MESA - Earnings call transcript Q4 2020

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Operator

Good afternoon, and thank you for standing by. And welcome to the Fourth Quarter Fiscal Year 2020 Earnings Call. Today’s conference is being recorded.

If you have any objections you please disconnect at this time.

Your lines are in a listen-only mode until the question-and-answer session of today’s conference. now Ornstein, to Officer. Chairman is over the It Jonathan to and Instructions] my turn pleasure conference [Operator Chief Executive you may Sir, begin.

Jonathan Ornstein

much, very you Thank Operator.

for Sorry guys. delay the

technically, as We of working we Mesa Executive am appreciate is the you the trying This But to patience. Airlines. Ornstein. can same are page. get remotely Officer imagine, Jonathan all your Chairman on everyone Chief so I and

our Financial Executive today is and Mike our Officer; On Brian Rich, call Chief Gillman, open up Brad Officer. with me Counsel; statement. with the Operating our I’d VP to President General Lotz, Chief forward-looking and our like

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

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

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

I of personnel of I is flight mechanics, our in like the employees. their incredible our risk a the to and call to thanks service control in pandemic, believe field, continue our nothing is short the Okay, each all dedication want outstanding. all despite in frontline operations, with big passengers. who pilots, attendants, and other start thank I to and face bravery obvious to of really exhibit That the dedication the people to the of

Agreement would for to leaves today. combination this Mesa November, million Embraer through industry and I forward. remain report operated and supporting and accomplish the that hours, this While crew April not October, in In an an Again, people of hour $XXX a who XX loan entered our before business this of and July, we that existing in agreement aircraft. our Act aircraft are both to of the United of partners In end scheduled going we darkest our service core example I’d with I’d the a will our number XXXX. XXX-XXX we some other challenges secured announced ended, positive everybody. and focused Thank our off has which be operate our in aircraft, for like to agreement at our CARES XXX XX company Also for with extending used CPA, the cargo you am recover of five incremental the dawn, the November, accomplishments although the into on maximize XXX five-year we optimistic us on Despite may is We expanding prepay industry, November of well tell achieved pay opportunities million and important older XXXX Purchase in country currently this grow be CRJ-X of in in cash our to you my some the to aircraft, for our to as started are our us Department. for to and United we all In June XXXX, which DHL to our XX Treasury for already of are year. Embraer very In under signed those the of of us had debt you XX walk year. Express for in hours for enabled with with pleased our These in them. in key to two carrier have primary years endeavor. likely the the reduction our and United, any calendar announced least year program six program XX finalized profit five down a Embraer CRJ-XXXs partners to existing our for would the half with million, significant $XX.X received our first a loan. our closed $XX business reduced We with flying years. aircraft thank due November, this years, that by traded the allowing significant the seven been environment. expenses a XXX of U.S. our a all We to XXXX, PSP for of furlough like level American U.S. four quarter, operations. we And personnel. publicly for remain normally retain mind we paid remarkable United calendar the remaining and employees aircraft Treasury those amended lastly, to furloughed the another on are each In in focused contract only administrative we delivery given business flow otherwise existing a employees voluntary CPA. the Capacity truly through PSP month and to to applied to-date. extend reduction XXXX. of to we through pilot accomplishment we additional well opportunities

to as on to the level operations, our of new growth, as provide and DHL operations. Brad to long-term well our that We like opportunities a could pursuing you also are enhanced Rich on it of we give update I’d and American United earnings. believe diversification company an additional number turn over

Brad Rich

with an of Okay. update Jonathan. hour block will begin you, I Thank production. our

pre-COVID hour like expect for update with an and block generated the quarter. amended continue for one operate quarter the which I on of to about CPA Based we about operation For increase pre-COVID our the partners, CRJ-XXX quarter, levels on of Based of current levels on and by XX% of projections our roughly be the level American at December believe we September guidance end recently provide level. March we from XX,XXX hours, might utilization is years. XX% aircraft the our term the of to block XX% a to our pre-COVID will relationship. to XX of year. We calendar reach five partners, our not high

aircraft, know, loan. June XX Our fleet, our you XX in many under current of own these of to and those we as XX are that will XXXX. and U.S. XX reduce is XX Treasury of Of financed announced recently CRJ-XXX

through aircraft We leased XX also XXXX. have

the using majority American We these will of the to be operation. aircraft support

reviewing that would some utilize new opportunities productively aircraft. of these are However, several we

productive. attractive low Given we aircraft a on fleet, the and debt believe financing these assets and balance the majority valuable will remain are of

that American CPA Additionally, flying over calendar up we the and half requested additional of levels. first year XXXX has pick the new above over

and to for began to and formalized operation. Eagle agreement, American discussed. in of to agreement American Stahle ownership in could rates thank their ability Getting now this was with appropriate like important years it relationship ago. to challenging additional that was are the three five not We work And an May, our believe did George hard that previously XX we support. Moessner over we also aircraft Obviously, industry leadership, considering have moving believe including Mark This flying. and are demonstrates our rates leading. and this of we would not this difficult And new and to our continue done and pleased Mesa. result offer to update reduced excited Devon environment agreement we an we Although, lines provide with competitive I American extremely are believe that easy United

As Jonathan four more first year scheduled Embraer month. to pointed that add six be EXXX XXXX. have this of delivered will the The out, Jon scheduled in aircraft half and calendar are new -- we already last XX as added are LL

on United the one operator these fleet, to one for add we will aircraft a CRJ-XXXs be term. As seven-year aircraft a removing another leased our are These United basis. we on to

and the We that be of training Embraer pilots of the agreement. CRJ-XXX purchase part that credits of on training are and current are the dowless will most by covered retraining expense XXX the most

of improve in Within and we the enhance cargo in United, and XXX-XXX operational regards Cincinnati our two to will we pilot be XX single are XXXs Both DHL. where six In months have service have operating fleet with cargo aircraft base. domiciled a efficiencies. performance we Embraer which cost based operations, next a with maintenance will aircraft a

been I’d now our we So business. to turn financial the have it to pleased to Mike are over like far performance. through Lotz grow that, we to and line believe this well-positioned walk With with of operation

Mike Lotz

Great. Thanks, Brad.

of $XX.X diluted or last Let quarter. net income Fiscal for me recap share. same of share. the This fourth income a $X.XX earnings the for quick per a we year net recorded XXXX, compares or million on $X.XX per give $XX.X quarter million the

of noted CPA term As CPAs. release, deferral of by XXXX the QX of our $X.X the remaining during the paid press be over in United the million billed American GAAP the include quarter and was of revenue, which will and and recognized results all for

expense -- million million as income an During the record PSP for quarter $XX.X to to relating wages $X.X recognize did tax also announced quarter. the we $XX of We point program. offset the previous

as NOL However, valuable we over forward. any did we not taxes have cash pay million carry $XXX

diluted to net $X.XX full million year. of compared For share, reported XXXX, $X.XX or the last $XX.X share per or income diluted we year per million $XX.X

results XXXX again for remaining of As the recognized was noted will CPA the release over our of also of be GAAP million include which $XX.X and deferred the in CPA. press deferral revenue, term

we million quarter Of to total XXXX then of the remaining as initially in XXXX. fiscal was $XX.X balance the program. quarter also the PSP the in we $XX.X $XX.X, to the note, related recognized up recognize and offset million an $XX.X fiscal million expect which to recognize and million, reallocated first During PSP of to $XX.X wages grant

$XXX.X down to Quarter-over-quarter XX% revenue tax down we year million. $XX.X as reported year, for income or million and and any expense, cash $XXX $XX.X million or million XXX.X million $XXX we million increased of For quarter and $XXX.X the and paid million. for taxes. we not by million the revenues $XX.X or was million the Cash XX% have $X.X noted, and

During expense million. of quarter the had we $X.X CapEx

since loan now million lot company. and In through level, total million also high important we deferred tell deferred you the to which of quarter. million I payments walk I’d lot loan At with payments total recently of effort, $XX is in can principal in million. also $XX.X people paid on payments closed like in We the scheduled a we of we our principal you Treasury very principal $XX.X U.S. which the March. within a have a had $XXX

cash million was was of extinguished aircraft we hand unencumbered The $XX tranche $XX tranche prepaid the second revenue the combination to United. of existing collateralized funding $XX XX CPA $XXX Prior from million and to assets. on with first million unencumbered debt and of million using

-- The $XXX generated tranche second million Net while the $XXX said XX interest-only, that plus was aircraft The in was $XXX million extinguished. $XXX U.S. million, funding with -- debt is amortizing the $XX that was cash debt that was for at plus fully X.XX%. debt. Treasury LIBOR million debt debt, which extinguished is was in million. we total It was collateralized we

which lower, As To are fiscal reduced the $XX did which touch as to for I’d items, reduced million. warrants extinguished part on XXXX, significantly In years, reduction next had for into between few loan, the scheduled year. end $X.XX. that through a be we in prior of $XX by million. of we option U.S. was of million agreement, fiscal Treasury struck are $XXX $X million of from example, that a result, October to a $XXX we a an all million for are $XXX scheduled reduced million, million, principal Treasury are being do. the $XX other of million will payments additional plus a XXXX July, an The was debt the fiscal to reduction year million million, repaid the the and principal put $XX the payments issue the will $XX scheduled to fiscal $XX included Treasury loan be we repay not we two in of at to have principal choose $X.X Also scheduled we that principal which principal differing of to payments million of deferrals, remaining payments, million loan, deferrals million of forward August. have $XXX going total this and context, $XX like if

$XXX $XX closed total we of million. our be have from are we revolver, XXXX We fiscal also loan. and prepayment engines At will received outstanding XX under by be negotiated GE November February. purchase XX to United XXXX are in that for now $XX.X XXXX. delivery year Currently, had for end, Treasury discounts zero CapEx for primarily expected $X.X roughly for considering repaying scheduled The on million is reduced of our our to million which in roughly those revenue engines approximately of CIT we million. prepaid XX

are Other financing payments as We fiscal scheduled on aircraft cash parties and book currently to schedule. discussions lease exceed will in to XXXX, discussions lease with with well by $X roughly various as delivery modify related cash the GE items expense million. options,

our We manage vendor from vendors moved continue a of net our to have and up XX net net to and XX, significant payments number XX.

utilization that deferred levels XXXX, performing fiscal heavy year was lower aircraft we in will be maintenance to fiscal For XXXX. previously due

a pre-tax negatively like Jon. XX there XX positively this not we the due few years. with our that Lastly, now the impact to aircraft over turn American the to are offering to back look this be new past areas both at could terms terms are aircraft, it at uncertainty, environment, Obviously, of numbers lot this these new time. and any for I’d new to EXXX expect and for as guidance or margins consistent in we the we the CPA

Jonathan Ornstein

recap. Thank the any questions the field and you, financial come of I’d listeners. Mike, that happy we from any be Operator, appreciate this At point, to

Operator

Thank sir. [Operator from Savi Raymond Syth you, Instructions] James.

You go ahead. may

Savi Syth

timing maybe If deferred of I the kind an is some deferred fiscal us showing know cost of could Hey. Good the of, those of give year up progression -- the I happening, afternoon, everyone. build revenue help us could some with of any idea you on and build not progression the color the but everything of and ‘XX? exact, revenue costs the in

Jonathan Ornstein

want do Mike, you do to that? Hello.

Mike Lotz

it. got I you. Yes. Thank

Jonathan Ornstein

Yeah.

Mike Lotz

This Mike. Savi. is Hey,

for based first We most on quarters. production. revenue two did growth the block hour to of guidance going be our So is our give

fourth Third quarter little for hard quarter and a is predict. to us

are and block indication for going costs cost increased. in our are And some hours. not maintenance primarily we But gotten from build, be from our did from we seeing from deferring this a of the by the QX. now block are and a give projections of it’s that we that hour But are just partners deferral that our to have will just be and We have to that driven we position on side, XXXX revenue right to those be a some our consistent heavy going of on XXXX. fairly airplanes lot in QX

Savi Syth

be -- Okay. are of kind and assume Did off-peak Mike, those they going deferrals show up or in do we an the those should costs to they are the update also or any and then those have of on you off kind periods on of kind part -- so quarters, heavy of agreements? some other of time pass-through

Mike Lotz

No.

the front them tail as are in as half. of more half Mesa Some most be pass-through, think, it of would them likely far are the responsibility. than year And of timing, but for the the I

Savi Syth

that additional beyond -- are And last on still in sense. that line, that that then what’s or guidance? block and hours be clarification, guidance American just above working for the from you one in request the Makes would the is

Mike Lotz

that’s I guidance. the believe in

Savi Syth

Thank Okay. you.

Operator

Thank you.

comes Our with next from Bert Stifel. question Subin

may sir. You go ahead,

Bert Subin

Hey. with time and This for good Stifel. Subin is a Thanks the afternoon. Bert

don’t confidence you have as highlighted you hours XXX%. last as come same can that strong you in have now? back completion sparing you gives and almost degree couple to maybe the of of factors, What pretty this start can the close much Over have a you to very operation strong and quarters, controllable run get block you

Jonathan Ornstein

I shot into add Well, I that. will have Brad to am happy you a and take

significantly ever we than have had. will more have spares side, we First on the American

we probably to having think the those aircraft to be make those beyond happens above have there. that really okay sure is levels will on that. depends spare certainly I We what ultimately This us think that would So adequate I with at and the operate allows aircraft. we are and do spares that

we to United continued side, operate. the have On

We any contractual for requirements. above have operated always United

good We job. a have done really

We adequate and have aircraft have we plus. there a sparing lot of new

goes part real see United we with big what on a a to of and big don’t allow aircraft see is changes there. bases have think lot two any us that of maintenance we I

So to fleet of think do age I feel anything the United. particularly to that? with you the confident, Brad, very we add at want

Brad Rich

I no, think, Jonathan.

then, really spared. I think we Jonathan the to side, are, we be And enhance we will two believe. look, main adequately to things one on of side, which said, are reliability consistent move the will on fleet excited XXXs United already the as Embraer operational American

Bert Subin

come is if that that. of if some appreciate or am spares to for down, you I productive of No. impact I some an guess, use there I you not aircraft, wondering just have some the really? said those potentially Yeah. expect

Jonathan Ornstein

than at we think with. wouldn’t don’t pulling by more American we aircraft comfortable jeopardize anything I feel out

As made Treasury build something loan. much continue to to burden a years, to less want become the the under aircraft confidence do additional of is and a of -- result available we to of XX that spare having These the financing the build financially we after aircraft our to us partners. even continue

So are felt that let I get adequately just point think we don’t to that it spared. we not we’d where

Bert Subin

That’s Thanks. color. Great. helpful Okay.

Just you assume you just think opportunity Jonathan, the is greater regional you that? you the side side. as around than follow-up, but still any commentary quarter, one last that’s wondering more I there think on had the said a if cargo case,

Jonathan Ornstein

do opportunities continues our on some side. regional regional core that clearly is good Well, and be no, business business the very I we the there think view in to think, that is my that

will cargo that on they whereas do difference we time, just there XX strength carriers, that terms no American, business, more and have imagined aircraft our I cargo seen I be XX, cargo the is mean, a to of that The United at at the opportunities the in the the tenancy lot side we and one deals incremental. have a partners In other exist. think, mainline side, a

just And cargo that the reason, business so, it’s rate just does cargo business could some provide build, do significant regional us I the a think, kind taking matter that longer some we cargo opportunity, it literally takes from bit the the will the in I do pretty to business. going of a years, maybe At potentially it’s But as few a we not I but in went being United, to, little airplanes to at of that -- growth to XX same that for business will potentially airplanes with little XX said, move develop. time. a think think but take

Bert Subin

Thanks for the time.

Operator

Thank you.

comes question next go from from Mike may you ahead. Sir, Linenberg Deutsche Bank. Our

Mike Linenberg

Oh! everyone. Jonathan. Hey. Hey, Hey,

on two years? And on kind a airplanes, Just dozen we of in think of could piece six, that, you one. then a frame we the sort Are Just you have can second when to or if cargo two I for big up to be how airplanes? like the three eight, talking expectations that follow XX what get do about us?

Jonathan Ornstein

XXX-XXX attraction niche. of Sure. think have operations very the to good the continues because long-term cargo Well, to we different a

other at think types some aircraft will point. looking as at to are We probably well XXX-XXXs move and I they

I I larger the with think surprised we out year or is how delivery they only continue looking don’t with that’s to smaller literally we in it’s think going with everywhere also places faster been be we I of be opportunities. country, business exacerbated need the would And And overnight get to that think as How more I again, with products pandemic a very today think at going great seems based cargo and to result, go significantly number a soon. a are two. We are away to what of anytime than two -- our But in has by we and which to existing aircraft advent the to business weren’t attractive to develop speculation. quick? if on just There fast are and pursue more DHL. our aircraft. our

nicely And operators time, the So said, build cargo bit things would -- in little think the there I I next like we to we would But couple think somewhere that over we to of add being said, of if over I think continue incrementally. that, kind could more I range. every that airplane like years. other take that be operation month nice that a an could it add

XX if happy. in pretty airplanes at we’d think be two think, I we I years, were XX and

Mike Linenberg

Okay. a end a just year us Mike, where a on, were numbers Great. the of the loan. perspective other question now year and And liquidity gave lot have you then on you closed a of fiscal you part -- from

CIT of credit. talked a a you line should capacity How we CIT in paying maybe just what calendar Thanks. much us of how the honing maybe level, like, that available end about much -- give You can and on have tell line down be year kind you on? us liquidity ballpark

Mike Lotz

Yeah.

the out, it’s that think, we CIT have $XX million, roughly So I million. $XX

amount the collateral have about that’s that to think we I support facility. that under

of I collateral, the based like the which million, we facility be most for cap the have actual But $XX drawn on $XX it probably it’s we think I of down. are million. may it think,

Mike Linenberg

Okay.

Mike Lotz

And right the in on burned little not we of But the liquidity, much tricky is be just are course, liquidity keeping loan how it United place, are just it of now. off. we And a and we paying year-end Treasury down. paying will based sure evaluating prepayment see down that where

kind to So cash off hold predicting on I for end now. year prefer right the of

Mike Linenberg

Mike. Very Jonathan. Thanks, Okay. Thanks. good. Thanks,

Mike Lotz

Yeah.

Jonathan Ornstein

Sure. Thanks.

Operator

And question Becker Cowen. next our comes from Helane with

ahead. go may You

Helane Becker

very Thanks Operator. much everybody, Hi, for the thank you very and much, time.

-- then, you provided want kind a figure So And to that they bit trying or since now, are line you good are you look your profitable? liability airlines out might the inbounds second and you sheet running you a at that the are It’s wanting liabilities operation. up other from that’s don’t those the just sign current wanting lines good question getting adding? for to off few performance and to by one one liability more you my operation why -- line question, add capacity respect of are money, right have the a of up today. the and on of really The you people that to fact airlines net the is not little with so guys on are on-time non-current balance a --

Jonathan Ornstein

question, first you the you me the have pointed First It’s an that not address let and time. I time since have -- Helane, been have each a first known out other error and long correct.

So that good certainly numbers look sure take the we we at would and a have right. that make

thank you. So,

Helane Becker

Oh! My god. so feel really bad. I and I am sorry

Jonathan Ornstein

fine. right. when Don’t mean, something slips any occasionally it. worry run kind All the you about I It’s I was a through just that cracks. commenting today operation of big

us take So at look have and it sure right. make let it a that we

so of employees likelihood our able catch is structure regional On looked all and have the structure think certainly less on as cost within established is the We have than of in competitors. to much And that really opportunity that be to that of our cargo last aircraft that the are our we the probability low second of question, major fact I two leading significantly half years’ regional expiring. seniority. as the business based cost our is because yeah, ourselves the leading one we I the feel carriers. one below think have our time CPAs very hopefully, other think I carriers, is There cost structure

junior benefits young a workforce us some gives there. we that So have

are there think think, in in be the included forward. So, yeah, that going Mesa and when RFPs and there, regional I side out both fact cargo in will I side the

that the win we on and that business level our both feel can do tested know provide. we I So also of because we in can we that are Believe that and critical. me, be service being performance coming doing costs right believe there now to but regard, could know we we by we can business quality that highest the everything are is growth provide DHL some that on we

So…

Helane Becker

Okay.

Jonathan Ornstein

to I the us have for what base the think have pandemic to building the grow do to to this is done to on that us demonstrate business. coming it’s obviously, that and we build out of been helpful here continue … we

Helane Becker

really Okay. much. That’s you Jonathan, -- so that’s helpful. Thank

Sorry my about there. that the But addition other…

Jonathan Ornstein

about worry Don’t it.

Helane Becker

wanted on of they either a the am The And all airports as and talked the processes over that of of the your move to the use airlines to and years? see have in starting at biometrics of press consistent stuff. I trade other I one thing your is, gates I of and and to ask lot to is with with partners am things the you two wondering few are next if making your that about sure that boarding theirs

Jonathan Ornstein

Well, you were to answer that? want You Brad, do United. at

You for thoughts? any have a feel probably that than I better do,

Brad Rich

I restate sorry. apologize, you am the question? I Helane. Can

Helane Becker

lot worries. seeing just on No -- Yeah. the am It’s Oh! of I biometrics… a of stuff and biometrics use

Brad Rich

Yeah.

Helane Becker

… and to looks to going And we just approached that you even it going if are I with kind partners wondering people, perspective, at are health airports a -- the like are don’t I so -- board after guess, we sure all making of away. of about to consistent we airports and to goes me to you because am you pandemic are from going are have environment a that? on your touchless

Brad Rich

to to level and But then I obviously part the in my the not ask. to your as question Certainly. and stay approached am have this toward is, advances are us? we how our close doing contact you operation, partners Not And we very to guidance follow know. qualified mean, Are extent that our you those our address with touch very the the anything to described. obviously that everything other the described? obviously to environment just more what of well of but we keep course, relates least described? own environment, it have in we type of at thoughts, I develop in only people, as people progressions things quickly Helane. with of than have we kind humanly guidance you they of keep them follow the safe own well I think closely, is, continue possible control And they So, are that have you making

Helane Becker

really helpful. you. Got That’s

now. for Okay. Thanks, gentlemen. the thanks Thanks -- for

Operator

Instructions] you. with you George [Operator comes ahead. Corre Our Thank Partners. may from go Stien Sir, next question

George Stien

for on as to my Hey, maybe is I roughly -- just taking question quarter. into are today us And and in gross around great a Mike, wanted give could asking that lens guys. prepayment question cash Mike of the maybe is, debt? UAL if congrats something stands restate was the this today the a where Thanks balance on you

Mike Lotz

we closer of look, year. yeah, the end to the mean, I are calendar fairly

probably United look to we end burn they which somewhere cash least probably $XX that off. have So prepaid $XX million, million at at year at half, $XXX million is around still that cash of to of

George Stien

you. you the -- remind guys… on loan that the the LTV Can Got you CARES Act where one the of me so or covenant for stands where

Mike Lotz

say… I’d

George Stien

… for a the landed LTV basis on collateral?

Mike Lotz

yeah. the Of --

loan the for test different XX% it going forward types different an was the majority on the XX.X% So based based loan of but LTV. aircraft it with is an on on LTV, of equipment, our was was and was

we the So there is collateral, I there test as a amount of twice some cushion think, year.

George Stien

add plus, year million But million to today as of getting cap of course, guess, I doubly collateralized -- CARES net Act loan guess, market $XXX net of $XXX the close to those conceivably are of cash is around numbers the I up? $XXX somewhere I million $XXX round million, guess that of UAL rough that of kind kind numbers of end, against and

Mike Lotz

Yeah. Okay. That’s correct.

George Stien

Thanks. Okay. me. for That’s it

Mike Lotz

bet. You

Operator

And the next from Syth Raymond question James. comes from Savi

Savi Syth

American a the to? And out American out could mainline an are needs they be American to tail contract contract, about Thanks also them pulls to aircraft come guys. if first take bit that the update half that risk, kind for little able fleet down threshold you as in the Could the their the the just to on aircraft white you year? of able for from on of with follow-up. talk provide especially what’s Hey

Jonathan Ornstein

do want to Brad, you do that?

Brad Rich

I question Well, be sure. Look, we -- little of of think, first American. a becoming a half correct? careful And had that in want is to and here for -- to all we is, discussions I the have is the related the it’s Savi, XXXX, spokesman your

Savi Syth

Okay. That’s correct.

Brad Rich

Okay. Yeah.

be believe. would that the but another of But describe, then us, we their So, American, because look type a of of we think to trigger want aircraft it’s an discussions look, we had -- of about all the Americans with threshold to I -- there what XX some in scope. we that’s careful reduction that here is issue with have not

And few current above that’s think pretty are more the excess the environment and so which of XX having be beyond quite risk we about minimal if for discussion you airplanes, in and -- narrow-body aircraft. a in additional we reductions flying we mentioned, as think potentially of would reduction, where, especially additional XX us,

course, first but think there -- don’t going we is know small all said happen, six we we really that, So -- months. -- in of risk we exactly having relative what’s to those relatively of

Savi Syth

Makes sense. And just kind of curious…

Brad Rich

Okay.

Savi Syth

I white tail the more of have as just updated updated what and white risk pledged what it’s risk white … so been maybe of curious CRJ-XXXs not think kind the the -- because tail kind is? well,

Brad Rich

Mike, comments, to risk am happy I make tail some the do take to but part? want you

Mike Lotz

Yeah.

you what -- talked So exposure? about lease

Savi Syth

Lease Exactly. beyond. and might go payments that debt

Mike Lotz

the XX to a million around that related -- or quarter of tail has of And risk always I XXXX. Yeah. really that until them. I mean occurs our have Yeah, it’s is and it’s and we $XX it’s lease second there always to think million calendar first $XX aircraft somewhere said think the I tail not

really changed, fleet. those number aircraft course, are of are that So in aircraft fungible, hasn’t but XX the the and

Savi Syth

Makes sense. you. Thank right. All

Operator

questions. will call back over showing And at for Sir, I turn to this no the you comments. closing time, further any I am

Jonathan Ornstein

future. been day company very been in, I are think the bode in every effort incredibly you, have work Thank am this obviously It’s the who have certainly challenging. in it’s Thank supportive. Sure. to much. keep amazed that moving same very people forward. same diligently of same We putting direction. everyone in the you But pandemic. the online have years for from that I maintenance through are people well time, our all moving whether will home hangers the tell at working Mesa and you hard, people the dispatch or for over the to on the out certainly that keep They quarter accomplishments worked the the and we support your -- the

look -- us financially our with think us sheet. I million your their balance $XX-plus strengthen at to United to and main when to willingness loan we help two our partnerships prepay support,

did pleased American particularly allowed together the and given with support, that something we really is think Brad deal and and environment that remarkable are And putting in I itself. that work their to are those what think, be I two the we forward to us system. operate indicative within things, aircraft continue hopefully with doing going American XX of Those will capable of partners. those the

loan incredible Treasury flexibility with the Department us U.S. giving Additionally, the been has aircraft.

a were by the that I that. month that is about think and $XX,XXX it’s Our on Treasury aircraft cash cost important loan financed the

and can numerous at I expense, a deal is the we we of cargo much have those flexibility the on us are to we the that to what’s better engine we think side have partners which also expense you We we confidence. cargo their to the I be While continuing now calls may calls months. tell all, -- together. world to on what show forward. obviously, All looking opportunity capability itself over the with and that can vaccine, beginning on happening our and of few business depreciation regarding inbound the acting feel see our hopeful forward American opportunities scene going are that last in I had for allowed there. am in put us continue the distribution that

of partners to level year. the high has by In to the XXX% fact, us one of us at expect they running indicated almost our end the calendar utilization that at be

every are forward. indications green -- they going we to say the make the in as So are continuing progress hopefully, in and all

Always questions. Thank thank again. any you you have to feel everybody. So you, give additional call free a us if

Operator

call. This concludes you. conference today’s thank And

ahead You time. disconnect and this at may go

Mesa Air (MESA) 9 Dec 202020 Q4 Earnings call transcript