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MA

MESA AIR GROUP INC (MESA)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $115.3M, up 0.8% year over year; GAAP diluted EPS was $(0.60), an improvement from $(0.69) in Q4 2023. Adjusted EBITDA turned positive to $14.7M versus a $(2.9)M loss in Q4 2023, driven by higher E-175 block-hour rates, improved operational performance, and lower depreciation from CRJ asset reductions .
  • Management announced a definitive merger agreement with Republic Airways, with a new 10-year CPA with United as part of the transaction; Mesa is now flying exclusively E-175s, with utilization scheduled to rise to 9.8 block hours/day by March 2025, supporting margin recovery .
  • Sequentially, revenue increased from $110.8M in Q3 to $115.3M in Q4 while EPS declined from $(0.48) to $(0.60) due to higher asset impairments in Q4; adjusted EBITDAR improved to $18.2M from $10.6M in Q3 .
  • Consensus estimates from S&P Global were unavailable at time of analysis; estimate-related beats/misses cannot be assessed (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

  • Adjusted profitability improved: Q4 2024 adjusted net loss narrowed to $(0.00) per diluted share from $(0.64) in Q4 2023; adjusted EBITDA rose to $14.7M from $(2.9)M, reflecting improved block-hour rates and cost control .
  • Operational execution: Controllable completion factor hit 99.88% in Q4 2024, up from 99.54% YoY; pilot attrition slowed and utilization increased, with planned further improvement in early 2025 .
  • Strategic repositioning: Exclusive E-175 operation and planned merger with Republic under a new 10-year CPA with United, plus monetization of surplus assets and debt reduction actions to lower interest expense .

Management quote: “We are moving forward with a merger with Republic Airways… We plan to continue to strengthen our operational and financial performance ahead of the closing of our transaction with Republic.” — Jonathan Ornstein, Chairman and CEO .

What Went Wrong

  • Asset impairments: Q4 2024 asset impairment was $22.8M (vs $3.4M in Q4 2023), weighing on GAAP EPS and net income despite operational improvements .
  • Contract revenue mix: Q4 2024 contract revenue decreased 1.0% YoY to $93.8M due to DHL wind-down, partially offset by higher United block-hour rates; pass-through revenue up but driven by maintenance expense .
  • Sequential EPS deterioration: Despite sequential revenue growth from Q3 to Q4, GAAP diluted EPS moved from $(0.48) to $(0.60) as impairments rose and net loss increased from $(19.9)M to $(24.9)M .

Financial Results

MetricQ2 2024Q3 2024Q4 2024Vs. Q4 2023Consensus (Q4 2024)
Revenue ($USD Millions)$131.582 $110.793 $115.257 $114.366 N/A
GAAP Diluted EPS ($)$0.28 $(0.48) $(0.60) $(0.69) N/A
Net Income ($USD Millions)$11.660 $(19.908) $(24.917) $(28.344) N/A
Operating Income ($USD Millions)$11.643 $(9.027) $(17.033) $(20.242) N/A
Adjusted EBITDA ($USD Millions)$26.758 $8.948 $14.717 $(2.867) N/A
Adjusted EBITDAR ($USD Millions)$28.166 $10.632 $18.217 $(2.449) N/A

Segment-like Revenue Mix

MetricQ2 2024Q3 2024Q4 2024
Contract Revenue ($USD Millions)$113.820 $95.596 $93.806
Pass-through & Other Revenue ($USD Millions)$17.762 $15.197 $21.451

KPIs and Operating Metrics

KPIQ2 2024Q3 2024Q4 2024
Controllable Completion Factor (United)99.85% 99.94% 99.88%
Block Hours43,270 43,813 42,495
Departures23,691 24,144 23,529
Passengers1,422,702 1,513,581 1,435,580

Note: Consensus estimates from S&P Global were unavailable for Q4 2024; estimate comparisons could not be performed (S&P Global data unavailable).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Average block hours/day utilizationQ1 2025 (calendar)~8.9 (Q4 2024 baseline) 9.5 by Jan 2025; 9.8 by Mar 2025 Raised utilization outlook
Fleet transitionBy Mar 1, 2025Mixed E-175/CRJ-900 All E-175 by Mar 1, 2025 Accelerated to single fleet
CPA block-hour rate (E-175)Through Aug 31, 2025Increased rate effective Oct 1, 2023 Extension through Aug 31, 2025 Maintained/extended
United cost reimbursement for transitionFY2025Not previously quantifiedUp to $14M reimbursement New reimbursement commitment
Strategic transactionFY2025NoneDefinitive merger with Republic; new 10-year CPA with United New strategic framework

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Fleet strategy (E-175 focus)Transition underway; CRJ asset divestitures Accelerate to all E-175 by Mar 1, 2025 Exclusive E-175 operation; strengthened utilization Improving/Consolidating
CPA economics with UnitedHigher E-175 rates; recognized deferred/recovered revenue Extended increased block-hour rates through Aug 2025 New 10-year CPA framework post-merger Structurally improving
Operational performance99.85% controllable completion factor 99.94% controllable completion factor 99.88% controllable completion factor Sustained strong ops
Pilot attrition/pipelineAttrition reduced; MPD program scaling Recalling pilots as utilization improves MPD began operations; recalling pilots Stabilizing workforce
Balance sheet actionsDebt down $221.5M YoY; asset sales Continued asset monetization; debt reduction Large E-175 sale to United; further CRJ/engine sales Deleveraging continues

Note: Q4 2024 earnings call transcript was not available in the document set; themes are derived from press releases and the Q4 results 8-K .

Management Commentary

  • “For fiscal full-year 2024, we produced positive adjusted EBITDAR… Our scheduling and utilization have been increasing sequentially… As of the end of February, we are exclusively flying E-175s, creating a more efficient operation and enabling us to transact on our remaining surplus CRJ assets.” — Jonathan Ornstein, Chairman and CEO .
  • “We have extended the increased block-hour rate in our CPA with United into next year… United has also agreed to reimburse Mesa for expenses associated with the transition to fully flying E-175 aircraft.” — Jonathan Ornstein .
  • “We achieved our first GAAP and adjusted net profits in 11 quarters… Mesa has reduced its total debt by $221.5 million, or 36%, over the past year.” — Jonathan Ornstein (Q2 2024) .

Q&A Highlights

  • The Q4 2024 earnings call transcript was not available in the document set; therefore, specific analyst Q&A themes, guidance clarifications, and tone changes versus prior quarters could not be assessed (no transcript found).

Estimates Context

  • Wall Street consensus estimates for Q4 2024 revenue and EPS via S&P Global were unavailable at the time of analysis, preventing beat/miss assessment (S&P Global data unavailable).

Key Takeaways for Investors

  • Sequential operational improvement with strong controllable completion factors supports increasing utilization into 1H 2025; this should expand adjusted EBITDA and margin runway as E-175-only operations take hold .
  • Structural shift: the Republic merger with a new 10-year CPA with United realigns Mesa’s long-term economics and could stabilize cash flows, contingent on successful integration and United block-hour growth .
  • Asset impairments remain a headwind to GAAP EPS; however, ongoing monetization of surplus CRJ assets and engine sales plus debt reduction should lower interest expense and improve net results over time .
  • Revenue mix is increasingly concentrated in United CPA economics; DHL wind-down and deferred revenue timing can introduce quarter-to-quarter volatility, but higher block-hour rates and utilization should offset .
  • Short term: watch for execution on utilization ramp to 9.8 block hours/day by March 2025 and pilot recalls; these are near-term catalysts for adjusted profitability .
  • Medium term: the single-fleet E-175 strategy simplifies operations and training costs, supporting margin improvement and more predictable maintenance/pass-through dynamics .
  • Risk monitors: asset impairment cadence, pace of CRJ asset dispositions, timing of 10-Q filings, and any changes in United scheduling or CPA terms remain critical .