Mesa Air Group Reports $58.6 Million Net Loss and $57.3 Million Operating Loss in Latest Quarter

Mesa Air Group, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending March 31, 2025. The company recorded an operating loss of $57.3 million, a stark contrast to an operating income of $11.6 million during the same period in 2024. The net loss for the quarter reached $58.6 million, compared to a net income of $11.7 million in the prior year. This downturn was primarily attributed to a $54.4 million loss from the sale of 18 E-175 aircraft and $111.8 million in asset impairments, alongside a decrease in contract revenue due to fewer aircraft under contract.

In terms of revenue, Mesa's total operating revenues fell by 28% to $94.7 million, down from $131.6 million in the previous year. Contract revenue specifically decreased by 39.9% to $68.4 million, driven by reduced block hours and a higher deferred revenue balance. However, pass-through and other revenue increased by 48.2% to $26.3 million, reflecting higher maintenance reimbursements related to the E-175 fleet. The company also reported a decline in passenger numbers, with 1.17 million passengers in the latest quarter, down 17.4% from the previous year.

Operationally, Mesa's fleet consisted of 60 E-175 aircraft, with approximately 238 daily departures. The company has been transitioning its operations from American Airlines to United Airlines, which has led to increased costs and reduced flying activity. As of March 31, 2025, Mesa's cash and cash equivalents stood at $54.1 million, a significant increase from $15.6 million at the end of the previous fiscal year. The company also reported $75.8 million in assets held for sale, indicating ongoing efforts to optimize its asset portfolio.

Strategically, Mesa entered into a merger agreement with Republic Airways Holdings on April 4, 2025, which is expected to provide a pathway for financial stability. The merger will involve the termination of the existing Capacity Purchase Agreement (CPA) with United and the sale of remaining eligible assets. Additionally, the company has implemented measures to address its liquidity concerns, including a three percent increase in CPA block hour rates retroactive to January 1, 2025, and a waiver of existing financial covenant defaults under its credit agreements.

Looking ahead, Mesa's management expressed cautious optimism regarding its ability to meet cash obligations over the next twelve months, contingent on the successful execution of its strategic initiatives and the anticipated merger. However, the company remains vigilant about market conditions, operational performance, and compliance with financial covenants, which could significantly impact its financial position and operational capabilities.