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]

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]

Financial Data and Key Metrics Changes - The company reported its twelfth consecutive quarter of profitability, achieving a total revenue of $263.6 million, which is 3.6% higher than 2024 despite a 0.5% decrease in total block hours [14][15] - The GAAP pretax margin was 3.2%, and the adjusted pretax margin was 3.9%, marking the third consecutive quarter of total revenue growth year-over-year and improvement in pretax margin [14] - Total operating expenses grew by 2.2% with adjusted CASM increasing by 11.3%, heavily impacted by a 6.2% decline in scheduled service ASMs [18][19] Business Line Data and Key Metrics Changes - Revenue from the passenger segment, including scheduled and charter services, decreased by 0.8% year-over-year, primarily due to reduced scheduled service operations [15] - Scheduled service TRASM increased by 3.7%, with total fare rising by 6.5%, offsetting a 1.3 percentage point decline in load factor [16] - Charter revenue grew by 6.4% to $54.3 million, supported by a 7.9% increase in charter block hours [16][17] - Cargo revenue surged by 36.8% to $34.8 million, marking the highest quarterly cargo revenue in the company's history [17] Market Data and Key Metrics Changes - The company expects third quarter total revenue to be between $250 million and $260 million, with block hours projected to increase by 5% to 8% [21] - The anticipated Q3 fuel cost per gallon is $2.61, with an expected operating margin of 36% [21] Company Strategy and Development Direction - The company aims to grow its cargo business significantly, expecting to double cargo revenue once additional aircraft reach mature utilization [7][11] - The strategy includes maintaining a flexible capacity allocation between segments to maximize profitability and minimize earnings volatility [21] - The company is focused on organic growth opportunities and maintaining a strong balance sheet to capitalize on potential disruptions in the industry [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately $1.5 billion in revenue, $300 million in EBITDA, and $2.5 in EPS by 2027, contingent on fleet utilization and demand [11][12] - The management noted that the current operating environment remains strong, with bookings showing year-over-year improvements in unit revenue [51][56] - There are expectations of a potential shakeup in the low-cost carrier space, with the company prepared to act on asset acquisitions or organic growth opportunities [66][68] Other Important Information - The company has a total liquidity of $206.6 million and plans to pay down an additional $44 million in debt by the end of the year [19][21] - The company does not anticipate purchasing additional aircraft until 2027 and beyond, focusing instead on optimizing current resources [19][20] Q&A Session Summary Question: Can you discuss the path to $2.50 EPS and its dependence on industry conditions? - Management indicated that long-term revenue forecasts include a general inflation tailwind of about 3% and are based on stable utilization and growth assumptions [23][24] Question: How is the peak season shaping up for Amazon revenues? - Management noted delays in asset utilization and entry into service dates, affecting the fleet's commitment [26] Question: What is the strategy regarding industry capacity and potential opportunities? - The company plans to execute well and remain nimble, focusing on organic growth opportunities as they arise [33][34] Question: Can you provide insights on margin improvement and cargo ramp-up? - Management expects the fourth quarter to be a good measurement point for cargo ramp-up, with pilot availability being a key factor [39][42] Question: How do you view the competitive landscape and capacity trends? - Management observed that many airlines are not extending schedules past January, leading to a favorable capacity environment for the company [82]

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 - Mesa Air Group reported a net loss of $114.6 million for Q1 2025, reflecting ongoing challenges despite operational improvements and positive adjusted EBITDA for the fifth consecutive quarter [7][8]. Financial Performance - Total operating revenues for Q1 2025 were $103.2 million, a decrease of $15.5 million or 13.1% compared to $118.8 million in Q1 2024 [4]. - Contract revenue fell to $80.7 million, down by $20.4 million or 20.2% from $101.1 million in Q1 2024, primarily due to reduced contractual aircraft with United Airlines and the wind-down of DHL revenue [4]. - Pass-through revenue increased by $4.9 million or 27.6%, mainly due to higher maintenance expenses [5]. - Total operating expenses rose to $214.0 million, an increase of $46.8 million or 30.0% compared to Q1 2024, driven by asset impairment costs and losses on asset sales [6]. Operational Highlights - The company achieved a controllable completion factor of 100.00% for United in Q1 2025, compared to 99.92% in Q1 2024 [9]. - Mesa operated 62 large jets under its capacity purchase agreement with United, consisting of 54 E-175s and eight CRJ-900s [9]. Adjusted Financial Metrics - Adjusted EBITDA for Q1 2025 was $11.0 million, up from $5.0 million in Q1 2024 [8]. - Adjusted EBITDAR was $12.6 million for Q1 2025, compared to $6.3 million in Q1 2024 [8]. Balance Sheet and Liquidity - As of March 31, 2025, Mesa had $54.1 million in unrestricted cash and cash equivalents, with total debt of $230.6 million, significantly reduced from $481.0 million a year earlier [11]. - The company paid down $79.8 million in debt during the quarter, including $69.0 million related to the sale of E175 aircraft [11]. Employee and Fleet Information - Mesa operates a fleet of 60 aircraft with approximately 238 daily departures, serving 82 cities across 32 states, the District of Columbia, Cuba, and Mexico [14].