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Mesa Air Group Reports Fiscal Third Quarter Net Income of $3.4 Million or $0.10 per Diluted Share

Updated: Aug 15, 2020

Mesa Air Group reported on Monday a fiscal third quarter net income of $3.4 million or $0.10 per diluted share compared to $3.0 million or $0.09 per diluted share during the same period last year.

United Express Embraer E175 - Courtesy United Airlines

On Monday (August 10, 2020), Phoenix Arizona-based regional carrier Mesa Air Group, Inc. (NASDAQ: MESA) reported a fiscal third quarter 2020 net income of $3.4 million or $0.10 per diluted share compared to $3.0 million or $0.09 per diluted share during the same period last year. Third quarter adjusted pre-tax income was $4.9 million versus $13.4 million during Q3 2019, while adjusted EBITDA was $35.9 million, compared to $58.8 million in the fiscal third quarter of 2019. Total operating expenses for the quarter declined 64.5 percent to $57.9 million attributable to lower flight operations and a $43 million grant received under the U.S. Cares Act Payroll Support Program (PSP). In Yesterday’s announcement, Mesa Air Group’s Chairman and Chief Executive Officer, Jonathan Ornstein said,

“Given the difficult operating environment, we are extremely pleased to be reporting both a profit and positive cash flow. We believe this is the result of our relentless focus on low costs and reliable operations, the construct of our agreements with our major partners, and the dedication and hard work of all our employees. While we believe there are significant opportunities ahead, there remain COVID-19 related challenges; our fleets continue to be utilized below 60%, aircraft financing has become more difficult, and the recovery time projected for demand to return to pre-COVID-19 levels.”

Mesa Air expects to receive 20 new Embraer E175s to operate under a capacity agreement with United Airlines between September 2020 and June 2021. The company is currently negotiating financing on the first ten aircraft and will continue operating their fleet of Bombardier CRJ-700s for United Express until the new aircraft are delivered. Upon removal from the Mesa fleet, the CRJ-700s are contracted with United to be leased to another United Express operator.

The company ended the third fiscal quarter with $64.9 million in unrestricted cash and equivalents and increase from $52.4 million at the close of the second quarter. Mesa Air paid out $12 million in CAPEX during the quarter which was offset by $14 million in returned deposits. The company also paid $24.2 million in scheduled principal payments on aircraft and engine debt. As previously announced, Mesa Air was approved for 92.5 million in grants under the U.S. Cares Act PSP and as of August 3, 2020, the company had received $77.1 million under the program. The remaining $15.4 million is expected to be disbursed on September 1st, 2020. The carrier has also applied for loans of up to $277 million under the Cares Act and is currently negotiating with the U.S. Department of the Treasury for the final terms, conditions and amount of the loan.

Mesa Air Group also recently signed a five-year agreement to operate two Boeing 737-400F freighters for DHL, with service commencing in October 2020. The agreement makes Mesa the first U.S. regional carrier to enter the narrow-body cargo business.

Phoenix Arizona-based Mesa Air Group, Inc. is the holding company of Mesa Airlines which offers scheduled service to 91 cities in 36 states, Washington D.C. and Mexico. As of July 31, 2020, the carrier operates around 299 daily departures with a fleet of 145 aircraft. The company currently has approximately 3,600 employees. Mesa Air operates flights as American Eagle and United Express, pursuant to capacity purchase agreements with the mainline carriers.

In trading Tuesday morning (August 11, 2020) shares in Mesa Air Group, Inc. (NASDAQ: MESA) were 10.98 percent higher at $3.87/share (10:49 AM EDT).

Source: Mesa Air Group, Inc.

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