Mesa bets on cargo as operating profit falls 12%
Mesa Air Group reported a $15m operating profit during Q3 despite the travel downturn during the coronavirus pandemic. While Mesa’s profit was only down about 12% year-over-year, operating revenue plunged 60% to $73m as passenger demand remains soft for the carrier’s airline partners. Mesa’s business has been somewhat insulated during the pandemic because it has capacity purchase agreements to operate flights for United and American Airlines, for which those carriers make fixed monthly payments. Block hours for those flights were down 73% year-over-year, but are expected to improve in September, Mesa chief executive Jonathan Ornstein said during an earnings call on 10 August. He anticipates that flights for its fourth quarter will be down 46% year-over-year. The regional carrier and its mainline customers are making changes within their contract parameters to save costs, including deferring aircraft deliveries. Mesa is in talks with American to extend its capacity purchase agreement, and has agreed to remove two Bombardier-built CRJ-900 aircraft from service in June that were scheduled to be removed in January, COO Brad Rich says during the call.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-08-12/unaligned/mesa-bets-on-cargo-as-operating-profit-falls-12
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Mesa bets on cargo as operating profit falls 12%
Mesa Air Group reported a $15m operating profit during Q3 despite the travel downturn during the coronavirus pandemic. While Mesa’s profit was only down about 12% year-over-year, operating revenue plunged 60% to $73m as passenger demand remains soft for the carrier’s airline partners. Mesa’s business has been somewhat insulated during the pandemic because it has capacity purchase agreements to operate flights for United and American Airlines, for which those carriers make fixed monthly payments. Block hours for those flights were down 73% year-over-year, but are expected to improve in September, Mesa chief executive Jonathan Ornstein said during an earnings call on 10 August. He anticipates that flights for its fourth quarter will be down 46% year-over-year. The regional carrier and its mainline customers are making changes within their contract parameters to save costs, including deferring aircraft deliveries. Mesa is in talks with American to extend its capacity purchase agreement, and has agreed to remove two Bombardier-built CRJ-900 aircraft from service in June that were scheduled to be removed in January, COO Brad Rich says during the call.<br/>
