PHOENIX, June 05, 2024 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) ("Mesa" or the "Company") today provided additional detail around its holdings in XTI Aerospace, Inc. ("XTI Aerospace"), which is developing the TriFan 600, a unique, fixed-wing vertical lift crossover airplane (VLCA) that can take off and land like a helicopter and is configurable to transport up to six passengers. XTI Aerospace began publicly trading on the Nasdaq (symbol: XTIA) on March 13, 2024, following the closing of the m ...

Core Points - Mesa Air Group has regained compliance with Nasdaq's minimum bid price requirement after maintaining a closing bid price of $1.00 or more for 10 consecutive business days [1][3] - The notification from Nasdaq confirms that Mesa's common stock met the minimum bid price requirement after previously being notified of non-compliance on November 3, 2023 [2][3] Company Overview - Mesa Air Group, Inc. is headquartered in Phoenix, Arizona, and operates as a regional air carrier under the brand Mesa Airlines, providing scheduled passenger service to 79 cities across 36 states, the District of Columbia, Canada, Cuba, and Mexico [4] - As of March 31, 2024, Mesa operated a fleet of 80 aircraft with approximately 263 daily departures and employed around 2,110 staff [4] - The company operates all flights as United Express under a capacity purchase agreement with United Airlines, Inc. [4]

Approximately 120 pilots are currently enrolled in program PHOENIX, May 20, 2024 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) ("Mesa" or the "Company") today reported first quarter fiscal 2024 financial and operating results. First Quarter Fiscal 2024 Update: Developments Subsequent to Quarter End: Received 283,734 common shares for vested warrants in XTI Aerospace, Inc. Surplus CRJ Asset Sale Updates, Subsequent to Quarter End: Jonathan Ornstein, Chairman and CEO, said, "While it has been a long ...

When travelers and investors think about the airline industry, their attention remains captivated by big names like United Airlines (NASDAQ:UAL) or Delta (NYSE:DAL). After all, these airlines operate the most exciting routes and aircraft, with flashy first-class amenities and branded credit cards. Moreover, these major airline companies provide some of the highest profile and potentially profitable investment opportunities on the stock market. However, there’s a subdivision of the industry that savvy aviati ...

Fleet and Operations - As of September 30, 2023, the company operated a fleet of 120 aircraft, with approximately 73% of revenues earned under the United CPA[16] - As of September 30, 2023, the company operated a total of 120 aircraft, including 60 E-175 and 54 CRJ-900 regional jets[34] - Under the United Capacity Purchase Agreement (CPA), the company has the ability to operate up to 80 aircraft, with 54 E-175 and 26 CRJ-900 aircraft currently in operation[44] - The company operates four Boeing 737 aircraft under the DHL Flight Services Agreement (FSA), receiving a fee per block hour with a minimum block hour guarantee[52] Financial Performance - For the fiscal year ended September 30, 2023, the company reported a net loss of $120.1 million, including a non-cash impairment charge of $54.3 million[22] - The company reported a total of 4,235,413 available seat miles (ASMs) for the fiscal year ended September 30, 2023, generating contract revenue of $421.298 million, with a revenue per ASM of 9.95 cents[40] - The company has a total of 421,298 contract revenue recognized for the fiscal year ended September 30, 2023, compared to 478,482 in the previous year, indicating a decrease in revenue[40] Revenue Generation and Agreements - The company expects to generate approximately $63.5 million in incremental revenue over the next twelve months from increased CPA rates retroactive to October 1, 2023[26] - The company has a revenue-guarantee arrangement with major partners, which provides a fixed minimum monthly amount per aircraft, helping to mitigate financial performance volatility[39] - The company’s CPA with United includes revenue-guarantee provisions, although the renewal and continued profitability of this partnership are not guaranteed[61] Debt and Financial Obligations - As of September 30, 2023, the company has $163.6 million of principal maturity payments on long-term debt due within the next twelve months[28] - The company has established a new line of credit with United totaling $25.5 million, with potential forgiveness of $15 million based on performance metrics[25] - The company holds $234.5 million of fixed rate debt, where a hypothetical 100 basis point change in market interest rates would not materially affect interest expense or the fair value of these debt instruments[413] - The company has $303.8 million of variable rate debt, with a hypothetical 100 basis point change in market interest rates potentially increasing interest expense by approximately $1.1 million in the fiscal year ended September 30, 2022[412] Asset Management - The company generated $21.0 million in gross proceeds from the sale of seven CRJ-900 aircraft, with net proceeds of approximately $1.5 million after debt reduction[25] - The company closed the sale of four CRJ-900 aircraft to a third party for gross proceeds of $12.0 million, with net proceeds of $6.5 million after debt reduction[25] - The company has entered into agreements to sell 12 surplus aircraft engines for gross proceeds of $56.0 million, expected to close by the end of March 2024[26] - The company has 15 CRJ-900 aircraft classified as assets held for sale as of September 30, 2023[34] Employee and Labor Relations - As of September 30, 2023, the company employed approximately 2,303 employees, including 807 pilots, 647 flight attendants, and 483 maintenance employees[65] - Approximately 63.1% of the company's employees are represented by labor unions under collective-bargaining agreements[69] - The company has never been subject to a labor strike or action that materially impacted operations, indicating stable labor relations[65] Cost Management - The company has implemented measures to ensure it can meet cash obligations, including selling surplus assets and deferring major spending on maintenance[27] - The company has established a low-cost structure as a regional airline, focusing on disciplined cost control and responsible outsourcing[30] Regulatory Compliance - The company is currently in compliance with federal regulations regarding foreign ownership, requiring at least 75% of voting stock to be owned by U.S. citizens[77] - The FAA requires commercial airlines to hold an FAA air carrier certificate, which the company currently possesses, ensuring compliance with safety regulations[81] - The company is subject to consumer protection regulations enforced by the DOT, which may impact operational practices and customer service commitments[83] - The company is subject to FAA regulations requiring pilots to have an Airline Transport Pilot license and undergo periodic training and certification[66] Legal and Environmental Matters - The company is involved in routine legal actions, with management believing that these matters are unlikely to materially affect financial position or results of operations[88] - As of September 30, 2023, the company is not subject to any environmental cleanup orders or actions imposed by regulatory authorities[85] Competition - The company faces competition from various U.S. regional airlines, including Air Wisconsin, Commuteair, Endeavor, Envoy, PSA, and Horizon Air[58] Strategic Agreements - The company entered into an amendment to the American CPA, which provided for the termination and wind-down of the agreement by April 3, 2023, transitioning aircraft to the United CPA[41] - The company has committed to not enter into new regional air carrier service agreements, excluding the existing agreement with DHL, until certain performance milestones are met[49] Miscellaneous - The company has a corporate headquarters in Phoenix, Arizona, with a leased area of 33,770 square feet, and several other leased facilities across different states[75] - The company operates under various bilateral air transport agreements, including an "open skies" agreement with Mexico, which could be affected by changes in aviation policies[80] - The company has minimal foreign currency risks related to operating expenses in currencies other than the U.S. dollar, primarily the Canadian dollar, with no material impact on financial results from foreign currency transactions[414] - The company is largely sheltered from fuel price volatility due to its CPA and FSA agreements, which are managed by major partners[415]

Financial Performance - Mesa Airlines reported an operating loss of $40.2 million for the three months ended June 30, 2023, compared to an operating income of $0.2 million for the same period in 2022[156]. - Total operating revenue decreased by $19.7 million, or 14.7%, to $114.7 million for the three months ended June 30, 2023, compared to $134.4 million in 2022[162]. - Total operating revenue decreased by $21.7 million, or 5.3%, to $383.7 million for the nine months ended June 30, 2023, compared to the same period in 2022[179]. - The company reported a net loss of $91.8 million for the nine months ended June 30, 2023, compared to a net loss of $67.0 million for the same period in 2022[176]. Revenue Breakdown - Contract revenue decreased by $24.5 million, or 20.6%, to $94.4 million, primarily due to reduced block hours flown and fewer aircraft under contract[162]. - Contract revenue decreased by $41.2 million, or 11.2%, to $326.6 million due to reduced block hours flown and fewer aircraft under contract[179]. - Revenue passenger miles (RPMs) decreased by 37.8% to 844,291 thousand for the three months ended June 30, 2023, compared to 1,358,298 thousand in 2022[162]. - Pass-through and other revenue increased by $4.8 million, or 31.2%, to $20.3 million, driven by increased pass-through maintenance related to the E-175 fleet[162]. Operating Expenses - Total operating expenses increased by $20.7 million, or 15.5%, to $154.9 million for the three months ended June 30, 2023, compared to the same period in 2022[163]. - Flight operations expense rose by $8.3 million, or 19.2%, to $51.6 million, primarily due to the implementation of a new pilot pay scale[163]. - Flight operations expense increased by $31.4 million, or 23.6%, to $164.7 million for the nine months ended June 30, 2023, driven by the new pilot pay scale and increased training costs[180]. - General and administrative expenses increased by $7.3 million, or 23.2%, to $38.9 million for the nine months ended June 30, 2023[183]. Asset Management - Mesa Airlines' impairment charges included designating seven CRJ-900 aircraft as held for sale[157]. - Asset impairment charge of $30.5 million was recorded for the three months ended June 30, 2023, related to seven CRJ-900 aircraft designated as held for sale[169]. - Asset impairment charges totaled $51.0 million for the nine months ended June 30, 2023, compared to $39.5 million for the same period in 2022[185]. - The company plans to generate approximately $21 million in gross proceeds from the sale of seven CRJ-900 aircraft before the end of the fiscal year 2023[199]. Cash Flow and Debt - Cash flows used in operations amounted to $13.8 million, with a net loss of $91.8 million for the nine months ended June 30, 2023[198]. - The company had net cash used in financing activities of $104.7 million for the nine months ended June 30, 2023, which included $142.6 million in principal repayments on long-term debt[219]. - As of June 30, 2023, the company has $124.3 million of long-term debt due within the next twelve months[202]. - As of June 30, 2023, the company had $504.9 million in secured indebtedness, primarily related to financing 74 aircraft[208]. Tax and Financial Ratios - The effective tax rate from continuing operations was 5.5% for the three months ended June 30, 2023, down from 19.9% in the same period in 2022[173]. - The effective tax rate (ETR) decreased to 5.9% for the nine months ended June 30, 2023, from 22.1% for the same period in 2022[189]. Operational Metrics - Block hours flown decreased by 28.6% to 45,301 hours for the three months ended June 30, 2023, compared to 63,486 hours in 2022[162]. - Average stage length decreased by 10.3% to 555 miles for the three months ended June 30, 2023, compared to 619 miles in 2022[162]. - Mesa Airlines operated 84 aircraft as of June 30, 2023, with approximately 93% of flights operated for United Airlines[138]. Future Outlook and Strategies - The company is actively seeking arrangements to sell surplus assets, including aircraft and engines, to reduce debt and optimize operations[205]. - Management is engaged in efforts to address the RASPRO aircraft repurchase obligation, which may include obtaining equity financing or restructuring the lease facility[205]. - The company is in active discussions with United to provide additional liquidity through existing lines of credit and other means[205].

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company reported a net loss of $44.2 million, an improvement from prior year, with total assets decreasing to $1.06 billion, reflecting strategic shifts and liquidity initiatives [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $1.055 billion, driven by reduced property and intangible assets, while liabilities and stockholders' equity also declined due to net losses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | September 30, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $51,428 | $57,683 | | Total current assets | $117,121 | $98,334 | | Property and equipment, net | $868,027 | $865,254 | | Assets held for sale (Current & Noncurrent) | $40,530 | $73,000 | | **Total assets** | **$1,055,357** | **$1,115,602** | | Total current liabilities | $242,088 | $214,477 | | Long-term debt and finance leases, net | $463,646 | $502,517 | | **Total liabilities** | **$780,140** | **$807,428** | | **Total stockholders' equity** | **$275,217** | **$308,174** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss improved to $35.1 million for the quarter and $44.2 million for six months, primarily due to lower asset impairment and aircraft rent expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $121,834 | $123,213 | $269,008 | $270,970 | | Total operating expenses | $148,705 | $167,968 | $293,431 | $319,711 | | Operating loss | $(26,871) | $(44,755) | $(24,423) | $(48,741) | | **Net loss** | **$(35,122)** | **$(42,783)** | **$(44,211)** | **$(57,057)** | | Diluted net loss per share | $(0.88) | $(1.19) | $(1.16) | $(1.58) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased to $275.2 million, mainly due to a $44.2 million net loss, partially offset by a $9.8 million capital increase from United Airlines share issuance - Stockholders' equity fell to **$275.2 million**, mainly due to a **$44.2 million** net loss over six months[15](index=15&type=chunk) - The company issued **4,042,061 shares** to United Airlines, contributing **$9.8 million** to additional paid-in capital[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $8.6 million, offset by $61.8 million from investing activities, leading to a $6.5 million decrease in cash and restricted cash Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(8,636) | $9,958 | | Net cash provided by (used in) investing activities | $61,801 | $(30,004) | | Net cash used in financing activities | $(59,618) | $(24,574) | | **Net change in cash, cash equivalents and restricted cash** | **$(6,453)** | **$(44,620)** | - The company generated **$86.1 million** from the sale of aircraft and engines, which was a primary source of cash for investing activities[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail strategic shifts including winding down American Airlines CPA, expanding United Airlines partnership, and asset sales to address pilot shortages and bolster liquidity - The company is winding down its American CPA, which will terminate by April 3, 2023, and transitioning aircraft to an amended and expanded CPA with United[33](index=33&type=chunk)[41](index=41&type=chunk) - To combat a severe pilot shortage, the company increased pilot hourly pay by **nearly 118%** for captains and **172%** for new-hire first officers[27](index=27&type=chunk) - Mesa entered into agreements to sell surplus aircraft and **30 spare engines** to United to raise capital and retire debt. The engine sale is expected to generate gross proceeds of approximately **$80 million**[27](index=27&type=chunk)[147](index=147&type=chunk) - United provided a new revolving line of credit totaling **$25.5 million** and received approximately **10%** of the Company's common stock, along with the right to appoint a board member[27](index=27&type=chunk)[42](index=42&type=chunk)[112](index=112&type=chunk) - As of March 31, 2023, **14 CRJ-900 aircraft** and **one CRJ-200 aircraft** were classified as assets held for sale with a net book value of **$40.5 million**[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Improved operating results were driven by lower rent and impairment, despite higher pilot pay, as management implemented a comprehensive plan to address pilot shortages, enhance liquidity, and meet debt obligations [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Operating revenue decreased 1.1% to $121.8 million, while expenses fell 11.5% to $148.7 million due to lower impairment and rent, despite increased pilot pay, resulting in a smaller operating loss Q2 FY2023 vs Q2 FY2022 Operating Results (in thousands) | Metric | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenues | $121,834 | $123,213 | $(1,379) | (1.1)% | | Flight Operations Expense | $54,830 | $42,410 | $12,420 | 29.3% | | Aircraft Rent Expense | $835 | $9,434 | $(8,599) | (91.1)% | | Asset Impairment | $16,743 | $39,475 | $(22,732) | (57.6)% | | Total Operating Expenses | $148,705 | $167,968 | $(19,263) | (11.5)% | | **Operating Loss** | **$(26,871)** | **$(44,755)** | **$17,884** | **40.0%** | - Block hours decreased by **26.6%** in Q2 2023 compared to Q2 2022, reflecting reduced flight activity due to the pilot shortage[177](index=177&type=chunk) [Adjusted EBITDA and Adjusted EBITDAR](index=37&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDAR) Adjusted EBITDA was $7.1 million and Adjusted EBITDAR was $7.9 million for the quarter, both decreasing from prior year, with six-month figures at $28.9 million and $33.8 million respectively Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDAR (in thousands) | Metric | Three Months Ended Mar 31, 2023 | Three Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2023 | Six Months Ended Mar 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(35,122) | $(42,783) | $(44,211) | $(57,057) | | **Adjusted EBITDA** | **$7,065** | **$15,764** | **$28,852** | **$32,747** | | **Adjusted EBITDAR** | **$7,900** | **$25,198** | **$33,770** | **$51,767** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity was impacted by a pilot shortage, leading to an $8.6 million cash outflow from operations and a $44.2 million net loss, prompting a multi-faceted plan to improve cash position and meet debt obligations - The pilot shortage and attrition led to negative financial impacts, including cash used in operations of **$8.6 million** and a net loss of **$44.2 million** for the six months ended March 31, 2023[215](index=215&type=chunk) - As of March 31, 2023, the company had **$51.4 million** in cash and cash equivalents and **$145.0 million** of short-term debt due within the next twelve months[219](index=219&type=chunk)[224](index=224&type=chunk) - Management's recovery plan includes selling surplus assets (CRJ-900s, CRJ-700s, **30 spare engines**), establishing a new credit line with United, and restructuring debt and lease agreements to generate liquidity[217](index=217&type=chunk)[219](index=219&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on $261.8 million in variable-rate debt, with fuel price risk largely mitigated by pass-through agreements, and is transitioning LIBOR to SOFR - The company is exposed to interest rate risk on **$261.8 million** of variable-rate debt. A hypothetical **100 basis point** change in rates would alter semi-annual interest expense by about **$1.0 million**[240](index=240&type=chunk)[241](index=241&type=chunk) - The company is transitioning its LIBOR-based debt (**$402.9 million**) to SOFR, which is expected to be completed after June 30, 2023[243](index=243&type=chunk)[244](index=244&type=chunk) - Fuel price risk is minimal as fuel costs are directly paid by major partners under CPA and FSA agreements[246](index=246&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed not effective due to material weaknesses in accounting for net operating loss carryforwards and asset impairment, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2023[247](index=247&type=chunk) - **Material weaknesses** were identified in the accounting for net operating loss carryforwards and asset impairment[248](index=248&type=chunk) - Remediation efforts include adding technical accounting staff and partnering with external consultants to improve review controls and communication[249](index=249&type=chunk)[252](index=252&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal actions are ongoing, but management anticipates no material adverse effect on the company's financial position or operations - As of March 31, 2023, management believes that ongoing routine legal matters are **not likely to have a material adverse effect** on the company[253](index=253&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the risk factors previously disclosed in the 2022 Annual Report on Form 10-K - **No material changes** have been made to the risk factors disclosed in the 2022 Form 10-K[254](index=254&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 29,276 shares for $30,000 to cover income tax obligations from vested employee equity awards - The company repurchased **29,276 shares** for **$30,000** to satisfy tax obligations on vested employee equity awards[255](index=255&type=chunk) [Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No other material information is reported [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) The report includes required certifications from executive officers and Inline XBRL data files

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38626 MESA AIR GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporati ...

Mesa Air Group, Inc. (NASDAQ:MESA) Q4 2022 Earnings Conference Call December 29, 2022 4:30 PM ET Company Participants Doug Cooper - Head of Investor Relations Jonathan Ornstein - Chairman and Chief Executive Officer Brad Rich - Executive Vice President and Chief Operating Officer Torque Zubeck - Chief Financial Officer Michael Lotz - President Conference Call Participants Shannon Doherty - Deutsche Bank Savi Syth - Raymond James & Associates Helane Becker - Cowen and Company Operator Thank you for standing ...

Mesa Air Group, Inc. (NASDAQ:MESA) Q3 2022 Earnings Conference Call August 8, 2022 4:30 PM ET Company Participants Doug Cooper - IR Jonathan Ornstein - Chairman & CEO Bradford Rich - EVP & COO Michael Lotz - President Torque Zubeck - CFO Conference Call Participants Savi Syth - Raymond James & Associates Hillary Cacanando - Deutsche Bank Helane Becker - Cowen and Company Andrew Didora - Bank of America Merrill Lynch Operator Thank you for standing by, and welcome to the Mesa Airlines Q3 Investor Conference ...