Mesa Air Group Reports Mixed Financial Results, Improved Operating Loss, and Strategic Adjustments

Mesa Air Group, Inc. reported its financial results for the three and nine months ended June 30, 2024, showing a mixed performance compared to the previous fiscal period. The company recorded operating revenues of $110.8 million for the three months, a decrease of 3.4% from $114.7 million in the same period of 2023. For the nine months, revenues totaled $361.2 million, down 5.9% from $383.7 million year-over-year. The decline in revenue was primarily attributed to reduced block hours flown and fewer aircraft under contract, particularly following the termination of the American Airlines Capacity Purchase Agreement (CPA) in April 2023.

Despite the revenue decline, Mesa Air Group improved its operating loss significantly, reporting a loss of $9.0 million for the three months ended June 30, 2024, compared to a loss of $40.2 million in the same quarter of 2023. For the nine-month period, the operating loss was $48.8 million, an improvement from $64.1 million in the prior year. The net loss for the three months was $19.9 million, down from $47.6 million, while the nine-month net loss decreased to $66.1 million from $91.8 million.

Total operating expenses for the three months ended June 30, 2024, were $119.8 million, a reduction of 22.7% from $154.9 million in the same period of 2023. This decrease was driven by lower flight operations and maintenance expenses, as well as reduced general and administrative costs. The company also reported a non-cash impairment charge of $50.9 million related to aircraft designated as held for sale.

Mesa Air Group's liquidity position showed a decline, with cash and cash equivalents at $16.3 million as of June 30, 2024, down from $32.9 million at the end of September 2023. The company was not in compliance with a minimum liquidity requirement of $15 million as of July 16, 2024, but received a waiver from United Airlines through December 31, 2024.

Strategically, the company is transitioning to an entirely E-175 fleet by March 2025, with a commitment to operate a combined fleet of 60 CRJ-900 and E-175 aircraft through January 2025. Mesa Air Group has also entered into agreements to sell surplus assets related to its CRJ fleet to reduce debt and optimize operations. The company furloughed 53 pilots, expected to save approximately $3.9 million from July to December 2024.

Overall, while Mesa Air Group faced challenges in revenue generation and liquidity, it demonstrated improved operational efficiency and strategic adjustments to its fleet and cost structure.