Mesa Air Group, Inc. (NASDAQ:MESA) Q1 2023 Earnings Call Transcript

Michael Lotz: Hey, this is Mike Lotz. Hi, Andrew. I think the $1,100 is the only thing that would change down the road from that is that we are on the maintenance side, probably a little lower than we would be on a normal run rate just because of the timing, we hit a peak last year and then we’re on the lower side of that. And then offsetting that, I think, is the pilot cost because we have so many pilots in training, and we’re hoping that, that — the attrition kind of levels out and we catch up, then the pilot per block hour would start to come down, certainly not to where it used to because of the pay scale difference. But those are, I think, the two items that we need to continue to look at.

Andrew Didora: Okay. Got it. And then maybe Jonathan, what is the risk that the CRJ flying for United just gets pushed out a little bit just in terms of like who’s doing the retrofits for the planes? Is the space already locked in for this type of work? Just curious what you think the risk is there?

Jonathan Ornstein: I think it’s a fair question. I mean, it took a little time for us to come up with a LOPA that would work for everyone. We went back and forth a few times, just to try to keep it as simple as possible. But I think we’re able to do that. Now my understanding is the conversion — well, now the — excuse me, I take that back, that there had been some discussion about changing the seats. But now we position that we always recommended was that we just have them remain at 76 seats. And so there won’t be a change there. We’re sprucing up the cabins, we’re taking out a bunch of it. Brad, why don’t you go, because you —

Brad Rich: Yeah. I mean, look, we don’t expect any real delays or issues with the fleet itself. We’ve got a good transition plan. The plan is being executed. It involves, as Jonathan said, some refreshing of the cabin in some cases, not extensive, but I’d just call them more refreshes and then exterior paint. We’ve got all that lined out and scheduled, and I don’t expect any delays relative to the fleet.

Jonathan Ornstein: Yeah, I think it’s fair to say, and I think understandably that obviously, both American — excuse me, United and Mesa, we’re taking a reasonably cautious approach. We’re not going to just throw 38 airplanes into service. I think we’re going to just schedule them in overtime and just make sure that everything goes smoothly. And so far, the schedules that we’ve been receiving have been excellent, have been very productive. I think it’s going to keep all of our pilots in place. We do plan on opening up a new base in Denver, which is going to be very popular with our crews. And so we think the transition will go well. And again, the biggest variable, and I hate to keep saying this, but it’s just — it’s not going to be equipment, it’s not going to be our maintenance capability.

It really boils down to pilots and attrition and our ability to continue to put out a good number of pilots through our training program, which we have worked really hard on expanding. And I think we’ve done a decent job, and we’re starting to see some of those results.

Andrew Didora: Got it. Thank you.

Operator: Question comes from Michael Linenberg with Deutsche Bank. Go ahead please, your mind is open.