Core Insights - Mesa Air Group is nearing the completion of its merger with Republic Airways Holdings, with the merger expected to close on November 25, 2025 [2][6][8] - The company reported total operating revenues of $90.7 million for the quarter ended September 30, 2025, a decrease of 21.3% compared to $115.3 million in the same quarter of 2024 [9][12] - Mesa's net loss for the September 2025 quarter was $14.1 million, or $0.34 per diluted share, an improvement from a net loss of $24.9 million, or $0.60 per diluted share, in the September 2024 quarter [12][34] Financial Performance - Total operating revenues for the September 2025 quarter were $90.7 million, down by $24.6 million, or 21.3%, compared to the same quarter in 2024 [9][11] - Contract revenue decreased by $27.8 million, or 29.6%, to $66.0 million, primarily due to a reduction in contractual aircraft with United Airlines [9][10] - Total operating expenses for the September 2025 quarter were $99.9 million, a decrease of 24.5% compared to the September 2024 quarter, mainly due to lower asset impairment expenses and reduced depreciation [11][12] Operational Highlights - Mesa achieved a controllable completion factor of 100.00% for the September 2025 quarter, compared to 99.88% in the same quarter of 2024 [14][25] - The company operated 60 large E-175 jets under its capacity purchase agreement with United Airlines during the quarter [14] - Passengers carried decreased by 8.3% to 1,316,088 compared to 1,435,580 in the September 2024 quarter [25] Debt and Asset Management - Mesa repaid over two-thirds of its debt principal over the past year, reducing total debt from $315.2 million in September 2024 to $95.2 million in September 2025 [15][6] - The company closed on the sales of surplus assets, generating gross proceeds of $19.6 million from the sale of 13 spare GE-34 engines and 9 surplus CRJ-900 airframes [8][11] - Following the merger, Mesa authorized a 15-for-1 reverse stock split, expected to take effect after market close on November 24, 2025 [8][12] Merger Details - The merger with Republic Airways is anticipated to create long-term value, supported by a new capacity purchase agreement with United Airlines that will last for ten years [6][8] - Mesa stockholders approved all proposals related to the merger at a special meeting on November 17, 2025 [8][12] - Post-merger, Mesa's common stock will trade under the Nasdaq symbol "RJET" [8][12]

Financial Performance - Mesa Air Group reported an operating loss of $9.2 million for the three months ended September 30, 2025, compared to an operating loss of $17.0 million for the same period in 2024, indicating an improvement in performance [157]. - Total operating revenues decreased by $24.6 million, or 21.3%, to $90.7 million for the three months ended September 30, 2025, compared to $115.3 million in 2024 [161]. - Total operating revenue decreased by $79.4 million, or 22.2%, to $278.2 million for the nine months ended September 30, 2025 compared to the same period in 2024 [175]. - The company reported a net loss of $51.9 million for the nine months ended September 30, 2025, primarily due to a $53.4 million impairment expense related to held-for-sale assets [198]. - Adjusted EBITDA for the three months ended September 30, 2025, was $3.3 million, compared to $14.7 million for the same period in 2024 [192]. - Adjusted EBITDAR for the nine months ended September 30, 2025, was $19.4 million, down from $57.0 million in the same period of 2024 [192]. Revenue Breakdown - Contract revenue decreased by $27.8 million, or 29.7%, to $66.0 million, primarily due to fewer aircraft under contract [161]. - Contract revenue decreased by $98.9 million, or 32.6%, to $204.3 million primarily due to reduced block hours flown and fewer aircraft under contract [175]. - Pass-through and other revenue increased by $3.3 million, or 15.2%, to $24.7 million, attributed to an increase in pass-through maintenance related to the E-175 fleet [161]. Operating Expenses - Operating expenses decreased by $32.4 million, or 24.5%, to $99.9 million for the three months ended September 30, 2025, compared to $132.3 million in 2024 [162]. - Flight operations expense decreased by $2.2 million, or 5.8%, to $35.7 million, driven by decreased pilot training expenses and lower pilot wages [162]. - Maintenance expense decreased by $5.3 million, or 11.2%, to $42.3 million, primarily due to a decrease in labor and other expenses [163]. - Depreciation and amortization expense decreased by $4.9 million, or 68.6%, to $2.3 million, primarily due to the retirement and sale of several aircraft [162]. - Total maintenance costs decreased by $5.3 million, or 11.2%, to $42.3 million for the three months ended September 30, 2025 compared to the same period in 2024 [164]. - Aircraft rent expense decreased by $3.1 million, or 88.7%, to $0.4 million for the three months ended September 30, 2025 compared to the same period in 2024 [164]. - Depreciation and amortization expense decreased by $15.2 million, or 56.7%, to $11.6 million for the nine months ended September 30, 2025 compared to the same period in 2024 [180]. - Asset impairment charges decreased by $15.5 million, or 67.8%, to $7.3 million, reflecting improved asset management [162]. Cash Flow and Liquidity - For the nine months ended September 30, 2025, the company reported a net cash used in operating activities of $34.6 million, compared to a net cash provided of $42.1 million for the same period in 2024 [217][220][221]. - The company experienced a net cash flow provided by investing activities of $95.5 million for the nine months ended September 30, 2025, primarily from proceeds of $100.5 million from the sale of aircraft and engines [223]. - Net cash used in financing activities was $62.0 million for the nine months ended September 30, 2025, all attributed to payments on long-term debt and finance leases [225]. - As of September 30, 2025, the company had cash and cash equivalents of $38.7 million and $33.8 million in assets held for sale [215]. - The company has $10.7 million of borrowing capacity under the United Revolving Credit Facility as of September 30, 2025 [199]. - The company expects to meet its cash obligations for the next twelve months following the issuance of its Form 10-Q, alleviating substantial doubt regarding its ability to continue as a going concern [211]. Debt and Liabilities - As of September 30, 2025, the company had $95.0 million in secured indebtedness, with $68.0 million classified as current debt [215]. - The company had $3.0 million in restricted cash as of September 30, 2025, required to collateralize outstanding letters of credit [216]. - The company has no fixed-rate debt as of September 30, 2025, with all borrowings based on SOFR [233]. Future Outlook and Events - Mesa's merger with Republic is expected to close on November 25, 2025, with Republic stockholders holding approximately 88% interest in the surviving corporation [202]. - The company faced increased costs due to the transition of operations to United, impacting financial results and cash flows [197]. - The state net operating losses will expire between 2026 and 2042, while federal net operating losses can offset only 80% of taxable income in a given year [186]. - A hypothetical 100 basis point change in market interest rates would have affected interest expense by approximately $1.0 million in the nine months ended September 30, 2025 [232].

Group 1 - Mesa Airlines announced that shareholders overwhelmingly approved the merger proposal with Republic Airways Holdings Inc, confirming the strategic value of the merger [1] - The merger is expected to be completed later this week, pending customary regulatory approvals and other closing conditions [1] - The combined entity will be named Republic Airways Holdings and is expected to trade on NASDAQ under the ticker "RJET" [1] Group 2 - Republic Airways has a history dating back to 1973 with the establishment of Chautauqua Airlines and was formally incorporated as Republic Airways Holdings in 1998 [2] - The company expanded in the 2000s through acquisitions of several regional airlines and assets, but faced financial pressures leading to Chapter 11 bankruptcy protection in 2016 [2] Group 3 - Mesa Airlines' stock has increased by 44% year-to-date, making it the best-performing U.S. airline stock [3]

Core Points - Mesa Air Group, Inc. announced that shareholders approved all proposals at the special meeting, including the merger with Republic Airways Holdings Inc. The merger proposal received approximately 99.25% of votes in favor [1][2] - The merger is expected to enhance the scale and long-term stability of the combined company, with the closing anticipated within the week, pending regulatory approvals [2] - Mesa operates a regional air carrier service to 68 cities across 31 states and Mexico, with a fleet of 60 aircraft and approximately 233 daily departures as of October 31, 2025 [3]

Core Viewpoint Mesa Air Group has announced significant updates regarding its loan agreement and merger with Republic Airways, which are expected to enhance its financial position and operational capabilities. Loan Agreement Update - Mesa Air Group has entered into an Amendment to its Loan and Guarantee Agreement, extending the maturity date from October 30, 2025, to November 28, 2025, with a further right to extend by 30 days [4] - The interest rate under the Loan Agreement has been reduced to zero percent for 90 days from the date of the Amendment [4] - The principal amount of the obligations under the Loan Agreement will be reduced by $12.3 million, subject to full payment on the maturity date [4] - Mesa Airlines has deposited cash and pledged an aircraft engine as collateral for the obligations under the Loan Agreement [2] Merger Update - Mesa and Republic Airways announced a definitive agreement to merge, creating a leading publicly-traded regional airline company [3] - The combined company is expected to have a twelve-month run-rate annual revenue between approximately $1.8 billion to $2.0 billion [5] - Republic generated approximately $169 million in adjusted EBITDA, while Mesa generated $14 million in adjusted EBITDA for the first half of 2025, totaling $183 million [5] - The pro forma cash and debt balances of the combined company post-merger are anticipated to exceed $300 million and approximately $1.1 billion, respectively, with Mesa contributing no debt [5][6] Shareholder Information - Pre-merger Mesa shareholders will own between 6% and 12% of the combined company, depending on the allocation of Escrow Shares and the determination of the Net Debt Amount [7] - The value of the Escrow Shares will be based on the combined company's 20-trading day average share price ending 60 calendar days after the merger closing [7] Financial Performance and NOL - As of June 30, 2025, Mesa had aggregate federal and state net operating losses (NOLs) of approximately $277.6 million and $150.6 million, which will be credited toward the Net Debt Amount calculation at the merger closing [8] - The share price of Mesa common stock at the merger closing will significantly impact the value received for the NOL [9] Company Overview - Mesa Air Group, headquartered in Phoenix, Arizona, operates as a regional air carrier providing scheduled passenger service to 79 cities in 31 states, Cuba, and Mexico [9] - As of September 30, 2025, Mesa operated a fleet of 60 Embraer 175 regional aircraft, with approximately 254 daily departures [9]

Executive Summary & Key Highlights [Third Quarter Fiscal 2025 Performance Summary](index=1&type=section&id=1.1.%20Third%20Quarter%20Fiscal%202025%20Performance%20Summary) Mesa achieved GAAP net income of **$20.9 million** in Q3 FY2025, a significant turnaround from a prior year net loss, with adjusted net loss near breakeven - Mesa's third-quarter results reflect the significant operational and financial restructuring that the company has undergone[4](index=4&type=chunk) Q3 FY2025 Key Financial Performance (YoY) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :-------------------------------- | :--------- | :--------- | :------- | | GAAP Net Income (Loss) | $20.9 million | $(19.9) million | +$40.8 million | | GAAP Diluted EPS | $0.50 | $(0.48) | +$0.98 | | Adjusted Net Loss | $0.6 million | $9.4 million | -$8.8 million | | Adjusted EBITDAR | $6.1 million | $10.6 million | -$4.5 million | [Strategic Operational and Financial Restructuring](index=1&type=section&id=1.2.%20Strategic%20Operational%20and%20Financial%20Restructuring) Mesa streamlined operations by transitioning to a single Embraer 175 fleet and retraining CRJ crews, improving daily block hour utilization for enhanced efficiency - The company now operates a single fleet type of Embraer 175s, simplifying operations, with all CRJ crews trained on E-Jet flying, anticipating stabilized utilization[4](index=4&type=chunk) - Daily block hour utilization increased to **9.8 hours** in Q3, up **15.4%** year-over-year and **5.1%** sequentially, consistent with regional peers[4](index=4&type=chunk)[6](index=6&type=chunk) [Asset Transactions Update](index=1&type=section&id=1.3.%20Asset%20Transactions%20Update) Mesa strengthened its balance sheet and reduced interest expense by selling surplus CRJ assets, using all proceeds to repay U.S. Treasury debt - Strengthening the balance sheet and reducing interest expense through the sale of surplus CRJ assets[5](index=5&type=chunk) - During Q3 FY2025, closed sales for **$17.2 million** gross proceeds (13 spare engines, 6 surplus CRJ-900 airframes), all used to repay U.S. Treasury debt[6](index=6&type=chunk) - Subsequent to Q3 FY2025, closed sales for **$11.7 million** gross proceeds (8 spare engines, 5 surplus CRJ-900 airframes), all used to repay U.S. Treasury debt[6](index=6&type=chunk) [Proposed Merger Update](index=1&type=section&id=1.4.%20Proposed%20Merger%20Update) Mesa's proposed merger with Republic Airways projects **$1.8 billion to $2.0 billion** in annual revenues, supported by a new 10-year United Airlines agreement - Estimated combined company twelve-month run-rate annual revenue in the range of approximately **$1.8 billion to $2.0 billion**[8](index=8&type=chunk) Combined Adjusted EBITDA (First Six Months CY2025) | Entity | Period | Adjusted EBITDA | | :------- | :---------------------- | :---------------- | | Republic | First six months CY2025 | ~$169 million | | Mesa | First six months CY2025 | $14 million | | **Combined** | **First six months CY2025** | **$183 million** | - Post-Merger, **60 E-175 aircraft** will be supported by a new and enhanced **10-year capacity purchase agreement** with United Airlines[9](index=9&type=chunk) Mesa Air Group Financial Results (Q3 FY2025) [Operating Revenues](index=2&type=section&id=2.1.%20Operating%20Revenues) Total operating revenues for Q3 FY2025 decreased by **16.3%** year-over-year, primarily driven by a reduction in contractual aircraft with United Airlines and lower aircraft ownership revenue, despite increased pass-through revenue Operating Revenues (Q3 FY2025 vs Q3 FY2024) | Revenue Type | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :------------------------ | :--------- | :--------- | :----------- | | Total Operating Revenues | $92.8 million | $110.8 million | -16.3% | | Contract Revenue | $69.9 million | $95.6 million | -26.8% | | Pass-through and other revenue | $22.8 million | $15.2 million | +50.3% | - Decreases in contract and total operating revenues were driven by the reduction in contractual aircraft with United Airlines and disposition of certain Embraer 175 aircraft[10](index=10&type=chunk) [Operating Expenses](index=2&type=section&id=2.2.%20Operating%20Expenses) Total operating expenses decreased by **22.4%** in Q3 FY2025, mainly due to lower flight operations expense from fewer contracted aircraft, reduced pilot training costs, and significantly lower depreciation, amortization, and asset impairment Operating Expenses (Q3 FY2025 vs Q3 FY2024) | Expense Type | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :-------------------------- | :--------- | :--------- | :----------- | | Total Operating Expenses | $92.9 million | $119.8 million | -22.4% | | Flight Operations | $36.6 million | $45.5 million | -19.6% | | Depreciation and Amortization | $3.4 million | $9.7 million | -65.3% | | Asset Impairment | $(0.05) million | $7.9 million | -$7.95 million | - The decrease in expenses primarily reflects lower flight operations due to fewer contracted aircraft and reduced pilot training, and lower depreciation/amortization from CRJ aircraft/engine retirements and sales[12](index=12&type=chunk) [Net Income and Adjusted Profitability](index=2&type=section&id=2.3.%20Net%20Income%20and%20Adjusted%20Profitability) Mesa achieved a net income of **$20.9 million** in Q3 FY2025, a significant improvement from a prior year net loss, with a considerably narrowed adjusted net loss, despite declines in Adjusted EBITDA and EBITDAR Net Income and Adjusted Profitability (Q3 FY2025 vs Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change (YoY) | | :-------------------- | :--------- | :--------- | :----------- | | Net Income (Loss) | $20.9 million | $(19.9) million | +$40.8 million | | Diluted EPS | $0.50 | $(0.48) | +$0.98 | | Adjusted Net Loss | $0.6 million | $9.4 million | -$8.8 million | | Adjusted EBITDA | $6.0 million | $8.9 million | -$2.9 million | | Adjusted EBITDAR | $6.1 million | $10.6 million | -$4.5 million | [Consolidated Statements of Operations (Table)](index=5&type=section&id=2.4.%20Consolidated%20Statements%20of%20Operations%20%28Table%29) This section provides the detailed consolidated statements of operations for Mesa Air Group for the three and nine months ended June 30, 2025, and 2024, presenting a comprehensive view of revenues, expenses, and net income or loss Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands) | | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Nine months ended June 30, 2025 | Nine months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Operating revenues: | | | | | | Contract revenue | $69,940 | $95,596 | $219,041 | $310,516 | | Pass-through and other revenue | 22,844 | 15,197 | 71,723 | 50,636 | | **Total operating revenues** | **92,784** | **110,793** | **290,764** | **361,152** | | Operating expenses: | | | | | | Flight operations | 36,551 | 45,455 | 108,021 | 146,602 | | Maintenance | 41,417 | 44,266 | 131,483 | 137,165 | | Aircraft rent | 98 | 1,684 | 3,038 | 4,296 | | General and administrative | 11,585 | 9,715 | 32,588 | 32,857 | | Depreciation and amortization | 3,377 | 9,730 | 17,311 | 32,846 | | Asset impairment | (52) | 7,880 | 111,786 | 50,923 | | Loss on sale of assets | — | — | 54,397 | 150 | | Other operating expenses | (46) | 1,090 | 335 | 5,098 | | **Total operating expenses** | **92,930** | **119,820** | **458,959** | **409,937** | | **Operating income (loss)** | **(146)** | **(9,027)** | **(168,195)** | **(48,785)** | | Other income (expense), net: | | | | | | Interest expense | (3,256) | (9,032) | (15,654) | (30,832) | | Interest income | 74 | 17 | 115 | 45 | | Other income, net | 23,946 | 125 | 21,126 | (234) | | **Total other income (expense), net** | **20,764** | **(11,691)** | **10,034** | **(17,186)** | | **Income (loss) before taxes** | **20,618** | **(20,718)** | **(158,161)** | **(65,971)** | | Income tax expense (benefit) | (238) | (810) | (5,829) | 126 | | **Net income (loss)** | **$ 20,856** | **$ (19,908)** | **$ (152,332)** | **$ (66,097)** | | Net income (loss) per share attributable to common shareholders | | | | | | Basic | $ 0.50 | $ (0.48) | $ (3.68) | $ (1.61) | | Diluted | $ 0.50 | $ (0.48) | $ (3.68) | $ (1.61) | Mesa Air Group Operating Performance (Q3 FY2025) [Key Operating Metrics](index=3&type=section&id=3.1.%20Key%20Operating%20Metrics) Mesa demonstrated improved operational reliability in Q3 FY2025 with a higher controllable completion factor for United flights, while available seat miles and block hours saw modest increases, and departures and passengers decreased year-over-year Operating Highlights (Q3 FY2025 vs Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :-------------------------- | :--------- | :--------- | :------- | | Controllable Completion Factor (United) | 99.99% | 99.94% | +0.05 pts | | Total Completion Factor (United) | 97.75% | 96.86% | +0.89 pts | | Available Seat Miles (thousands) | 996,290 | 962,669 | +3.5% | | Block Hours | 44,100 | 43,813 | +0.7% | | Departures | 22,162 | 24,144 | -8.2% | | Passengers | 1,357,129 | 1,513,581 | -10.3% | [Fleet and Pilot Transition](index=1&type=section&id=3.2.%20Fleet%20and%20Pilot%20Transition) Mesa successfully completed its transition to a single fleet of **60 Embraer 175 jets** for its capacity purchase agreement with United Airlines, including retraining all CRJ crews for E-Jet operations, anticipating simplified operations and stable utilization - The Company operated **60 large (70/76 seats) E-175 jets** under its CPA with United[16](index=16&type=chunk) - Achieved single fleet operation, training **160 pilots** to transition from CRJ fleet to E-175 fleet[6](index=6&type=chunk) Mesa Air Group Financial Position [Balance Sheet and Liquidity](index=3&type=section&id=4.1.%20Balance%20Sheet%20and%20Liquidity) Mesa significantly improved its liquidity and reduced its debt burden, ending Q3 FY2025 with a substantial increase in unrestricted cash and a considerable reduction in total debt, primarily through asset sales and scheduled payments Balance Sheet and Liquidity Highlights (YoY) | Metric | June 30, 2025 | June 30, 2024 (or Sept 30, 2024) | Change (YoY) | | :-------------------------- | :-------------- | :------------------------------- | :----------- | | Unrestricted Cash & Equivalents | $42.5 million | $15.6 million (Sept 30, 2024) | +$26.9 million | | Total Debt | $113.7 million | $366.4 million (June 30, 2024) | -$252.7 million | - During the quarter, the Company paid **$17.9 million** in debt, comprising payments related to CRJ asset sale transactions and scheduled obligations[17](index=17&type=chunk) [Consolidated Balance Sheets (Table)](index=6&type=section&id=4.2.%20Consolidated%20Balance%20Sheets%20%28Table%29) This section presents the detailed consolidated balance sheets for Mesa Air Group as of June 30, 2025, and September 30, 2024, providing a comprehensive overview of the company's assets, liabilities, and stockholders' equity Consolidated Balance Sheets (In thousands) | ASSETS | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :-------------- | :----------------- | | CURRENT ASSETS: | | | | Cash and cash equivalents | $42,472 | $15,621 | | Restricted cash | 3,048 | 3,009 | | Receivables, net | 8,724 | 5,263 | | Expendable parts and supplies, net | 16,172 | 28,272 | | Assets held for sale | 60,311 | 5,741 | | Prepaid expenses and other current assets | 2,714 | 3,371 | | Total current assets | 133,441 | 61,277 | | Property and equipment, net | 31,850 | 426,351 | | Lease and equipment deposits | 637 | 1,289 | | Operating lease right-of-use assets | 7,255 | 7,231 | | Deferred heavy maintenance, net | — | 6,396 | | Assets held for sale | — | 86,605 | | Other assets | 5,466 | 7,709 | | **TOTAL ASSETS** | **$178,649** | **$596,858** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | CURRENT LIABILITIES: | | | | Current portion of long-term debt and finance leases | $84,725 | $50,455 | | Current portion of deferred revenue | 5,532 | 3,932 | | Current maturities of operating leases | 1,693 | 1,681 | | Accounts payable | 50,132 | 72,096 | | Accrued compensation | 9,294 | 12,797 | | Customer deposits | 226 | 1,189 | | Other accrued expenses | 23,015 | 32,308 | | Total current liabilities | 174,617 | 174,458 | | NONCURRENT LIABILITIES: | | | | Long-term debt and finance leases, excluding current portion | 28,245 | 259,816 | | Noncurrent operating lease liabilities | 6,872 | 6,863 | | Deferred credits | — | 3,020 | | Deferred income taxes | 575 | 8,173 | | Deferred revenue, net of current portion | 7,787 | 5,707 | | Other noncurrent liabilities | 1,837 | 28,579 | | Total noncurrent liabilities | 45,316 | 312,158 | | **Total liabilities** | **219,933** | **486,616** | | STOCKHOLDERS' EQUITY: | | | | Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 41,861,544 (2025) | 273,183 | 272,376 | | and 41,331,719 (2024) shares issued and outstanding, 4,899,497 (2025) and 4,899,497 (2024) warrants issued | | | | and outstanding | | | | Accumulated deficit | (314,467) | (162,134) | | **Total stockholders' equity** | **(41,284)** | **110,242** | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$178,649** | **$596,858** | Merger with Republic Airways Holdings Inc. [Merger Status and Approvals](index=2&type=section&id=5.1.%20Merger%20Status%20and%20Approvals) The proposed merger with Republic Airways Holdings Inc. is progressing, with the HSR Act waiting period expired, and Mesa preparing to file a definitive proxy statement/prospectus for stockholder approval, while Republic has already secured necessary stockholder consents - Waiting period under the HSR Act with respect to filings by Mesa and Republic expired on **June 16, 2025**[14](index=14&type=chunk) - Mesa will file a definitive proxy statement/prospectus with the SEC for a stockholder vote after the registration statement is declared effective[14](index=14&type=chunk) - Republic has obtained sufficient consents from its stockholders to approve the Merger[14](index=14&type=chunk) [Combined Company Financial Projections](index=2&type=section&id=5.2.%20Combined%20Company%20Financial%20Projections) Projections for the combined Mesa-Republic entity indicate robust financial performance, with estimated annual revenues between **$1.8 billion and $2.0 billion** and a combined adjusted EBITDA of **$183 million** for the first half of calendar year 2025, with Mesa contributing no debt - The combined company is estimated to have twelve-month run-rate annual revenue in the range of approximately **$1.8 billion to $2.0 billion**[8](index=8&type=chunk) Combined Adjusted EBITDA (First Six Months CY2025) | Entity | Period | Adjusted EBITDA | | :------- | :---------------------- | :---------------- | | Republic | First six months CY2025 | ~$169 million | | Mesa | First six months CY2025 | $14 million | | **Combined** | **First six months CY2025** | **$183 million** | - Pro forma cash and debt balances of the combined company post-Merger closing are anticipated to be in excess of **$300 million** and approximately **$1.1 billion**, respectively, with Mesa contributing no debt[9](index=9&type=chunk) Company Overview [About Mesa Air Group, Inc.](index=3&type=section&id=6.1.%20About%20Mesa%20Air%20Group%2C%20Inc.) Mesa Air Group, Inc. is a regional air carrier based in Phoenix, Arizona, operating a fleet of **60 Embraer 175 aircraft** and providing scheduled passenger service to **79 cities** across **31 states**, Cuba, and Mexico, exclusively as United Express under a capacity purchase agreement with United Airlines - Mesa Air Group, Inc. is a regional air carrier providing scheduled passenger service to **79 cities** in **31 states**, Cuba, and Mexico[20](index=20&type=chunk) - As of **June 30, 2025**, Mesa operated a fleet of **60 Embraer 175 regional aircraft**, with approximately **254 daily departures** and **1,645 employees**[20](index=20&type=chunk) - All flights operate as United Express pursuant to a capacity purchase agreement with United Airlines, Inc[20](index=20&type=chunk) Non-GAAP Financial Measures Reconciliation [Mesa Air Group Reconciliation](index=7&type=section&id=7.1.%20Mesa%20Air%20Group%20Reconciliation) This section provides a detailed reconciliation of Mesa Air Group's GAAP net income (loss) to its adjusted net income (loss), adjusted EBITDA, and adjusted EBITDAR for the three and nine months ended June 30, 2025, and 2024, outlining specific adjustments for non-recurring items - Non-GAAP financial measures are provided to offer useful information regarding underlying business trends and performance, and for period-over-period comparisons, supplementing GAAP financial statements[29](index=29&type=chunk) Mesa Air Group Reconciliation of GAAP vs. Non-GAAP Disclosures (In thousands) | Metric | Q3 FY2025 | Q3 FY2024 | 9M FY2025 | 9M FY2024 | | :-------------------- | :--------- | :--------- | :---------- | :---------- | | GAAP Net Income (Loss) | $20,856 | $(19,908) | $(152,332) | $(66,097) | | Adjustments | $(21,420) | $10,494 | $145,088 | $43,220 | | Adjusted Net Income (Loss) | $(564) | $(9,414) | $(7,244) | $(22,877) | | Adjusted EBITDA | $6,001 | $8,948 | $25,329 | $40,800 | | Adjusted EBITDAR | $6,099 | $10,632 | $28,367 | $45,096 | - Key adjustments for Q3 FY2025 include a **$25.1 million** gain on the write-off of warrant liabilities[33](index=33&type=chunk) - Key adjustments for 9M FY2025 include a **$54.4 million** net loss on the sale of assets and a **$60.7 million** impairment loss related to aircraft write-down[34](index=34&type=chunk) [Republic Airways Holdings Inc. Reconciliation](index=9&type=section&id=7.2.%20Republic%20Airways%20Holdings%20Inc.%20Reconciliation) This section provides the reconciliation of Republic Airways Holdings Inc.'s net income to Adjusted EBITDA for the three and six months ended June 30, 2025, clarifying that Adjusted EBITDA is a non-GAAP measure used for performance evaluation - Adjusted EBITDA is a non-GAAP financial measure that should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP[35](index=35&type=chunk) Republic Airways Holdings Inc. Adjusted EBITDA (in millions) | (in millions) | Three Months Ended March 31, 2025 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------ | :-------------------------------- | :------------------------------- | :----------------------------- | | Net income | 27.1 | 37.4 | 64.5 | | Plus: | | | | | Interest expense | 14.3 | 14.8 | 29.1 | | Investment loss and other, net | 2 | -11.1 | -9.1 | | Income tax expense | 9.5 | 13.3 | 22.8 | | Depreciation and amortization | 30.6 | 30.9 | 61.5 | | **Adjusted EBITDA** | **83.5** | **85.3** | **168.8** | Legal and Regulatory Information [Forward-Looking Statements](index=3&type=section&id=8.1.%20Forward-Looking%20Statements) This section provides a cautionary statement regarding forward-looking information, highlighting that such statements are subject to inherent risks and uncertainties that could cause actual results to differ materially, particularly concerning the proposed merger, and the company disclaims any obligation to update these statements - Forward-looking statements are subject to risks and uncertainties that could cause actual events and results to differ materially, including those related to the proposed merger with Republic[21](index=21&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statement, except as required by applicable laws[21](index=21&type=chunk) [Participants in the Solicitation](index=4&type=section&id=8.2.%20Participants%20in%20the%20Solicitation) Mesa's directors and executive officers may be considered participants in the solicitation of proxies for the proposed merger, with detailed information regarding their direct or indirect interests to be disclosed in the proxy statement filed with the SEC - Mesa and its directors and certain executive officers may be deemed participants in the solicitation of proxies from Mesa's stockholders with respect to the Merger[22](index=22&type=chunk) - Additional information regarding participants' identity and interests will be set forth in the proxy statement and other materials filed with the SEC[22](index=22&type=chunk) [No Offer or Solicitation](index=4&type=section&id=8.3.%20No%20Offer%20or%20Solicitation) This communication serves solely for informational purposes and does not constitute an offer to sell or buy securities, nor a solicitation of any vote or approval, as securities related to the proposed merger cannot be sold until the registration statement filed with the SEC becomes effective - A registration statement relating to these securities has been filed with the SEC but has not yet become effective; securities may not be sold nor offers to buy accepted prior to effectiveness[23](index=23&type=chunk) - This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell or buy any securities or any vote or approval[23](index=23&type=chunk) [Additional Information and Where to Find It](index=4&type=section&id=8.4.%20Additional%20Information%20and%20Where%20to%20Find%20It) Mesa filed a preliminary proxy statement/prospectus on Form S-4/Form S-1 with the SEC on **July 10, 2025**, concerning the proposed business combination, and investors are strongly advised to review these documents, which contain crucial information and are available on the SEC's website and Mesa's investor relations site - Mesa filed a registration statement on Form S-4/Form S-1 containing a preliminary proxy statement/prospectus with the SEC on **July 10, 2025**, regarding the proposed business combination[24](index=24&type=chunk) - Investors and security holders are urged to read the proxy statement/prospectus and other filed documents carefully for important information about the proposed transaction[24](index=24&type=chunk) - Documents are available free of charge on the SEC's website (www.sec.gov) and Mesa's investor relations website (https://investor.mesa-air.com)[24](index=24&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial information, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, reflecting significant asset and equity decreases, Q3 2025 net income, but a substantial 9M 2025 net loss from asset sales and impairments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :-------------------------------- | :-------------------- | :------- | | Total assets | $178,649 | $596,858 | $(418,209) | -70.1% | | Total liabilities | $219,933 | $486,616 | $(266,683) | -54.8% | | Total stockholders' equity | $(41,284) | $110,242 | $(151,526) | -137.4% | | Cash and cash equivalents | $42,472 | $15,621 | $26,851 | 171.9% | | Property and equipment, net | $31,850 | $426,351 | $(394,501) | -92.5% | | Assets held for sale (current) | $60,311 | $5,741 | $54,570 | 950.5% | | Long-term debt and finance leases, excluding current portion | $28,245 | $259,816 | $(231,571) | -89.1% | - Total assets decreased significantly by **70.1%** from **$596.9 million** to **$178.6 million**, primarily due to a **92.5%** reduction in property and equipment, net, and a substantial increase in current assets held for sale[13](index=13&type=chunk) - Stockholders' equity turned negative, decreasing by **137.4%** from **$110.2 million** to **$(41.3) million**, indicating a challenging financial position[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | % Change (3M) | | :-------------------- | :------------------------------- | :------------------------------- | :---------- | :-------------- | | Total operating revenues | $92,784 | $110,793 | $(18,009) | -16.3% | | Total operating expenses | $92,930 | $119,820 | $(26,890) | -22.4% | | Operating loss | $(146) | $(9,027) | $8,881 | -98.4% | | Total other income (expense), net | $20,764 | $(11,691) | $32,455 | 277.6% | | Net income (loss) | $20,856 | $(19,908) | $40,764 | 204.8% | | Basic EPS | $0.50 | $(0.48) | $0.98 | 204.2% | | Metric (in thousands) | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | Change (9M) | % Change (9M) | | :-------------------- | :------------------------------ | :------------------------------ | :---------- | :-------------- | | Total operating revenues | $290,764 | $361,152 | $(70,388) | -19.5% | | Total operating expenses | $458,959 | $409,937 | $49,022 | 12.0% | | Operating loss | $(168,195) | $(48,785) | $(119,410) | 244.8% | | Total other income (expense), net | $10,034 | $(17,186) | $27,220 | 158.4% | | Net income (loss) | $(152,332) | $(66,097) | $(86,235) | 130.5% | | Basic EPS | $(3.68) | $(1.61) | $(2.07) | 128.6% | - For the three months ended June 30, 2025, the company reported a net income of **$20.9 million**, a significant improvement from a net loss of **$19.9 million** in the prior year, driven by a substantial increase in other income (expense), net[15](index=15&type=chunk) - For the nine months ended June 30, 2025, the company experienced a larger net loss of **$152.3 million**, compared to **$66.1 million** in the prior year, primarily due to increased operating expenses, including asset impairment and loss on sale of assets[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) | Metric (in thousands) | June 30, 2025 | September 30, 2024 | | :-------------------- | :------------ | :----------------- | | Common Stock and Additional Paid-In Capital | $273,183 | $272,376 | | Accumulated Deficit | $(314,467) | $(162,134) | | Total Stockholders' Equity | $(41,284) | $110,242 | - Total stockholders' equity decreased from **$110.2 million** at September 30, 2024, to a deficit of **$(41.3) million** at June 30, 2025, primarily due to accumulated net losses[18](index=18&type=chunk) - The accumulated deficit significantly worsened from **$(162.1) million** to **$(314.5) million** over the nine-month period[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net cash (used in) provided by operating activities | $(43,346) | $19,596 | | Net cash provided by investing activities | $193,662 | $112,918 | | Net cash used in financing activities | $(123,426) | $(149,301) | | Net change in cash, cash equivalents and restricted cash | $26,890 | $(16,787) | | Cash, cash equivalents and restricted cash at end of period | $45,520 | $19,285 | - Operating activities used **$43.3 million** in cash for the nine months ended June 30, 2025, a significant decline from **$19.6 million** provided in the prior year, primarily due to a larger net loss[20](index=20&type=chunk)[204](index=204&type=chunk) - Investing activities provided **$193.7 million**, an increase from **$112.9 million** in the prior year, largely driven by **$199.0 million** in proceeds from the sale of aircraft and engines[20](index=20&type=chunk)[207](index=207&type=chunk) - Financing activities used **$123.4 million**, primarily for principal payments on long-term debt and finance leases[20](index=20&type=chunk)[210](index=210&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Operations](index=8&type=section&id=1.%20Organization%20and%20Operations) - Mesa Air Group, Inc. operates a fleet of **60 Embraer 175 (E-175)** regional aircraft, providing scheduled passenger service to **79 cities** in **31 states**, Cuba, and Mexico, primarily under a Capacity Purchase Agreement (CPA) with United Airlines[22](index=22&type=chunk) - On April 4, 2025, Mesa entered into a Merger Agreement with Republic Airways Holdings, Inc., where Republic will merge into Mesa, with Mesa as the surviving corporation, subject to stockholder and regulatory approvals[24](index=24&type=chunk)[29](index=29&type=chunk) - Concurrently, Mesa, Republic, and United entered into a Three Party Agreement, including termination of the existing United CPA (to be replaced by a new long-term CPA), sale/disposal of Mesa's remaining eligible assets, debt extinguishment, a **3%** increase in CPA block hour rates retroactive to January 1, 2025, and transfer of Archer agreements[35](index=35&type=chunk)[39](index=39&type=chunk) - The company faced liquidity concerns due to transition costs, increased pilot wages, and rising interest rates, resulting in a **$152.3 million** net loss for the nine months ended June 30, 2025, including a **$54.4 million** loss on aircraft sales and **$111.8 million** in asset impairment[37](index=37&type=chunk)[38](index=38&type=chunk) - Management implemented several measures to address liquidity concerns, including the merger agreement, CPA amendments (rate increases, performance incentives), waiver of financial covenant defaults, sale of engines for **$16.3 million** to pay down debt, and delaying major maintenance spending[39](index=39&type=chunk)[40](index=40&type=chunk)[46](index=46&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The company operates as a single operating and reportable segment, with the CEO using consolidated financial information to evaluate performance and allocate resources[53](index=53&type=chunk)[145](index=145&type=chunk) - Contract revenue is recognized as flight services are provided under the CPA, based on fixed monthly amounts per aircraft, flights, and block hours, with additional incentives or penalties[55](index=55&type=chunk) - Pass-through revenue includes reimbursements for direct expenses like passenger liability insurance, property taxes, and major maintenance on United-leased aircraft[56](index=56&type=chunk) - Lease revenue associated with the CPA is accounted for as an operating lease, with **$0.2 million** and **$26.1 million** recognized for the three and nine months ended June 30, 2025, respectively[59](index=59&type=chunk) - Heavy maintenance costs for previously owned E-175 fleet were deferred and amortized, but upon sale of **18 E-175** aircraft to United, remaining deferred balances were written off, while other fleets use the direct expense method[67](index=67&type=chunk)[68](index=68&type=chunk) [3. Recent Accounting Pronouncements](index=19&type=section&id=3.%20Recent%20Accounting%20Pronouncements) - The company applied new disclosure requirements from ASU 2023-07 (enhanced segment disclosures) and ASU 2023-08 (additional income tax disclosures) during the nine months ended June 30, 2025[71](index=71&type=chunk)[79](index=79&type=chunk) - The company is evaluating ASU 2024-03, effective in 2026, which requires disaggregation of operating expenses and additional disclosures[71](index=71&type=chunk) [4. Concentrations of Credit Risk](index=19&type=section&id=4.%20Concentrations%20of%20Credit%20Risk) - United Airlines accounted for approximately **98%** of total revenue for the three and nine months ended June 30, 2025, and **96-98%** for the same periods in 2024, indicating a significant concentration of credit risk[75](index=75&type=chunk) - A termination of the United CPA would have a material adverse effect on the company's business, financial condition, results of operations, and cash flows[75](index=75&type=chunk) [5. Assets Held for Sale](index=19&type=section&id=5.%20Assets%20Held%20for%20Sale) - As of June 30, 2025, the company classified **21 airframes**, **34 engines**, and certain spare parts as held for sale, with a net book value of **$60.3 million**, all as current assets[78](index=78&type=chunk) - During the three months ended June 30, 2025, the company completed the sale of **six CRJ-900** airframes, **13 GE Model CF34-8C** engines, and certain spare parts[77](index=77&type=chunk) [6. Balance Sheet Information](index=21&type=section&id=6.%20Balance%20Sheet%20Information) | Item (in thousands) | June 30, 2025 | September 30, 2024 | | :------------------ | :------------ | :----------------- | | Expendable parts and supplies, net | $16,172 | $28,272 | | Property and equipment, net | $31,850 | $426,351 | | Other assets | $5,466 | $7,709 | | Other accrued expenses | $23,015 | $32,308 | | Other noncurrent liabilities | $1,837 | $28,579 | - Property and equipment, net, decreased significantly from **$426.4 million** to **$31.9 million**, reflecting asset sales and reclassifications to held for sale[80](index=80&type=chunk) - Other noncurrent liabilities decreased substantially from **$28.6 million** to **$1.8 million**, primarily due to a write-off of warrant liabilities[80](index=80&type=chunk) - Depreciation of property and equipment decreased by **65.3%** to **$3.4 million** for the three months ended June 30, 2025, and by **47.3%** to **$17.3 million** for the nine months ended June 30, 2025, due to aircraft sales or reclassification as non-depreciable assets held for sale[86](index=86&type=chunk)[157](index=157&type=chunk)[172](index=172&type=chunk) [7. Fair Value Measurements](index=22&type=section&id=7.%20Fair%20Value%20Measurements) - The estimated fair value of total long-term debt and finance leases (including current maturities) was **$110.4 million** as of June 30, 2025, compared to a carrying value of **$113.7 million**[89](index=89&type=chunk) - The fair value of debt is determined using the discounted cash flow method and is classified as Level 3 due to unobservable inputs[89](index=89&type=chunk)[90](index=90&type=chunk) [8. Long-Term Debt, Finance Leases, and Other Borrowings](index=23&type=section&id=8.%20Long-Term%20Debt%2C%20Finance%20Leases%2C%20and%20Other%20Borrowings) | Debt Type (in thousands) | June 30, 2025 | September 30, 2024 | | :----------------------- | :------------ | :----------------- | | Gross long-term debt, including current maturities | $113,744 | $315,210 | | Net long-term debt, including current maturities | $112,970 | $310,271 | | Current portion, net | $(84,725) | $(50,455) | | Net long-term debt | $28,245 | $259,816 | - Gross long-term debt, including current maturities, decreased significantly from **$315.2 million** to **$113.7 million** between September 30, 2024, and June 30, 2025[91](index=91&type=chunk) - Principal maturities of long-term debt for the next five years include **$86.5 million** in 2026, **$6.2 million** in 2027, **$4.8 million** in 2028, and **$16.2 million** in 2029[91](index=91&type=chunk) - The company has no obligations under the Enhanced Equipment Trust Certificate (EETC) note as of June 30, 2025, as United assumed the remaining balance of **$73.4 million**[92](index=92&type=chunk) - The United Revolving Credit Facility was amended to increase revolving commitments to **$50.7 million** and includes a deemed prepayment of **$15 million** with potential forgiveness upon achieving certain block hours and maintaining a high completion factor[95](index=95&type=chunk)[96](index=96&type=chunk) - The Treasury Loan, with an outstanding balance of **$80.7 million** as of June 30, 2025, matures in October 2025 and requires compliance with a minimum collateral coverage ratio (CCR), which was lowered to **0.91 to 1.0** effective February 28, 2025[97](index=97&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) [9. Earnings/(Loss) Per Share](index=27&type=section&id=9.%20Earnings%2F%28Loss%29%20Per%20Share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income/(loss) | $20,856 | $(19,908) | $(152,332) | $(66,097) | | Basic EPS | $0.50 | $(0.48) | $(3.68) | $(1.61) | | Diluted EPS | $0.50 | $(0.48) | $(3.68) | $(1.61) | - Basic and diluted EPS for the three months ended June 30, 2025, were **$0.50**, a positive shift from **$(0.48)** in the prior year[104](index=104&type=chunk) - For the nine months ended June 30, 2025, basic and diluted EPS were **$(3.68)**, worsening from **$(1.61)** in the prior year[104](index=104&type=chunk) - Approximately **1.0 million** unvested restricted shares and **4.9 million** warrants were excluded from diluted EPS calculations in loss periods due to their anti-dilutive effect[105](index=105&type=chunk) [10. Common Stock](index=28&type=section&id=10.%20Common%20Stock) - As of June 30, 2025, **4,899,497** warrants to purchase common stock at an exercise price of **$3.98** per share were issued and outstanding to the U.S. Treasury[108](index=108&type=chunk) - The company has not historically paid dividends, and the Treasury Loan contains restrictions limiting or prohibiting dividend payments[109](index=109&type=chunk) [11. Income Taxes](index=28&type=section&id=11.%20Income%20Taxes) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Income tax (benefit) expense | $(238) | $(810) | $(5,829) | $126 | | Effective Tax Rate (ETR) | -1.2% | 3.9% | 3.7% | -0.2% | - The company maintains a valuation allowance on a portion of its federal and state net operating losses (NOLs)[111](index=111&type=chunk)[162](index=162&type=chunk)[177](index=177&type=chunk) - As of June 30, 2025, aggregate federal NOL carryforwards were approximately **$277.6 million** (expiring 2030-2038) and state NOL carryforwards were **$150.6 million** (expiring 2024-2043)[112](index=112&type=chunk)[163](index=163&type=chunk)[178](index=178&type=chunk) [12. Share-Based Compensation](index=28&type=section&id=12.%20Share-Based%20Compensation) | RSU Activity (Nine Months Ended June 30, 2025) | Number of Shares | Weighted Average Grant Date Fair Value | | :--------------------------------------------- | :--------------- | :------------------------------------- | | Unvested at September 30, 2024 | 975,415 | $1.83 | | Granted | 550,247 | $1.04 | | Vested | (532,397) | $1.92 | | Forfeited | (29,575) | $1.88 | | Unvested at June 30, 2025 | 963,690 | $1.32 | - Total unrecognized compensation cost related to unvested share-based awards was **$1.2 million** as of June 30, 2025, expected to be recognized over a weighted-average period of **1.6 years**[115](index=115&type=chunk) - Share-based compensation expense was **$0.3 million** for the three months ended June 30, 2025, and **$0.8 million** for the nine months ended June 30, 2025[116](index=116&type=chunk) [13. Leases](index=29&type=section&id=13.%20Leases) | Lease Cost Component (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Operating lease costs | $639 | $810 | $2,000 | $3,233 | | Variable and short-term lease costs | $1,261 | $2,581 | $5,907 | $5,543 | | Interest expense on finance lease liabilities | $- | $746 | $48 | $3,291 | | Amortization expense of finance lease assets | $- | $365 | $54 | $5,001 | | Total lease costs | $1,900 | $4,502 | $8,009 | $17,068 | - Total lease costs decreased by **57.8%** to **$1.9 million** for the three months ended June 30, 2025, and by **53.0%** to **$8.0 million** for the nine months ended June 30, 2025, primarily due to reduced finance lease expenses[119](index=119&type=chunk) - As of June 30, 2025, operating leases had a remaining weighted average lease term of **5.8 years** and were measured using a weighted average discount rate of **5.4%**[119](index=119&type=chunk) [14. Commitments and Contingencies](index=29&type=section&id=14.%20Commitments%20and%20Contingencies) - The company is subject to routine legal actions, but management believes the outcomes are not likely to have a material adverse effect on financial position, liquidity, or results of operations[120](index=120&type=chunk)[226](index=226&type=chunk) - In February 2021, Mesa entered into a forward purchase contract with Archer for eVTOL aircraft with an aggregate base commitment of **$200.0 million**, which the company agreed to transfer or have United assume during Q3 2025, leading to a write-off of the associated liability[121](index=121&type=chunk) - In July 2021, Mesa entered into a forward purchase contract with Heart for fully electric aircraft, with a maximum aggregate base commitment of **$1,200.0 million**, subject to future terms and conditions[122](index=122&type=chunk) [15. Subsequent Events](index=30&type=section&id=15.%20Subsequent%20Events) - Subsequent to June 30, 2025, the company sold **five CRJ-900** airframes and **eight GE Model CF34-8C** engines for **$11.7 million**, with proceeds used to pay down the UST Loan[124](index=124&type=chunk) - On July 4, 2025, the 'One Big Beautiful Bill Act' (OBBBA) was signed into law, which includes permanent extension of certain Tax Cuts and Jobs Act provisions and modifications to international tax framework, with the company assessing its impact[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, detailing revenue and expense trends, liquidity, capital resources, and non-GAAP measures, highlighting strategic changes and asset sales impact [Overview](index=31&type=section&id=Overview) - Mesa Airlines operates **60 E-175** regional aircraft under a Capacity Purchase Agreement (CPA) with United, which provides guaranteed monthly revenue and shields the company from fuel price and passenger traffic volatility[127](index=127&type=chunk)[128](index=128&type=chunk) - All consolidated contract revenues for the three and nine months ended June 30, 2025, were derived from the United CPA, aircraft leases to a third party, and Mesa Pilot Development (MPD)[127](index=127&type=chunk) [Components of Results of Operations](index=31&type=section&id=Components%20of%20Results%20of%20Operations) - Operating revenues consist of contract revenue (fixed monthly amounts, flight/block hour fees, rental revenue) and pass-through and other revenue (reimbursements for insurance, property taxes, landing fees, etc.)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Operating expenses include flight operations (pilot wages, training), maintenance (engine overhauls, airframe, pass-through costs), aircraft rent, general and administrative, depreciation and amortization, asset impairment, and other operating expenses[133](index=133&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [Segment Reporting](index=33&type=section&id=Segment%20Reporting) - The company operates as a single operating and reportable segment, as the Chief Operating Decision Maker (CODM) evaluates performance and allocates resources on a consolidated basis[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=35&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) | Metric (in thousands) | 3M Ended June 30, 2025 | 3M Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------- | :--------------------- | :----- | :------- | | Total operating revenues | $92,784 | $110,793 | $(18,009) | -16.3% | | Contract revenue | $69,940 | $95,596 | $(25,656) | -26.8% | | Pass-through and other revenue | $22,844 | $15,197 | $7,647 | 50.3% | | Total operating expenses | $92,930 | $119,820 | $(26,890) | -22.4% | | Flight operations | $36,551 | $45,455 | $(8,904) | -19.6% | | Maintenance | $41,417 | $44,266 | $(2,849) | -6.4% | | Aircraft rent | $98 | $1,684 | $(1,586) | -94.2% | | Depreciation and amortization | $3,377 | $9,730 | $(6,353) | -65.3% | | Asset impairment | $(52) | $7,880 | $(7,932) | -100.7% | | Operating loss | $(146) | $(9,027) | $8,881 | -98.4% | | Net income (loss) | $20,856 | $(19,908) | $40,764 | 204.8% | - Net income improved significantly to **$20.9 million** from a **$19.9 million** net loss, primarily due to a **$32.5 million** increase in other income (expense), net, driven by the write-off of warrant liabilities and lower interest expense[146](index=146&type=chunk)[160](index=160&type=chunk) - Total operating revenues decreased by **16.3%** to **$92.8 million**, mainly due to a **26.8%** decrease in contract revenue from fewer aircraft under contract, partially offset by a **50.3%** increase in pass-through and other revenue[152](index=152&type=chunk) - Total operating expenses decreased by **22.4%** to **$92.9 million**, driven by lower flight operations (decreased pilot training and wages), a **94.2%** reduction in aircraft rent, and a **65.3%** decrease in depreciation and amortization[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024](index=37&type=section&id=Nine%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20Nine%20Months%20Ended%20June%2030%2C%202024) | Metric (in thousands) | 9M Ended June 30, 2025 | 9M Ended June 30, 2024 | Change | % Change | | :-------------------- | :--------------------- | :--------------------- | :----- | :------- | | Total operating revenues | $290,764 | $361,152 | $(70,388) | -19.5% | | Contract revenue | $219,041 | $310,516 | $(91,475) | -29.5% | | Pass-through and other revenue | $71,723 | $50,636 | $21,087 | 41.6% | | Total operating expenses | $458,959 | $409,937 | $49,022 | 12.0% | | Flight operations | $108,021 | $146,602 | $(38,581) | -26.3% | | Maintenance | $131,483 | $137,165 | $(5,682) | -4.1% | | Aircraft rent | $3,038 | $4,296 | $(1,258) | -29.3% | | Depreciation and amortization | $17,311 | $32,846 | $(15,535) | -47.3% | | Asset impairment | $111,786 | $50,923 | $60,863 | 119.5% | | Loss on sale of assets | $54,397 | $150 | $54,247 | 36164.7% |\ | Operating loss | $(168,195) | $(48,785) | $(119,410) | 244.8% | | Net loss | $(152,332) | $(66,097) | $(86,235) | 130.5% | - Net loss worsened by **130.5%** to **$152.3 million**, primarily due to a **244.8%** increase in operating loss, driven by significant asset impairment (**$111.8 million**) and loss on sale of assets (**$54.4 million**)[164](index=164&type=chunk)[165](index=165&type=chunk)[173](index=173&type=chunk) - Total operating revenues decreased by **19.5%** to **$290.8 million**, mainly due to a **29.5%** decrease in contract revenue from reduced block hours and fewer aircraft under contract, partially offset by a **41.6%** increase in pass-through and other revenue[166](index=166&type=chunk)[167](index=167&type=chunk) - Total operating expenses increased by **12.0%** to **$459.0 million**, despite decreases in flight operations (**26.3%**), maintenance (**4.1%**), and depreciation and amortization (**47.3%**), due to the large asset impairment and loss on sale of assets[168](index=168&type=chunk)[169](index=169&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Cautionary Statement Regarding Non-GAAP Measures](index=40&type=section&id=Cautionary%20Statement%20Regarding%20Non-GAAP%20Measures) - The company presents Adjusted EBITDA and Adjusted EBITDAR as non-GAAP measures, which are used by management, investors, and analysts for industry comparisons[179](index=179&type=chunk) - Adjusted EBITDA is defined as net income or loss before interest, income taxes, and depreciation and amortization, adjusted for gains/losses on investments, lease termination costs, impairment charges, and gains/losses on debt extinguishment[180](index=180&type=chunk) - Adjusted EBITDAR further adjusts Adjusted EBITDA by excluding aircraft rent[181](index=181&type=chunk) - These non-GAAP measures have limitations, as they do not reflect cash expenditures for capital, working capital, debt service, or the need for asset replacement, and may not be comparable to similarly titled measures used by other companies[182](index=182&type=chunk)[183](index=183&type=chunk) [Adjusted EBITDA and Adjusted EBITDAR](index=42&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDAR) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income/(loss) | $20,856 | $(19,908) | $(152,332) | $(66,097) | | Adjusted EBITDA | $6,001 | $8,948 | $25,329 | $40,800 | | Adjusted EBITDAR | $6,099 | $10,632 | $28,367 | $45,096 | - Adjusted EBITDA decreased by **32.9%** to **$6.0 million** for the three months ended June 30, 2025, and by **37.9%** to **$25.3 million** for the nine months ended June 30, 2025[184](index=184&type=chunk) - Adjusted EBITDAR decreased by **42.6%** to **$6.1 million** for the three months ended June 30, 2025, and by **37.1%** to **$28.4 million** for the nine months ended June 30, 2025[184](index=184&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) [Going Concern](index=43&type=section&id=Going%20Concern) - The company's financial results for the nine months ended June 30, 2025, including a **$152.3 million** net loss, raised concerns about its ability to fund operations and meet debt obligations over the next twelve months[190](index=190&type=chunk)[191](index=191&type=chunk) - Management implemented several material changes, including the Merger Agreement and Three Party Agreement with United and Republic, which involve a new CPA, asset disposals, debt extinguishment, and a **3%** increase in CPA block hour rates[192](index=192&type=chunk) - Other measures include waivers for financial covenant defaults, sale of engines for **$16.3 million** to reduce UST Loan, and delaying major maintenance spending[192](index=192&type=chunk) - The company believes these plans have alleviated financial concerns and will enable it to meet cash obligations for the next twelve months, though forecasts involve significant judgment and estimates[193](index=193&type=chunk) [Sources and Uses of Cash](index=44&type=section&id=Sources%20and%20Uses%20of%20Cash) - Primary cash requirements include operating expenses, working capital, capital expenditures, aircraft pre-delivery payments, maintenance, aircraft rent, and debt service[195](index=195&type=chunk) - Principal sources of liquidity are cash on hand, cash generated from operations, and external borrowings[195](index=195&type=chunk) - As of June 30, 2025, the company had **$42.5 million** in cash and cash equivalents and **$60.3 million** in assets held for sale[199](index=199&type=chunk) [Restricted Cash](index=44&type=section&id=Restricted%20Cash) - As of June 30, 2025, the company had **$3.0 million** in restricted cash, collateralizing outstanding letters of credit for airport authorities, insurance, and other business needs[200](index=200&type=chunk)[201](index=201&type=chunk) [Cash Flows](index=45&type=section&id=Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Net cash (used in) provided by operating activities | $(43,346) | $19,596 | | Net cash provided by investing activities | $193,662 | $112,918 | | Net cash used in financing activities | $(123,426) | $(149,301) | | Net change in cash, cash equivalents and restricted cash | $26,890 | $(16,787) | - Net cash used in operating activities was **$43.3 million** for the nine months ended June 30, 2025, compared to **$19.6 million** provided in the prior year, primarily due to a net loss of **$152.3 million**[204](index=204&type=chunk) - Net cash provided by investing activities increased to **$193.7 million**, mainly from **$199.0 million** in proceeds from the sale of aircraft and engines[207](index=207&type=chunk) - Net cash used in financing activities was **$123.4 million**, primarily for principal payments on long-term debt and finance leases[210](index=210&type=chunk) [Critical Accounting Estimates](index=47&type=section&id=Critical%20Accounting%20Estimates) - There have been no material changes to the critical accounting estimates previously disclosed in the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[213](index=213&type=chunk) [Recently Issued Accounting Pronouncements](index=47&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) - A description of recently issued accounting pronouncements is disclosed in Note 3 to the unaudited condensed consolidated financial statements[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Outlines exposure to market risks, primarily interest rate risk on variable-rate debt and minimal foreign currency risk, with fuel price risk largely mitigated by capacity purchase agreements [Interest Rate Risk](index=47&type=section&id=Interest%20Rate%20Risk) - The company is exposed to interest rate risk on its variable-rate long-term debt, which is based on SOFR[216](index=216&type=chunk) - As of June 30, 2025, the company had **$113.7 million** of variable-rate debt, and a hypothetical **100 basis point** change in market interest rates would affect interest expense by approximately **$1.1 million** for the nine months ended June 30, 2025[217](index=217&type=chunk) - The company transitioned from LIBOR to SOFR for its debt arrangements after June 30, 2023, and does not use derivative instruments to hedge interest rate risk[216](index=216&type=chunk)[218](index=218&type=chunk) [Foreign Currency Risk](index=48&type=section&id=Foreign%20Currency%20Risk) - The company has de minimis foreign currency risks related to station operating expenses denominated in currencies other than the U.S. dollar, primarily the Canadian dollar[219](index=219&type=chunk) - Foreign currency transaction gains and losses have not been material, and the company does not have a formal hedging program[219](index=219&type=chunk) [Fuel Price Risk](index=48&type=section&id=Fuel%20Price%20Risk) - The company's capacity purchase agreements largely shelter it from volatility related to fuel prices, as fuel is directly paid and supplied by its major partners[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Details management's evaluation of disclosure controls and internal control over financial reporting, concluding effectiveness with no material changes, while acknowledging inherent limitations [Evaluation of Disclosure Controls and Procedures](index=48&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[221](index=221&type=chunk) [Changes in Internal Control Over Financial Reporting](index=48&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[223](index=223&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=48&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) - The effectiveness of any internal control system is subject to inherent limitations, including judgment in design and operation, and the inability to eliminate misconduct or unintentional error completely[224](index=224&type=chunk) [PART II – OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section addresses legal proceedings, risk factors, equity sales, defaults, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal actions, but management believes outcomes will not materially adversely affect financial position, liquidity, or operations - The company is subject to routine legal actions, but management believes the ultimate outcomes are not likely to have a material adverse effect on its financial position, liquidity, or results of operations[226](index=226&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Refers to previously filed documents for comprehensive risk factors, confirming no material changes to those disclosed in the 2024 Form 10-K and March 2025 Form 10-Q - Readers are referred to 'Item 1A. Risk Factors' in the Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and the Quarterly Report on Form 10-Q for the three months ended March 31, 2025, for important risk factors[227](index=227&type=chunk) - There have been no material changes to the risk factors previously disclosed in the 2024 Form 10-K and March 2025 10-Q[227](index=227&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[228](index=228&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities occurred during the period[229](index=229&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[230](index=230&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 2025 - No directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[231](index=231&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Provides a list of exhibits filed with the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The exhibit index includes certifications from the Principal Executive Officer and Principal Financial Officer, Inline XBRL documents, and the Cover Page Interactive Data File[233](index=233&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section contains the official signatures certifying the accuracy and completeness of the report - The report was duly signed on behalf of Mesa Air Group, Inc. by Michael J. Lotz, Chief Financial Officer, on August 13, 2025[236](index=236&type=chunk)[238](index=238&type=chunk)

Core Viewpoint - Mesa Air Group reported significant operational and financial restructuring in Q3 fiscal 2025, leading to improved performance and optimism regarding the proposed merger with Republic Airways Holdings Inc. Financial Performance - Total operating revenues for Q3 2025 were $92.8 million, a decrease of $18.0 million or 16.3% compared to $110.8 million in Q3 2024 [10] - GAAP net income was $20.9 million, or $0.50 per diluted share, compared to a net loss of $19.9 million, or $(0.48) per diluted share, in Q3 2024 [13] - Adjusted net loss was $0.6 million, or $(0.01) per diluted share, versus an adjusted net loss of $9.4 million, or $(0.23) per diluted share, in Q3 2024 [13] - Adjusted EBITDA for Q3 2025 was $6.0 million, down from $8.9 million in Q3 2024 [14] Operational Highlights - Daily block hour utilization increased to 9.8 hours, up 15.4% year-over-year and 5.1% sequentially [4] - The company achieved a controllable completion factor of 99.99% for United during Q3 2025, compared to 99.94% in Q3 2024 [15] - Mesa operated 60 E-175 jets under its capacity purchase agreement with United Airlines [15] Merger Update - The combined company post-merger is estimated to have a twelve-month run-rate annual revenue between $1.8 billion and $2.0 billion [6] - Republic generated approximately $169 million in adjusted EBITDA in the first half of 2025, while Mesa generated $14 million, totaling $183 million [6] - The pro forma cash and debt balances of the combined company post-merger are expected to exceed $300 million and approximately $1.1 billion, respectively [9] Asset Transactions - Mesa closed on sales of surplus CRJ assets for gross proceeds of $17.2 million, which were used to repay U.S. Treasury debt [7] - Subsequent to the June 2025 quarter end, Mesa entered into purchase agreements for additional assets and closed on sales of 8 spare engines and 5 surplus CRJ-900 airframes for gross proceeds of $11.7 million [7] Balance Sheet and Liquidity - As of June 30, 2025, Mesa had $42.5 million in unrestricted cash and cash equivalents and $113.7 million in total debt, down from $366.4 million a year earlier [16] - The company paid $17.9 million in debt during the quarter, primarily related to CRJ asset sale transactions [16]

Company Overview - Mesa Air Group, Inc. is headquartered in Phoenix, Arizona and operates as a regional air carrier providing scheduled passenger service to 82 cities across 32 states, the District of Columbia, Cuba, and Mexico [3] - As of March 31, 2025, Mesa operated a fleet of 60 aircraft with approximately 238 daily departures and employed around 1,650 individuals [3] - All flights are operated as United Express under a capacity purchase agreement with United Airlines [3] Merger Announcement - Mesa Air Group filed a registration statement on Form S-4 and S-1 with the U.S. Securities and Exchange Commission on July 10, 2025, regarding a proposed merger with Republic Airways Holdings Inc. [1] - The registration statement includes a proxy statement and preliminary prospectus, which will be mailed to Mesa stockholders once declared effective by the SEC [1][7] - The registration statement has not yet become effective, and the information contained is subject to change [2][6]

Core Viewpoint - Lazydays Holdings, Inc. has successfully completed the asset sale of its Mesa, Arizona location to General R.V. Center, Inc., with plans to finalize two additional divestitures in Longmont, Colorado and Fort Pierce, Florida shortly [1][2]. Group 1: Company Overview - Lazydays has been a significant player in the RV industry since 1976, known for exceptional RV sales, service, and ownership experiences [3]. - The company offers a wide selection of RV brands, state-of-the-art service facilities, and a comprehensive range of accessories, positioning itself as a go-to destination for RV enthusiasts [4]. Group 2: General RV Overview - General RV, founded in 1962, is the nation's premier RV dealer, operating over 20 full-service dealerships across multiple states, including its first location in Arizona [5]. - The company has nearly doubled its number of Supercenters nationwide in the past three years, providing a vast selection of RVs and services [2].