Mesa Air Group Enters Into a $200 Million Secured Loan Facility

                                    Mesa Air Group, Inc. announced that it has entered into a five-year Loan and Guarantee Agreement on October 30, 2020, with the U.S. Treasury Department which provides Mesa Airlines with a secured term loan facility to borrow up to $200 million under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

On October 30, 2020, Mesa borrowed $43 million under the facility and has until December 15, 2020, to determine if it will borrow up to an additional $157 million in a subsequent borrowing. Mesa’s ability to borrow up to the additional $157 million is subject to the satisfaction of certain conditions precedent under the secured term loan facility, including, among other things, updated appraisals, compliance with the collateral coverage ratio, and the release of liens on the collateral that will secure such additional indebtedness.

"No Furloughs" in 2020 for the Mesa Air Group

News from the Phoenix HQ of the US regional air carrier Mesa Air Group is that it has reached an agreement with its pilots, represented by the Air Line Pilots Association, that will enable the company to avoid furloughing any employee for the remainder of 2020. This is a massive and quite remarkable step considering the tremendous negative impact of the COVID-19 pandemic on air travel.  

Mesa takes great pride in the strong relationship the company has with its employees, and significant work has been done over the last several months to avoid any furloughs associated with the expiration of the CARES Act Payroll Support Program funds on September 30th.  

Commenting on the announcement, Mesa Air Group Chairman and CEO Jonathan Ornstein said, “We like to think of Mesa as a big extended family. In times of crisis, families pull together and I’m incredibly grateful for the dedication, hard work, and bravery of our people. Their willingness to support their fellow employees through this incredibly difficult time is a real testament to their kindness and humanity.”

Mesa, like many in the aviation industry in the US, are hopeful Congress will extend the Payroll Support Program to further protect its employees and their families should the pandemic continue to have a negative impact on air travel demand into 2021,  yet as time travels on,  such hopes are starting to fade. 

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Mesa Air Group Reports Third Quarter Fiscal 2020 Results

                                             

Mesa Air Group, reported its third quarter fiscal 2020 financial and operating results on Monday, which showed a net income of $3.4 million. Mesa's Q3 2020 pre-tax income was $4.9 million, compared to $3.9 million for Q3 2019. Mesa's Q3 2020 adjusted pre-tax income1 was $4.9 million, compared to $13.4 million for Q3 2019.   In addition, Mesa's Adjusted EBITDA1 for Q3 2020 was $35.9 million, compared to $58.8 million in Q3 2019, and Adjusted EBITDAR1 was $51.5 million, compared to $58.8 million in Q3 2019.

The primary reason for the $8.5 million decrease in adjusted pre-tax income from Q3 2019 to Q3 2020 was $16.0 million of deferred revenue. The $16.0 million revenue deferral is a GAAP concept, which requires the Company to recognize revenue related to fixed monthly payments received under capacity purchase agreements over time, based on completed flights relative to the estimated number of flights expected over the term of the agreements. The deferred revenue will be recognized over the remainder of the capacity purchase agreements based on the estimated number of completed flights.

Mesa Air Group Signs Five-Year Cargo Contract with DHL Express

Adding two Boeing 737-400F aircraft to fleet

Mesa Air Group, announced plans to begin providing air cargo service for DHL Express with Boeing 737-400F cargo aircraft.

Under the agreement, Mesa will operate two cargo aircraft from DHL Express Americas global hub at Cincinnati/Northern Kentucky International Airport for a five-year term. The company will lease the aircraft from DHL with the first scheduled to be in service this October.

“We are very excited to enter the cargo market and diversify our business. Flying under contract on behalf of DHL is essentially the same business model Mesa has operated under for over 20 years,” said Jonathan Ornstein, Chairman and Chief Executive Officer. “Cargo transport plays a critical role in the health of communities and economies around the world. Mesa is well-suited for this new mission, and this is just the beginning of what we believe will be a long and productive relationship with DHL.”

Mesa Air Group Reports June 2020 Operating Performance

Mesa Air Group, has reported Mesa Airlines’ operating performance for June 2020, this week

Mesa Airlines reported 9,247 block hours in June 2020, a 75.8 percent drop from June 2019 as a result of reduced schedules during the COVID-19 pandemic. The company also reported a controllable completion factor of 100 percent for both its American and United operations.

Operating statistics for June 2020 and fiscal year 2020 YTD are included in the table below.

	Jun-20	Jun-19	% Change		YTD FY2020	YTD FY2019	% Change
Block Hours
American	3,000	16,546	-81.9%		111,199	148,592	-25.2%
United	6,248	21,694	-71.2%		144,289	192,479	-25.0%
Total	9,247	38,240	-75.8%		255,488	341,071	-25.1%
	Jun-20	Jun-19	% Change		YTD FY2020	YTD FY2019	% Change
Departures
American	1,699	9,737	-82.6%		63,693	85,570	-25.6%
United	3,550	11,318	-68.6%		72,559	96,987	-25.2%
Controllable Completion Factor*
American	100.00%	98.71%	1.3%		99.75%	99.21%	0.5%
United	100.00%	99.10%	0.9%		99.98%	99.59%	0.4%
Total Completion Factor**
American	100.00%	91.88%	8.8%		93.27%	95.72%	-2.6%
United	99.83%	97.81%	2.1%		94.72%	98.34%	-3.7%

*Controllable Completion Factor excludes cancellations due to weather and air traffic control
**Total Completion Factor includes all cancellations

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 66 cities in 29 states, the District of Columbia and Mexico. As of June 30th, 2020, Mesa operated a fleet of 145 aircraft with approximately 175 daily departures and 3,400 employees. Mesa operates all of its flights as either American Eagle or United Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc.

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Mesa drops over 75% in blocked hours in June 2020

Mesa Air Group, Inc. has reported the operating performance for June 2020 for Mesa Airlines.  Headquartered in Phoenix, Arizona, Mesa Airlines, is a regional air carrier providing scheduled passenger service to 66 cities in 29 states, the District of Columbia and Mexico. As of June 30th, 2020, Mesa operated a fleet of 145 aircraft with approximately 175 daily departures and 3,400 employees. Mesa operates all of its flights as either American Eagle or United Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc.

Mesa Airlines reported 9,247 block hours in June 2020, a 75.8 percent drop from June 2019 as a result of reduced schedules during the COVID-19 pandemic. The company also reported a controllable completion factor of 100 percent for both its American and United operations.

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Mesa Air Group Reports May 2020 Operating Performance

        Mesa Air Group, has reported its operating performance

 for May 2020.

Mesa Airlines reported 12,077 block hours in May 2020, a 68.6 percent drop from May 2019 as a result of reduced schedules during the COVID-19 outbreak. The company also reported a controllable completion factor of 100 percent for both its American and United operations.

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Mesa Air Group Reports April 2020 Operating Performance

Mesa Air Group reported Mesa Airlines’ operating performance for April 2020.

Mesa Airlines reported 10,297 block hours in April 2020, a 72. 4 percent drop from April 2019 as a result of reduced schedules during the COVID-19 outbreak. The company also reported a controllable completion factor of 100 percent for both its American and United operations.

Commenting on the results, Mesa Air Group Chairman and CEO Jonathan Ornstein said, “In my more than 20 years as CEO I have never seen a sustained drop in demand like this. It’s an incredibly difficult time for everyone, but I am extremely proud of our people for running a perfect operation during a challenging month.”

Mesa Air Group to get help from US government's Payroll Support Program

The Mesa Air Group, has confirmed it expects to receive $92.5 million in assistance from the Treasury Department under the Payroll Support Program as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The funds can only be used for the continuation of payment of employee wages, salaries, and benefits for the period April 1, 2020, to September 30, 2020. The company is finalizing the agreements with the Treasury Department and expects it will be completed shortly.

“We’d like to thank President Trump and Treasury Secretary Mnuchin for taking decisive action at this critical juncture,” said Jonathan Ornstein, Mesa Air Group Chairman and CEO. “We also want to thank our partners, United and American, the Regional Airline Association, and labor leaders Sara Nelson, President of the Association of Flight Attendants, and Captain Joe DePete, President of the Air Line Pilots Association, for working together to make this happen.”

Mesa Air Group reports March 2020 operating performance

Mesa Air Group, has reported Mesa Airlines’ operating performance for March 2020.

Mesa Airlines reported 33,464 block hours in March 2020, a 14.8 % drop from March 2019 as a result of reduced schedules during the COVID-19 outbreak. The company also reported controllable completion factors of 99.85 % and 99.99 % for American and United respectively.

Commenting on the results, Mesa Air Group Chairman and CEO Jonathan Ornstein said, “Our industry is in uncharted territory. The drop in departures and block hours reflects the significantly reduced demand our partners are seeing as a result of concerns over COVID-19. I am incredibly proud and thankful for the performance our people have continued to deliver during this turbulent time.”

Mesa's monthly performance

Mesa Air Group, has reported operating performance for February 2020.

Mesa Airlines reported 36,552 block hours in February 2020, a 6.2 percent increase from February 2019, and controllable completion factors of 99.98 percent and 99.96 percent for American and United respectively.

Operating statistics for February 2020 and fiscal year 2020 YTD are included in the table below.

	Feb-20		Feb-19		% Change			YTD FY2020		YTD FY2019		% Change
Block Hours
American	15,784		15,246		3.5	%		81,604		81,997		-0.5	%
United	20,768		19,165		8.4	%		108,798		105,771		2.9	%
Total	36,552		34,411		6.2	%		190,403		187,769		1.4	%
	Feb-20		Feb-19		% Change			YTD FY2020		YTD FY2019		% Change
Departures
American	8,800		8,685		1.3	%		46,986		46,930		0.1	%
United	9,747		9,345		4.3	%		54,065		52,868		2.3	%
Controllable Completion Factor*
American	99.98	%	98.97	%	1.0	%		99.69	%	99.23	%	0.5	%
United	99.96	%	99.75	%	0.2	%		99.98	%	99.66	%	0.3	%
Total Completion Factor**
American	99.33	%	95.57	%	3.9	%		98.09	%	96.72	%	1.4	%
United	99.64	%	97.76	%	1.9	%		99.45	%	98.56	%	0.9	%

*Controllable Completion Factor excludes cancellations due to weather and air traffic control
**Total Completion Factor includes all cancellations

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