MESA AIR GROUP INC
For the period ended Mar 31, 2025. Filed May 20, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 20, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-05-19.
0000950170-25-073787
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0000950170-25-075201
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 130 current paragraphs.
81 unchanged; 29 reworded; 12 added; 12 removed; 3 previous and 8 current paragraphs rearranged.
Tables are not compared: 5 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Gain on Investments. Gain on investments relates to gains resulting from the transfer of investments in equity securities.
Current report
Unrealized Loss on Investments, Net. Unrealized loss on investments, net relates to losses resulting from the change in fair value of investments in equity securities.
Current report
Aircraft Rent. Aircraft rent expense decreased $0.1 million, or 6.0%, to $1.3 million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024. The decrease is primarily due to fewer airframe lease costs during our three months ended March 31, 2025.
Current report
Six Months Ended March 31, 2025 Compared to Six Months Ended March 31, 2024
Current report
We had operating loss of $168.0 million in our six months ended March 31, 2025 compared to operating loss of $36.8 million in our six months ended March 31, 2024. In our six months ended March 31, 2025, we had net loss of $173.2 million compared to net loss of $46.2 million in our six months ended March 31, 2024.
Current report
Total operating revenue decreased by $52.4 million, or 20.9%, to $198.0 million for our six months ended March 31, 2025 as compared to our six months ended March 31, 2024. Contract revenue decreased by $65.8 million, or 30.6%, to $149.1 million primarily driven by reduced block hours flown and fewer aircraft under contract compared to the six months ended March 31, 2024. Our block hours flown during our six months ended March 31, 2025 decreased 12.7% compared to the six months ended March 31, 2024 due to a decrease in scheduled flying for United and fewer aircraft under contract. Our pass-through and other revenue increased by $13.4 million, or 37.9%, to $48.9 million compared to our six months ended March 31, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Current report
Flight Operations. Flight operations expense decreased $29.7 million, or 29.3%, to $71.4 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of fewer block hours flown.
Current report
Maintenance. Aircraft maintenance expense decreased $2.8 million, or 3.0%, to $90.0 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024. This decrease was primarily driven by a decrease in labor and rotable and expendable parts, partially offset by an increase in other pass-through engine overhaul, other pass-through costs, and C-check maintenance expenses. Total pass-through maintenance expenses reimbursed by United increased by $18.5 million during our six months ended March 31, 2025 compared to our six months ended March 31, 2024.
Current report
Asset Impairment. Asset impairment of $111.8 million was recorded for our six months ended March 31, 2025 primarily related to held for sale assets and the write down of net book value of 10 E-175 aircraft. There was $43.0 million of asset impairment recorded for our six months ended March 31, 2024, related to held for sale assets.
Current report
Gain on extinguishment of debt. A gain on extinguishment of debt of $3.0 million was recorded for our six months ended March 31, 2024 related to the retirement of debt. There was no gain on extinguishment of debt recorded for the six months ended March 31, 2025.
Current report
Other Operating Expenses. Other operating expenses decreased by $3.8 million, to $0.4 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024. The decrease is primarily attributable to lower interrupted trip expense during the six months ended March 31, 2025.
Current report
Other expense increased by $2.5 million to $2.8 million for our six months ended March 31, 2025, compared to our six months ended March 31, 2024. The increase is primarily attributable to lower non-operating gains for our six months ended March 31, 2025, partially offset by a decrease in interest expense and a lower unrealized loss on investments in equity securities.
Removed paragraphs (12)
Previous report
Operating Revenues
Previous report
Operating Expenses
Previous report
Operating Revenues
Previous report
Operating Expenses
Previous report
Income Taxes
Previous report
On December 31, 2024, we entered into an Aircraft Purchase Agreement with United which provides for the sale of 18 E-175 aircraft to United for gross proceeds of $227.7 million and net proceeds of $84.7 million after the retirement of debt. Subsequently, we closed the sale of all 18 aircraft to United.
Previous report
On December 30, 2024, we received notice from United that $4.5 million of our Effective Date Revolving Loan balance under our United Revolving Credit Facility has been forgiven for achieving certain operational performance metrics outlined in the United CPA.
Previous report
On December 23, 2024, we entered into an agreement with the UST to lower the minimum CCR covenant to .99 to 1.0 effective as of November 22, 2024 through February 28, 2025. After such date, the CCR will revert to 1.55 to 1.0. The agreement also requires the Company to use its reasonable best efforts to cause counterparties to all Receivables (as defined in the Treasury Loan) (whether or not constituting “Eligible Receivables” (as defined in the Treasury Loan)) of the Company to be paid to the Eligible Receivables Account (as defined in the Treasury Loan). Receivables generated from the sale of assets that are not Collateral (as defined in the Treasury Loan) are excluded from the scope of the foregoing requirement. As a result of the lower CCR covenant, we are in compliance with this covenant as of September 30, 2024. Additionally, on March 18, 2025, we entered into a new CCR Modification Agreement with the UST to lower the minimum CCR covenant to .91 to 1.0 effective as of February 28, 2025 through the maturity date of the loan.
Previous report
o
Previous report
Amended certain scheduled exit dates for our E-175 and CRJ-900 Covered Aircraft (as defined in the United CPA).
Previous report
o
Previous report
Added provisions relating to the reimbursement by United of up to $14.0 million of pilot training costs incurred by the Company with respect to its E-175 aircraft.
Reworded paragraphs (29)
Previous wording
Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. ("Mesa", the "Company", "we", "our", or "us") is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 76 cities in 32 states, Cuba, and Mexico. Mesa operated a fleet of 60 aircraft with approximately 228 daily departures and 1,582 employees as of December 31, 2024. As of December 31, 2024, we operated 54 E-175 and 6 CRJ-900 aircraft under our United CPA. All of the Company’s consolidated contract revenues for the three months ended December 31, 2024 and December 31, 2023 were derived from operations associated with the CPA, leases of aircraft to a third party, and MPD. Revenues during the three months ended December 31, 2023 also included $3.9 million in revenues derived from our FSA with DHL, which terminated in March 2024.
Current wording
Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. ("Mesa," "Mesa Airlines," the "Company," "we," "our," or "us") is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 82 cities in 34 states, Cuba, and Mexico. As of March 31, 2025, Mesa operated a fleet of 60 Embraer 175 ("E-175") regional aircraft with approximately 238 daily departures. The aircraft in Mesa’s fleet were operated under the Company’s Capacity Purchase Agreement ("CPA"), as United Express, pursuant to the terms of the CPA entered into with United. Except as set forth in the following sentence, all of the Company’s consolidated contract revenues for the three and six months ended March 31, 2025 and March 31, 2024 were derived from operations associated with the CPA, leases of aircraft to a third party, and Mesa Pilot Development ("MPD"). Revenues during the three and six months ended March 31, 2024 also included $6.2 million in revenues derived from our Flight Services Agreement ("FSA") with DHL Network Operations (USA), inc. ("DHL"), which terminated in March 2024. Additionally, our leases of aircraft to a third party terminated upon the sale of such aircraft to United during the six months ended March 31, 2025.
Previous wording
While we operate under a capacity purchase agreement, we do not manage our business based on any performance measure at the individual contract level. Additionally, our CODM uses consolidated financial information to evaluate our performance, which is the same basis on which he communicates our results and performance to our Board of Directors. The CODM bases all significant decisions regarding the allocation of our resources on a consolidated basis. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment.
Current wording
While we operate under a capacity purchase agreement, we do not manage our business based on any performance measure at the individual contract level. Additionally, our CODM uses consolidated financial information to evaluate our performance, which is the same basis on which he communicates our results and performance to our Board of Directors.
Previous wording
We had operating loss of $110.8 million in our three months ended December 31, 2024 compared to operating loss of $48.4 million in our three months ended December 31, 2023. In our three months ended December 31, 2024, we had net loss of $114.6 million compared to net loss of $57.9 million in our three months ended December 31, 2023.
Current wording
We had operating loss of $57.3 million in our three months ended March 31, 2025 compared to operating income of $11.6 million in our three months ended March 31, 2024. In our three months ended March 31, 2025, we had net loss of $58.6 million compared to net income of $11.7 million in our three months ended March 31, 2024.
Previous wording
Our operating results for the three months ended December 31, 2024 slightly worsened as a result of the loss recorded on the sale of aircraft, greater impairment, and a decrease in contract revenue. This was partially offset due to decreases in operating expenses from (i) decreases in flight operations expense as a result of decreased pilot training and lower pilot wages; and (ii) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft. Our contract revenue decreased due to fewer aircraft under contract, higher deferred revenue, and the wind-down of the DHL FSA.
Current wording
Our operating results for the three months ended March 31, 2025 worsened as a result of the loss recorded on the sale of aircraft, impairment related to held for sale assets and the write down of E-175 aircraft, and a decrease in contract revenue. This was partially offset due to decreases in operating expenses from; (i) decreases in flight operations expense as a result of decreased pilot training and lower pilot wages; and (ii) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft. Our contract revenue decreased due to fewer aircraft under contract and higher deferred revenue. We also recognized the retroactive United block hour compensation rate increase for the three months ended December 31, 2023 during the three months ended March 31, 2024.
Previous wording
Total operating revenue decreased by $15.5 million, or 13.1%, to $103.2 million for our three months ended December 31, 2024 as compared to our three months ended December 31, 2023. Contract revenue decreased by $20.4 million, or 20.2%, to $80.7 million, primarily due to fewer aircraft under contract, higher deferred revenue, and the wind-down of the DHL FSA. Our block hours flown during our three months ended December 31, 2024, decreased 16.3% compared to the three months ended December 31, 2023 due to a decrease in scheduled flying on our CRJ fleet. Our pass-through and other revenue increased by $4.9 million, or 27.6%, to $22.6 million compared to our three months ended December 31, 2023 due to an increase in pass-through maintenance related to our E-175 fleet.
Current wording
Total operating revenue decreased by $36.8 million, or 28.0%, to $94.7 million for our three months ended March 31, 2025 as compared to our three months ended March 31, 2024. Contract revenue decreased by $45.4 million, or 39.9%, to $68.4 million, primarily due to fewer aircraft under contract and higher deferred revenue. We also recognized the retroactive United block hour compensation rate increase for the three months ended December 31, 2023 during the three months ended March 31, 2024. Our block hours flown during our three months ended March 31, 2025, decreased 8.7% compared to the three months ended March 31, 2024 due to fewer aircraft under contract. Our pass-through and other revenue increased by $8.6 million, or 48.2%, to $26.3 million compared to our three months ended March 31, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Previous wording
Flight Operations. Flight operations expense decreased $16.5 million, or 31.9%, to $35.3 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of decreases in headcount.
Current wording
Flight Operations. Flight operations expense decreased $13.1 million, or 26.6%, to $36.2 million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of decreases in headcount.
Previous wording
Maintenance. Aircraft maintenance expense decreased $2.1 million, or 4.3%, to $46.5 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023. This decrease was primarily driven by a decrease in wages. Total pass-through maintenance expenses reimbursed by United increased by $7.4 million during our three months ended December 31, 2024 compared to our three months ended December 31, 2023.
Current wording
Maintenance. Aircraft maintenance expense decreased $0.7 million, or 1.7%, to $43.5 million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024. This decrease was primarily driven by a decrease in wages. Total pass-through maintenance expenses reimbursed by United increased by $11.1 million during our three months ended March 31, 2025 compared to our three months ended March 31, 2024.
Previous wording
General and Administrative. General and administrative expense decreased $2.5 million, or 20.7%, to $9.5 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023. The decrease is primarily driven by decreases in wages and pass-through insurance costs, partially offset by increased consulting fees.
Current wording
General and Administrative. General and administrative expense increased $0.4 million, or 3.2%, to $11.5 million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024. The increase is primarily driven by increased consulting fees, partially offset by decreases in wages and pass-through insurance costs.
Previous wording
Depreciation and Amortization. Depreciation and amortization expense decreased by $5.3 million, or 40.0%, to $8.0 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023 due to aircraft in our fleet being sold or classified as non-depreciable assets held for sale.
Current wording
Depreciation and Amortization. Depreciation and amortization expense decreased by $3.9 million, or 39.4%, to $6.0 million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024 due to aircraft in our fleet being sold or classified as non-depreciable assets held for sale.
Previous wording
Asset Impairment. Asset impairment of $65.7 million was recorded for our three months ended December 31, 2024 related to the impairment of 10 E-175 aircraft and held for sale airframes. There was $40.4 million of asset impairment recorded for the three months ended December 31, 2023 related to held for sale airframes and engines.
Current wording
Asset Impairment. Asset impairment of $46.2 million was recorded for our three months ended March 31, 2025 related to held for sale assets. There was $2.7 million of asset impairment recorded for the three months ended March 31, 2024 related to held for sale assets.
Previous wording
Loss on Sale of Assets. A loss on sale of assets of $46.7 million was recorded for our three months ended December 31, 2024 primarily related to the difference in sales price versus net book value of the eight E-175 aircraft sold to United.
Current wording
Loss on Sale of Assets. A loss on sale of assets of $7.7 million was recorded for our three months ended March 31, 2025 primarily related to a write off of deferred heavy maintenance upon the sale of 10 E-175 aircraft.
Previous wording
Other Operating Expenses. Other operating expenses decreased by $1.7 million, to $0.8 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023. The decrease is primarily attributable to lower interrupted trip expense during the three months ended December 31, 2024.
Current wording
Other Operating Expenses. Other operating expenses decreased by $1.7 million, to $(0.4) million for our three months ended March 31, 2025 compared to our three months ended March 31, 2024. The decrease is primarily attributable to lower interrupted trip expense during the three months ended March 31, 2025.
Previous wording
Other expense decreased $3.0 million, or 35.7%, to $5.5 million for our three months ended December 31, 2024, compared to our three months ended December 31, 2023. The decrease is primarily attributable lower interest expense and a $4.5 million gain on debt forgiveness, partially offset by a $42 thousand unrealized loss on investments for our three months ended December 31, 2024, versus a $2.5 million unrealized gain on investments for our three months ended December 31, 2023.
Current wording
Other expense increased by $5.3 million, to $5.2 million for our three months ended March 31, 2025, compared to our three months ended March 31, 2024. The increase is primarily attributable to a lack of non-operating gains during the three months ended March 31, 2025 versus gains on debt forgiveness and the sale of equity investments that occurred during the three months ended March 31, 2024. The increase was partially offset by lower interest expense and a minimal unrealized loss on investments for our three months ended March 31, 2025, versus a $6.5 million unrealized loss on investments for our three months ended March 31, 2024.
Previous wording
The income tax benefit totaled $1.7 million for the three months ended December 31, 2024 compared to a tax expense of $0.9 million for the three months ended December 31, 2023. The effective tax rate ("ETR") from continuing operations was 1.5% for the three months ended December 31, 2024 compared to -1.5% for the three months ended December 31, 2023. Our ETR during the three months ended December 31, 2024 increased from the three months ended December 31, 2023, primarily as a result of certain tax depreciation differences, state taxes, and changes in the valuation allowance against federal and state net operating losses.
Current wording
The income tax benefit totaled $3.9 million for the three months ended March 31, 2025 compared to a tax benefit of $(0.1) million for the three months ended March 31, 2024. The effective tax rate ("ETR") from continuing operations was 6.2% for the three months ended March 31, 2025 compared to 0.6% for the three months ended March 31, 2024. Our ETR during the three months ended March 31, 2025 increased from the three months ended March 31, 2024, primarily as a result of certain tax depreciation differences, state taxes, and changes in the valuation allowance against federal and state net operating losses.
Previous wording
As of December 31, 2024, the Company had aggregate federal and state net operating loss carryforwards of approximately $371.7 million and $176.1 million, respectively, which expire in 2030-2038 and 2024-2043, respectively. Approximately $1.2 million of state net operating loss carryforwards are expected to expire in the current fiscal year.
Current wording
As of March 31, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $276.2 million and $146.6 million, respectively, which expire in 2030-2038 and 2024-2043, respectively. Approximately $0.5 million of state net operating loss carryforwards are expected to expire in the current fiscal year.
Previous wording
Aircraft Rent. Aircraft rent expense increased $0.4 million, or 34.2%, to $1.6 million for our three months ended December 31, 2024 compared to our three months ended December 31, 2023. The increase is primarily due to greater engine lease costs during our three months ended December 31, 2024.
Current wording
Aircraft Rent. Aircraft rent expense increased $0.3 million, or 12.6%, to $2.9 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024. The increase is primarily due greater engine lease costs during our six months ended March 31, 2025.
Previous wording
During our three months ended December 31, 2024 and fiscal year ended September 30, 2024, the decrease in scheduled flying activity associated with the transition of our operations with American to United, increased costs associated with pilot wages, together with increasing interest rates adversely impacted our financial results, cash flows, financial position, and other key financial ratios. Additionally, United has asked us to accelerate the removal of our CRJ-900 aircraft and transition the pilots to our E-175 fleet. These events will lead to increased costs and impact our block hour capabilities while these pilots are in training.
Current wording
During our three and six months ended March 31, 2025 and fiscal year ended September 30, 2024, the decrease in scheduled flying activity associated with the transition of our operations with American to United, increased costs associated with pilot wages, together with increasing interest rates adversely impacted our financial results, cash flows, financial position, and other key financial ratios. Additionally, United has asked us to accelerate the removal of our CRJ-900 aircraft and transition the pilots to our E-175 fleet. These events will lead to increased costs and impact our block hour capabilities while these pilots are in training.
Previous wording
As a result of the decrease in scheduled flying activity for United, we produced less block hours to generate revenues. During the three months ended December 31, 2024, these challenges resulted in a negative impact on the Company’s financial results highlighted by net loss of $114.6 million, primarily due to a $46.7 million loss recorded related to the sale of eight E-175 aircraft and a $65.7 million impairment loss primarily related to the write down of net book value of 10 E-175 aircraft. These conditions and events raised concerns about our ability to continue to fund our operations and meet our debt obligations over the next twelve months from the filing of this Form 10-Q.
Current wording
As a result of the decrease in scheduled flying activity for United, we produced less block hours to generate revenues. During the six months ended March 31, 2025, these challenges resulted in a negative impact on the Company’s financial results highlighted by net loss of $173.2 million, primarily due to a $54.4 million loss recorded related to the sale of 18 E-175 aircraft and $111.8 million in impairment related to held for sale assets and the write down of net book value of 10 E-175 aircraft. These conditions and events raised concerns about our ability to continue to fund our operations and meet our debt obligations over the next twelve months from the filing of this Form 10-Q.
Previous wording
The extension of the CPA rate increases agreed upon in the January 2024 United CPA Amendments, retroactive to January 1, 2025, through March 31, 2026.
Current wording
The extension of the CPA rate increases agreed upon in the First Amendment to our Third Amended and Restated United CPA and the Second Amendment to our Third Amended and Restated United CPA, dated January 11, 2024, and January 19, 2024, respectively (the "January 2024 United CPA Amendments”), retroactive to January 1, 2025, through March 31, 2026.
Previous wording
As of December 31, 2024, the Company has $143.3 million of principal maturity payments on long-term debt due within the next twelve months. We plan to meet these obligations with our cash on hand, ongoing cashflows from our operations, and the liquidity created from the additional measures identified above. If our plans are not realized, we intend to explore additional opportunities to create liquidity by refinancing and deferring repayment of our principal maturity payments that are due within the next twelve months. The Company continues to monitor covenant compliance with its lenders as any noncompliance could have a material impact on the Company’s financial position, cash flows and results of operations.
Current wording
As of March 31, 2025, the Company has $98.6 million of principal maturity payments on long-term debt due within the next twelve months. We plan to meet these obligations with our cash on hand, ongoing cashflows from our operations, and the liquidity created from the additional measures identified above. If our plans are not realized, we intend to explore additional opportunities to create liquidity by refinancing and deferring repayment of our principal maturity payments that are due within the next twelve months. The Company continues to monitor covenant compliance with its lenders as any noncompliance could have a material impact on the Company’s financial position, cash flows and results of operations.
Previous wording
During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust operating and capital expenditures to reflect the current market conditions and our projected demand. Our capital expenditures are primarily directed toward our aircraft fleet and flight equipment including spare engines. Our capital expenditures, net of purchases of rotable spare parts and aircraft and spare engine financing for the three months ended December 31, 2024 were approximately 2.0% of our revenue during the same period. We expect to incur capital expenditures to support our business activities. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
Current wording
During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust operating and capital expenditures to reflect the current market conditions and our projected demand. Our capital expenditures are primarily directed toward our aircraft fleet and flight equipment including spare engines. Our capital expenditures, net of purchases of rotable spare parts and aircraft and spare engine financing for the six months ended March 31, 2025 were approximately 2.2% of our revenue during the same period. We expect to incur capital expenditures to support our business activities. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
Previous wording
As of December 31, 2024, our principal sources of cash are cash and cash equivalents of $40.0 million, restricted cash of $3.0 million as of December 31, 2024, and $80.7 million in assets held for sale as of December 31, 2024. Further, 10 aircraft which are in use as of December 31, 2024, and therefore not classified as held for sale, will be sold to United for expected gross proceeds of $122.9 million. As of December 31, 2024, we had $230.6 million in secured indebtedness incurred primarily in connection with our financing of aircraft and related equipment. As of December 31, 2024, we had $143.3 million of current debt, excluding finance leases, and $83.8 million of long-term debt excluding finance leases.
Current wording
As of March 31, 2025, our principal sources of cash are cash and cash equivalents of $54.1 million and $75.8 million in assets held for sale as of March 31, 2025. As of March 31, 2025, we had $131.7 million in secured indebtedness incurred primarily in connection with our financing of aircraft and related equipment. As of March 31, 2025, we had $98.6 million of current debt, excluding finance leases, and $31.7 million of long-term debt excluding finance leases.
Previous wording
The following table presents information regarding our cash flows for each of the three months ended December 31, 2024 and December 31, 2023 (in thousands):
Current wording
The following table presents information regarding our cash flows for each of the six months ended March 31, 2025 and March 31, 2024 (in thousands):
Previous wording
During our three months ended December 31, 2024, we had cash flow used in operating activities of $11.6 million. We had net loss of $114.6 million adjusted for the following significant non-cash items: depreciation and amortization of $8.0 million, stock-based compensation of $0.3 million, deferred income taxes of $(3.0) million, amortization of deferred credits of $(1.0) million, amortization of debt discount and financing costs and accretion of interest of $1.4 million, asset impairment of $65.7 million, loss on sale of assets of $46.7 million, gain on debt forgiveness of $(4.5) million, and $3.7 million in miscellaneous operating cash flow items. We had a net change of $(14.2) million within other net operating assets and liabilities largely driven by decreases in accounts receivable and prepaid expenses and increases in accounts payable and accrued expenses, partially offset by decreases in deferred revenue.
Current wording
During our six months ended March 31, 2025, we had cash flow used in operating activities of $34.0 million. We had net loss of $173.2 million adjusted for the following significant non-cash items: depreciation and amortization of $13.9 million, stock-based compensation of $0.5 million, deferred income taxes of $(7.6) million, amortization of deferred credits of $(4.1) million, amortization of debt discount and financing costs and accretion of interest of $3.5 million, asset impairment of $111.8 million, loss on sale of assets of $54.4 million, gain on debt forgiveness of $(4.5) million, and $4.1 million in miscellaneous operating cash flow items. We had a net change of $(32.9) million within other net operating assets and liabilities largely driven by increases in accounts receivable and decreases in accounts payable and accrued expenses.
Previous wording
During our three months ended December 31, 2023, we had cash flow used in operating activities of $7.8 million. We had net loss of $57.9 million adjusted for the following significant non-cash items: depreciation and amortization of $13.3 million, stock-based compensation of $0.4 million, deferred income taxes of $0.4 million, net gains on investments in equity securities of $(2.5) million, amortization of deferred credits of $(0.2) million, amortization of debt discount and financing costs and accretion of interest of $2.3 million, asset impairment of $40.4 million, loss on sale of assets of $0.4 million, gain on extinguishment of debt of $(3.0) million, and $0.9 million in miscellaneous operating cash flow items. We had a net change of $(2.6) million within other net operating assets and liabilities largely driven by decreases in accounts payable, deferred revenue, and accrued expenses and other liabilities which were offset primarily by decreases in receivables and prepaid expenses in accrued expenses and other liabilities.
Current wording
During our six months ended March 31, 2024, we had cash flow provided by operating activities of $8.4 million. We had net loss of $46.2 million adjusted for the following significant non-cash items: depreciation and amortization of $23.1 million, stock-based compensation of $0.8 million, deferred income taxes of $0.5 million, gains on investments in equity securities of $(7.2) million, net unrealized losses on investments in equity securities of $4.0 million, amortization of deferred credits of $(0.6) million, amortization of debt discount and financing costs and accretion of interest of $5.4 million, asset impairment of $43.0 million, loss on sale of assets of $0.2 million, gain on debt forgiveness of $(10.5) million, gain on extinguishment of debt of $(3.0) million, and $2.4 million in miscellaneous operating cash flow items. We had a net change of $(3.6) million within other net operating assets and liabilities largely driven by decreases in accounts payable, deferred revenue, and accrued expenses and other liabilities which were offset primarily by decreases in receivables and prepaid expenses in accrued expenses and other liabilities.
Previous wording
During our three months ended December 31, 2024, net cash flow provided by investing activities totaled $115.8 million. Proceeds from the sale of aircraft and engines totaled $117.7 million and we invested $2.1 million in capital expenditures, primarily consisting of rotable parts and tools.
Current wording
During our six months ended March 31, 2025, net cash flow provided by investing activities totaled $178.0 million. Proceeds from the sale of aircraft and engines totaled $182.1 million and we invested $(4.3) million in capital expenditures, primarily consisting of rotable parts and tools. We received $0.2 million in refunds of equipment and other deposits.
Previous wording
During our three months ended December 31, 2023, net cash flow provided by investing activities totaled $46.6 million. Proceeds from the sale of aircraft and engines totaled $53.5 million and we invested $6.9 million in capital expenditures, primarily consisting of rotable parts and costs associated with transferring our CRJ-900 aircraft to United operations.
Current wording
During our six months ended March 31, 2024, net cash flow provided by investing activities totaled $94.5 million. Proceeds from the sale of aircraft and engines totaled $107.7 million, we invested $(13.2) million in capital expenditures, primarily consisting of rotable parts and costs associated with transferring our CRJ-900 aircraft to United operations, paid $(0.4) million in investment transaction costs, and received $0.3 million in refunds of equipment and other deposits.
Previous wording
During our three months ended December 31, 2024, net cash flow used in financing activities was $79.9 million, all of which was payments on long-term debt and finance leases.
Current wording
During our six months ended March 31, 2025, net cash flow used in financing activities was $105.5 million, all of which was payments on long-term debt and finance leases.
Previous wording
During our three months ended December 31, 2023, net cash flow used in financing activities was $55.6 million. We received $81.9 million of proceeds from long-term debt and made $(137.5) million of principal repayments on long-term debt.
Current wording
During our six months ended March 31, 2024, net cash flow used in financing activities was $117.5 million. We received $86.9 million of proceeds from long-term debt, made $(203.4) million of principal repayments on long-term debt, and paid $(0.9) million for debt prepayment costs.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The CODM bases all significant decisions regarding the allocation of our resources on a consolidated basis. Based on the information described above and in accordance with the applicable literature, management has concluded that we are organized and operated as one operating and reportable segment.
Current report — wording carried from elsewhere
Our operating results for the six months ended March 31, 2025 worsened as a result of (i) decreases in contract revenue due to reduced block hours flown and fewer aircraft under contract; (ii) large losses and impairments associated with the sale of 18 E-175 aircraft; and (iii) increased impairment expense, partially offset by (i) decreases in flight operations as a result of decreased pilot training and lower pilot wages; and (ii) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft.
Current report — wording carried from elsewhere
The following table presents information regarding our maintenance costs during the six months ended March 31, 2025 and March 31, 2024 (in thousands):
Current report — wording carried from elsewhere
General and Administrative. General and administrative expense decreased $2.1 million, or 9.2%, to $21.0 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024. The decrease is primarily driven by decreases in wages and pass-through insurance costs, partially offset by increased consulting fees.
Current report — wording carried from elsewhere
Depreciation and Amortization. Depreciation and amortization expense decreased by $9.2 million, or 39.7%, to $13.9 million for our six months ended March 31, 2025 compared to our six months ended March 31, 2024 due to aircraft in our fleet being sold or classified as non-depreciable assets held for sale.
Current report — wording carried from elsewhere
The income tax benefit totaled $5.7 million for the six months ended March 31, 2025 compared to a tax benefit of $0.9 million for the six months ended March 31, 2024. The effective tax rate ("ETR") from continuing operations was 3.1% for the six months ended March 31, 2025 compared to -2.1% for the six months ended March 31, 2024. Our ETR during the six months ended March 31, 2025 decreased from the six months ended March 31, 2024 due to permanent tax differences, state taxes, and changes in the valuation allowance against federal and state net operating losses.
Current report — wording carried from elsewhere
We continue to maintain a valuation allowance on a portion of our federal and state net operating losses in jurisdictions with shortened carryforward periods or in jurisdictions where our operations have significantly decreased as compared to prior years in which the net operating losses were generated.
Current report — wording carried from elsewhere
As of March 31, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $276.2 million and $146.6 million, respectively, which expire in 2030-2038 and 2024-2043, respectively. Approximately $0.5 million of state net operating loss carryforwards are expected to expire in the current fiscal year.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
On December 24, 2024, we entered into a purchase agreement with a third party which provides for the sale of 15 CRJ-900 airframes to the third party for expected gross proceeds of $19.0 million, which will be used to pay down our UST Loan. On April 3, 2025, the purchase agreement was amended to include an additional 14 CRJ-900 airframes to be sold to the third party for expected gross proceeds of $9.1 million. The total expected gross proceeds of $28.1 million will be used to pay down our UST Loan.
Previous report — wording carried elsewhere
On December 23, 2024, we entered into a Waiver to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period July 1, 2024 to December 23, 2024 and a projected financial covenant default with respect to the period December 24, 2024 to December 31, 2024, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.
Previous report — wording carried elsewhere
On December 23, 2024, we entered into the Fourth Amendment to our Third Amended and Restated United CPA which provides for the following: