Mesa Air Group 2025 Q2 Earnings Misses Targets with Net Income Decline

Mesa Air Group (MESA) reported its fiscal 2025 Q2 earnings on May 20th, 2025. The total revenue of Mesa Air Group decreased by 28.0% to $94.75 million in 2025 Q2, down from $131.58 million in 2024 Q2, with specific segment revenue listed as follow: Contract revenue: $68.42 million, Pass-through and other revenue: $26.32 million and Total operating revenues: $94.75 million. Mesa Air Group missed expectations with a significant net loss, reflecting financial challenges. The company did not adjust its guidance, maintaining expectations for operational improvements and a merger conclusion by year-end.

Revenue
Total revenue for Mesa Air Group in Q2 2025 fell 28% year-over-year to $94.75 million. Contract revenue contributed $68.42 million, while pass-through and other revenue added $26.32 million, resulting in total operating revenues of $94.75 million.

Earnings/Net Income
Mesa Air Group swung to a loss of $1.42 per share in 2025 Q2 from a profit of $0.28 per share in 2024 Q2 (607.1% negative change). Meanwhile, the company reported a net loss of $-58.63 million in 2025 Q2, reflecting a 602.8% deterioration from the net income of $11.66 million achieved in 2024 Q2. The EPS performance was notably poor, indicating significant financial challenges.

Price Action
The stock price of Mesa Air Group has edged down 0.96% during the latest trading day, has edged up 1.98% during the most recent full trading week, and has dropped 3.74% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Mesa Air Group shares after their revenue drop on the financial report release date and holding for 30 days resulted in poor performance. The strategy's return was -65.89%, substantially underperforming the benchmark return of 88.25%. The excess return was -154.14%, with a CAGR of -19.44%, indicating significant losses over the 5-year period. The strategy also experienced a high maximum drawdown of -95.94% and a Sharpe ratio of -0.21, highlighting substantial risk and negative returns. These metrics underscore the challenges Mesa Air Group faced during the observed period, with the strategy failing to deliver any favorable outcomes in the face of financial instability.

CEO Commentary
"In the March 2025 quarter, Mesa posted our sixth straight quarter of positive EBITDA and EBITDAR performance, along with our third consecutive quarter of improving block-hour-per-day utilization, which is expected to be 9.8 in the June 2025 quarter," said Jonathan Ornstein, Chairman and CEO. He emphasized the conclusion of the CRJ-900 operations, marking a significant transition as Mesa's fleet now consists solely of 60 E-175 aircraft. Ornstein highlighted the company's focus on asset sales and debt repayment, reinforcing their commitment to strengthening the enterprise ahead of the upcoming merger.

Guidance
The merger with Republic Airways is anticipated to close prior to the calendar year-end 2025, contingent upon regulatory and shareholder approvals. Ornstein noted expectations for continued operational improvements, aiming for an increase in block-hour utilization to 9.8 in the June 2025 quarter. The company is positioned to offer enhanced opportunities for shareholders and employees post-merger, with a focus on maximizing enterprise strength by the time of transaction completion.

Additional News
Mesa Air Group announced a significant merger agreement with Republic Airways Holdings Inc. on April 7, 2025. The merger aims to create America's leading regional airline, combining two highly complementary cultures, fleets, and operations. The transaction is expected to close in late Q3 or early Q4 2025. Additionally, Mesa received a notice from Nasdaq on February 21, 2025, regarding non-compliance with listing requirements due to filing delays. The company has until March 17, 2025, to submit a compliance plan. Furthermore, Mesa Air Group disclosed receiving another notice from Nasdaq on January 15, 2025, related to the late filing of its Annual Report for the fiscal year ended September 30, 2024, with a compliance plan submission deadline of 60 days.