Q2 Fiscal Loss Recorded by Mesa Airlines

Mesa Airlines reported net losses of $35 million in the second quarter of fiscal 2023.

In April, the airline stopped operating for American Airlines after renewing their partnership with United Airlines.

Mesa losses during a difficult transition

Mesa Airlines announced its second quarter fiscal results on Tuesday. The company revealed a slight drop in revenue from last year. The regional airline made $121.8 million in revenue in 2022, which is just below the $123.2 million in the same period of last year. FlightGlobal reported that the airline's performance was due to "deferred revenues and lower block hours," as it had completed 27% less block hours than last, but this was partly offset by higher United block hour rates.

Mesa CEO Jonathan Ornstein said,

"This is obviously a tough quarter. We have a ways to go. United has been extremely supportive in terms of helping us through this."

Net losses for the airline were $35.1 million, or $0.88 per share diluted. The completion factor for United was 98.5% and for American it was 94.7%, which is an improvement over last year.

United Partnership Pays Off

Mesa Airlines, American Airlines and United Express announced that they would terminate their nine-year capacity agreement on April 1st. Mesa signed a new contract to fly for United Express from March. American Airlines cited Mesa’s financial viability for the termination while Mesa claimed that it lost $5 million per month flying with American.

Ornstein commented,

"While our financial results reflect the ongoing transition of CRJ flying to United, we believe these actions will prove to be the right long-term strategic decision for the company. We began operating CRJ-900 flights for United Airlines in March, representing the culmination of months of diligent preparation and coordination between Mesa and United teams."

Airline attributed 55% to United Airlines contracts. The remaining 40% came from American Airlines. DHL accounted for 4%, and the remaining 1% was from leasing aircraft. Mesa, which has been hard hit by pilot shortages, claims that its situation has already improved following its United Airlines deal.

Since March, the carrier began transitioning its Bombardier CRJ 900 fleet to United in order to end its agreement with American. The carrier has successfully transferred 24 CRJ-900s to United, and has 40 more regional jets parked.

Ornstein added,

“We have now converted 24 CRJ 900s.”

After completing its fleet transition, Mesa plans to operate a fleet of 80 Embraer E175s with CRJ-900s. The airline sold four CRJ-900s to third parties in the past quarter.

Source: simpleflying.com