expand Relationship with United Airlines, Winds Down Contract with American

Mesa Air has released details of a significant restructuring of its operations with American Airlines and United Airlines. As a result of ongoing unprofitable operations with American Airlines, driven primarily by higher pilot wages and block hour utilization penalties driven by the ongoing industry-wide pilot shortage, Mesa initiated and has finalized a consensual wind down of its American operations. Mesa is finalizing a new five-year agreement with United Airlines that would place the associated aircraft into United Express operations and compensate Mesa for the higher costs associated with regional jet flying. The new agreement would cover all of Mesa’s existing flying at American and could increase to 38 CRJ-900 aircraft, dependent upon the number of E-175s that Mesa is operating.

Operations with American will cease on April 3, 2023. The expected agreement with United anticipates Mesa would begin to place aircraft with United in March 2023 and continue to utilize all of its crew and maintenance locations currently operated for American Airlines in Phoenix, Dallas, El Paso, and Louisville through the transition and beyond. The agreement also provides for Mesa to open a CRJ-900 crew base in Houston and a new pilot base in Denver, CO, with the potential for other incremental crew bases.

“I’d like to thank our long-time friends at American Airlines,” said Jonathan Ornstein, Mesa Chairman and CEO. “Our relationship with American began in 1992 when Mesa initiated flying as a codeshare partner with America West after investing in its reorganization. Over the last 30 years, we’ve been through a lot together and we will always appreciate the opportunity to work as America West Express, US Air Express, and American Eagle.”

“Once finalized, our expanded agreement with United is expected to both solidify our operations and, in conjunction with our amended agreements with key stakeholders, significantly improve our financial position. Most importantly, after years of reduction in service to smaller and rural communities, this agreement will help turn the tide and is expected to add over 100 regional jet flights into the United network,” Ornstein continued. “This will be a win-win for both companies and will provide a more financially stable and focused enterprise for our shareholders and employees. This new agreement would allow us to transition to higher revenue-per-block hour operations and create more opportunities and job security for our people. Importantly, current and future pilots at Mesa will benefit from the anticipated new agreement with United, which is poised to offer the best combination of the highest pay rates and fastest career path to a major airline in the industry. I’d like to thank our employees and our ALPA and AFA labour union leadership whose hard work and dedication has been and will continue to be the core of Mesa’s success.”

To further enhance liquidity, Mesa is finalizing the previously announced sale of its remaining 8 CRJ-550s to United. Mesa has also reached an agreement to sell 11 surplus CRJ-900 aircraft to a third party. Once completed, the proceeds of these two transactions will significantly reduce debt and improve liquidity. Further, Mesa is pursuing other avenues to increase liquidity through the sale of additional surplus aircraft, spare parts, and spare engines. Additionally, Mesa recently negotiated improved terms and conditions with RASPRO, a Canadian special purpose finance company, on its leases for 15 CRJ-900 aircraft, and is finalizing an agreement with EDC, the Economic Development Corporation of Canada, and MHI RJ Aviation on debt associated with seven NextGen CRJ-900 aircraft.

Mesa Airlines offers accelerated path to 1,500 hours to combat pilot shortage.

Mesa Airlines announced this week that it has purchased 29 state-of-the-art Pipistrel Alpha Trainer 2 aircraft, with the option to buy an additional 75 over the next year. The new fleet will be the backbone of the Mesa Pilot Development Program (MPD), a major initiative to close the pilot shortage gap that has been affecting the industry over the last several years. As part of the program, pilots will be provided with the opportunity to accumulate up to 1,500 flight hours required to fly a commercial aircraft at Mesa Airlines.

The company is investing in the new program to alleviate the pilot shortage while giving new pilots a direct route to a long-term career. Jonathan Ornstein, Chairman and CEO of Mesa said, “The pilot shortage could become a permanent feature of the airline industry if we don’t get more aviators into the system,” said Ornstein. “It is basic math. If there aren’t enough trained pilots, customers suffer from loss of service and high-ticket prices.” The aircraft will go into operation in Inverness, Florida starting in October 2022, with expansion to Arizona over the next year. At full strength, the fleet will have capacity for up to 2,000 daily hours of flying time and is expected to accommodate more than 1,000 pilots per year.

Ornstein continued, “We believe there is no faster way for a new aviator to enter commercial aviation and ultimately be employed at a major airline.”

Losses of nearly $4 million for Mesa Airlines

Mesa Airlines,  the regional air carrier providing scheduled passenger service to 121 cities in 41 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. The firm, that as of June 30, 2022, Mesa operated a fleet of 168 aircraft with approximately 360 daily departures, posted a pretax loss of $12.5 million, an adjusted net loss of $3.9 million for the second quarter of the year. 

A couple of key aircraft highlights of the quarter saw the airline add a third cargo aircraft to its fleet supporting DHL and Mesa added a second CRJ simulator to increase pilot training capacity, which will go some way in combatting the pilot shortage in the U.S.

Jonathan Ornstein, Chairman and CEO, said, “While demand remained resilient for the quarter, our financial results continue to be impacted by industry-wide, elevated pilot attrition and the significant reduction in the commercial pilot pipeline, exacerbated by the 1,500-hour rule. Looking forward, we intend to take dramatic action to address the pilot shortage through increased recruiting, additional simulator capacity, and expansion of our pilot pipeline. We are also pleased that United Airlines has expanded the Aviate program to include all of our pilots.”

Fiscal Third Quarter Details:

Total operating revenues in Q3 2022 were $134.4 million, an increase of $9.2 million (7.4%) from $125.2 million for Q3 2021. Contract revenue increased $9.2 million, or 8.4%. This was due to the return to normal rates from our partners, which were temporarily reduced last year related to the PSP program. These were partially offset by a reduction in block hours. Mesa’s Q3 2022 results include, per GAAP, the recognition of $6.8 million of previously deferred revenue, versus the deferral of $1.9 million of revenue in Q3 2021. The remaining deferred revenue balance of $22.7 million will be recognized as flights are completed over the remaining terms of the contracts.

Mesa’s Adjusted EBITDA1 for Q3 2022 was $20.1 million, compared to $35.3 million in Q3 2021, and Adjusted EBITDAR1 was $29.4 million for Q3 2022, compared to $44.9 million in Q3 2021.

Mesa’s Q3 FY22 results reflect a net loss of $10.0 million, or $(0.28) per diluted share, compared to net income of $4.3 million, or $0.11 per diluted share for Q3 FY21. Mesa’s Q3 FY22 adjusted pre-tax loss1 was $8.7 million versus an adjusted pre-tax income1 of $5.8 million in Q3 FY21. The year over year decrease in adjusted pre-tax income of $14.5 million was primarily due to lower block hours, the net impact of the PSP program, and the change in deferred revenue.

Operationally, the Company ran a controllable completion factor of 98.8% for American and 99.8% for United during Q3 2022. This is compared to a controllable completion factor of 99.4% for American and 99.9% for United during Q3 2021. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.7% for American and 98.8% for United during Q3 2022. This is compared to a total completion factor of 97.6% for American and 99.2% for United during Q3 2021.

Enhanced partnership between Mesa Air Group and United Aviate

Mesa Air Group, confirmed this week that Mesa Airlines pilots participating in United’s Aviate career development programme are now able to earn service credit, and count prior service, towards their United transition for flying across all of Mesa’s operations, including American Eagle.

The United Aviate programme is designed to give pilots a clear path to the United Airlines flight deck while building their flight hours with Mesa. Previously, United Aviate participants could only earn service credit hours while flying aircraft operating as United Express.

Mesa is pleased to communicate this opportunity to our pilots and is thankful to United for expanding the programme’s transition eligibility requirements.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 113 cities in 41 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of May 31, 2022, Mesa operated a fleet of 166 aircraft with approximately 376 daily departures and 2,700 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and DHL.

Chris Gill, Mesa Air Group MEC Chairman representing the Air Line Pilots Association, said, "We're glad Aviate has chosen to extend mainline advancement opportunities to all Mesa pilots. This represents a tremendous opportunity for our pilots, and I am confident it will also help Mesa retain and attract qualified pilots. It is our goal to help make Mesa the most attractive option for regional pilots.”

"We greatly appreciate the support and confidence our pilots have received from our partners at United Airlines. I believe this will make Mesa an even more attractive option for pilots entering commercial aviation. The career path of our pilots has never been more promising since I joined Mesa in 1988. I'd like to thank United and ALPA who helped make this happen," said Jonathan Ornstein, Chairman, and CEO of Mesa.

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Mesa reports net loss of $42.8 million in first quarter...

 The U.S. regional carrier, Mesa Air Group, has just released its latest results for the second quarter of this year. 

Financial Summary Q2:

• Pre-tax loss of $55.2 million, net loss of $42.8 million or $(1.19) per diluted share.
• Adjusted net loss1 of $10.3 million or $(0.29) per diluted share.
• Adjusted net loss excludes a $39.5 million (pre-tax) non-cash charge related to 12 CRJ aircraft held for sale.
  

Quarter Highlights:

• Mesa took delivery of its third 737-400F freighter aircraft in the quarter.
• Added an additional E175 flight simulator.

Fiscal Year Q2 Results:

Mesa’s Q2 FY22 results reflect a net loss of $42.8 million, or $(1.19) per diluted share, compared to net income of $5.7 million, or $0.14 per diluted share for Q2 FY21. Mesa’s Q2 FY22 adjusted pre-tax loss1 was $13.1 million versus an adjusted pre-tax income1 of $12.1 million in Q2 FY21. The year over year decrease in adjusted pre-tax income of $25.2 million was primarily due to lower block hours and the impact of the PSP program.

Jonathan Ornstein, Chairman and CEO, said, “While demand for our product remains strong, our financial results this quarter reflect the ongoing challenge of heightened pilot attrition. In January, our operational and financial performance was significantly impacted by Covid-related higher pilot absence rates which have since subsided. We remain focused on taking steps to address pilot attrition, including increased hiring, simulator capacity, and training capabilities, which has been exacerbated by the industry-wide pilot shortage.”

Fiscal Q2 details:

Mesa Air Group name new Vice President of Maintenance and Technical Operations

Mesa Air Group have named Christian Daoud as its new Vice President of Maintenance and Technical Operations. 

Daoud is currently Senior Director of Technical Operations at Mesa and first worked for Mesa as a Lead Aircraft Mechanic in 2006. He will be taking over from Chris Toro and reporting directly to Executive VP and COO Brad Rich. Mesa is grateful for all Toro did for the company and is confident that his department is in capable hands with Daoud.

Christian has progressed quickly in maintenance operations. After beginning his aviation career with Mesa in 2006 as a mechanic, he went on to Hawaiian Airlines as an Engineer. He then moved on to Allegiant where he held progressive positions as Engineer, Manager of Aircraft Systems Engineering and then Manager of Aircraft Deliveries. After serving for several years at Allegiant, Daoud took on the role of Field Rep for Pratt & Whitney. Daoud spent three more years in various managing roles back at Allegiant and then joined Airborne Maintenance and Engineering Services as the Director of Engineering. In 2021 he finally returned to Mesa as Senior Director of Technical Operations.

“Christian has quickly proven his value as part of the Mesa team since rejoining in 2021. His experience at Allegiant, as well as his performance as Senior Director of Technical Operations for Mesa, has proven he will be a great addition as a VP” said Brad Rich, Mesa Air Group Executive Vice President and Chief Operating Officer.

Congratulations to Christian Daoud on his new position at Mesa!

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First quarter fiscal 2022 results for Mesa Air Group

Mesa Air Group, Inc has just reported its first quarter fiscal financial and operating results for this year which shows a pre-tax loss of $18.4 million, net loss of $14.3 million - an adjusted net loss of $9.3 million.

Mesa’s Q1 FY22 results reflect a net loss of $14.3 million, or $(0.40) per diluted share, compared to net income of $14.1 million, or $0.39 per diluted share for Q1 FY21. Mesa’s Q1 FY22 adjusted net loss1 of $9.3 million was down compared to net income of $13.2 million in Q1 FY21. We can attribute this $22.5 million decrease to the impacts related to Covid, such as cancelled flights, a catch up in deferred heavy maintenance expense, and a spike in sick-related absence rates. Mesa also did not recognize any PSP funds as an offset to operating expenses during Q1 2022, compared to an $11.3 million reduction in Q1 2021.

Jonathan Ornstein, Chairman and CEO, said, “Mesa’s results reflect the impact of Covid to our quarter’s operations and financials. Its effect on this quarter was significant and unlike anything we have seen in twenty years. This was further impacted by elevated pilot attrition as the major and national airlines have accelerated hiring. Looking ahead, we are cautiously optimistic that we are already seeing a decrease in Covid-related absence rates. Managing through the challenges of pilot attrition in our core regional operation remains our team’s top priority.

Outside of our core regional operation, we continue to move forward with some of our important strategic initiatives. We are taking delivery of our third 737-400F aircraft this month. We also remain invested in electric aircraft companies Archer Aviation and Heart Aerospace as we look to position Mesa to be the regional airline leader in decarbonization and electric aircraft. Going forward, our strategy is to selectively look for other opportunities in aviation related, green technologies to ensure a leadership role in this area.”

Fiscal Q1 details:

Mesa Air's December performance

Mesa Air Group, Inc has released details of its performance for December 2021, a slight increase of 3.8% block hours. 

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 120 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As December 31, 2021, Mesa operated a fleet of 166 aircraft with approximately 457 daily departures and 3,000 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and DHL.

Mesa Airlines reported 26,920 block hours in December 2021, a 3.8 percent increase from December 2020. Covid-19 and its impact on employee attendance was a primary factor behind Mesa’s controllable completion factor of 93.05 percent and 97.89 percent for its American and United operations, respectively.

Operating statistics for December 2021 and fiscal year 2021 YTD are included in the table below.