MESA - Earnings call transcript Q1 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome, and thank you for standing by. At this time, all participants are in listen-only mode.

During the discussion, we will conduct a question-and-answer session. [Operator Instructions] this call is being recorded.

If you have any objections, you may disconnect at this point.

meeting Mr. the turn I'll over to Now Jonathan Ornstein.

may begin. You

Jonathan Ornstein

you, thanks operator, joining us Hi, for on and everyone thank today. the call

As Jonathan is Officer. indicated, and operator Executive Ornstein, Chief the Chairman this

Safe Officer; are On call our Chief to Executive Zapfe, and with Brian General today our of the Brian the like Mike Vice to our Gillman, ask Harbor President me President Lotz, and Counsel; statements, Darren please. VP, Financial Finance. read I'd

Brian Gillman

Thanks, Jonathan.

like conference to the the and the include would some to begin, Before forward-looking you comments of remind Mesa statements your presentation that questions call statements. responses in in this may

Mesa statements. the they our are to update included undertakes forward-looking revise such, statements our to uncertainties the actual cautionary no considered these forward-looking events and risk or results be factors that the which note should could you differ materially Any As statements. Company with with to affect in those in our subject the obligation conjunction statements also encourages press from filings future to and please read. release in Also, SEC,

please website addition, disclosures find to In used be reconciliations the release call. that on and measures non-GAAP will to of financial additional the of today's our Investors section in refer Mesa's press

Jonathan Ornstein

Thank you, Brian.

like that those talk achieving. some go of and things looking highlights to Okay. the about achieve the I'd financial are quarter, to things and results over able forward you the bit of of sort our a little we we've to to

feel importantly, of issues able certainly, our we which forward we'd line to where operational a production. area with increase which the pleased particular thought -- block more to we've of we challenge They quite from hour resulted the some reduced our pilot the for nicely, we attrition think, our in and move are ability has resulting in continuing financial in been hiring industry and big in key been are We results. the be with that,

block from is increase hours for result, only last lower February it adjusting XXX,XXX, quarter, current flat XX.X% days. XX this We're increase a a X.X% about hours quarter the next were be for also guidance from to a quarter. quarter quarter, the same and than As which although the when prior for the block XXX,XXX year providing has

Although shutdown we sign the shutdown. don't due do to to the has government FA again delayed not immune have affect in to simulator but expect off. we rescheduled been a us, This been the a has -- February of XX, a we're event for that

significantly their closed further debt XX the And did we a know, currently documentation note reduced of leased United. and transaction, and we announced pleased going of anticipation aircraft for of use forward, are we XX. had term the million approvals you think recently to purchase subject a refinancing our to signed $XX aircraft CRJ-XXX to one importantly, aircraft acquire we on for have that the our in operating final that sheet the XX completed. third parties of at was to important these of GECAS we Upon items Also, it's we fleet. I very this As at within completion lower with key that rates, we number

us than continue the the highly we an been to United. to productive but topic anticipated, remain course has of gave United to of the aircraft. XX point, ongoing on on extension XX CPA CRJ-XXXs, that side, we any which I with this confidence buy confident On longer know those have discussions of us the very for

advantage CPA partnerships operator, of are and previously low-cost to flying We Beyond discussed, well-positioned regional that our existing we potential explore new opportunities business, including a believe to expansions continue cargo. take increased and we as these other opportunities. includes

performance, at 'XX operational fourth had highlights and we XX.X%, two on to the fiscal On get issues factor over we another XXXX going on quarter are I'll XX.X% quarter, quarter from controllable couple with to back operational in for XX.X% side discuss to completion to-date, walk up and a you -- in strategic nicely the of financial improvement some the other I'm let through we'd Mike previous like you. quarter. the

Mike Lotz

Thanks, Okay. Jonathan.

reported So the reported is taxes just compared of for earnings taxes quarter $XXX,XXX. same for where million, the we quarter increase before $XX this the last fourth to significant first quarter -- a earnings year of we before

approximately tax Also we until tax NOL taxpayer of $X.X will accounting reported cash of net This not tax to although income income be is $XX.X year. as we taxes leased $X.XX NOL an a million. of of purposes, we we $X.X is income still from perspective, reflect up expense current for income previous not have aircraft $XXX for will Additionally, million. we $XXX Most pay based from share. projections, XXXX, on that significant million our of expense a that our or cash per believe, of last any roughly of year's due million XXXX. purchase We increase million

million, Our increases were the significant million million, $XX.X and $XX.X quarter from these and EBITDA and million same was last $XX.X year EBITDA respectively. EBITDAR EBITDAR again was $XX.X where are

year is in $XXX the dollar pass XX.X% Also contract, of same of for quarter we've compared million excluding over last side, revenue million. CPA pass the is reported through revenue, the reported revenue same through quarter an million $XX.X year. P&L where million, we included and repay last $X.X has first impact, $XXX.X of quarter, items the On to for increase which but revenue for no dollar

the take increased well hours of both and even for to from advantage order demand On situated our be more growth in potential partners. block to side, of expense again

partners hire to more continue We the associated would require. levels than attrition

we in as will $X new future million. to previously our training will rapidly that do investment strategic while and as result, million and be a That time, we we As added between had not $X training said, the pilot this believe believe is long-term expense expense a it being decline decline we over anticipated. -- estimate

our when engine only for still million, the we were to Our quarter year, compared quarter for expense $X.X in heavy the million maintenance $XX.X cycle. last was same

have our changes As engine which vary rate partner direct million, With the going heavy and program will Bombardier our our line method be $X.X guidance on significantly QX based as is engine request. quarter-to-quarter QX going can expense recent are at forward for on our more in accommodate we said, forward. million, expected our with we escalation our accounting. run retimed and expenses, predictable, to for although C-check have C-check we Also, expenses $X.X year-over-year

XX cash roughly quarter was per million years. million million million $X year. Again, previous lease add year the a sheet at on with next for the million, remainder $X $XX I'd On aircraft Total impact have down million are purchase of of ended to we million positive the of earnings, the like previous buyout liquidity, C-check with the We for looking the $XXX $XXX.X increase QX the expenses balance quarter. the to on a this from $X.X will similar over few $XXX is engines, roughly similar issue. and CRJ-XXX we the to that did to from timing the in cash. debt the

which engines the did we and These significantly pay were allowed quarter debt LTV pool in for rates. of purchased. included reduced collateral engines lower be the the $XX six achieve we recently interest new financing During the to million the announced, we

$XX Company additional roughly identified discounts, two for engines XXXX, the also purchase the we'll XX We million million, which then looking significant to the QX. remainder in roughly of $XX fiscal two the for have engines Other primarily we're $XX will at for million in for the we remainder maintenance of CapEx. million CapEx again $XX aircraft and

Jonathan available and that which anticipate the to extending we Lastly, have $XX still us and over we facility on of few to revolving next cash, turn I'd it now for credit expanding information. over a back further months. both like million, to remains

Jonathan Ornstein

hi. Yes, you, Mike. Thank

the I want investment, was that in things pilots. our out pointed and of view as to emphasize we One investment it truly Mike

XX a and currently We XX generally pilots out attributing between pilots are month.

us upwards to future will above beyond hire to to which think to continue work XX. will be is success, our given leading, pilots hire requirements. those people and there put I industry and that we We believe probably current our opportunities We for continue to

moment -- I of availability sim anticipation Embraer lack result a can moved and in people time and is pretty think road our the that of we taken I'd the bring down would we been alleviated like has of prepared believe number also pretty know, the as fleet, XXX an investment a point, training lot talk days. to to we issue the and significantly, quite down X-K to worldwide. had one significant about opportunities have take to are example an potential was of we But that That that with a XX be XXX to a give bit over like through of days American. past, do as in to in we for. at we closer We training making get we people that filed footprint where, down even further. you now

year talked raising through levels. our walk to Just performance -- ago, that, about American a about about us

addressed guess, said, ago. know were was currently went in best some for It's levels do operate for said, contract below level. as we willing issues but operate that, below We I us mouth you I to look, our certainly willing higher operating. we years and better sort some money were the the do that. with industry us almost the put negotiated performance where lack a to they we return for know, All levels carriers, ability we're of at of, the important but our can is and American XX been many As is, of to which through the need initially were that back far were, modifications, that term, to to significantly that

call, put block Requirement aircraft we our that We time. and For those a throughout we addressed no but example, maximize that forward by the hangar strategically increased us primarily two of, that did performance we performance is for to the amount increased time we system. to going issues by out. time were hangar into to is traded certain which pulling and of have do airplanes aircraft and number system, some we requirements. we And There that in use were two. operated, that those touch ability those obligation time, additional did the what for of spares that will

us the if that frankly of levels started the tracking didn't performance as the we made would got of they in American we incentives levels, give be all in In few actually clear, was, performance -- right that and able opportunity that were available. the may we nice needed new great. couple to fleet perform for more the that's long as money, spares felt the you and the earned want But over the aircraft, want and and that'll six we our that that, tell things it they to have quite give and levels have a aircraft them the perform, we incentives tests we any I One tests time. believe to we that we down that some can a we at did month actually passed new the prior pull that first of did the changes return that to can

partners come given not The we feel are in forward We that But can view September. move operating very do we likelihood. first that our that out we could a would Dallas. where in one as confident productively be today, with again,

wanted We that that aircraft see, something of XXXX, we availability, have a that given in that those would perform large fact also made frankly a with we'll we effectively be exceeding there are even now than ourselves industry aircraft levels those in out, guarantees trade-off hour think -- we understand a at addition that projections that the have that we a in consistently. to fact do additional system so many there'll and and have to all know, as remain any in and be, that we will In believe feel requirements and the but a with think new where that, now we that this is hours of million, that we block do less that we cooperation I this that did the block at going mention we've I have out couple scheduling $X to think is of we that we part you had and can don't can American, we we be a forward. was impact regardless. there think and think again, dedicated all. regarding confident requirements, their years or while two the for meeting I of expires -- and the test contract year-over-year the also of with net do to we a don't sort that the us just given impact that of

people I just and go that let we'd know. thought So little bit through a

I America our level up with think perform show I said West really friends proper to can it in gives given the in an like since had at whom a open us I'd With that, opportunity back we've Mesa's to we any investment relationship that that resources. questions. like for Dallas

me Capri, in I'm -- that, York. later to I Industrial Defense Cowen Aerospace If thing, will would more apologize. New to I'm New do when want leaving today. York be one to actually Before at York mention I I in Conference anyone I talk the like New City.

and over at XXXX through and also the to Conference Conference Raymond set maybe X. I March and Institutional think February could Logistic one-on-one that, in I X you be Transportation happy for goes Stifel March in XX then Investors XXth Annual up XX, call a same will the Orlando, James there at Miami, & appointment.

set So with the us. free feel getting and like in moment please if Mike I, at up take end. you to of to those call see and any one to interest any We'd an together appointment have firms

what in we'd course, X industry, just we for noble We've them now with really like all of the I'd pleased thank thank it at open to our doing are literally people are to over I up I'm I for billion our questions. that and every I'd effort that outstanding We each and -- an job working any hard and and that, With industry. all day. who truly safely. job highest a people They carry the Of are done. decade year level a almost believe that are tell that to done performing everyone they employees doing very like for the put. a they've like and

Operator

you. Thank

first from begin will Syth the Our Instructions] the question now James. We is Raymond [Operator from Savi question-and-answer session. line of coming

now Your line open. is

Savi Syth

morning. good Hey,

of XX you're then wondering XQ kind on about of get hour kind of topic, utilization? similar Just was American? appreciate talk production. block have side, the the if production rest hour fact we Is block level with the clarity. kind I you a very days given And hour of I been same the high the especially could expect, a some just the on what of at XQ February. in question of kind if can that and -- in I somewhat year, of light block in level kind that now might the Historically, function adjustments that of of

Jonathan Ornstein

through yes, that. you Well, to mean Mike, go I want

Mike Lotz

as saying, part going block slightly of asked hit were are some increase if the during generally number any growing to we productions. level of -- that of Yes, taking I the years, -- anything quarter were I we're being hours at We to we has is X.X think second where, probably don't the previous because higher, American us days think the that we there as opposed function going would forward, with slightly of the two in number stable we're flat, same have because to there think potentially block aircrafts was And lower increase to if in going this still quarter period February. which of out. and aircraft fact a in change that be hour our more is this still that even

Savi Syth

thinking you and quick benefit I is that off-lease if follow-up had Got it. that do think And Mike, still $X.X a might, on pre-tax the are you close? million a maybe might -- when purchases. I

Mike Lotz

to Yes, it sooner we do close million think it will think it's certainly about by trying $X.X we and We're than done June. that. get

Savi Syth

right. you. All Thank

Operator

The you. next Andrew coming America. is Bank the question from Didora Thank of of line from

open. now line is Your

Andrew Didora

ask to the everyone. morning, differently. hour Mike, question production good Hi, maybe block

I I the little we bit a to back a last the mean, Is should thinking run the of to that that you XXX,XXX half 'XX? table on about haircut think XXX,XXX number in rate. quarterly talked on or be about, of the still call

Mike Lotz

in be half. No, shouldn't that back haircut thinking the we of a

Andrew Didora

that the -- I touched forward from then get a know think XX it maybe flight just or run keep plus to in you XX your look in, of can you ops you I when the I'll like sort Okay. And was was out, not say, upon cost before you rate perspective, had quarter. back thought. like as after March It remarks. it's going -- issues think months you these year-on-year, of do prepared now, as ago? some when much down pilot it of Right crept kind we

Jonathan Ornstein

pilots good us be, there from may perspective, opportunities can biggest be not investment, to business me carriers remaining see that we financial the we you another with on the overall have stockpiling on three and garner hire that other given is our Let tell the my a the could didn't up, in necessarily feel pilots months we then our growth just that, end and partners that decision. is they stack rates, available right Mike our fill and a do in because will they will pilots. We having we'd view only additional aircraft. you piece. pilot maybe Right and are those pilots now, financial now, because the issue will attrition that current that if based have long fact view have best be we training But

say, of can we which talk we we we So for in XX,XXX out spend had not that in last in in to beginning position to position of we month the had three today money United year. people order a and have little a mean, I a crew where think was out we bringing initially going decided total to extra But want that -- example, sick are so down cancels in flights number staffed, you're to be and are, American only almost where a outstation. hey, we've properly ourselves we long, put call an had to anticipated we're

than opportunities for to or be that anticipate will going of the that we to the these that with see, we that it level that with to I feel decline. down the fact attrition can things can additional the closer feel And if less. we do, would dial even that we're think change. probably we opportunities We we fly rather continue with We do would to leave hour do like be monitor probably that think But quickly we'd hours you to we back block there Mike, in closer we our XX XX feel continue that number closely. partners think and to us. will that But current again? down even us when confident production we hiring pull could

Mike Lotz

maybe Probably, QX. QX, in

Jonathan Ornstein

Yes.

Mike Lotz

we Where that ourselves additional positioning good we want on we we and ourselves in position for the to have don't have -- a to to just take want initially want one just to we maybe opportunities sure in factors is to to were position. QX, make and not of really key cushion but thought pilots, enough aircraft

Andrew Didora

most to was couple you That's guys. the the $XX I good September $XX step close recent now just and million run a of G&A in rate dollars meaningfully quarter? you the And lastly up reported sequentially, XX%. Is there in model, a had quarter pretty helpful, million the like the then think versus on million did

Mike Lotz

on basis. increase no should have this would higher there have a run been rate G&A driven quarter have this a to should not been that Yes, level -- significant for

and what go as the rate, So quarter run we that. see can I quarter use this the but was look wouldn't this to reinforce driver and back

Andrew Didora

Okay, great. Thank you.

Operator

is next the line Thank you. DeNardi question coming The of Stifel. Joseph from from

question. You ask may your now

Joseph DeNardi

decision just and can good some how conference to mentioned Can why to the it's and it that just it dots you buy updated confidence aircraft connect contract? provide I that contract. remarks in long you you partnership relates thoughts? you Hey, Yes. United on know taking the thanks kind Like get for the your the done just on morning, you so think plug. in Jonathan, briefly and prepared have the in your the to of

Jonathan Ornstein

Yes.

Okay, couple things. of

was and is -- it's with At particular, it to seats. leases. now of in how to those and We But deployed and XXXs of and in few terms actually off willing aircraft I economic sense make seeing of of the leases are lot we a be its point, -- sort us on being flexibility, buying prices year let has environment of that be that recently. GE was off the such, stay it's odd high, aircraft buy particularly those aircraft for a little regardless. great a it will The bit that in XX and There duck it continued the a confident bought and of us, up makes if be one price hot go that off, feel over class multipurpose, perform aircraft interesting any will proven aircraft evolved. an think First we good has decision to aircraft. as have we some really a has GE last performance. purchase almost dual the aircraft think those deployed the It we're quite than aircraft rather the aircraft in of can expire. that terms

to fair confident dots. aircraft. not relationship we the remain say those the scope a terms that it's lot in a it's really We have in United below you carriers. highly with think again, aircraft can airplane, is forward. contract purchased I Obviously, we of it's I And would opportunities our really going probably say of some or think would we think and good probably that connect So there

of left has So There's a life a we for it. aircraft the it. lot lot of think that in opportunity

additional only slightly out we As I over said, is XXX for There fact aircraft. they're and scarce. looking are more in becoming built

in buy of homes to economics lease the have aircraft, the confidence our aircraft and reasons will just purchase our of to addition at them of lot the that partners. one of a there's So,

we that's of terms again So the on sort better where aircraft getting are economics going keep those I in forward, for think us. of that. And

you that flexibility as low the we significantly the paid or on on off is can go levels. us the forward, getting a little as debt as debt to where flexibility. the XXXs. gives just a We cycle. lot have clarity them continue I've fleet, in that extend reach cost a debt mentioned are helps either on at hopefully down and hope XXX lower that, -- that Does of out them know, level those And again the -- of As we precipitously I we too into view to decline position we our that that more very rather pay our end gives also increased

Joseph DeNardi

Yes, you it thoughts really on not could not when do does. insight any get of into mean, -- I the it's kind timing or have because or resolved contract United

Jonathan Ornstein

United that working since known Continental who ours forever, of a known we've and to I people Continental operation close back working the at people ExpressJet which of lot United at Mike even fellow only had the the was runs from to the things of many friend longer company, back resources work in in are which big do and 'XX's, where we've started this, than deal, been lately, as they a not the in -- so a position United least well, took on has a Yes, Express XXXX. they age. have anticipated with

and but maybe to We the have we lot the happen again issue line might line, will feel do. of when so confident maybe thing does. be done, So we end in that feel them know right -- the of they may pressure a we we part we're because at confident, other carriers something don't it get the is,

continue Kirby friend given aircraft confident Scott there not to with to costs where will our continue that bad been the and that such additional So also Again, the find line that looking Mesa's. United we've a at the keep also can and and Again, particularly, operator able feel will you're be been. to home in lowest a do we're a there we job of we to think that's we future that now, place close when we opportunities if is believe they've be over is business. cost do

Joseph DeNardi

then, a expense And million, pilots small Mike, added for your kind number investing for helpful. really bench to $X the $X mentioned guys. and maintaining the that's million in Okay, you you there not a of

growth making of in that sort that I consider you you justify XXXX, mean, it you assume in aircraft through aircraft I prior the pretty to guys was do really what So any have, order flat. investment? growth in plan think didn't

you kind gives confidence the So that to of you always upside changed kind more that up has something guys that plan? aircraft pick of can additional or is

Jonathan Ornstein

seen able We pilots totally position. to they We're for not potentially currently to that opportunities statement the to are we available The statement, of. carriers prepared like need to in more doing are there just be to believe want speculate. though, same us only that to other thing that fact that business we'd than advantage is it, be be take to that given Obviously, that and make they we have significantly operate. can the go have a true that they

remember So, that We and we in somewhat there's be to a want that. to what but that going of think been yes, we're change some bet, make, -- those. there take opportunities be attrition. to willing could a And always to advantage have we're prepared it's of

or we look in completely number four at XX it we made which it, that would be think stack burn to months. pilots, a are like, would pilots if five we bet, XXX I even So, over-buy, that aircraft, enough we a but if OK, off call wrong, we could

we've and to one going $X is funny reason find like for to flying so we it's we some wrong road one in talked which fleet and fact initial in we pilots working not It continue confidence also because and And of just our us They've And example, about opportunities XX maybe timing it's potential achieve asked that also is fact does going there'll the days, to talked do some we're we have more not that to American, last because opportunities work to be demonstrated come in that with -- that can grows of time once Mike that think that opportunity period million. over or had to we very our but the staffing like hours that there. can them, training goals, and helping closely I even way of maybe for reset -- some then, relationship very we of the to we continue helpful ability particularly them. do opportunity to longest for million with a us we're their operate do the these we've been down as to American the closely the folks terms and things be do that see that sort and I they've mentioned the forward. of Again, our only we're everything value with training out fruition, not expense, that feel stop the effectively But if in with or think some staffing. $X have to slowdown could United. I additional we've we too there

Mike Lotz

those block you're be also our we schedule potential just to that to partners will able hours to add can position be at on to us. say, just whatever continue come give additional that, And as growth to in a hours well. pilots want and able take yes, flexibility us that us addition additional is Yes. We potential block to in to to

Jonathan Ornstein

in cost outright. aircraft service an The to XX with on the carriers that's configuration in maybe that cost highly I mention thing and fleet, want for is where other outright result, aircraft and environment. provide low there that given is which yield our distant point owned be we flexible XX out will that, a to given cost we is potentially time, non-traditional, we structure of of are example, other low could I future own different aircraft where be think pretty in a opportunities in will a fact our think extremely effective sort not too, these too given non-op we the structure the The CRJ-XXX think there important, as

that for figured out it's been another years I the it. will work forward. are are of lot good to We kind shoot of been carrier as that think paid the is We've we own be basically where have to looking were used the out forward. need to all for when it. again go only in put engines seven look that engine engine our LLP We or at these sort of we numbers, we paper of that through we've We will of well CapEx able as carriers of necessity years, conversations where the pencil engine feel is fly that of on the engine the -- a the also we're significant exciting out issue. brand eight mother with had discussed, kinds before aircraft the and it's across, Mike five one We've to structure no and And of buying deal we we really the is whether sort bodes expense, had for needs every we we've paper, and think those riddle. new also, the our outright it we be or at new the already -- We've big aircraft we that it first we about So even that on can and and the options. way to future cost figure think, overall first CRJ-XXXs. invention. five-year did We were going significant come it, on engine think purchasing mother very

Mike Lotz

We large the aircraft. own our people will have

Jonathan Ornstein

the Right. we with aircraft And along outright. own will that

new a of forward, the the us. we partners. issue, lot industry But existing could of for that partners is but we're best even a to our things there high of of with be most potentially scope there's understandably, us that in would happen time scope. with scope and a over language, confidence will Clearly, that both for So thing the good with looking opportunities feel be difficult relief level know, as you we have grow the

Joseph DeNardi

thorough the for response. you Thank Jonathan. helpful, That's

Just the I'll in then lastly back get from me and queue.

of that? test metrics how doing the with to assess we kind is that relative can you're mentioned of and monitor American to run. kind a You to need performance improve What this

Jonathan Ornstein

completion like controllable major departures factor, metrics all things at, the Well, things zero, are folks are right, that within looking that. like

have have rate from a very I us that a already this you old it'd I example a lot an completion contract incentive. mean, were no can argument XX.X%, into a and going I XX.X% effort rate. that levels back would think decade mean signed that be in there's -- to we in of when good we've You completion to put were it was great But XX.X% contracts see a XX.X%. made over give that doubt put American the just a that changed. performance the

raised the going Now acceptable and not at to both American XX.X% and just levels perform have is that level and been United at significantly we're need sort no we barely they just lowest to performance if is today's at you environment. cost in competitive. you're operate buy because be expect levels going you but obviously if Costs can't one the that to are important, the of

the have allow at to which -- United's those continue good. One, to with this has a said, lot. historically there days, you really policies performance us as have we it's hubs, also, we our and scheduling a I I at which levels been level side above new XX -- that last we able helps maintenance requirements, -- all that show been E-Jets, a performance two-pronged fact new our we American attack. their are monitoring us were look on in this, United we in helped and blessed fleet of do incentive So started like the to been we're back and that on all do in think, if obviously have And

Joseph DeNardi

you. Thank

Operator

from Helane next you. is the Becker from Thank line The question of coming Cowen.

is line Your open. now

Helane Becker

operator. And time. Thank for Hi, very the thanks guys. you much,

questions. two all profits? the impactful with is, Just that Jonathan, to CPA in American, is the first the one change at with agreement

Jonathan Ornstein

Mike, do -- want you to

Mike Lotz

what? Is

Jonathan Ornstein

to how in is change that the CPA going The American, impact profitability? with

Mike Lotz

to American two removed, are that block being the little on touched aircraft. aircraft addition in the hours earlier. increase desire bit to Yes, on the remaining Jonathan it But has also their indicated

million months two 'XX, had we projected -- few block XXXX when So looked for a it's ago to and that's the production actually this at that at and in than on higher our at hour fiscal $X fact, year we look expect less profitability, impact into less minimal have aircrafts. with we a than for what American,

So again next year will be no impact.

Helane Becker

or Okay. And in then is spares just two clarify, that four spares? to

Mike Lotz

to it's XX. to be American come CPA And go has to to aircraft that in those from whether they'll the aircraft well, XX the the want Yes, them, XX them initial whatever our us of operation. the CPA, out CPA just aircraft United, and available in anywhere to two plan remove it's we to use system use two the to support we're certainly actually American, at going is

Helane Becker

Okay. on they're trying their in problem, on flight don't good the like very And and promise. to first getting operational time. of the know they the out American, gate Is I -- because I they for going really there, summer out had performance that or mornings figure a what's and do then job feel of on question on final just poor it your sure problem last

I'm issue So is or issue? how much it versus their their all just issue your really wondering is

Jonathan Ornstein

two integrate operations. to had big American

over and in is time, can incredibly some operating significantly. their you those be even hub, at a operations and not actually, is easiest pretty they've difficult the by their look I easy integrating they're Dallas done think of job a impacted not good JFK hubs. weather in terms performance. If Remember, numbers Chicago hub,

side think that I it in recently in much -- had on make of that internally mean, I of frankly a We because was make just was touch for appropriate Dallas, that up to terms time. we resources hangar the levels issue terms in adequate contract our ago. things example, the of, don't signed important, other maintenance have appear since just that decade granted. being opened some were an just the in meeting it able changes also some want having I us in we to was do over do performance the more October which too, hub, But the and there changed So very

American it's I all. don't no, So, at think

been us. that -- and we the in incredibly have knowledgeable, their us involvement constructive very for think to fact be productive speak I helpful, with find we incredibly to, and people and

as to to you much that, I'd so. no, don't that, able as do like So would I I think be tell

a our I is come biggest which that bit we getting we ago were look in fleet think it, had, year -- and issue had a the consultants we at little older.

just ERJs, made that newer our both and spares to American's at not brand same in that was some it's mean, few why aircraft not same the additional dissimilar XXX perform and they at argument we level. we American the we more look needed operator look, but a first that, just to at the operation They're also operate, as like of we not available the the to really to us. new time have are We felt touch was, of opportunity and CRJ-XXXs the I It's a MAX. and higher we MD-XXs. E-Jet, that aircraft XXXs obviously the we do so maintenance a newer

-- things to appear mean, I sort there we reality want situation we to the thing. future I too. coming some I and are I certainly don't those our But -- think the of like answer of is, in think changes, we the I to the not our is did. did right things most just with it we your grips no, hands, to that with and question did make make do that need

and in very very the in think are I Doug and a we've fact long partner this helpful. companies. on relationship, that were productive fact table nicely we've whole American Our the have people for the has future for making from And down known a for those people all time, both Parker who process it's there, been set been long decisions

Helane Becker

there Europe opportunities opportunities there? that Okay, great. are last just, some there maybe then think do used are if in be And my question these aircraft you is can in And market?

Jonathan Ornstein

little a of -- paid that of be of are The for are put given a a just aircraft, debt Europe at but smaller the fair in one that aircraft legs think matter the the is, there do little terms there we number gets cost be lots opportunities, we fact big could these on the turboprops as example is areas potential particularly European have than regional potentially the different CRJ's, of need and because and at bit looked there longer there, the where -- bit will there jets have Europe. opportunities off. a of we that look taken their in are

your is, that. Europe the opportunities question think to begun a to definitely at answer So are we've take in and there look yes, we

Helane Becker

Great.

Jonathan Ornstein

familiar operated with for so over I Virgin and environment. half the Mike with a almost we're and there Express decade

Helane Becker

Thanks, Jonathan Great. you see and and for Mike, thanks conference your and tomorrow. we'll our of support

Jonathan Ornstein

forward Look you. Thanks. Great. to seeing

Operator

from is coming Savi of James. Thank Raymond Syth line next question from the you. The

You ask may question. your now

Savi Syth

the Hey, thanks follow-up. for

really due performance Just going been I was a and to to bit think not are in to kind that investors share what I has think just necessarily question, Jonathan. hear curious need to disappointing, partly really and what going control. a The your boost that shares? confidence is the high-level build But markets is anything your back that you thoughts

Jonathan Ornstein

Sure.

we that issues. know people concerned I by to our have hopefully the announcement. feel ExpressJet parties I clearly bit has good, problematic. a we that We confident resolved that not future. were to near know have done spooked of uncertainty like in number broken a and on investors, little it's will some And numbers a the extension think we that been were think mean, while that the XXXs degrees we I been talking get again, I I One, record, other the now been. around need to the and have might extent but some that get hopefully, the

and have do which I tomorrow. we think get elephant unlocked. in shares I room, of million the believe occurs issue the it's clearly that other that that is an sort issue, XX the

being the have could long-term the we the some we But shareholders fact, we that pressure continue so have fact We some the them. valuation we support for raised something sit money a there that say have own at our an over just we do we are two the days and Company do true through basis for we example, price on that a at areas own bit we what way what stock there stock of very While is that last thoughts forward. low is and them of lot we still just could up Everyone in increased the anticipated feel but to is be bought I meeting at constructively value not once a would my through any stock were that's down, think think is type in discussed, think that's speculation. we But offer a think overhang deal the more that, time organized if and can toward share, work had our anxious at I'll the Company. we was can there work hoped lot Board lockup between what that beyond there. recently with just price that to that, feel to further the Again, action, the $XX perform brought at do biggest the are it's the that opportunity. point, and we and -- the of to is, to if decent And done taken from going stock to and but deliver prices contemplate is the continue that, the at fact a is that we I private, of little higher, the work basically the of release, that interesting remains initial concern. it. levels numbers to have pressure stock buyback back spite about kind we in due of a I affect also delayed of any I this stock the issues numbers the that arrangement the to it feel one our sure the if value think just where pretty United the on going that are that that probably seemed price below

Savi Syth

Very Thank helpful. Jonathan. you,

Operator

Creek from next Owl The coming you. question of from Thank line Starke Kevin the is Asset Management.

your You may now ask question.

Kevin Starke

a dividend? question, given to paying last has thought simply the the Board of any Further Hey.

Jonathan Ornstein

there of feelings aircraft, is New opportunities probably of regarding consider, we offer. cash I there example. that we down-payments we but that began fairly a There's big to article we buybacks. aircraft, out analysis. think additional that to would are in there that that I amount purchase, think and also sometimes buyback But can mixed of that a lot best a make given But if toward think our again were example, I think stock there the to stock significant do make Times is that for acquisition judicious. I nothing think, I the the wouldn't appetite about of saw impact. York dividend be again, you We require just was for its on only today the new sort have is real

So contemplating the this will, at sort together we are United where deal, we we'd confident that which leads think we various if ideas us. and see in little highly of this were again further fact point and just -- play time, we again see let put we that in we but out a bit where can and are

Kevin Starke

you. Thank

Operator

question the coming Joseph Thank DeNardi Stifel. is from line from you. next of The

now may question. You your ask

Joseph DeNardi

pieces making with guys in it what's kind moving moving American to Yes, the and of of the the here financing, amendment, contract of thanks. the effect neutral the or the different Is given guess just net are of positive? pieces these relative you earnings? I Mike, pilots, some kind all investments

Mike Lotz

again less Yes, the I mean, until for June, it'll pilot we million. the we fiscal in had initially to $X $X have impact year. The engine coming benefit then than where below or neutral. done to to a have I it's get million slightly projected, neutral it probably be costs. C-checks we don't the million a months have will mentioned this GECAS in only $X in seems few positive buyout if

to So neutral slightly that. it's below

Jonathan Ornstein

how dependent be think think question, expense that we the $XXX,XXX. and every add about further to -- it's it to Yes, pilot, upon -- a I acquire I time really is estimate we to

that cost. We're that do think not a productive mean for online if I between So not put away, these some to long to very there that's to is place acquisition work. and we bonus going don't big training we're right going folks and

any So again we and can off quickly excess. shut that down burn very

sort like totally said, right look I we to people month we I problem. think a we've XX, XX we environment, again teeter-totter investment probably number given out and to I like them is the purchasing of think side, go-forward So more of than the I anticipated in pilot chosen that current again, be the say, engines. because to having pilots, expenses. we our no partners that able January, and right, we it's are I the there extend terms on got particularly view prepared we've a in biggest there an we opportunities be out strategy as of the an and XX in want But hiring, expense the plan our XX in and eye think had because, in to to class, think -- pilots are the

Joseph DeNardi

maybe risk And there United significant Savi's here. can back the makes you of to that going is business. grow Yes, market sense. Okay. is valuing alone kind as pretty if just question let that retain the The the work, stock

and can fleet. you confident the grow the sound that United keep You contract

from expectation XX now, contract than you XX the from is should that of that it So, be have months under now or the aircraft greater number now? is months

Jonathan Ornstein

say in I that particular industry, those opportunities to exist there one opportunities, would throughout say carrier. the when Well, are this, not I just any

existing want our be confident have fair We to to bet for. partners we remain think other again, we new the a think it's opportunities are XXXs, that to prepared I we that. be can also, the we wouldn't opportunity potentially extend I achieve pilots. there with we making with that that And that think or partners with say didn't like

situation $XX feel and a we our or we financial those exist bet where if So our with and more carrier, a the little sound we current is, stand partnership contract the a bit we potential view million given think or that positive that's that million within make forward for going of bet, industry. long-term opportunities $X another

Joseph DeNardi

with some the Jonathan, lastly, just expiring, on just, I much guess, should of lockup philosophy can other you with you us And provide named how stock own and the Okay. your going forward? executives

Jonathan Ornstein

that I look, to a interest personal don't my I any of that view my is, who in can you that you valuation that actually if that That's for sell because would to view have limited shareholders, large they spoken I below lock I view to or have the point share -- up might basis some -- purchased and they I not Yes, selling share $X $XXX, have should believe stock, mean, some Company's anticipated the you it that sell had number say have the mean, at what of just want the sometime me this or a is be. of a lifespan. and at hedge is a funds probably

we that of potentially. would some that opportunities do just cognizant we just make strategic preparing for long-term look obviously example, that and we're see consider to to So if that some that buyback, ourselves and did

out being long-term acquire aircraft, going I some think for us buy even be that pointed us low earnings very report to that in have I of if growth us that that obviously we're just the I that said, to that's be may a earnings. level mean but by trading, contract opportunities industry someone standards to trading there read that. go cognizant this read little I a mean, go we're we're that aircraft -- other to can forward. be investment X that As require and on I into right pretty current better out, times I we morning in may look new didn't over be piece at profitable this a That know, and for

Joseph DeNardi

helpful. It's time. for very the you Thank

Jonathan Ornstein

Sure.

Operator

[Operator have questions phone. moment questions. Instructions] please At anymore this time, any over don't for the One we

Jonathan Ornstein

again, as confident is we've put the more the questions, the structure We Mesa at thank place anxious We any is that a one. remain investment everyone. good like that aren't that are business that there our I'd little plan know right is one. we. to If Okay. think in community I

think I that strategic options owned. available really to close fleet or now some have being We is excellent to a

half have two a You some less a for will of look us, our believe, forward. going seniority, than we which Almost employees very years' cost have quite we at significant flexible our workforce, advantage give workforce. time

a signed been relationship to We've year dissent a had we -- of our frankly. are with I labor, with contracts labor moment the think, unionized our Our success has workforce. key ago never our

be just In And ability of the that come us those arise. all we fact to as it's for things we of quite together feel the they are them. as them going to always forward, for make may help us supportive to look we opportunities opposite, and take for advantage

of that, I'd like to the all So again, for with you time. thank taking

Mike shareholders like work I well. continue we and are We hard. and too to forward we'd as significant and to as Brian go see very performance better all

one We forward all. you on you the conferences thank day. talking Have a to at our to we of look So call next great discussed. or

Operator

joining. concludes all today's you That conference. Thank for

You may now disconnect.

Mesa Air (MESA) 5 Feb 192019 Q1 Earnings call transcript