Mesa Air Group (MESA) Q1 2025 earnings summary

Executive summary

• Report covers the quarter ended December 31, 2024, with all revenues derived from the United CPA, aircraft leases, and Mesa Pilot Development; DHL FSA revenues ended in March 2024.

• Q1 FY2025 operating revenues were $103.2M, down 13.1% year-over-year due to reduced aircraft with United and DHL wind-down, partially offset by higher E-175 block-hour rates.

• The company operated 60-62 aircraft, primarily E-175s, under a capacity purchase agreement with United, providing scheduled passenger service to 76-82 cities.

• A merger agreement with Republic Airways Holdings was signed in April 2025, with significant asset sales and debt restructuring planned as part of the transaction.

• Achieved 100% controllable completion factor for United, with scheduled utilization at 8.9 block hours per day.

Financial highlights

• Net loss for the quarter was $114.6 million, compared to a net loss of $57.9 million in the prior year period.

• Operating revenues decreased 13.1% year-over-year to $103.2 million, with contract revenue down 20.2% and pass-through/other revenue up 27.6%.

• Operating loss widened to $110.8 million from $48.4 million year-over-year.

• Asset impairment charges totaled $65.7 million, and loss on sale of assets was $46.7 million, both primarily related to E-175 aircraft.

• Adjusted EBITDA was $11.0 million, up from $5.1 million in the prior year quarter; adjusted EBITDAR was $12.6 million, up from $6.3 million.

Outlook and guidance

• Management implemented measures to address liquidity, including asset sales, debt extinguishment, and amendments to agreements with United and lenders.

• The company expects these actions to provide sufficient liquidity to meet obligations for the next twelve months, but forecasts are subject to significant judgment and uncertainty.

• Block hour utilization expected to rise to 9.8 in the June quarter, up from 8.9 in December and 9.4 in March.