Mesa Airlines reported a net loss of $47.6 million and revenue of $114.7 million reporting a decline of 15% over Q3 of 2022. The airline reported its financial results for third quarter (Q3) of FY2023.
During this period, 96% of its revenue came from its United capacity purchase agreement (CPA), which covers the operation of 80 jets, both CRJ-900s and E175s. The airline flew around half a million United Express passengers on its CRJ fleet in Q3 and will focus on increasing block hours for its E-175s going forward.
During a major period of transition for the regional airline, Mesa saw a 50% reduction in CRJ-900 block hours as it moved over to United Airlines following the end of its partnership with American Airlines. This was a major factor behind its latest results - Mesa furthered its losses over the last financial quarter with a net loss of $47.6 million, following a $35.1 million loss in Q2 2023.
Commenting on the results, chairman and chief executive, Jonathan Ornstein said: “As expected, Fiscal 2023 has been a transformative year as we ended our agreement with American Airlines and transitioned all of our regional capacity to United. While we are pleased with the progress we have made in some areas, we have more work to do in others."
Mesa entered agreements for sale of 18 CRJ-900s during the Q3, FY2023 with more to follow. So far, it has closed on four of those sales, and expects the remaining 14 to go through by the end of this year - once sealed, these sales will reduce its debt by around $74.3 million
As of June 2023, the airline had $566.3 million in total debt. Mesa made over $40 million in debt payments over the last quarter, a large portion of which was funded by the sale of 20 engines to United.
The airline is struggling to find enough pilots to make full use of its fleet amid the ongoing industry pilot shortages. The airline is currently at around 70% fleet utilization, despite the fact it has been hiring pilots since the start of the year. The airline would need around 150 pilots, primarily captains, to meet United's fleet utilization targets.
"With United’s continued support, we believe, based on the current pilot staffing outlook, we will be at United’s target block-hour utilization rate by the end of fiscal-year 2024,” Ornstein added.
Mesa's active fleet currently consists of 56 E-175s and 24 CRJ-900s, along with four Boeing 737 freighters flown on behalf of DHL Express. It operated an average of 277 daily departures in the last quarter and has around 2,300 employees.