Mesa Air Group (MESA) Q3 2024 earnings summary

Executive summary

• Net loss for Q3 2024 was $19.9 million, improved from $47.6 million in Q3 2023, driven by lower expenses and asset sales, despite a 3.4% revenue decrease; adjusted net loss was $9.4 million.

• The company operates 73 aircraft, mainly under a CPA with United Airlines, with the American Airlines CPA terminated in April 2023.

• Adjusted EBITDA for Q3 2024 was $8.9 million, up from negative $1.8 million in Q3 2023; adjusted EBITDAR was $10.6 million.

• Achieved a 99.94% controllable completion factor for United, up from 98.83% in Q3 2023.

• Extended increased block-hour rate with United through August 2025 and agreed to transition to an all E-175 fleet by March 2025, with United reimbursing up to $14 million in transition costs.

Financial highlights

• Q3 2024 total operating revenue was $110.8 million, down 3.4% year-over-year; United Express contract revenue rose 8% while pass-through and other revenue fell.

• Total operating expenses fell 22.7% year-over-year to $119.8 million, mainly due to lower asset impairment, maintenance, and flight operations costs.

• Operating loss for Q3 2024 was $9.0 million, improved from $40.2 million in Q3 2023.

• Net loss per share was $0.48 for Q3 2024, compared to $1.17 in Q3 2023.

• Cash and cash equivalents were $16.3 million as of June 30, 2024, with total debt reduced to $366.4 million from $577.5 million a year earlier.

Outlook and guidance

• Management expects $46.0 million in incremental revenue from increased CPA rates with United from September 2024 through August 2025.

• The company plans to transition to an all E-175 fleet by March 2025, with United committed to a combined fleet of 60 aircraft through January 2025.

• Pilots are being recalled from furlough in anticipation of higher E-175 block hours.

• Liquidity measures and asset sales are expected to support cash obligations and debt maturities over the next twelve months.

• No formal forecast for fiscal 2025 provided, but management expects improved aircraft utilization and margin expansion.