MESA - Earnings call transcript Q4 2021

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Operator

Welcome to the Mesa Airlines Q4 Investor Conference Call. All participants are on a listen-only mode until the question-and-answer session. [Operator Instructions] This call is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the call over to Susan Donofrio, Head of Investor Relations. Ms. begin. may you Donofrio,

Susan Donofrio

this And fiscal to This quarter and replay being Operator. our found for website. call earnings its recorded of A webcast. fourth ended simultaneously can welcome you, be Mesa’s on everyone call is call Thank September XXth.

with are members CFO, Zubeck, the Brad as Mesa’s other CEO; the Jonathan as Chairman management Torque call On EVP President; and and Ornstein, and of team. Rich, COO; me today Michael Lotz, well

fourth question-and-answer to filed differ not prepared update session fiscal risks on opening reflected comparing undertake reports We based with items. our our With SEC. reconciliation the I is in by Please measures. we call today, release, forward-looking to it materially results remarks, current are Also there to forward-looking a our earnings expectations the significant our website of discussed the forward-looking his any that for to all refer exclude will be could company’s special on factors periods contains the adjusting to statements. duty a and statements, future no wanted the be Following analysts. and available on for will discussion cause of on turn the performance. are including sell-side will that, Jonathan non-GAAP remind which that for over our be quarter the to remarks. from statements There In everyone that uncertainties risk those guarantee results actual today’s

Jonathan Ornstein

difficult of COVID would difficult than for more who out anticipated this have that a was Thank be it. coming going into Obviously, quarter you, Susan. would Mesa,

by presented This detail dominated span Mesa we before for pressures the innovation in successfully. fluctuations XXXX, airline has will driver. to circumstances something that The disruption. Risley, operating what of happens massive the times cost that attrition, higher century. set year aviation happened, a of business years. once Torque the once in seat that significantly remain beginning has pandemic every and demand, in a environment our Brad founder every And cooperation address me, happens seen something been and cover XX in will mentor, chain primary Larry in my told and -- require more As happens inflationary supply have unlike higher resulting and and

for fiscal of some all through is like it believe allowed While tough end is I PSP pandemic remain likely intact and people their the we transition this industry the the of be fully highlights. of for year’s to that year, government employees work throughout I’d the that the all a to expectation for us program like to our dedication keep long-term, to go this fundamentals year. would Since thank federal environment pandemic of our we the as our is employed. XXXX over

a years. First, our with we another in added contract next operation. successfully our XXX year CRJ-XXXs United, the aircraft launched Express cargo new five XX for of United XX CRJ-XXXs for XX XXX term. for with put We partnership United place nine DHL like to Embraer urban operate technology. to will American is electric lead we We and GoJet Express operator believe takeoff designed industry Heart manufacturers economical We Aviation to Archer’s in environments in our leased operation with a leaders convenient, make growth Aerospace. vertical aircraft the transportation for United York, carbon opportunities hub agreements Archer in aircraft of us congested electric and and Chicago. into low entered significant and this Angeles New and Los airports to aviation to long-term green We

and equity made the in Mesa receive invested company transaction, the warrants. of part As

$X million. close is $XX cost approximately investments the million basis the on As a on of our of of Tuesday, value

and deliveries XX aircraft We also expecting XXXX. another begin in to entered into options a for with XX purchase agreement

Another to in by pathway significant an regional the Breakthrough Energy our for a Bill Ventures new our United alongside jets. these Gates. larger aircraft led pilots Heart industry we Aerospace and entering made see initiative benefit fly investment we Airlines is small And provide that another green

XX receive In entered to been to efficient the the and reintroduce XX agreement regional addition all highly aircraft aircraft. to into electric that Sweden, has in commercial over on will in that been our our of allow aircraft friendly with to dozens investment warrants scheduled lost seat purchase XX Aerospace XXX -- is to Mesa located us begin service service XX of of is provider first commercial we Gothenburg, cities for be and seat largest previously last these and years. a had operator option, Heart environmentally deliveries hope plans aircraft XXXX. the

For no at to example, our air headquarters former at New destinations day currently XX has commercial one over a and Mexico, Farmington, time five flights service.

national As the Heart air transportation safe cities aviation a system. off this the people rural been reintroduce will ES-XX reliable Farmington like clean, result, efficient, cut XX,XXX aircraft and from to effectively of transportation. have

to at drones as is of trillion being operate fully formerly We’ve $X agreement and position Our regional be first entered -- of continue of up be development. forefront electric that the on with developed investments this to companies in to two most to designed regional a has new perspective, to forefront in we This introducing are to decarbonizing delivery. travel fossil To air allow intend it drone systems in airline one reliance in total. could also reducing option We Mesa and delivery is known an fly Mesa have in technology when these estimated our for to acquire SkyDrop into grow the this Flirtey its the growth will an market fuels. technically to leader to XXX be and the on SkyDrop focus the eVTOL on significant world, precision aviation. and food put advanced Stanley believe and to with initial the Morgan opportunities aircraft with in

with think potential year growth market, huge the our in and regional will Subsequent a We to are European limiting airline. venture Gramercy there future. while we about excited of agreement new London joint our the finalized is venture XXXX. Malta end, XX% exciting based and completed the first be of definitely pioneering are Limited based we We about to industry and the Mesa owns believe think introducing develop to drone a risk. Associates The potentially -- is in delivery half based in of an venture. be joint certification expected high

at pilots We Torque -- strengthening With to over April, we in the is future as will and potential caused of more exacerbated near-term. an potential back I’d uncertain detail, foundation of environment demand explaining will and potential and our rule friendly regional our to to always federally FAA and Brad to the business of our laying the initiatives our like environmentally the pilot the shortages respond our increased labor going our largest wide efforts shortage. airline together recruiting up at the that, through by other forward. to while XXXX. provide overseas. be position cooperatively well but are In our be this with the and navigating strategic overall believe for our that hurdles as Throughout exception. the faced the COVID forefront retirements impact require as a and are by in mandated by I’d hour performance This an the solutions The and this XXXX, bring we on situation federal focus electric are come model government, partners, ourselves will X,XXX creative quarter. early update like on to focus labor touch we in over major excited by strong We needs operational with partnerships response, near-term have driven looking problem now at employees. history the no with industry this an addressed time carriers are to Brad training shortages worked we’re aviation. believe when turn call to and to be

Brad Rich

and We working with network. and the of everyone. as customers, on our Jonathan, Thank expect, ensure and safety good for partners and major today. are people our latest you you, consistency to you our joining to focused follow to our continue afternoon the guidance remain us we across cooperatively health CDC would Thank and

our capacity objectives, and United conditions. Our to the we American with and performance only responsive often industry remain and remain of and are business, flexible committed cornerstone partnerships but their to meeting changing rapidly not

pleased a XX.X% to In hours, quarter last demand are year from last the XX.X% and increase recovering. travel above we is We an XX,XXX see flew September quarter. which for block air

factor controllable to completion XX.X%, was ago. Our year XXX% a compared combined

result fleet for of primarily current production driven by under our contract. is as XXXX our reduction Americans levels, smaller our a below in flying Our

meet our the of likely recovering, there been of XXXX, ahead demand uncertainty airline our while new will partners arise, severity pandemic. to Looking has to variants upon dependent COVID-XX as demand to continues be ability the be

we Additionally, costs, face in by labor wide on a these issues. our the This more as these expensive of heavy remain cost industry being immune impact rapid are significant increasing employee continues obstacles, often operating often to increases due and changes focused environment maintenance, to to we difficulties, of inflationary demand, hiring, That and issues chain the in the includes solving COVID. retention while due industry said, overall pressures. not magnified supply to

and in increased of obtaining scheduled these heavy to and as note parts aircraft of impacting do our return spite and and ability fiscal few C-check maintenance fleet. supply chain We costs The our heavy been the upgrades. expenses are number of volume our highs a scheduled is CRJ-XXX lengthened time also elevated spare impeding result service me driving has aircraft anticipate refurbishment to materials, into the of recovers. times the of place to operations. It’s primarily discuss Let interior daily thus C-checks, important that into reduction next In year factor historical heavy at the will support aircraft which into our checks, This the add are issues aircraft additional in the maintenance. primary remain the span issues issues.

aircraft. fleet Regarding our our operation, United E-XXX at remains XX

quarter strong XX.X%. Our controllable throughout completion at remains factor the

rankings consistently exception. in was has the top tier performance this our versus peers United no quarter placed Our and us

consists CRJ-XXX March impacted with aircraft by fleet. provide issues of delivered These parts be faced we of which we events. end XXXX. remaining by to like agreement will the maintenance as update operation, heavy of on I’d the shortages CRJ-XXXs. operations aircraft to entirely leasing and particularly timing of mentioned have our and quarter aircraft were two GoJet continue as of CRJ-XXX of XXXX, announced aircraft transitioning with in transition of these the previously XX, the XXXX. all been removed our XX the We of XX additional CRJ-XXXs into process and four delivered the have September from part ending quick December Airlines the American our of we quarter, aircrafts Last a the

Additionally, number the and flying at C-checks added the of additional schedule. request we lines an combined This increase five capacity of additional through reduced Americans, the with the of summer the through aircraft company. spare available to mid-August extended

our C-check rates. As double volume high C-check and more mentioned, at the scheduled previously a than normalized is company’s historical

to DHL our and operations. our year rate operationally. perform performance. time on We’ve factor performance Our XX.XX. goals controllable our our -- for DHL completion operation continues very We have full performance and was year completed was exceeded of DHL’s XX.XX% for Both first well the

We our staffing The delivery has and make operational lessor like outlook and some maintenance the requirements about third focused in increasing -- our meet of labor. by divisions. aircraft additional comments to third due X now all to XXX postponed deliveries training on to the XXX on I’d hiring -- in certification. conversion, remain the been

by For early pilots, was as increase at has majors, the this an in in resulted attrition. higher retirements exacerbated

into back capacity levels seen have we May, days. full training the our put we attrition over further in XX elevated While past

there able While pilots we and new training and completed. XXX when been the the a currently pilots a resignations recruit number training, gap have sufficient between is hire is to have hire new over of successfully in

block a opportunities direct XXXX Furthermore, XX hour our removed quarter, American program, aircraft. we’ve Aviate September currently the quarter. turboprop not aircraft for of result our through consists are has that fleet well December we and to United pilots United are operations, an XX be from peak of The or a very or become feel regional career for does offer option our narrow-body reduction summer of few from the as XXX pilot positioned in Airlines. anticipating pilots airlines one In and regional we off X% entirely as for a passenger aircraft able offer passenger we’re flying to have for addition, We we for the to attractive five like a been such pathway added

the Our XXX the highest the in the earn offering regional and regional only fly airline are industry. pay aircraft to aircraft, we opportunity larger

across -- opportunity well We that easily desire they and crew positioned have we live are well commute domiciles the country allow where work. positioned pilots to our the to

currently offering We’re upgrade opportunities. captain

recruiting schools country. the aviation actively of hundreds We’re across from

able pay We bonus to initiatives with said, thus have we pilot we creative opportunities. to other while attrition enhanced to to remain retain deal continuing this hire competitive new focused And new in pursuing candidates. are With with That sufficient higher keep been area. have respect number being pace with attract are continue we mechanics, to attrition, and far. to highly critical a we

to implemented that, of through we As in I’d a effective an retention like the over financial implemented turn Torque XXXX our incentives October and now new performance. to example, scale With programs. pay walk other and time

Torque Zubeck

Brad. you, Thank Great.

a more capital review balance of After I’ll discuss business outlook our do on outlook. performance financial provide our sheet. and and detail then our some Let that, me

For the $X.XX mark-to-market or non-cash net year an share we fourth diluted of related share, on impact $X.X on equity our XXXX, adjusted per the $X.X $X.X expense. of loss investments and securities income per and losses excluding of $X.XX quarter fiscal diluted a million our net or in tax million reported loss million

termination well on income securities, the net aforementioned $X.XX on loss gain For full per adjusted a diluted $X.XX debt. lease and million income a a XXXX, $XX.X These the of equity of per non-cash adjustments of in or net on and extinguishment year share. include we diluted mark-to-market or share reported losses investments as $XX.X as million

Similarly, roughly prior expendable than fleet As our associated higher Brad deferred them Fleet check volumes been through in versus getting mentioned, million The year. maintenance that has COVID-XX. and Overall, double been investing heavy was expense was in were expenses to rotable we’ve $XX support QX the fiscal normal expense our of at quarter. maintenance were run year higher during cost up XXXX. through the rate were now $X in our put XXXX maintenance million another a net not due parts lower of activity. elevated $X but are removed with service flying These levels of outs that catch to and repaired into up one vendors. on being needed the add one-time back flying million

me quarter is the of one-time $X a the Archer $XX of the $XXX.X deferred quarter. decreased prior $XXX.X a partner included last during debt are where million, from true-ups cash in where the we to spare to amount million of excluding by $XX.X Heart of This liquidity, for payment Aviation, the new investment from of QX at to million payments Total is it to restricted its Let be cash reduction $XX.X quarter. and was roughly million, review primarily cash above a million we million debt engine. million, end QX which on million. investment the quarter $XX $X The and slightly due debt forecast quarter planned purchase Aerospace was scheduled which in million, $XX a down

debt, reduced will roughly roughly and the by This year down average of new fiscal million purchase be engine million CapEx was Assuming XXXX. There at to of brings on in spare XXXX. $XXX consisted parts. year-end primarily rotable the a XXXX balance million fiscal $XXX spare each which $X and debt quarter, total the no in the of additional balance

additional expenditures. no the deliveries at four reductions of new temporary Effective are have in September. still program the and we XXXX, PSP rate as PSP year end all major related other partner effect longer planned ended fiscal no to capital For spare XXXX, engine October

Let me now touch on guidance.

in still a provide is we areas. few to guidance environment did the Although, recovering, want

the lower X% our outlined, QX anticipated previous are Brad hours than block XXXX quarter. to As be

full training We hire we to increased regionals, costs pilot trainees. new of have new for we center most number training as captain like our at training also capacity And anticipate pilot hire and a sufficient attract upgrades. compensation qualified enhanced have

the first quarters two as Our levels American, at will interior for program fiscal the visits. expense This heavy as heavy scheduled refresh maintenance XXXX. regularly to be includes our year both of well elevated maintenance an continue

it’s this is the impact XXXX provided We events, transitional related two year, primarily is best to as first our P&L pass-through quarters. to we the operations. release. maintenance This more and timing know, zero has level our our related of estimates in our see you as expense, in For press not a so

We carriers throttle. pilot to be are is given coming are levels, C-check and to at keep we hiring activity in travel major the year. elevated end recruiting at past the the We of elevated pilot sure activity see we’ve increasing, at we seen our full focused hiring that on making expected demand

impact area this a will in direct success our performance. have upon Our financial

to over Jonathan. like I’d to back Now turn it

Jonathan Ornstein

much up, into with in for partnership with also appreciate retain pandemic. the electric very we contract We our We and able American believe aviation. we a successfully partnership addition United strengthened the the to of a to employees. sum and you Torque. have plan aircraft the midst To of financial Thank were qualified We recap. attract enter XX new in our

and cargo for We continue like are also and pursue to feel flying just DHL we as new growth European start opportunities. growth look our plans

Finally, electric the in we airline cost being intend regional remain leader the on low decarbonisation and and aircraft. regional airline

as significant issues, the over the point, Operator, our some long-term. remain At to the we up answer believe analysts any may of industry certainly that this While I’d we open please unchanged questions be fundamentals the that call have. happy face near-term

Operator

[Operator Savi Syth. so our ahead Thank first you from Instructions] comes And Go much. please. question

Your is open. line

Savi Syth

leaving deferred of I your block delivered of guidance, came am for your a in production -- to C-check I confused, kind higher, were maybe and results just aircraft bit slower everybody. lower. this with the revenue actually be your your was is recognition aircraft maybe cost afternoon, seems What hour quarter, little to look Good sooner GoJet. if relative engine different estimates Hey. at some five your non-pass-through and American higher a of and maintenance the

non-GAAP couple a quarters? non-GAAP quarters the is, So costs kind September those some Do we you And of happened quarter the continue more previously another of you of expect or for that that well? as quarter else loss -- a expecting couple along for during expecting in that? these lines I’m a just losses drove to you should be also -- loss curious, were something

Jonathan Ornstein

let this high things what level in drove what was Savi, at just give you heavy in a terms the this number. clearly and in. quarter is I’ll here duration, Johnson. going chime from drove the the primarily my cost, and view I’m But perspective just Mike to level of maintenance maybe of Torque C-check, the elevated

in new we I think our of aircraft of those was it’s -- had that additional, lines maintaining through we there. of had all the that, would funding mods, part meantime, American, But aircraft would available it not an XX, don’t I interior flying imagine on and were important continue. them I parked be of lot five to we agreement believe been otherwise five various so aircraft. just mods, that not be that will with them that property, were put for were XX expense types only point paint actually seat additional are of also, and out mods, of have as maintaining either we mods, we’re whether aircraft been electric a the in we spares aircraft We

that expensive contract, were new chain to longer And were related and of lot American again, those took supply primarily heavy the they a to and in associated they came as the they transition is costs that result. more into due a issues more, through. on check this C-checks, with higher again, So

Brad Rich

the it’s there when of the can to the flying parts some time, spares, doing aircraft the Jonathan, of for like that American alluded C-check, -- some support to an C-checks CPA, in the the are C-checks for more with to fleet. expanded the is we significant just -- expenses tied the parts interiors, not in which programs some in but that and was to, to I to support, for than quarter are to a its the related maybe only And had related support Jonathan add, we’re related of them there of that increase we’re C-checks, the them period parts

to are two the part the support the those So maintenance major and related them. items, heavy

Savi Syth

quarters And couple sense. changes on losses non-GAAP, makes for be of quarters? of couple the that, That that expecting here just the here? Is another next something we in there should the

Brad Rich

for earnings. think alluded as to work not Torque we and by of that run I through longer and through go that heavy took going probably it’ll tailing QX Jonathan expected that point. did be is a is we whole kind but we’re Well, point, on rate But to maintenance, QX, any of of in, under to then lot guidance giving QX, the part was and -- than a that we’re and QX will we’ll certainly right, at be off it be cycle lower flipped

Savi Syth

you training it. seeing on like, And if issue, this kind transitionary you might that if are that talk any color in catch a about, quite or I longer? bit of you on ask, treadmill the a what front do little pilot the to Got takes this is bit pilots see lasting just time could and levels where mentioned, of as, for you’re a on a up you’re as

Jonathan Ornstein

color. want to -- give you comment, to going Brad make more again my I’m I’ll I

do zero. a -- this we there not pilots so month, felt was that much eight, six, point, there think to be also moderate in would long-term then at I to for this we April, it to the coming in had The considered went attrition that increased we’re back a attrition as mean, somewhat, pilots obviously, And COVID, it the not literally air up zero, elevated that to and be turn. we still us, said, were trend During they an level. we to -- levels moderate long-term And down. we reduced. while I’m forward. we I increased when which fact center still would move and fired going is, XX, and guess, leave, -- not was, The counting what given mentioned that call, voluntary the on talking again. I started XX but training was on we when how began could this turned was them really the fact flying

also work a I that and together might partners it about work we talking to mentioned coming together, just on We’re to we with solution and how to we handle Brad this, this fact, fact there best to the we be within to due paradigm, to -- that about able problem talked up to, lag that our as have that operate new how need of this and in where just the offered the it to regulation on was add demand And has is government the the by something again, shortage, created all that for rule. hour do pilots But retirements pilot want appears exacerbated that? the be absolutely pandemic, been accelerated artificially I it very to think, Brad, we X,XXX during effectively by powerful. early the impact you know regarding is, were which which,

Brad Rich

add. have Yeah. issue. meaningful anything to I That’s mean, think, don’t Jonathan, covered the you’ve I I really it.

Savi Syth

guys. Okay. Thank you,

Operator

question Helane next And Becker. our from comes please. ahead, Go

Your line is open.

Helane Becker

That’s Operator. everybody. much, All mile clock for time. Thank the the very second Thanks Oh! Hi, right. you off. goes

free and other five Just five on pilots -- did into to they immediately on a being of that were just aren’t the that to up go go immediately did clarify did questions flown that leave couple -- the or airlines? now, here spares aircraft they or that

Jonathan Ornstein

five we’re of out service. Oh! No. -- We just the transitioned aircraft,

out, we is is just bit spool lose, train we XX the mentioned, any this how think we many Brad that’s it’s little at I utilization than around because with to volatile industry, But up how days going fulfill very to in At other can as to pilot and people anecdotal we’re something of by example, to the carriers. as that for this the American, takes sure. We just aircraft best fast we’re had at for to we need make training environment question took our stretch. of levels, that But best. time -- roughly going and it we attrition catch not tell, to talking so higher the again, our mean, it have versus from again, talking time XXX we did levels training, footprint to have leaves us that, because pilots partners up best tell. you able other we to is people lag. a pull it and our us But is best over requirements be and forward, continue can and can

Helane Becker

are and And you. I then already you other But talked exists outsourced people other than issues most and maintenance that about with there there Got issues… that. pilots know your you of are

Jonathan Ornstein

have will not just trip shortage flight we XX say of I But applicants. example, of our I -- levels attendants out an mean, hired about you so just But attendants. mean, exploded. we flight me the thankfully, you quickly thousands when is attendants, their to this we demand remotely of have fairly that where let kind attrition of have high Brad flight give let maintenance, level numbers that a can out partners I even days. we of which, just but seen it’s give example, one amazing. an there’s within labor talk and we give coming of, just we’ve close example, and are generally eight to you an I our in train to mean,

it So it’s can. attrition grips acting with fact, come way just you’d would and attendant with it’s as like a and regime second a think have in a flight to said, that effectively be in the I just are, as fast dealing and you we flight. But we never shortage is it for new to we

mechanics. is you everybody, So, affects a I’ll highly obviously, yes, trained about it comment. next, Brad, and want let the to talk Brad critical to make

Brad Rich

think on thing with hire a mechanic, and And able the don’t it’s mean, a training inexperienced mechanics it sufficient no pilot. not The as numbers, I actual to nearly Helane, mechanics, is to footprint though, number with attrition. look, an getting you’re Yeah. all I pace with as of keep labor mechanics The surprise, pressure although, we’ve long is been groups. are exception. any there’s

Helane Becker

Right.

Brad Rich

other groups. the supply been get and The the the more this issues and of although, the length up focus attention, keeping with pressure, of issues pilots demand the or hiring So, footprint. have, obviously, we’ve because training on

Helane Becker

the Thanks, Got American helpful. up, That’s does American And follow for you. I change, you can management very just contract? Brad. with if change the anything

Jonathan Ornstein

closely nothing been, a went certainly, viewed But an always to friend ally. Isom But the a I worked because known have bankruptcy. and Brad time. friends Robert mean, him Nothing, but, since Devon very we’ve May. we’ve I with has retire, for starting long contractually. American him go as and No. And see he’s people, certainly, we’re -- their also Doug operational to been

So we I see for folks deal change. with, the don’t significant any that

we like and him both we’ll best. Doug a professionally I I the think by hurt but mean, be wish it. So and don’t lot, personally

I something -- same and the there’s change. you would contractually, thing be the have no impact anything, Do to that Brad, it’ll be think add?

Helane Becker

Got you. Thank you. Thanks, guys.

Operator

from next Linenberg. comes ahead, please. Our Instructions] question Go Mike [Operator

open. line Your is

Mike Linenberg

was that’s just don’t -- the so in Oh! method. some going I for still up year up CapEx? when under Hey. showing Jonathan. costs I know, Like, there’s you ramp to fiscal their initial the And Good equity to like that guess about XX%, the if P&L? that start can development? going operation, maybe Can European be you afternoon, that talk does startup what’s that everyone. a Hey, The that, you’re account XXXX guess, because there, and I the

Jonathan Ornstein

the taking answer responsible lead European been ask to the to he’s because that, operation. Well, I’m on Mike going and

So I’m questions. answer ask to to going those Mike

Mike Linenberg

Great.

Michael Lotz

Hi, Mike.

So, yeah…

Mike Linenberg

Hey.

Michael Lotz

the We multi-regulatory is working were Michael going we’re certificate this with where expected. and authorities were We the be incorporated. Lotz. to have …

We’re a going the certificate. process getting through of

of QX, be to minimum. calendar XXXX. in expect certificate, half the costs get We in that certainly, startup The first will

more in of thousands and months probably there. customers not start we’ll dollars, of millions go dollars up. hundreds And be the talking for looking coming of like from to We’re

Mike Linenberg

Is bringing operation with is going Is highlight Thanks. pilot us? that mechanic front we’re seeing the for issues in to on Like and global. run you same, anything you some of can to shortage that -- to -- you’re that the and this be like? -- same that are respect staffing going or of to some like seeing noticed I into U.S.? into the run and that in seems pilots are the it you

Jonathan Ornstein

Yeah.

think U.S. more of we’re to all, there looking already kind our agreement. to customers, much partners that is We’ve of Europe service. begun conversations purchase for of model with I we’re to want thoughts that when capacity to because going and our mention intend bring of carriers we said, Mike a over level that First important, that’s I thought provide large

the been has know, truly Europe. business you regional decimated in As

it’s a In know harping cause, of I don’t the here you hour few same of do personnel, so in I’m see but that in someone I X,XXX one else to parts well and issues the internationally, the terms look the United the States, because lost the on at no because pilot rule, probably looked feels other people world mean, of other in say, what us, situations country has when rules. know about talk We’ve as these shortage, they world shortage. some in at adopted keep we you and

some the of than regulated crazy when of people be kind operate a anywhere near difficulty can being level and think that we there of that’s think the but And that respects comfortable that I retain attract the it it So and States, at United problem. that we Europe a likely think have type don’t And less and to we will aircraft without in that of that comes pilots jet, least be it’s regional we people hire we here. feel to we feel case. the with that

Mike Linenberg

can one. then, sneak And I or in one or Okay. Jonathan Mike Brad, last just

a throw did you about be it’s and that my percent, high, Thanks front questions. You taking right flight what anything talked on would what attendants, the or whether thanks for great? now, being seeing rate number, pilots you’re attrition out

Jonathan Ornstein

pilot are Board. the short mean, over I all numbers the Yeah.

of -- unfair level attrition. driven that’s you past tell up it’s increasing But down, hiring can’t went the been since at and we have say they the I will But levels the that have what’s COVID. -- wind and in the under COVID look, been I say, sort all to to had I by driven begun Although, exit think numbers of high it. major really we as

the that’s range, happens? a lower that like where a what problem one had that and any regionals little terms it’s and in we of Again, flying XX -- the -- at we’ve be seen that it’s occasionally, I off just is be may have popped things and of a ourselves There’s -- than fact to we XXXX level of question to But total of pulled and back think mean, partners. am But We’re of it’s to bit numbers XX pilots. in going up to not for higher I things really that too, dependent attrition other aircraft the is immune, We but and fair, lot that it’s this American. to And aware is us. right in the realize all out. out. on where believe do regionals shake levels at one partners hard only run higher because upon run in ours. the because those lower, going our it’s fly to closest actually no couple now, months, according is, a thing, were throughout matter immune. that no the say industry, be A I it’s our I that’s

mean, I there. nothing So, not, magical we’re there’s

drained expansion within the ecosystem, in the it’s a just really bring all how the question American is retaining we not -- pilots beating to with one is, think that our of just as in, we to occurring. the attracting effective not fact, but partners been drums I of people. the United and with have are on people we flying, reservoir also focus being refill people well at keep are or retirements but that actually of as the And need to sort of of as ecosystem ways pilots, really that

Mike Linenberg

Thanks. Thanks, everyone. Thanks, Jonathan.

Operator

Savi question please. another have from we Go Syth. And ahead,

Your line open. is

Savi Syth

getting fronts. the just there, you’re you’re another I Thanks. curious Hey. land, cargo fleet well. was as executing on that on eight It of well the like sounds getting looks aircraft kind third

on any the year can you Just expect or that or what how in two? we update next expand can

Jonathan Ornstein

business -- just an of lots efficient we just did I It’s aircraft. cargo why not mean, Clearly there’s not enter for reasons it’s Sure. bigger. three operation. the it needs be to

because one and we we tell only a expectations we that two were fact, without the two we was the not operate aircraft we did Operationally, the just got why DHL that nervous you, exceeded aircraft -- having we of airplanes exceeded -- we a found over having spare. only In about I year. doubt and were can third with reasons

be well very DHL, growth So are are that positioned And we of us fact go in and the a they’re few probably And airplanes, the hard our has they like a successful that made that at target help that. fair don’t that it very I conversations they’ve see a they years. I impacted the us clear at larger. made would say long-term growth. clearly to that the I they’ve fast. It it’s we’re costs But well far, The and portfolio next indicated eight over that investment going aware around. think won’t We’ve have to for us that for Amazon, -- are they’re to and thoughtful. airplanes, that, -- to our and eight it’s they big without spread with we that DHL’s can which least be doubt, statement happen us to I airplanes, do our to six to nilly to think portfolio of us in as for be number us clear airplanes, XX so very that they remain the really supportive add think world. below But in numbers that for want the they willy-nilly, made have would to we well. be clearly

Savi Syth

Okay. Thank you.

Operator

showing I’m no further time. at Speakers questions this

Jonathan Ornstein

to enter tough at The All segment high that, provide we said can to attrition as us. just We to on that about My to taking domestically hours pilots speed be who to caught had were, been difficult. finally, rapidity COVID which to and continue have additional majors just while still surprise. we VLAA least frankly want we’ve to get we as would make possible. going can right. COVID. not come still for as as has have the It’s at it that It’s are back exit at. block has harder April, time, to be starting you capacity. fact [ph]. I It’s say In to you sure first back would been anxious much we they to levels situation The up know, know, are put we a conclusion, down, us many as as want quarter were just that like we it thought if would best by work to still and levels training so than even that not in demand it increased the

we we the that to I also, deal do mentioned near-term. at here as But feel the that a well. we’ve that as think laid of intact but long-term are feel all that Mesa industry these got I not see and the we’ll issues the long-term, we’ve with over over we good think fundamentals base benefit

appreciate your So, we with time. that,

us you work to need much. you the any Thank if to you any we this very best after free can whenever have always and any continue additional to additional call questions, hard do will week, of We information. have feel as the to call or

Operator

thank conclude will you today’s for participating. That conference we and

may at time. You disconnect this

Mesa Air (MESA) 10 Dec 212021 Q4 Earnings call transcript