Arizona-based Mesa reported operating revenues of $147.2 million for the first quarter of 2023 (Q1 2023).
A net loss of $9.1 million or $0.25 per diluted share meant an year-on-year improvement on the $14.3 million loss for the same period in 2022.
The carrier gave an adjusted net loss of $4.3 million, which it said excluded "a $3.7 million impairment related to intangible assets and $1.7 million related to investments in equity securities".
The operating revenue amounted to a decrease of 0.4% from the $147.8 million for Q1 2022, and included a fall in contract revenue of $8.4 million, which was driven by lower block hours and offset by increased block-hour revenue for new pilot payscales.
Half of Mesa's revenue came from contracts with United Airlines and 45% from American Airlines, with the rest from DHL and leases of aircraft.
Adjusted earnings for the quarter were $21.8 million, compared to $17.0 million in Q1 2022. By the end of the period, Mesa reported liquidity of $56.1 million in unrestricted cash and equivalents.
By the end of the 2022 calendar year, Mesa had $701.3 million in total debt, which it said was "secured primarily with aircraft and engines" and included $64.2 million" corresponding to the reclassification from operating lease to finance lease on 15 CRJ-900s".
The carrier also borrowed $25.5 million in term loan from United Airlines, of which $15 million is forgivable "upon the meeting of certain performance criteria".
"While block hour production continued to be challenged by the industry-wide pilot shortage during the quarter, we believe all the pieces are in place to begin restoring capacity across our fleets," said Jonathan Ornstein, chairman and chief executive.
"We are preparing for the transition of our CRJ-900 operation to United next month. Our pilot pipeline continues to strengthen and pilot attrition has remained significantly lower since we have enhanced our payscales and expanded our participation in the Aviate program with United," Ornstein added.
Among the operational highlights for the quarter, Mesa said it had a "controllable completion factor of 99.4% for American and 99.9% for United", though the percentages did not take in cancellations due to weather and air traffic control.
Analysts at Cowen and Company said Mesa "has come through its restructuring process" and that the results were better than expected. But they warned that Mesa and other regional airlines were "not out of the woods" and that pilot recruitment could prove challenging in the face of competition from the major US carriers.