MESA AIR GROUP INC
For the period ended Sep 30, 2025. Filed Nov 21, 2025.
View on SEC.govAbout this filing
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.
Sep 30, 2025 · Filed Nov 21, 2025
RJET$20.15+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0000950170-25-108021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-21.
0001193125-25-290256
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 135 previous paragraphs and 137 current paragraphs.
69 unchanged; 37 reworded; 31 added; 28 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 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 (31)
Current report
General and Administrative. General and administrative expense decreased $0.5 million, or 4.2%, to $10.9 million for our three months ended September 30, 2025 compared to our three months ended September 30, 2024. The decrease is primarily driven by decreases in wages.
Current report
As of September 30, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $189.5 million and $153.1 million, respectively. Of the federal net operating loss carryovers, $3.6 million will expire at the end of 2038 if not utilized. The remaining federal net operating losses have an indefinite carryover period but can only offset eighty percent of taxable income in a given year. The state net operating losses expire between 2026 and 2042.
Current report
As of September 30, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $189.5 million and $153.1 million, respectively. Of the federal net operating loss carryovers, $3.6 million will expire at the end of 2038 if not utilized. The remaining federal net operating losses have an indefinite carryover period but can only offset eighty percent of taxable income in a given year. The state net operating losses expire between 2026 and 2042.
Current report
As of September 30, 2025, Mesa has $10.7 million of borrowing capacity under the United Revolving Credit Facility based on spare parts valuation. As of December 31, 2024, the Company has $68.0 million of principal maturity payments on long-term debt due within the next twelve months including $62.2 million under our UST Loan which is due and payable on October 30, 2025, and extendable to November 28, 2025.
Current report
Mesa’s merger with Republic
Current report
On April 4, 2025, Republic and Mesa entered into the Merger Agreement pursuant to the Merger. Upon closing of the Merger, the Surviving Corporation, to be renamed Republic Airways Holdings Inc., will be led by the executive leadership of Republic. Republic will designate six of seven non-employee directors to the Surviving Corporation Board, while Mesa will designate one of seven non-employee directors.
Current report
Upon effectiveness of the Merger, stockholders of Republic will hold an approximate 88% interest in the Surviving Corporation, and stockholders of Mesa will hold an approximate 6% interest in the Surviving Corporation with the ability to acquire additional equity interests up to 6% of the Surviving Corporation, totaling up to approximately 12% in the aggregate, contingent upon Mesa’s satisfaction of certain pre-closing criteria.
Current report
Concurrently with the execution and delivery of the Merger Agreement, Republic, Mesa, and United Airlines, among other parties, entered into the TPA, pursuant to which, among other things: (i) Mesa will take certain actions at or prior to the closing of the Merger to dispose of certain assets, extinguish certain liabilities, and effectuate certain related transactions; (ii) United Airlines will take certain actions at or prior to the closing of the Merger to facilitate Mesa’s actions in the foregoing clause (i); (iii) Mesa, following the Closing (and in all events immediately following the Effective Time), will conduct the Escrow Issuance; and (iv) United Airlines will reimburse the Surviving Corporation for certain specified costs and expenses.
Current report
As part of the merger closing process, the TPA among Mesa, Republic, and United outlines a structured approach to resolving Mesa’s outstanding financial obligations. Specifically, Mesa will terminate its existing capacity purchase agreement with United Airlines and dispose of certain aircraft and spare inventory assets. The proceeds from these sales, along with Mesa’s available cash, will be applied toward the repayment of substantially all trade debts, long-term liabilities, and other outstanding obligations. If any residual liabilities remain after Mesa’s resources are exhausted, United Airlines will either forgive the remaining amounts or provide a one-time cash payment at closing sufficient to fully discharge them.
Current report
Note that a Form S-4 Proxy Statement/Prospectus ("Form S-4") was filed by Mesa with the SEC for the proposed Merger, and Mesa received the Notice of Effectiveness of the Form S-4 on September 30, 2025. On September 29, 2025, Mesa filed a Form 8-K (Item 5.03) approving a change in the Company’s fiscal year-end, moving from September 30 to December 31 of each year, effective for the fiscal year beginning on January 1, 2025, and ending on December 31, 2025. The change in the fiscal year-end was approved by the Board of Directors of Mesa on September 24, 2025.
Current report
Mesa’s Special Meeting and shareholder vote to approve the merger occurred on November 17, 2025, and the Merger is expected to close on November 25, 2025. All closing conditions are listed below and are all satisfied as of November 20, 2025:
Current report
Republic and Stockholder Approvals: Mesa held a special meeting of its stockholders on November 17, 2025, during which the Merger was approved. Republic’s stockholder approval was already obtained earlier.
Current report
Regulatory Approvals and HSR Act Compliance: All regulatory approvals have been received. The HSR waiting period expired on June 16, 2025. All necessary approvals from DOT, FAA, FCC, TSA, and foreign CAA have been received. Additionally, notification to AFAC and the necessary approvals regarding transfer of control have been obtained.
Current report
Effectiveness of SEC Registration Statement: The registration statement has been declared effective by the SEC on September 30, 2025. No stop order has been issued.
Current report
Nasdaq Listing Approval: Nasdaq has approved the shares of Mesa common stock to be issued in the Merger.
Current report
Absence of Legal Prohibition: No such legal or regulatory prohibition exists. Condition satisfied.
Current report
Accuracy of Representations and Warranties: Each party has delivered an officer certificate confirming the accuracy of its representations and warranties. Condition satisfied.
Current report
Compliance with Covenants: Compliance has been confirmed by both parties.
Current report
Absence of Material Adverse Effect: No material adverse effect has occurred. Condition satisfied.
Current report
Certificates: Officer certificates have been delivered. Condition satisfied.
Current report
Ownership Limitation Post-Merger: Post-merger, no entity will own 30% or more of the new company. Confirmed that no such ownership concentration will exist post-closing.
Current report
TPA Agreement Compliance: All required pre-Closing transactions have been completed. No breaches have been reported. Certification from United Airlines has been received.
Current report
CPA Side Letter Compliance: No breach or notice of non-performance has been received.
Current report
Filing of Financial Statement: Required filings have been made and are publicly available on EDGAR.
Current report
Disposition of Non-Core Assets: All CRJ-related assets have been sold, except three airframes, 11 engines and certain spare parts, which will be sold post-closing and credited to Mesa. All other non-E-175 assets have been disposed of. Condition substantially satisfied.
Current report
Asset sales
Current report
On December 31, 2024 and January 31, 2025, Mesa sold 18 E-175 aircraft to United for $227.7 million in gross proceeds equal to the fair market value of the assets based on multiple appraisals discounted by $20 million. $69.6 million of the proceeds was used to pay off outstanding debt, and $73.4 million of the proceeds was withheld by United for the assumption of debt. As a result of these sales, all 60 E-175 aircraft are owned by United and all heavy maintenance (C Check, L Gear, Engine) as well as all non-expendable part repairs are pass-through expenses reimbursed by United, eliminating the majority of Mesa’s maintenance cost exposure for these aircraft.
Current report
On October 24, 2025, the Company entered into an Amendment (the "Amendment") to its Loan and Guarantee Agreement, dated as of October 30, 2020 (as theretofore amended, the "Loan Agreement"), among Mesa, Mesa Airlines, the Guarantors party thereto from time to time, Jefferies Capital Services, LLC (as successor in interest to the United States Department of the Treasury) (the "Lender" or "Jefferies"), and The Bank of New York Mellon as Administrative Agent and Collateral Agent (the "Agents") (collectively, the "Parties"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Loan Agreement.
Current report
Under the terms of the Amendment, Jefferies agreed to: (a) extend the Maturity Date of the Loan Agreement from October 30, 2025 to November 28, 2025, subject to the Company’s further right to extend the Maturity Date by 30 days by providing notice to the Administrative Agent to no later than November 27, 2025; (b) reduce the interest rate under the Loan Agreement to zero percent (0%) for a period of 90 days from the date of the Amendment; (c) waive the restrictions on Fundamental Changes and Organizational Document amendments in connection with the Merger; (d) waive the Collateral Coverage Ratio through the Maturity Date, and (e) subject to the payment in full of the obligations under the Loan Agreement on the Maturity Date, reduce the principal amount of the Obligations under the Loan Agreement by $12.3 million (collectively, the "Amendments").
Current report
In connection with the execution of the Amendment, (i) Mesa Airlines entered into a Security and Control Agreement with Jefferies pursuant to which Mesa Airlines deposited $31.9 million into a collateral account controlled by Jefferies and agreed to pledge an aircraft engine, each as collateral for the obligations under the Loan Agreement, and (ii) Mesa Airlines agreed to pay Jefferies a non-refundable advisory fee of $3.5 million, payable on the earlier of the approval of the Merger and the Maturity Date.
Current report
As of the issuance of this Form 10-Q, the Company has implemented certain strategic and financial plans, including the merger with Republic as outlined above. Based on management`s plan, which includes the increased financial position of the combined company, the Company has alleviated the substantial doubt regarding its ability to continue as a going concern and expects to be able to meet its cash obligations for next twelve months following the issuance of this Form 10-Q.
Removed paragraphs (28)
Previous report
General and Administrative. General and administrative expense increased $1.9 million, or 19.2%, to $11.6 million for our three months ended June 30, 2025 compared to our three months ended June 30, 2024. The increase is primarily driven by increases in wages, pass-through insurance costs, and legal fees.
Previous report
As of June 30, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $277.6 million and $150.6 million, respectively, which expire in 2030-2038 and 2024-2043, respectively. No state net operating loss carryforwards are expected to expire in the current fiscal year.
Previous report
As of June 30, 2025, the Company had aggregate federal and state net operating loss carryforwards of approximately $277.6 million and $150.6 million, respectively, which expire in 2030-2038 and 2024-2043, respectively. No state net operating loss carryforwards are expected to expire in the current fiscal year.
Previous report
To address such concerns, management developed and implemented several material changes to our business designed to ensure the Company could continue to fund its operations and meet its debt obligations over the next twelve months. The following measures were implemented during the three months ended June 30, 2025, and through the date of issuance of the financial statements.
Previous report
On April 4, 2025, the Company entered into the Three Party Agreement among United, Republic, and the Company, as well as a Merger Agreement entered into by Republic and Mesa, which provides for, among other things, the following:
Previous report
o
Previous report
Termination of the United CPA which will be replaced with a new long-term CPA
Previous report
o
Previous report
The Company to sell or dispose of all remaining Eligible Assets (as defined in the Three Party Agreement).
Previous report
o
Previous report
The Company to extinguish all remaining debt with cash and sale of assets. Any remaining debt will be assumed by the surviving corporation or forgiven by United.
Previous report
o
Previous report
A three percent (3%) increase in CPA block hour rates, retroactive to January 1, 2025.
Previous report
o
Previous report
The transfer of all of the Company's rights and obligations under its agreements with Archer (as discussed in Note 15).
Previous report
On April 4, 2025, we entered into the Sixth Amendment to the Third Amended and Restated Capacity Purchase Agreement with United which provides for the following:
Previous report
o
Previous report
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 report
o
Previous report
The extension of incentives for achieving certain performance metrics, retroactive to July 1, 2024, through March 31, 2026.
Previous report
On April 4, 2025, we entered into the Sixth Amendment to Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period ended March 31, 2025, and a projected financial covenant default with respect to the periods ending June 30, 2025, September 30, 2025, December 31, 2025, and March 31, 2026, each relating to a minimum liquidity requirement under our United Revolving Credit Facility.
Previous report
On April 3, 2025, we entered into a purchase agreement with a third party which provides for the sale of 23 GE model CF34-8C engines to the third party for expected gross proceeds of $16.3 million, which will be used to pay down our UST Loan.
Previous report
Based on the most recent appraisal value of our spare parts, we have $10.5 million of borrowing capacity under our United Revolving Credit Facility.
Previous report
In addition to already executed agreements to sell aircraft, the Company is actively seeking arrangements to sell other surplus assets primarily related to the CRJ fleet including aircraft, engines, and spare parts to reduce debt and optimize operations.
Previous report
We have delayed and/or deferred major spending on aircraft and engine maintenance to match the current and projected level of flight activity.
Previous report
The Company believes the plans and initiatives outlined above have effectively alleviated the financial concerns and will allow the Company to meet its cash obligations for the next twelve months following the issuance of its financial statements. The forecast of undiscounted cash flows prepared to determine if the Company has the ability to meet its cash obligations over the next twelve months was prepared with significant judgment and estimates of future cash flows based on projections of CPA block hours, maintenance events, labor costs, and other relevant factors. Assumptions used in the forecast may change or not occur as expected.
Previous report
As of June 30, 2025, the Company has $84.7 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 report
If we fail to generate sufficient cash from operations, we may need to raise additional equity or borrow additional funds to achieve our longer-term objectives. There can be no assurance that such equity or borrowings will be available or, if available, will be at rates or prices acceptable to us.
Reworded paragraphs (37)
Previous 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 79 cities in 31 states, Cuba, and Mexico. As of June 30, 2025, Mesa operated a fleet of 60 Embraer 175 ("E-175") regional aircraft with approximately 254 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 nine months ended June 30, 2025 and June 30, 2024 were derived from operations associated with the CPA, leases of aircraft to a third party, and Mesa Pilot Development ("MPD"). Revenues during the nine months ended June 30, 2024 also included $7.2 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 nine months ended June 30, 2025.
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 76 cities in 32 states, and Mexico. As of September 30, 2025, Mesa operated a fleet of 60 Embraer 175 ("E-175") regional aircraft with approximately 234 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 nine months ended September 30, 2025 and September 30, 2024 were derived from operations associated with the CPA, leases of aircraft to a third party, and Mesa Pilot Development ("MPD"). Revenues during the nine months ended September 30, 2024 also included 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 fiscal year 2024.
Previous wording
We had operating loss of $0.1 million in our three months ended June 30, 2025 compared to operating loss of $9.0 million in our three months ended June 30, 2024. In our three months ended June 30, 2025, we had net income of $20.9 million compared to net loss of $19.9 million in our three months ended June 30, 2024.
Current wording
We had operating loss of $9.2 million in our three months ended September 30, 2025 compared to operating loss of $17.0 million in our three months ended September 30, 2024. In our three months ended September 30, 2025, we had net loss of $14.1 million compared to net loss of $24.9 million in our three months ended September 30, 2024.
Previous wording
Our operating results for the three months ended June 30, 2025 improved as a result of (i) decreases in flight operations expense as a result of decreased pilot training and lower pilot wages; (ii) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft; and (iii) decreases in impairment related to held for sale assets. and the write down of E-175 aircraft. This was partially offset by a decrease in contract revenue due to fewer aircraft under contract and higher deferred revenue.
Current wording
Our operating results for the three months ended September 30, 2025 improved as a result of (i) decreases in flight operations expense as a result of decreased pilot training and lower pilot wages; (ii) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft; and (iii) decreases in impairment related to held for sale assets. and the write down of E-175 aircraft. This was partially offset by a decrease in contract revenue due to fewer aircraft under contract.
Previous wording
Total operating revenue decreased by $18.0 million, or 16.3%, to $92.8 million for our three months ended June 30, 2025 as compared to our three months ended June 30, 2024. Contract revenue decreased by $25.7 million, or 26.8%, to $69.9 million, primarily due to fewer aircraft under contract. Our block hours flown during our three months ended June 30, 2025, increased 0.7% compared to the three months ended June 30, 2024 due to an increase in the average stage length. Our pass-through and other revenue increased by $7.6 million, or 50.3%, to $22.8 million compared to our three months ended June 30, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Current wording
Total operating revenue decreased by $24.6 million, or 21.3%, to $90.7 million for our three months ended September 30, 2025 as compared to our three months ended September 30, 2024. Contract revenue decreased by $27.8 million, or 29.7%, to $66.0 million, primarily due to fewer aircraft under contract. Our block hours flown during our three months ended September 30, 2025, increased 1.5% compared to the three months ended September 30, 2024 due to an increase in the average stage length. Our pass-through and other revenue increased by $3.3 million, or 15.2%, to $24.7 million compared to our three months ended September 30, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Previous wording
Flight Operations. Flight operations expense decreased $8.9 million, or 19.6%, to $36.6 million for our three months ended June 30, 2025 compared to our three months ended June 30, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of decreases in headcount and operating a single E-175 fleet type.
Current wording
Flight Operations. Flight operations expense decreased $2.2 million, or 5.8%, to $35.7 million for our three months ended September 30, 2025 compared to our three months ended September 30, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of decreases in headcount and operating a single E-175 fleet type.
Previous wording
Maintenance. Aircraft maintenance expense decreased $2.8 million, or 6.4%, to $41.4 million for our three months ended June 30, 2025 compared to our three months ended June 30, 2024. This decrease was primarily driven by a decrease in labor and other expense. Total pass-through maintenance expenses reimbursed by United increased by $6.3 million during our three months ended June 30, 2025 compared to our three months ended June 30, 2024.
Current wording
Maintenance. Aircraft maintenance expense decreased $5.3 million, or 11.2%, to $42.3 million for our three months ended September 30, 2025 compared to our three months ended September 30, 2024. This decrease was primarily driven by a decrease in labor and other expense. Total pass-through maintenance expenses reimbursed by United increased by $4.1 million during our three months ended September 30, 2025 compared to our three months ended September 30, 2024.
Previous wording
Aircraft Rent. Aircraft rent expense decreased $1.6 million, or 94.2%, to $0.1 million for our three months ended June 30, 2025 compared to our three months ended June 30, 2024. The decrease is primarily due to fewer engine lease costs during our three months ended June 30, 2025.
Current wording
Aircraft Rent. Aircraft rent expense decreased $3.1 million, or 88.7%, to $0.4 million for our three months ended September 30, 2025 compared to our three months ended September 30, 2024. The decrease is primarily due to fewer engine lease costs during our three months ended September 30, 2025.
Previous wording
Depreciation and Amortization. Depreciation and amortization expense decreased by $6.4 million, or 65.3%, to $3.4 million for our three months ended June 30, 2025 compared to our three months ended June 30, 2024 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 $4.9 million, or 68.6%, to $2.3 million for our three months ended September 30, 2025 compared to our three months ended September 30, 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 $(0.1) million was recorded for our three months ended June 30, 2025 related to held for sale assets. There was $7.9 million of asset impairment recorded for the three months ended June 30, 2024 related to held for sale assets.
Current wording
Asset Impairment. Asset impairment of $7.3 million was recorded for our three months ended September 30, 2025 related to held for sale assets. There was $22.8 million of asset impairment recorded for the three months ended September 30, 2024 related to held for sale assets.
Previous wording
Other Operating Expenses. Other operating expenses decreased by $1.1 million, to $(46) thousand for our three months ended June 30, 2025 compared to our three months ended June 30, 2024. The decrease is primarily attributable to lower interrupted trip expense during the three months ended June 30, 2025.
Current wording
Other Operating Expenses. Other operating expenses decreased by $0.9 million, to $1.1 million for our three months ended September 30, 2025 compared to our three months ended September 30, 2024. The decrease is primarily attributable to lower interrupted trip expense during the three months ended September 30, 2025.
Previous wording
Other income (expense) increased by $32.5 million, to $20.8 million for our three months ended June 30, 2025, compared to our three months ended June 30, 2024. The increase is primarily attributable to the write off of warrant liabilities, lower interest expense, and lower losses on investments.
Current wording
Other income (expense) increased by $5.1 million, to $(2.4) million for our three months ended September 30, 2025, compared to our three months ended September 30, 2024. The increase is primarily attributable to a decrease in interest expense.
Previous wording
The income tax benefit totaled $0.2 million for the three months ended June 30, 2025 compared to a tax benefit of $0.8 million for the three months ended June 30, 2024. The effective tax rate ("ETR") from continuing operations was -1.2% for the three months ended June 30, 2025 compared to 3.9% for the three months ended June 30, 2024. Our ETR during the three months ended June 30, 2025 and June 30, 2024 differed from the statutory rate during both periods principally as a result of the impact of the valuation allowance on operating loss carryforwards and deferred tax assets on tax expense.
Current wording
The income tax expense totaled $2.5 million for the three months ended September 30, 2025 compared to a tax expense of $0.4 million for the three months ended September 30, 2024. The effective tax rate ("ETR") was -21.9% for the three months ended September 30, 2025 compared to -1.6% for the three months ended September 30, 2024. Our ETR during the three months ended September 30, 2025 and September 30, 2024 differed from the three months ended September 30, 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
We had operating loss of $168.2 million in our nine months ended June 30, 2025 compared to operating loss of $48.8 million in our nine months ended June 30, 2024. In our nine months ended June 30, 2025, we had net loss of $152.3 million compared to net loss of $66.1 million in our nine months ended June 30, 2024.
Current wording
We had operating loss of $66.6 million in our nine months ended September 30, 2025 compared to operating loss of $14.4 million in our nine months ended September 30, 2024. In our nine months ended September 30, 2025, we had net loss of $51.9 million compared to net loss of $33.2 million in our nine months ended September 30, 2024.
Previous wording
Our operating results for the nine months ended June 30, 2025 worsened as a result of (i) decreases in contract revenue due to reduced block hours flown and fewer aircraft under contract; and (ii) large losses and impairments associated with the sale of 18 E-175 aircraft, partially offset by (a) decreases in flight operations as a result of decreased pilot training and lower pilot wages; and (b) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft.
Current wording
Our operating results for the nine months ended September 30, 2025 worsened as a result of (i) decreases in contract revenue due to reduced block hours flown and fewer aircraft under contract; and (ii) greater impairment associated with held for sale assets, partially offset by (a) decreases in flight operations as a result of decreased pilot training and lower pilot wages; and (b) decreases in depreciation expense, primarily due to the retirement and sale of several aircraft.
Previous wording
Total operating revenue decreased by $70.4 million, or 19.5%, to $290.8 million for our nine months ended June 30, 2025 as compared to our nine months ended June 30, 2024. Contract revenue decreased by $91.5 million, or 29.5%, to $219.0 million primarily driven by reduced block hours flown and fewer aircraft under contract compared to the nine months ended June 30, 2024. Our block hours flown during our nine months ended June 30, 2025 decreased 8.3% compared to the nine months ended June 30, 2024 due to a decrease in scheduled flying for United and fewer aircraft under contract. Our pass-through and other revenue increased by $21.1 million, or 41.6%, to $71.7 million compared to our nine months ended June 30, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Current wording
Total operating revenue decreased by $79.4 million, or 22.2%, to $278.2 million for our nine months ended September 30, 2025 as compared to our nine months ended September 30, 2024. Contract revenue decreased by $98.9 million, or 32.6%, to $204.3 million primarily driven by reduced block hours flown and fewer aircraft under contract compared to the nine months ended September 30, 2024. Our block hours flown during our nine months ended September 30, 2025 decreased 2.0% compared to the nine months ended September 30, 2024 due to a decrease in scheduled flying for United and fewer aircraft under contract, partially offset by an increase in average stage length. Our pass-through and other revenue increased by $19.5 million, or 35.8%, to $73.9 million compared to our nine months ended September 30, 2024 due to an increase in pass-through maintenance related to our E-175 fleet.
Previous wording
Flight Operations. Flight operations expense decreased $38.6 million, or 26.3%, to $108.0 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of fewer block hours flown, decreases in headcount, and operating a single E-175 fleet type.
Current wording
Flight Operations. Flight operations expense decreased by $24.3 million, or 18.3%, to $108.4 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024. The decrease was primarily driven by decreased pilot training expense and lower pilot wages as a result of fewer block hours flown, decreases in headcount, and operating a single E-175 fleet type.
Previous wording
Maintenance. Aircraft maintenance expense decreased $5.7 million, or 4.1%, to $131.5 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024. This decrease was primarily driven by a decrease in labor and other 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 $24.7 million during our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024.
Current wording
Maintenance. Aircraft maintenance expense decreased $8.9 million, or 6.5%, to $127.2 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024. This decrease was primarily driven by a decrease in labor and other 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 $21.4 million during our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024.
Previous wording
Aircraft Rent. Aircraft rent expense decreased $1.3 million, or 29.3%, to $3.0 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024. The decrease is primarily due to fewer engine lease costs during our nine months ended June 30, 2025.
Current wording
Aircraft Rent. Aircraft rent expense decreased $4.8 million, or 72.4%, to $1.8 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024. The decrease is primarily due to fewer engine lease costs during our nine months ended September 30, 2025.
Previous wording
General and Administrative. General and administrative expense decreased $0.3 million, or 0.8%, to $32.6 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024. The decrease is primarily driven by decreases in pass-through property tax, partially offset by increased legal fees.
Current wording
General and Administrative. General and administrative expense increased $1.7 million, or 5.4%, to $34.0 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024. The increase is primarily driven by increased legal fees.
Previous wording
Depreciation and Amortization. Depreciation and amortization expense decreased by $15.5 million, or 47.3%, to $17.3 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024 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 $15.2 million, or 56.7%, to $11.6 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 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 $111.8 million was recorded for our nine months ended June 30, 2025 primarily related to held for sale assets and the write down of net book value of 10 E-175 aircraft. There was $50.9 million of asset impairment recorded for our nine months ended June 30, 2024, related to held for sale assets.
Current wording
Asset Impairment. Asset impairment of $53.4 million was recorded for our nine months ended September 30, 2025 related to held for sale assets. There was $33.3 million of asset impairment recorded for our nine months ended September 30, 2024, related to held for sale assets.
Previous wording
Other Operating Expenses. Other operating expenses decreased by $4.8 million, to $0.3 million for our nine months ended June 30, 2025 compared to our nine months ended June 30, 2024. The decrease is primarily attributable to lower interrupted trip expense and ferry fuel costs during the nine months ended June 30, 2025.
Current wording
Other Operating Expenses. Other operating expenses decreased by $3.8 million, to $0.6 million for our nine months ended September 30, 2025 compared to our nine months ended September 30, 2024. The decrease is primarily attributable to lower interrupted trip expense and ferry fuel costs during the nine months ended September 30, 2025.
Previous wording
Other income (expense) increased by $27.2 million to $10.0 million for our nine months ended June 30, 2025, compared to our nine months ended June 30, 2024. The increase is primarily attributable to the write off of warrant liabilities, lower interest expense, and lower losses on investments for our nine months ended June 30, 2025, partially offset by lower non-operating gains.
Current wording
Other income (expense) increased by $32.2 million to $13.1 million for our nine months ended September 30, 2025, compared to our nine months ended September 30, 2024. The increase is primarily attributable to the write off of warrant liabilities and lower interest expense for our nine months ended September 30, 2025.
Previous wording
The income tax benefit totaled $5.8 million for the nine months ended June 30, 2025 compared to a tax expense of $0.1 million for the nine months ended June 30, 2024. The effective tax rate ("ETR") from continuing operations was 3.7% for the nine months ended June 30, 2025 compared to -0.2% for the nine months ended June 30, 2024. Our ETR during the nine months ended June 30, 2025 and June 30, 2024 differed from the statutory rate during both periods principally as a result of the impact of the valuation allowance on operating loss carryforwards and deferred tax assets on tax expense.
Current wording
The income tax benefit totaled $1.6 million for the nine months ended September 30, 2025 compared to a tax benefit of $0.3 million for the nine months ended September 30, 2024. The ETR was 2.9% for the nine months ended September 30, 2025 compared to 1.0% for the nine months ended September 30, 2024. Our ETR for the nine months ended September 30, 2025 decreased from the nine months ended September 30, 2024, due to permanent tax differences, state taxes, and changes in the valuation allowance against federal and state net operating losses.
Previous wording
(iv) Adjusted EBITDA and Adjusted EBITDAR do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; (v) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future; (vi) Adjusted EBITDA and Adjusted EBITDAR do not reflect gains and losses on investments, which are non-cash gains and losses but will occur in periods when there are changes in the value of our investments in equity securities; and (vii) Adjusted EBITDA and Adjusted EBITDAR do not reflect any cash requirements for such replacements and other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDAR differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, Adjusted EBITDAR should not be viewed as a measure of overall performance because it excludes aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate our business. For the foregoing reasons, each of Adjusted EBITDA and Adjusted EBITDAR has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.
Current wording
Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools. Some of the limitations applicable to these measures include: (i) Adjusted EBITDA and Adjusted EBITDAR do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; (ii) Adjusted EBITDA and Adjusted EBITDAR do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; (iii) Adjusted EBITDA and Adjusted EBITDAR do not reflect changes in, or cash requirements for, our working capital needs; (iv) Adjusted EBITDA and Adjusted EBITDAR do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; (v) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future; (vi) Adjusted EBITDA and Adjusted EBITDAR do not reflect gains and losses on investments, which are non-cash gains and losses but will occur in periods when there are changes in the value of our investments in equity securities; and (vii) Adjusted EBITDA and Adjusted EBITDAR do not reflect any cash requirements for such replacements and other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDAR differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA and Adjusted EBITDAR should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. In addition, Adjusted EBITDAR should not be viewed as a measure of overall performance because it excludes aircraft rent, which is a normal, recurring cash operating expense that is necessary to operate our business. For the foregoing reasons, each of Adjusted EBITDA and Adjusted EBITDAR has significant limitations which affect its use as an indicator of our profitability. Accordingly, you are cautioned not to place undue reliance on this information.
Previous wording
During our three and nine months ended June 30, 2025 and fiscal year ended September 30, 2024, costs 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 requested that we 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 the nine months ended September 30, 2025 and fiscal year ended December 31, 2024, costs associated with the transition of our operations with American to United, ongoing carrying costs related to the parked CRJ-900 fleet that has been sold but not closed, selling costs related to the CRJ-900 airframes and GE CF34-8B/C engines, and increasing interest rates adversely impacted our financial results, cash flows, financial position, and other key financial ratios. Additionally, United had asked us to accelerate the removal of CRJ-900 aircraft and transition the pilots to our E-175 fleet, leading to increased costs and impacting our block hour capabilities while these pilots are in training.
Previous wording
As a result, during the nine months ended June 30, 2025, these challenges resulted in a negative impact on the Company’s financial results highlighted by net loss of $152.3 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.
Current wording
As a result, these challenges resulted in a negative impact on the Company’s financial results highlighted by net loss of $51.9 million, primarily due to an impairment expense of $53.4 million related to held-for-sale assets, contributing to the ongoing financial distress. These conditions and events raised substantial doubt regarding our ability to continue as a going concern and to fund our operations and meet our debt obligations over the next twelve months after the filing of this Form 10-Q.
Previous wording
Our ability to service our long-term debt obligations, including our equipment notes, to remain in compliance with the various covenants contained in our debt agreements and to fund our working capital requirements, capital expenditures and business development efforts will depend on our ability to generate cash from operating activities, which is subject to, among other things, our future operating performance, as well as other factors, some of which may be beyond our control.
Current wording
Our ability to service our long-term debt obligations, including our equipment notes, to remain in compliance with the various covenants contained in our debt agreements and to fund our working capital requirements, capital expenditures and business development efforts will depend on the completion of the Merger as well as our ability to generate cash from operating activities, which is subject to, among other things, our future operating performance, as well as other factors, some of which may be beyond our control.
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 nine months ended June 30, 2025 were approximately 1.9% 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 nine months ended September 30, 2025 were approximately 1.8% 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 June 30, 2025, our principal sources of cash are cash and cash equivalents of $42.5 million and $60.3 million in assets held for sale as of June 30, 2025. As of June 30, 2025, we had $113.7 million in secured indebtedness incurred primarily in connection with our financing of aircraft and related equipment. As of June 30, 2025, we had $84.7 million of current debt, excluding finance leases, and $28.2 million of long-term debt excluding finance leases.
Current wording
As of September 30, 2025, our principal sources of cash are cash and cash equivalents of $38.7 million and $33.8 million in assets held for sale as of September 30, 2025. As of September 30, 2025, we had $95.0 million in secured indebtedness incurred primarily in connection with our financing of aircraft and related equipment. As of September 30, 2025, we had $68.0 million of current debt, excluding finance leases, and $27.0 million of long-term debt excluding finance leases.
Previous wording
During our nine months ended June 30, 2025, we had cash flow used in operating activities of $43.3 million. We had net loss of $152.3 million adjusted for the following significant non-cash items: depreciation and amortization of $17.3 million, deferred income taxes of $(7.6) million, write off of warrant liability of $(25.1) million, amortization of deferred credits of $(4.1) million, amortization of debt discount and financing costs and accretion of interest of $4.2 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 $6.9 million in miscellaneous operating cash flow items. We had a net change of $(44.2) million within other net operating assets and liabilities largely driven by increases in accounts receivable and decreases in accounts payable and accrued expenses.
Current wording
During our nine months ended September 30, 2025, we had cash flow used in operating activities of $34.6 million. We had net loss of $51.9 million adjusted for the following significant non-cash items: depreciation and amortization of $11.6 million, deferred income taxes of $(3.3) million, write off of warrant liability of $(25.1) million, amortization of deferred credits of $(3.1) million, amortization of debt discount and financing costs and accretion of interest of $3.4 million, asset impairment of $53.4 million, loss on sale of assets of $7.7 million, and $3.6 million in miscellaneous operating cash flow items. We had a net change of $(30.9) million within other net operating assets and liabilities largely driven by increases in accounts receivable and expendable parts and decreases in accounts payable, accrued expenses, and deferred revenue.
Previous wording
During our nine months ended June 30, 2024, we had cash flow provided by operating activities of $19.6 million. We had net loss of $66.1 million adjusted for the following significant non-cash items: depreciation and amortization of $32.8 million, stock-based compensation of $1.0 million, deferred income taxes of $(0.4) million, gains on investments in equity securities of $(6.5) million, net unrealized losses on investments in equity securities of $6.1 million, amortization of deferred credits of $(0.8) million, amortization of debt discount and financing costs and accretion of interest of $6.2 million, asset impairment of $50.9 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 $3.2 million in miscellaneous operating cash flow items. We had a net change of $6.3 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 nine months ended September 30, 2024, we had cash flow provided by operating activities of $42.1 million. We had net loss of $33.2 million adjusted for the following significant non-cash items: depreciation and amortization of $26.7 million, gains on investments in equity securities of $(8.0) million, net unrealized losses on investments in equity securities of $8.6 million, amortization of deferred credits of $(0.9) million, amortization of debt discount and financing costs and accretion of interest of $6.0 million, asset impairment of $33.3 million, gain on debt forgiveness of $(10.5) million, and $3.9 million in miscellaneous operating cash flow items. We had a net change of $16.1 million within other net operating assets and liabilities largely driven by increases in accounts receivable and accrued expenses, partially offset by decreases in deferred revenue.
Previous wording
During our nine months ended June 30, 2025, net cash flow provided by investing activities totaled $193.7 million. Proceeds from the sale of aircraft and engines totaled $199.0 million and we invested $(5.4) million in capital expenditures, primarily consisting of rotable parts and tools. We received $0.1 million in refunds of equipment and other deposits.
Current wording
During our nine months ended September 30, 2025, net cash flow provided by investing activities totaled $95.5 million. Proceeds from the sale of aircraft and engines totaled $100.5 million and we invested $(5.0) million in capital expenditures, primarily consisting of rotable parts and tools. We received $0.1 million in refunds of equipment and other deposits.
Previous wording
During our nine months ended June 30, 2024, net cash flow provided by investing activities totaled $112.9 million. Proceeds from the sale of aircraft and engines totaled $127.1 million, proceeds from the sale of investments in equity securities totaled $2.7 million, we invested $(16.9) million in capital expenditures, primarily consisting of heavy maintenance rotable parts, paid $(0.4) million in investment transaction costs, and received $0.3 million in refunds of equipment and other deposits.
Current wording
During our nine months ended September 30, 2024, net cash flow provided by investing activities totaled $102.2 million. Proceeds from the sale of aircraft and engines totaled $104.9 million, proceeds from the sale of investments in equity securities totaled $9.6 million, we invested $(13.4) million in capital expenditures, primarily consisting of heavy maintenance rotable parts, paid $(0.4) million in investment transaction costs, and received $1.5 million in refunds of equipment and other deposits.
Previous wording
During our nine months ended June 30, 2025, net cash flow used in financing activities was $123.4 million, all of which was payments on long-term debt and finance leases.
Current wording
During our nine months ended September 30, 2025, net cash flow used in financing activities was $62.0 million, all of which was payments on long-term debt and finance leases.
Previous wording
During our nine months ended June 30, 2024, net cash flow used in financing activities was $149.3 million. We received $86.9 million of proceeds from long-term debt, made $(235.2) million of principal repayments on long-term debt, paid $(0.9) million for debt prepayment costs, and paid $0.1 million for tax withholding of RSUs.
Current wording
During our nine months ended September 30, 2024, net cash flow used in financing activities was $144.8 million. We received $5.0 million of proceeds from long-term debt, made $(148.8) million of principal repayments on long-term debt, paid $(0.9) million for debt prepayment costs, and paid $0.1 million for tax withholding of RSUs.
Previous wording
The accompanying discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated interim financial statements included elsewhere in this Form 10-Q. We believe certain of our accounting estimates and policies are critical to understanding our financial position and results of operations. There have been no material changes to the critical accounting estimates as explained in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 under the heading "Critical Accounting Estimates."
Current wording
The accompanying discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated interim financial statements included elsewhere in this Form 10-Q. We believe certain of our accounting estimates and policies are critical to understanding our financial position and results of operations. There have been no material changes to the critical accounting estimates as explained in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and our Transition Report on Form 10-KT for the transition period ended December 31, 2024 under the heading "Critical Accounting Estimates."
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools. Some of the limitations applicable to these measures include: (i) Adjusted EBITDA and Adjusted EBITDAR do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; (ii) Adjusted EBITDA and Adjusted EBITDAR do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; (iii) Adjusted EBITDA and Adjusted EBITDAR do not reflect changes in, or cash requirements for, our working capital needs;