For fiscal year 2022 Mesa Air Group has reported total operating revenues of US$531.0 million, an increase of US$27.4 million (5.4%) from US$503.6 million for fiscal year 2021. Contract revenue increased US$44.0 million, or 10.1%. This was primarily due to the return to normal rates from its partners, which were temporarily reduced last year related to the PSP programme and recognition of higher deferred revenue, partially offset by a reduction in block hours and partner utilisation penalties.
Mesa’s fiscal-year 2022 results include, per GAAP, the recognition of US$10.4 million of previously deferred revenue, versus the deferral of US$10.7 million of revenue in fiscal 2021. Mesa’s Adjusted EBITDA for fiscal year 2022 was US$66.6 million, compared to US$150.0 million in fiscal year 2021 and Adjusted EBITDAR was US$103.6 million for fiscal year 2022, compared to US$189.3 million in fiscal year 2021. Mesa’s fiscal-year 2022 results reflect a net loss of US$182.7 million, compared to net income of US$16.6 million for fiscal year 2021. Mesa’s fiscal year 2022 adjusted net loss was US$40.2 million, versus adjusted net income of US$24.6 million in fiscal-year 2021. The year-over-year decrease in adjusted net income of US$64.8 million was primarily due to lower block hours, the net impact of the PSP programme, change in deferred revenue, and higher pilot training expense.
On December 19, 2022, the company announced a final agreement with American Airlines to wind down its contract by April 3, 2023. The wind down with American Airlines was primarily the result of ongoing losses within the American operation as a result of higher pilot wages, which American would not agree to compensate Mesa for and utilisation penalties.
On December 27, 2022, Mesa finalised an amendment and restatement of its capacity purchase agreement with United Airlines. Under the agreement, Mesa will add up to 38 CRJ-900 aircraft, dependent on the number E-175s it is operating. Mesa will begin flying CRJ-900s on behalf of United in March of 2023 and utilise all of the crew and maintenance locations currently operated for American Airlines in Phoenix, Dallas, El Paso, and Louisville, as well as open a CRJ-900 crew base in Houston and a pilot base in Denver. As part of the final agreement, United will also pay Mesa increased block-hour rates to cover the incremental pilot wage increases instituted by Mesa in September 2022, which will remain in effect through September 2025. United will receive a 10% equity position in Mesa and a seat on the Mesa Board of Directors. Additionally, on December 27, 2022, the company finalised an agreement with United for a US$41.2 million liquidity facility, including the refinancing of US$15.7 million outstanding under its CIT revolving credit facility maturing December 31, 2022, and an additional US$25.5 million term loan, of which US$15.0 million is forgivable if Mesa achieves certain aircraft utilisation thresholds.
The collateral for the loan is a combination of aircraft parts and a pledge of its equity investment in Archer Aviation, Inc. and Heart Aerospace Incorporated. United also agreed to purchase 30 GE-CF34-8 spare engines from Mesa for US$80 million, which is expected to provide over US$50 million of net cash proceeds and close in Q1 CY2023. (£1.00 = US$1.20 at time of publication).
