Mesa Air 4Q Profit Falls on Higher Costs

Airline operator Mesa Air Group Inc. said Tuesday fiscal fourth-quarter earnings plunged, hurt by unexpected engine repairs and crew-training costs.

Mesa, which flies under contract as US Airways Express, Delta Connection and United Express, said net income in the three months ended Sept. 30 fell 68 percent to $4.7 million, or 12 cents per share, from $15 million, or 36 cents per share, in the year-ago period.

Excluding net investment losses, earnings fell to $6 million, or 14 cents per share.

The results fell short of expectations on Wall Street, where analysts polled by Thomson Financial were looking for earnings of 23 cents per share.

Mesa said pilot training expenses for its partnership with Delta Air Lines came in about $2.5 million higher than expected and engine maintenance costs surpassed plans by $7.8 million, hurting the bottom line.

Revenue rose 17 percent to $362.5 million from $309.1 million last year. The airline said higher cost reimbursements under its revenue guarantee contracts led to the revenue gain.

Revenue passenger miles, or one paying passenger flown one mile, rose 4.2 percent to 1.77 billion, as the percentage of seats filled, or load factor, increased to 74.9 percent from 72 percent.

For the year, Mesa reported 40 percent drop in earnings to $34 million, or 84 cents per share despite an 18 percent revenue gain to $1.3 billion.

Revenue passenger miles jumped 10.6 percent to 6.84 billion, available seat miles increased 4.9 percent and load factor rose to 74.8 percent from 71 percent.

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