Mesa Air Group 2025 Q3 Earnings 43.3% Narrowed Net Loss Amid Merger

Mesa Air Group reported a 43.3% reduction in its net loss year-over-year, narrowing to $14.12 million in Q3 2025 compared to $24.92 million in the prior-year period. The results partially exceeded expectations as the company announced a pending merger with Republic Airways, set to close on November 25, 2025, which is expected to stabilize its financial position.

Revenue

Mesa Air Group’s total operating revenue declined 21.3% to $90.68 million in Q3 2025, reflecting reduced contract and pass-through revenue. Contract revenue fell to $69.94 million from $93.8 million in the prior year, driven by fewer United Airlines contractual aircraft and the disposition of Embraer 175 units. Pass-through and other revenue rose modestly to $24.71 million, supported by higher maintenance expenses and the recognition of $1.4 million in previously deferred revenue.

Earnings/Net Income

The company’s net loss improved to $14.12 million, or $0.34 per share, from $24.92 million, or $0.60 per share, a year earlier. Adjusted net loss narrowed to $2.1 million, or $0.05 per share, indicating operational progress despite ongoing challenges. The earnings contraction highlights persistent cost pressures but signals a step toward stabilization.

Post-Earnings Price Action Review

A backtest of buying MESA shares following its Q3 revenue drop and holding for 30 days revealed a cumulative return of -35.95% over three years, underscoring poor performance post-earnings. The strategy’s failure to capitalize on rebounds or sentiment shifts suggests short-term momentum is lacking, with the stock continuing to decline by the end of the holding period. The consistent underperformance underscores the need for longer-term strategic approaches rather than short-term trading.

[CEO Commentary]

Mesa Air Group’s CEO emphasized operational challenges, including cost pressures and competitive dynamics, while highlighting strategic investments in fleet modernization and route optimization. Despite the Q3 net loss, the CEO expressed cautious optimism about long-term regional aviation opportunities, stressing disciplined capital allocation and operational efficiency.

[Guidance]

The company guided for full-year 2025 revenue between $350–360 million and adjusted EBITDA of $25–28 million. Capital expenditures are projected at $45–50 million for fleet upgrades, with a focus on reducing fuel costs. Operational cost reductions of 5–7% year-over-year are targeted to mitigate market volatility.

Additional News

Mesa Air Group’s merger with Republic Airways, approved by shareholders, is set to close on November 25, 2025. The deal, following a 1-for-15 reverse stock split, will create one of the largest U.S. regional airline operators, combining 310 Embraer 170/175 jets and $1.9 billion in annual revenue. Mesa’s debt will be extinguished, leaving the combined entity with strong liquidity. Mesa shareholders will own 6–12% of the new company, while Republic shareholders retain 88%. The merger aims to enhance economies of scale and financial flexibility, positioning the entity for stability in a competitive market.