Mesa Airlines(US:MESA)2021-05-11 01:55Financial Performance - Mesa Airlines reported operating income of $16.8 million for the three months ended March 31, 2021, compared to $13.9 million for the same period in 2020, reflecting an increase of 20.9%[152] - Net income for the three months ended March 31, 2021, was $5.7 million, up from $1.9 million in the same period in 2020, indicating a significant improvement in profitability[152] - Total operating revenues decreased by $82.6 million, or 45.9%, to $97.3 million for the three months ended March 31, 2021, compared to $179.9 million for the same period in 2020[157] - Total operating revenue decreased by $116.3 million, or 32.0%, to $247.7 million for the six months ended March 31, 2021 compared to the same period in 2020[176] - Adjusted EBITDA increased to $88.9 million for the six months ended March 31, 2021, compared to $82.7 million for the same period in 2020[191] Revenue Breakdown - Contract revenue fell by $84.1 million, or 50.7%, to $81.7 million, primarily due to reduced flying on the CRJ-900, CRJ-700, and E-175 fleets as a result of COVID-19[157] - Contract revenue decreased by $128.7 million, or 38.1%, to $208.9 million primarily due to reduced flying on the CRJ-900, CRJ-700, and E-175 fleet as a result of COVID-19[176] - Pass-through and other revenue increased by $1.5 million, or 10.3%, to $15.6 million, primarily due to pass-through maintenance revenue related to the E-175 fleet[157] - Pass-through and other revenue increased by $12.4 million, or 47.2%, to $38.8 million for the six months ended March 31, 2021, primarily due to maintenance revenue related to the E-175 fleet[176] Operating Metrics - Available seat miles (ASMs) decreased by 32.2% to 1,771,498 thousand for the three months ended March 31, 2021, compared to 2,611,940 thousand for the same period in 2020[155] - Block hours flown decreased by 31.7% to 73,942 for the three months ended March 31, 2021, compared to 108,305 for the same period in 2020[155] - Revenue passenger miles (RPMs) decreased by 35.7% to 1,148,498 thousand for the three months ended March 31, 2021, compared to 1,785,153 thousand for the same period in 2020[155] - The average stage length increased by 11.5% to 690 miles for the three months ended March 31, 2021, compared to 619 miles for the same period in 2020[155] - Average stage length increased by 11.5% to 690 miles for the three months ended March 31, 2021 compared to 619 miles for the same period in 2020[158] Expenses - Total operating expenses decreased by $85.5 million, or 51.5%, to $80.5 million for the three months ended March 31, 2021 compared to the same period in 2020[158] - Flight operations expense decreased by $15.5 million, or 29.3%, to $37.4 million for the three months ended March 31, 2021 due to lower pilot and flight attendant wages[158] - Aircraft maintenance costs decreased by $12.6 million, or 19.5%, to $51.8 million for the three months ended March 31, 2021, primarily driven by a decrease in engine overhaul and component contracts[160] - Total operating expenses decreased by $118.9 million, or 36.8%, to $203.9 million for the six months ended March 31, 2021, compared to the same period in 2020[177] - Flight operations expense decreased by $31.2 million, or 29.5%, to $74.4 million, primarily due to lower pilot and flight attendant wages[177] - General and administrative expenses decreased by $3.3 million, or 11.9%, to $24.2 million, primarily due to a decrease in pass-through property taxes[183] Government Support - The company recognized a Federal Grant received through the Payroll Support Agreement under the CARES Act, contributing to the decrease in flight operations and general administrative expenses[153] - Government grant recognition increased by $56.0 million, or 100.0%, to $56.0 million for the three months ended March 31, 2021 under the CARES Act[166] - The company recognized $67.3 million in government grant funds for payroll support, an increase of 100.0% compared to the same period in 2020[186] - The company expects to receive approximately $52.2 million under the third Payroll Support Program (PSP3) as part of the American Recovery Plan Act[195] Cash Flow and Debt - As of March 31, 2021, the company had cash and cash equivalents of $147.9 million and restricted cash of $3.4 million[202] - For the six months ended March 31, 2021, net cash provided by operating activities was $78.6 million, an increase from $65.2 million in the same period of 2020[205][206] - The company reported a net increase in cash and cash equivalents of $48.4 million for the six months ended March 31, 2021, compared to a decrease of $16.7 million in the prior year[205] - Net cash used in investing activities for the six months ended March 31, 2021, was $11.7 million, significantly lower than $24.8 million in the same period of 2020[208][209] - During the six months ended March 31, 2021, net cash used in financing activities was $18.5 million, compared to $57.1 million in the prior year[210][211] - The company had $533.8 million of variable-rate debt as of March 31, 2021, with a hypothetical 50 basis point change in market interest rates potentially affecting interest expense by approximately $2.7 million[220] - The company had $192.2 million of fixed-rate debt as of March 31, 2021, with no material effect on interest expense from a hypothetical 50 basis point change in market interest rates[221] Risk Factors - The company did not have any off-balance sheet arrangements during the periods presented[213] - The company has de minimis foreign currency risks related to station operating expenses, primarily in Canadian dollars, with no material impact on financial results[225] - Fuel price volatility is largely mitigated by capacity purchase agreements with major airline partners, which directly pay and supply fuel[226]