Mesa Air Group Achieves Impressive Q2 Fiscal 2024 Revenue Growth – Travel And Tour World

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Mesa Air Group, Inc. (NASDAQ: MESA) Releases Second Quarter Fiscal 2024 Financial and Operating Results

Second Quarter Fiscal 2024 Highlights:

• Total Operating Revenues: $131.6 million
• Pre-Tax Income: $11.7 million, translating to a net income of $11.7 million or $0.28 per diluted share
• Adjusted Net Income: $6.3 million or $0.15 per diluted share
• Adjusted EBITDAR: $28.2 million
• Operational Performance: 99.85% controllable completion factor

Additional Updates:

• Acquired five additional engines via RASPRO finance lease since the June 2024 announcement.
• Renegotiated two CRJ aircraft operating leases into fully amortized buyout leases, reducing payments by $9.5 million over the lease’s duration.

“Our second quarter results have begun to demonstrate an improvement in our business and reflect our efforts over the past year-and-a-half to restructure and strengthen our operations, P&L, and balance sheet,” said Jonathan Ornstein, Chairman and CEO. “Given meaningfully improved block-hour rates on our E-175 flying, coupled with our initiatives to eliminate surplus CRJ assets, we achieved our first GAAP and adjusted net profits in 11 quarters, as well as our best adjusted EBITDAR result over that period. Concurrently, Mesa has reduced its total debt by $221.5 million, or 36%, over the past year.

“While we still have work to do as we transition out of our CRJ-900 fleet and build our E-175 flying, we expect to remain cash-flow neutral for the remainder of the fiscal year. With an optimized asset base, our ongoing transition toward higher-margin E-175 flying, and the continued reduction in pilot attrition and strength in our pilot pipeline, we look forward to returning to consistent profitability in the future.”

Detailed Financial Performance:

For Q2 2024, Mesa Air Group reported:

• Total Operating Revenues: $131.6 million, an 8.0% increase from $121.8 million in Q2 2023. The rise is primarily due to higher E-175 block-hour rates with United Airlines, effective October 1, 2023, including an additional $8.8 million for Q1 2024 recognized in this quarter. Contract revenue decreased by $10.0 million or 9.7%, while pass-through revenue decreased by $0.3 million or 1.6%. Q2 2024 results included the recognition of $7.9 million of previously deferred revenue, versus the deferral of $5.7 million in Q2 2023. The remaining $10.2 million deferred revenue will be recognized as flights are completed under the United contract.
• Total Operating Expenses: $119.9 million, a 19.3% decrease from $148.7 million in Q2 2023. This decrease is due to lower asset impairment losses by $14.1 million, reduced depreciation and amortization expense by $6.7 million, and lower flight operations expense by $5.5 million (10.0%), driven by the divestiture of surplus CRJ assets.

Net Income and Adjustments:

• Net Income: $11.7 million or $0.28 per diluted share, compared to a net loss of $35.1 million or $(0.88) per diluted share in Q2 2023.
• Adjusted Net Income: $6.3 million or $0.15 per diluted share, versus an adjusted net loss of $21.3 million or $(0.53) per diluted share in Q2 2023.

Adjusted EBITDA and EBITDAR:

• Adjusted EBITDA: $26.8 million, up from $7.1 million in Q2 2023.
• Adjusted EBITDAR: $28.2 million, up from $7.9 million in Q2 2023.

Operational Performance for Q2 2024:

Mesa reported a controllable completion factor of 99.85% for United, compared to 99.63% in Q2 2023. Approximately 98% of the company’s revenue in Q2 2024 was derived from its contract with United, covering 80 large jets (a mix of E-175s and CRJ-900s). The fleet comprised 56 E-175s and 24 CRJ-900s.

Balance Sheet and Cash Flow:

As of March 31, 2024, Mesa had:

• Unrestricted Cash and Cash Equivalents: $18.5 million
• Total Debt: $400.0 million, primarily secured with aircraft and engines, down from $621.6 million as of March 31, 2023. During the quarter, Mesa made $38.8 million in debt payments related to CRJ engine sales, achieved $10.5 million in loan forgiveness from United due to operational performance, and reduced its line of credit with United by $7.6 million. Additionally, $27.1 million in scheduled debt payments were made.