Mesa Air Group (MESA) Q2 2024 earnings summary

Executive summary

• Net income of $11.7 million for Q2 2024, reversing a $35.1 million loss in Q2 2023, driven by higher United block hour rates and lower impairment charges.

• Achieved first GAAP and adjusted net profits in 11 quarters, with best adjusted EBITDAR result over that period.

• Operating income of $11.6 million in Q2 2024, compared to a $26.9 million loss in Q2 2023; six-month net loss of $46.2 million due to non-cash impairment charges.

• Completed wind-down of DHL operations as of March 1, 2024; all scheduled passenger flights now operated for United.

• Reduced total debt by $221.5 million (36%) over the past year, with $38.8 million in debt payments and $10.5 million in loan forgiveness from United in the quarter.

Financial highlights

• Q2 2024 operating revenue rose 8% year-over-year to $131.6 million; contract revenue up 9.7% to $113.8 million.

• Operating expenses fell 19.3% to $119.9 million, mainly due to lower impairment, flight operations, and depreciation.

• Adjusted EBITDA for Q2 2024 was $26.8 million, up from $7.1 million in Q2 2023; Adjusted EBITDAR was $28.2 million.

• Six-month operating revenue declined 6.9% to $250.4 million; net loss of $46.2 million includes $43.0 million in non-cash impairment.

• Unrestricted cash and equivalents at March 31, 2024 were $18.5 million; $80.3 million in assets held for sale.

Outlook and guidance

• Management expects additional $26.8 million in incremental revenue from United CPA rate increases through December 2024.

• Expects to remain cash-flow neutral for the remainder of the fiscal year.

• Plans to meet $94.4 million in debt maturities over the next 12 months via cash, operations, and asset sales.

• Ongoing efforts to sell surplus CRJ fleet assets and defer major maintenance to align with flight activity.

• Anticipates consistent profitability as transition to E-175 flying continues and pilot attrition declines.