Mesa Airlines(US:MESA)2021-08-10 07:09Financial Data and Key Metrics Changes - The company reported a pre-tax profit of $5.8 million and net income of $4.3 million, or $0.11 per diluted share, compared to net income of $3.4 million or $0.10 per diluted share in the same quarter last year [7][21] - Cash for the quarter, excluding restricted cash, increased by $32.5 million to $180.4 million, with an expected fiscal year ending cash balance of approximately $100 million to $110 million [21][23] - Total debt at the end of the quarter was $713.7 million, down $11 million from the prior quarter, with a projected reduction of $46 million in the fourth quarter of 2021 [22] Business Line Data and Key Metrics Changes - The company flew 85,162 block hours, a 169.3% increase from last year and a 15.2% increase from the previous quarter [11] - The controllable completion factor was 99.7% compared to 100% a year ago, and the controllable on-time departure rate was 88% versus 94.1% a year ago [12] Market Data and Key Metrics Changes - The company anticipates that daily aircraft utilization in its United operations will be about 88% of pre-COVID levels and slightly over 100% in its American operation for the September quarter [12] - The aviation industry continues to face challenges, including rapid demand increases, employee turnover, and supply chain issues [12][13] Company Strategy and Development Direction - The company is investing in next-generation aircraft technology, including a commitment to sustainable aviation operations and plans to add 100 electric ES19 aircraft to its regional fleet by 2026 [9][10] - The company aims to strengthen long-term relationships with major airline partners through investments in electric aircraft technology [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of air travel demand and the company's ability to adapt to changes in the operating environment [6][12] - The company is focused on hiring and training to meet increasing staffing requirements, having hired 250 pilots since April [17][42] Other Important Information - The company received $52.2 million in PSP3 funds in Q3, which will provide temporary rate reductions to partners [23] - The company is evaluating options for its European joint venture, expecting to start operations in calendar year 2022 [24][60] Q&A Session Summary Question: Operational performance related to maintenance issues - The lack of available CRJ-900s is due to deferred heavy checks during the pandemic, leading to delays in aircraft returning to service [30][36] Question: Expectations for maintenance costs and pilot costs per block hour - Maintenance costs are expected to remain elevated into the next fiscal year, with a return to normal run rates anticipated by the second or third quarter of 2022 [32][34] Question: Impact of weather on operations - Weather has impacted operations, but the primary issue has been the inability to reset the system due to a lack of adequate spare aircraft [40] Question: Attrition rates and pilot hiring - Pilot attrition during the pandemic was in single digits, with current hiring efforts aimed at building a cushion for future flying demands [42] Question: Electric vehicle investments and future partnerships - The company is open to expanding partnerships in electric aircraft technology and is committed to being a leader in decarbonization efforts [46] Question: Growth opportunities in cargo versus passenger services - The company sees strong growth opportunities in both cargo and passenger services, with a focus on long-term relationships with partners like DHL [52]