Mesa Air Group, the holding company of US regional airline Mesa Airlines, has reported its Q1 results, which paint a mixed picture for the carrier. Posting a US$57.9 million net loss, the company’s total operating revenues were down 19.3% compared to Q1 2023.
However, the company has paid down $39.2 million towards its debt since December 2023, largely due to the surplus asset sales of its CRJ aircraft. It has successfully started the reduction of 12 CRJ-900s from its contracted fleet by August 2024. Reduced cargo demand also meant that Mesa Air Group is winding down its cargo operations with DHL, which started in February 2024. Pilots will transition to operate the airline’s E175 fleet.
Jonathan Ornstein, Chairman and CEO of Mesa Air Group, 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 finalised 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.”
Turning a corner
Despite this net loss, Ornstein remained optimistic in his outlook for the group going forwards. Its pilot attrition was reported to be halved versus the figures from 2023. Additionally, its Mesa Pilot Development time-building programme turned a profit in its first year of operations. It has increased its Pipistrel training fleet to 28, and currently, 120 cadets are enrolled in the programme. Mesa Airlines intends 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,” he added.
Mesa has also invested in sustainability initiatives over the last year, making investments in REGENT, a developer and manufacturer of all-electric passenger seagliders, and previously held $5 million of stock in Heart Aerospace, the developer of the hybrid-electric ES-30 plane, which it sold to United in January 2024 to clear $12.6 million of debt.
Mesa Airlines currently serves 79 cities in 36 states and, as of 31 March 2024, operates a fleet of 80 aircraft with approximately 263 daily departures.
Photo: Mesa Air Group
