Mesa Air Group stumbles to loss
 

Mesa Air Group stumbles to loss

Friday May 11, 2007
A second fiscal quarter rife with operational difficulties resulted in a $24 million net loss for Mesa Air Group compared to a $5.3 million profit in the first three months of 2006.

The company blamed weather, air traffic control problems and operations on behalf of United Airlines that were cancelled or significantly delayed. It also cited low yields and lower-than-expected revenue at its Hawaiian subsidiary go!. "We are clearly not happy with this report," Chairman and CEO Jonathan Ornstein said. "We know we are below Street expectations."

Gross operating revenue rose 7.8% to $336.4 million although the company reported a $25.3 million impairment charge related to an incentive payment to UA that impacted its operating result, which swung to a $24.9 million loss from a $27.9 million profit. Expenses climbed 18.2% to $336 million. "We know what we have to do and we have a plan in place going forward," Ornstein said, adding that MAG is working closely with United to "reduce the impact of irregular operations."

Its agreement to operate Dash 8s on behalf of Delta Air Lines ends in August and Mesa will look for other options for the aircraft. Also, it announced a stock repurchase program for up to 10 million shares of common stock. Ornstein said its joint venture with Shenzhen Airlines is on schedule with first flight expected in September.

MAG flew 1.68 billion RPMs in the quarter, up 4.7% from the year-ago period, against a 3.8% increase in capacity to 2.27 billion ASMs. Load factor rose 0.7 point to 73.9%. Yield increased 3.6% to 20.2 cents on a 4.2 lift in unit revenue to 14.9 cents. Unit cost was up 10% to 14.3 cents, or 16.9% to 9.7 cents excluding fuel.

For the six months ended March 31, the company reported a net loss of $16 million, a reversal from an $18.3 million profit in the year-ago period. Operating result fell to a $5.7 million loss from a $56.7 million profit.

by Sandra Arnoult

As predicted . . .MAG is starting to lose playing its own shell game. A few more months of NOT luring any pilots and a few more months of NOT fixing their planes will lead this carrier to extinction. . . . Can't wait.

ellen as much as everyone hates mesa, its gonna put a lot of good pilots including a close relative of mine on the street. i cant help but feel sorry for them

Everyone makes choices in life. It sucks yes. But I hope they go down. I don't like having a regional out there that tries to lower the bar so much. They deserve to go down.

the pilots and fa's arent the ones who brought it down. theyre the ones who kept it afloat.

but based on your logic, would you like it if i said that if your management ever becomes ridiculously incompetent, i hope you end up on the street without a job?

You could say the same for GoJets and Freedom. They kept it afloat by accepting bad work conditions. Yes I've met people from there and several of them good guys. But noone is perfect and they did chose to go there. The statement isn't about the pilots though it's about the airline. It needs to go belly up. It would help the industry.

im not done. when mesa finally does decide to fold, do you think that everythings going to be magically better for all other regionals? sure mesa is the bottom of the barrel, but other regionals are going to follow in reaching that status. as long as majors are able to get regionals to bid outrageously low for contracts, nothings going to change. youll just have to find some other pilot group to blame for the crappy regional world.

and what about the people who came to mesa when it wasnt "all that bad." you know mesa used to be an average place to work before they really just went to he!!. im more concerned for the guys who were on board when it was an ok place to be.

and no no no its not going to do anything to make the industry better when mesa goes away

gojet and freedom? you cant even compare thats very different scenarios compared to what were talking about here. lets not confuse the issue

Mesa didn't really "lose" $25 mil, it's just how they had accounting run the numbers. All done to weaken the unions position as they enter negotiations.

Notice the point about Mesa buying back shares? Companies generally only do this for one reason - they think their share price (and resulting market cap) is below current market value.

i do agree that mesa is hiding money. i still want to know, toilet, what makes you think the industry will improve when mesa goes away. is this going to result in some industry wide wage increase? are all regionals gonna band together and stick it to the majors? come on man you gotta be kidding

I wont say the industry will improve.................it will just be less ****ty.

ok tell me how? i understand youre removing a bottom feeder from the industry, but theyve essentially not been a big competitor for new contracts (except for the DAL contract) for a while now, so how are things going to improve?

well for one, maybe companies will realize that if you treat your pilot group like shiit and run your mx like they do................your going to loose money

I still dont see that. Management isnt going to all of a sudden have compassion for their crews. ASA treats its pilots horribly and theyre one of the most profitable airlines. Besides, competition is still going to be fierce, thats not going to let up. its going to get worse actually

Hey, what can I say, im a "glass half full" type of guy.................but then again
I managed to get sunday off so my journey to Itlaly starts a day earlier, so Im just very happy............... and Im listening to "BROWN EYED WOMEN"........................great great Grateful Dead song:rolleyes:

maybe the glass is just twice as big as it needs to be...

haha. hey im optimistic too, about majors and what not, but not so much about regionals because that will always be what it is. have fun in italy man, any chance of riding first class?

nah I wish, its booked full then there is a list of like ten 81' hires before me:o

Don't you work for Colgan or Pinnacle, if that is the case you have no room to speak...

The bottle was dusty, but the liquor was clean. . .

Yes. Might take some time. But herds become stronger when the weak are cut lose.

that may be true but youre referring to the wrong herd. the pilots have nothing to do with it. mesa going away doesnt take away from the fierce competition among regionals.

Guys, Mesa isn't going anywhere. Just because they posted a paper loss doesn't mean anything. Sheesh - get a grip :D.

not saying it is. im just more concerned with the attitude of thinking its ok for 1500 hard working pilots to lose their jobs, which by the way all you regional hopefuls is a bad thing because theyll take your xjt or rah or skw job youre excited about.

i dont think its ever right to hope a group of pilots gets furloughed or fired or goes completely away, unless its scabs etc. mesa (except freedom a) pilots dont fall into that category. have some sympathy if something bad does happen, just like you should have sympathy for every other pilot group thats been screwed over

Well, it's also the current favorite tactic that companies are using to make their earnings look better than they actually are. EPS always looks better if there are fewer shares. With rates the way they are right now, they could potentially borrow to buy the shares still get a pretty good return on it, assuming their business doesnt tank. There is a reasonably good chance that JO could go laughing to bank on this...

I can guarantee you he will.

So your arguement then is that I should be supportive of pilots that are willing to undercut the industry as well as knowingly work for less money and worse work rules because they didn't want to be a CFI and suck it up past the 600hr mark?

Now that's a broad general statement. It doesn't apply to them all. I know some take it for domicile reasons, family, ect., but there are many out there that take it because of a 250hr bridge program and a nice shot of SJS that never gave a damn about what their actions were doing for the industry as a whole. I don't feel sorry for those kind and I know that place is full of them. People are scared to work a little for what they want. You'll see those kinds of guys running for places like gojets.

Preach on my dear brother, preach on...............

"You'll see those kinds of guys running for places like gojets."

Those kinds of guys? what kinds of guys. with xjt hiring at 600, asa at 300, pinnacle at 300, whiskey at 500, i fail to see your point on what "those kinds of guys" means. i support low time pilots btw so thats not what im talking about.

mesa pilots abide by their contract. i dont understand what youre talking about.

Duck, that's a pretty high horse you're sitting on considering you've been an airline pilot all of about 2 months now.

this "my regional is better than yours" attitude is ridiculous. why does it happen? all regionals suck, just hope that you dont end up on the street one day

dont get me wrong, you should still want to be hired at a more stable regional, but dont act like its the best thing since sliced bread

I hope they go down or, more likely, suffer a major reorganization. I know guys who work there who feel the same way (obviously they are trying to leave).

I feel for the people who have been there a while. It was never great, but it used to be good enough if you lived near one of their domiciles. I have to admit that I have no sympathy for some of the junior punks and street clowns that went over there lately knowing full well what they were getting into. A little unpaid time off from aviation might help improve their judgement.

I think a mesa liquidation or sell-off will make the industry better. Mesa is the poster-child for walmart-ization of the regional business. If their formula fails, others would certainly take notice.

Thank you! Your right, "my regional is better than yours" attitude is getting old! Sounds like alot of people plans are to stay at the regionals forever.
Okay, Each to their own.

Yes but while we are here at the REGIONAL level we should try and preserve whatever self-respect we have. Though I don't want to stay at the regional level, while I am here I would like to have my QOL either preserved, or raised. If every regional raises the bar, this level of the industry might not be such a bad place to be while your waiting for that dream airline to call

i will support any regional willing to fight for good QOL or pay increases. i think every pilot deserves it regardless of your experience. i think regionals without a union are just as bad as the people who refuse to say no to these kind of companies. The pilot pool is drying up... there is a shortage and if we as a pilot group, not as 20 or so small company pilot groups, say look this is what you need to keep us flying... i think there should be an industry wide ALPA or whoever contract. 50 seat RJ pay is a min of this, # days off min on reserve, If you cant meet these requirements alpa will descourage pilot applicants from going to your airline. i have never been a huge alpa fan and it seems the alpa guys at my company and a couple others have been out for themselves for awhile but they need to start getting riled up. This Prater "take it back" or whatever needs some action behind it and i aint seeing it yet. the next couple years are going to be interesting and i have a feeling we are about to seem some serious battles between regionals and their pilot groups.

How can anyone disagree with this statement? Right On

You want a job at the "Majors" secure yout job at the regional and treat it like a career. Why shouldn't flying 90 passenger be treated like a career? oh yeah, 1000 pic and your going to move on

what what what what? youre out of your mind

Because that kind of flying should be at the majors. DC-9s and 737 were the original RJs.

Ghilis - If Mesa would disappear tomorrow, not saying that it will, there would me a large sigh of relief coming from many people. You do not realize what a poorly run airline can do all involved in the industry. The pay is crap. The management blows and allow aircraft to fall below standard and consistantly have mx problems.

Look at it this way - when a flight gets cancelled, what happens down the line? There is a long list of problems, but I will address one, the Jumpseat. There are crew memebers that look for rides to work. If a flight gets cancelled, then there is a good chance that jumpseaters will get left behind somewhere in the system.

Mesa guys/gals are great people, but the management is destroying the market. Look at the Go! operation Good folks over there are suffering cause of the low standard that Mesa as provided is not diluting the system.

Over and out, for now.

They have been losing money. It's not a paper loss anymore.
1) The coverup of "go!" and its failure to make $$$$,
2) the continual postponing of maintenance forces MESA to CXL flights (they lose actual $ AND lose performance $$ for a double whammy,
3) Pilots not getting paid for cancelled trips get fed up and leave to other airlines,
4) MESA pays signing bonuses to acquire pilots
5) Agree to a 10 million share buyback. Could buy 1 share OR 2 OR 3 OR 1000. It's a smoke and mirrors play on behalf of JO. We all know it.
6) Going overseas for business because MESA cannot find anyone else to pay them to do the job they were hired to do here in the USA. i.e They burned all their bridges.

What does them leaving do . . . decreases supply of contract regionals, with LESS supply, companies can charge more.