Mesa Air Group lost $47.6m during its fiscal third quarter, with the airline’s block hours plummeting during its transition to flying its Bombardier CRJ-900s on behalf of United Airlines. The parent company of Mesa Airlines lost $10m during the same period of 2022. “We’re not particularly pleased with these numbers,” CE Jonathan Ornstein said during the company’s 9 August quarterly earnings call. “We know that things have to change. The good news is that we feel we have a very strong partner to help make that happen.” The Phoenix-based carrier generated $115m in quarterly revenue, down from $134m last year, as contract revenue decreased nearly 21%. “These decreases were primarily driven by 50% reduction in CRJ-900 block hours and fewer aircraft, partially offset by higher United block-hour rates for new pilot pay scales,” Mesa says. The regional carrier is also struggling to hire enough pilots to fully utilise its fleet amid the industry-wide shortage of qualified flight crews, which Ornsteins calls a “captain crunch”. “In spite of consistently adding pilots from January to present, we’re still only flying approximately 70% of our full utilisation capacity, which we believe is consistent with other regional carriers in the United portfolio,” Ornstein says. “To meet United’s target utilisation, we will need approximately 150 more pilots, primarily captains.” “Given our current pilot outlook as well as cooperation and support from United Airlines, we believe we will reach United’s target utilisation by the end of fiscal year 2024,” he adds. The carrier’s transition away from flying on behalf of former mainline partner American Airlines “has not been easy”, Ornstein adds, as United “took a particularly conservative approach” to scheduling Mesa’s block hours during the quarter. Moving forward, “more efficient scheduling” could boost Mesa’s block hour production, he says. <br/>
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South Florida start-up carrier Global Crossing Airlines (GlobalX) reports a Q2 loss of $7.5m as aircraft delivery delays and long turnaround times for aircraft maintenance continue hindering the airline’s operations. GlobalX lost $6.8m during the same three-month period last year. The charter operator said on 9 August that it generated $31.5m in quarterly revenue, compared with $17.4m last year. The carrier’s quarterly expenses reached $38.3m, including $12.1m spent on employee wages and benefits, $6m on fuel and $6.8m on leasing aircraft. The company adds that it was negatively impacted by “accelerated cockpit crew hiring and training to prepare for a busy 2023 summer schedule, resulting in an increase of approximately $4.2m in training expenses”, and the delayed delivery of its second Airbus A321 freighter. The aircraft was set to be delivered in late 2022 but finally entered revenue service in June. “While we had built in 90 days of flying for that airplane and 90 days of revenue for the quarter, we only got 10 days because of staffing issues and supply chain issues at the MROs,” says Ed Wegel, CE of GlobalX. Amid these challenges, Wegel says that “it was a very good quarter for us, setting us up for success in the future”. He points to GlobalX recently securing $35m of financing from investment firm Axar Capital Management, which comes with a six-year repayment term. The firm’s purchase of GlobalX stock will be used to “refinance all of the company’s existing indebtedness” and expand the carrier’s fleet of passenger and freighter aircraft”, Wegel said 2 August. The charter carrier flew 3,585 block hours in the second quarter, up 70% from last year. And company executives say the worst supply-chain snags and delivery delays are in the rearview mirror.<br/>
Shortages of Pratt & Whitney engines for Airbus A220 passenger jets have eased but it will take around 18 months before disruption is lifted altogether, the head of the airplane's second-largest operator, airBaltic, told Reuters. A recall of Geared Turbofan engines for larger Airbus A320s for inspections and possible repairs, which roiled the aircraft industry last month, does not affect the Canadian-designed A220 which was the first aircraft to use the fuel-saving powerplants. A220 operators have still had to grapple with some durability issues, compounded by a shortage of spare engines and maintenance bottlenecks that have collectively reduced the supply of working engines and left dozens of planes grounded. "Things have changed if we look at the engine. For us, it is getting better," CE Martin Gauss said in an interview. With more than 40 airplanes in its fleet, airBaltic is the second-largest operator of A220s after Delta. On average 11 of its A220s were out of action during the first-half, slowing an improvement in first-half earnings caused by buoyant air travel demand. The extra downtime reflects some durability problems as engines come in for maintenance sooner than expected, though these are not as severe as those seen on the larger A320 in hot and dusty climates. But the trend of so-called Unexpected Engine Removals is "going down significantly" after a recent modification involving a change of oil pipe, Gauss said ahead of the mid-year results.<br/>
About 140 flights were grounded Wednesday on the southern island of Jeju due to the approaching Typhoon Khanun. The powerful typhoon was moving from Japan toward Korea and was predicted to make landfall on the country's southern coastal regions Thursday, according to the Korea Meteorological Administration (KMA). Jeju International Airport reported that out of the 492 flights scheduled for the day, 137 had been canceled as of 1 p.m. All passenger boat services from and to the island were also suspended, maritime authorities said, with operations expected to resume Friday. Typhoon alerts have been issued for the entire land area of the Island and its offshore waters. Earlier in the day, Korea Airports Corp., which operates 14 regional airports excluding Incheon International Airport, said a total of 87 departures had been canceled across the airports as of 11 a.m. The affected flights included 33 from Gimpo International Airport in Seoul, 22 from Jeju, 13 from Busan, six from Gwangju and five from Cheongju. On Tuesday, the company already reported the cancellations of 78 flights. But no flights to or from Incheon International Airport in Incheon, 27 km west of Seoul, have yet been affected. <br/>
Air Baltic overcame the impact of around 25% of its own fleet being grounded during the second quarter to report a profitable first half of 2023. Outlining its six-month performance on 9 August, the carrier said it continues to see reliability issues with the Pratt & Whitney PW1500G engines that power its all-Airbus A220-300 fleet – a situation exacerbated by a shortage of spare engines, which is prolonging aircraft time on ground. In the April-June period, on average, 11 of its A220s were grounded at any one time, it says, echoing recent challenges faced by other operators of aircraft with PW1000G-family engines. To offset those groundings, Air Baltic has continued to wet lease-in capacity – largely older A320s – with a number of undesirable consequences, including increased fuel burn, punctuality issues relating to more complex operations, reduced load factors, higher airport and handling charges, lower customer satisfaction, and costs to secure the leases, it says. It estimates that extra costs relating to the leasing-in of aircraft amounted to around E30m ($33m) in Q2 alone. At the beginning of July 2023 – outside the first-half earnings period – it received a E20.4m “commercial support payment” relating to the engine issues, the carrier says. Despite its engine challenges, Air Baltic swung to a net profit of E14.6m for the January-June period, from a loss of E91m a year ago. EBIT also reached E31.8m, against a loss of E24.8m in 2022. Its record H1 revenue of E291m was up 52% year on year and 33% over its 2019 figure, helped by ”healthy yields”. Some 15%, or E45m, of the carrier’s revenue came from ACMI lease deals with other airlines. Air Baltic had previously indicated that it would wet lease-out up to 14 of its A220s for the summer season, as its own markets felt the impact of the Ukraine war in particular. <br/>
Ryanair Holdings Plc senior executive Eddie Wilson said a new decree passed by the Italian government to reduce the impact of rising airfares this summer is illegal. “It’s ridiculous, illegal and goes against free market laws,” Wilson, who is chief executive officer of Ryanair’s main unit, said in an interview with Ansa newswire. If the new package isn’t scrapped, “there’s going to be an impact on Ryanair operations in Italy.” Prime Minister Giorgia Meloni’s cabinet earlier this week approved the airline measure alongside a controversial surprise tax on banks’ profits that roiled markets. The airline initiative is designed to clamp down on carriers’ use of algorithms to set ticket prices — particularly for connections from Italian hubs to the islands of Sicily and Sardinia — in a bid to protect consumers against sudden price spikes. Renewed demand for summer travel following the ending of Covid-related restrictions has buoyed airlines, but inflationary pressure could dent demand in coming months. Dublin-based Ryanair has lowered its full-year forecast for traffic and said it may need to cut ticket prices to fill seats this winter as passengers become more cost-sensitive.<br/>
Wheels Up Experience just got a fresh liquidity boost from its largest shareholder, Delta. The struggling concierge jet-service firm has been seeking new financing from investors as its cash dwindles, according to people with knowledge of the situation. It has been working with Jefferies Financial Group Inc. and Kirkland & Ellis to explore options, including asset sales and cost cutting, to improve profitability. “Delta, which has a long history of supporting its partners, is providing a short-term capital infusion in the form of a secured promissory note as the company pursues strategic partnerships,” the airline’s representatives said in an emailed statement Wednesday. The carrier, which called Wheels Up “a valued Delta partner,” declined to disclose the amount of the note. Wheels Up could also get a cash injection from the sale of its non-core aircraft management business. Plans to sell those assets to Airshare are underway, according to a statement. The New York-based company, which lets customers book private charter flights by the hour, has garnered big name investors including former LVMH executives and the consumer-focused private equity firm L Catterton, but has reported losses in every quarter since it went public through a reverse merger with a blank-check company in mid-2021. As of March 31, Wheels Up had $363.2m of cash on hand, and an additional $36.6m of restricted cash. The company’s earnings report and conference call, previously scheduled for Wednesday, were canceled.<br/>