Mesa Airlines(US:MESA)2023-08-12 00:54Financial 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].