Company Summary: Mesa Air Group, Inc.

Business Overview

• Type: Regional airline holding company
• Headquarters: Phoenix, Arizona
• Founded: 1982 (reincorporated in Nevada in 1996)

Operations

• Main Operations: Operates as Mesa Airlines, providing scheduled passenger and cargo services
• Service Regions: 67 cities in 34 states, as well as Cuba and Mexico
• Fleet Size: 67 regional aircraft (as of September 30, 2024)
  • 55 Embraer E-175 aircraft
  • 12 Bombardier CRJ-900 aircraft
• Aircraft Usage: Approximately 265 daily departures

Revenue Generation

• Primary Revenue Sources:
  • 97% from United Airlines under the Capacity Purchase Agreement (CPA)
  • 2% from DHL under the Flight Services Agreement (FSA) (wind-down completed March 1, 2024)
  • 0.4% from aircraft leases to third parties
  • 0.5% from Mesa Pilot Development (MPD) program
• Other Revenue: Previously included a CPA with American Airlines (ended April 3, 2023)

Customers

• Main Customer: United Airlines, with whom the company operates all flights as United Express under a revenue-guarantee CPA
• Additional Customers: DHL (cargo services, wind-down completed in March 2024), previously American Airlines

Financials (as of September 30, 2024)

• Employees: Approximately 1,838
  • Pilots: 596
  • Flight Attendants: 559
  • Maintenance Employees: 447
  • Administrative and Other Staff: 204
• Revenue: Not explicitly disclosed in the provided excerpt
• Net Income: Reported a net loss of $91.0 million for fiscal year 2024
• Market Value (as of March 31, 2024): Approx. $36.2 million (market value of stock held by non-affiliates)

Key Agreements & Fleet Details

• United CPA: Revenue-guarantee arrangement where United pays fixed fees, flight hours, and departments, controlling route selection, schedules, and pricing
• Fleet Composition:
  • Owned aircraft: 49
  • Leased aircraft: 49
• Aircraft Residuals & Impairment: Recognized $73.7 million in impairment losses in FY2024 on owned aircraft

Strategic Initiatives

• Engaged in asset sales to reduce debt
• Transitioning entirely to E-175 fleet (aiming for fleet simplification and operational efficiency)
• Negotiating amendments to existing agreements to extend incentives and rate increases
• Exploring surplus asset sales (aircraft, engines, spare parts)

Summary

Mesa Air Group, Inc. is a regional airline and aviation services company predominantly providing passenger flights operated as United Express. The company operates a fleet mainly composed of Embraer E-175 and Bombardier CRJ-900 aircraft, with a focus on short- and medium-haul routes connecting regional communities to major hubs. Its financial performance in 2024 was negatively impacted by decreased utilization during fleet transitions, resulting in a net loss of $91 million. The company is heavily reliant on its agreement with United Airlines, which accounts for the majority of its revenues and operations.