Mesa Air Group 2025 Q3 Earnings 43.3% Reduction in Net Loss Despite 21.3% Revenue Decline

Mesa Air Group (MESA) reported mixed results for its fiscal 2025 Q3 earnings, with a significant reduction in net losses but a sharp decline in revenue. The company narrowed its net loss to $14.12 million ($0.34 per share) compared to $24.92 million ($0.60 per share) in the prior-year period, a 43.3% improvement. However, total revenue fell 21.3% to $90.68 million, reflecting ongoing operational and market challenges.

Revenue

Mesa Air Group’s Q3 2025 revenue totaled $90.68 million, a 21.3% decline from $115.26 million in Q3 2024. Contract revenue, the core driver of the business, dropped 29.6% to $65.97 million, while pass-through and other revenue rose 14.9% to $24.71 million. The contraction in contract revenue was attributed to reduced United Airlines aircraft commitments and the disposition of Embraer 175 aircraft. Despite higher pass-through maintenance expenses, total operating revenues fell short of the prior year’s performance.

Earnings/Net Income

The company’s net loss narrowed to $14.12 million ($0.34 per share) in Q3 2025, a 43.3% improvement from the prior-year loss of $24.92 million ($0.60 per share). Adjusted net loss, excluding impairment charges, was $2.10 million ($0.05 per share). The EPS reduction reflects improved cost management and asset sales, though profitability remains constrained by structural headwinds.

Post-Earnings Price Action Review

The strategy of buying MESA shares after its revenue drop quarter-over-quarter on the financial report release date and holding for 30 days shows poor performance over the past three years. The cumulative return is -35.95%, significantly underperforming the market. This indicates the strategy failed to capitalize on potential rebounds or market sentiment shifts following earnings disappointments. The revenue drop quarter-over-quarter is a critical indicator of weakening business performance, often leading to investor concerns over profitability and valuation pressures. The 30-day holding period is insufficient for capturing meaningful rebounds, as evidenced by the stock’s continued decline by the end of the holding period. This suggests that even short-term momentum is lacking. The cumulative return of -35.95% demonstrates that this strategy has been consistently unprofitable, with the stock struggling to recover post-earnings, indicating a persistent bearish sentiment. The backtest reveals that buying MESA shares after a revenue drop quarter-over-quarter and holding for 30 days is a losing strategy. The consistent underperformance highlights the importance of cautious optimism around earnings releases and the need for longer-term perspectives in navigating such events.

Additional News

Mesa Air Group’s merger with Republic Airways is set to close on November 25, 2025, creating one of the largest regional airline operators in the U.S. The transaction, approved by shareholders, will result in Republic shareholders owning 88% of the combined entity, while Mesa shareholders retain 6–12%. The merger aims to leverage economies of scale, with the post-merger company operating 310 Embraer aircraft and serving major carriers like American, Delta, and United. Mesa’s debt will be extinguished, and United’s 10-year capacity agreement will be retained. Analysts view the deal as a strategic move to enhance stability and operational flexibility in the competitive regional airline sector.

CEO Commentary

Jonathan Ornstein, Mesa’s CEO, highlighted operational strides, including a 100% controllable completion factor and a 100.00% on-time arrival rate for United regional flights. He emphasized asset sales and debt reduction ($315.2 million to $95.2 million) as key steps toward financial stability. The CEO expressed optimism about the merger’s potential to unlock long-term value through combined scale and operational efficiencies.

Guidance

The company did not provide explicit forward-looking financial guidance in the Q3 report. However, management indicated continued focus on cost discipline, fleet optimization, and leveraging the United capacity agreement post-merger.

Additional News

The merger’s approval follows a 15-for-1 reverse stock split, effective November 24, 2025. The combined entity will trade under the ticker “RJET” and aims to achieve $1.9 billion in annual revenue. Mesa’s recent asset sales and debt repayment efforts have stabilized its balance sheet, positioning the company for post-merger growth. Analysts anticipate improved margins and cash flow from the expanded fleet and operational synergies.