Harbor Diversified Reports $2.2 Million Net Loss in Q3 2024, Revenue Increases to $53.6 Million

Harbor Diversified, Inc. reported a net loss of $2.2 million for the third quarter of 2024, a decrease from a net loss of $4.5 million in the same period last year. The company’s operating revenues for the quarter reached $53.6 million, reflecting a 7.0% increase from $50.1 million in the prior year. This growth was primarily driven by a rise in contract revenues, which increased by 7.2% to $53.6 million, despite a decline in operational metrics such as available seat miles and passenger counts due to an ongoing pilot shortage affecting flight operations.

In comparison to the previous fiscal period, Harbor's total operating expenses rose to $59.1 million, up from $55.1 million, largely due to increased payroll costs and aircraft maintenance expenses. The company reported a significant increase in aircraft maintenance costs, which rose by 45.2% to $16.2 million, attributed to higher airframe repairs and materials. Despite these challenges, the overall operating loss narrowed to $5.5 million from $5.1 million year-over-year, indicating some operational efficiencies were achieved.

Strategically, Harbor has been navigating significant changes, particularly following the termination of its capacity purchase agreement with American Airlines, effective April 3, 2025. This agreement had been a primary source of revenue, and the company is now exploring alternative business strategies, including expanding charter operations and focusing on Essential Air Service markets. The company has also initiated workforce reductions, notifying approximately 240 employees of potential furloughs or terminations as part of its realignment efforts.

Operationally, the company reported a decrease in key performance indicators, with available seat miles down 11.8% and actual departures down 8.5% compared to the previous year. The total number of passengers carried also fell by 8.5% to 603,837. These declines were primarily attributed to the industry-wide pilot shortage, which has constrained flight availability. Despite these challenges, the company has seen an increase in contract revenue per available seat mile, which rose to 26.84 cents, reflecting improved revenue rates negotiated under the American capacity purchase agreement.

Looking ahead, Harbor Diversified remains cautious about its financial outlook. The company has indicated that its ability to generate sufficient cash flows from operations will be critical in the wake of the impending termination of its agreement with American Airlines. While the company believes its current cash and marketable securities will meet liquidity needs for at least the next 12 months, it acknowledges the significant risks associated with its evolving business strategies and the potential need for further operational adjustments.