Mesa Air Group, Inc. (NASDAQ: MESA) has announced strong second-quarter fiscal 2024 financial and operating results, reflecting a positive impact from its restructuring efforts. These efforts have focused on improving operations, strengthening the company’s balance sheet, and increasing profitability.
Jonathan Ornstein, Chairman and CEO, highlighted the company’s progress, stating, “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.” He further emphasized the positive financial performance, attributing it to the improved block-hour rates on its Embraer E-175 aircraft and the elimination of surplus CRJ assets.
Mesa achieved its first GAAP and adjusted net profits in 11 quarters, along with its best adjusted EBITDAR result in the same period. This improvement is attributed to the company’s ongoing transition towards higher-margin E-175 flying. This strategic shift coupled with a reduction in pilot attrition and a robust pilot pipeline, contribute to the positive outlook for future profitability.
Mesa has also made significant strides in reducing its debt. Over the past year, the company has reduced its total debt by $221.5 million, representing a 36% decrease. This achievement is a key factor in the company’s enhanced financial stability.
While Mesa acknowledges that its transition away from the CRJ-900 fleet and towards the E-175 aircraft continues, the company anticipates remaining cash-flow neutral for the remainder of the fiscal year. Looking ahead, Mesa is optimistic about its future, expecting to return to consistent profitability.
The company’s operational performance in Q2 2024 further emphasizes its improvement. Mesa reported a controllable completion factor of 99.85% for its contract with United Airlines, exceeding the 99.63% achieved in Q2 2023. This success is a testament to the company’s commitment to operational efficiency.
Currently, Mesa’s revenue is predominantly generated through its contract with United Airlines, accounting for approximately 98% of total revenue in Q2 2024. This contract involves the operation of 80 large jets, a mix of E-175s and CRJ-900s. The company’s fleet currently consists of 56 E-175s and 24 CRJ-900s.
Mesa Air Group’s financial stability is further evidenced by its balance sheet as of March 31, 2024. The company had $242.4 million in cash and cash equivalents, representing a significant increase from the previous quarter.
In summary, Mesa Air Group’s second-quarter fiscal 2024 results highlight the success of its restructuring efforts, leading to improved operations, profitability, and financial stability. The company’s focus on transitioning towards higher-margin E-175 aircraft, coupled with its commitment to operational efficiency and a strengthened pilot pipeline, positions Mesa for future success.
