Mesa Air Group, Inc.

Thank you for standing by and welcome to the Mesa Airlines Q1 fiscal 2022 earnings conference call. All participants are in a listen-only mode until the question and answer session. At that time, please press star 1, unmute your phone and record your name at the prompt. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Susan D'Onofrio, head of investor relations. Ms. D'Onofrio, you may begin.

Thank you, Operator, and welcome everyone to Mesa's earnings call for its first fiscal quarter ended December 31st. This call is being recorded and simultaneously webcast. A replay of this call can be found on our Web site. On the call with me today are Jonathan Ornstein, Mesa's Chairman and CEO, Michael Lotz, President, Brad Rich, EVP and COO, and Tork Zubek, CFO, as well as other members of the management team. Following our prepared remarks, there will be a question and answer session for the sell side analysts. We also wanted to remind everyone on the call today that today's discussion contains forward-looking statements that are based on the company's current expectations and are not a guarantee of future performance. There could be significant risks and uncertainties that cause actual results to differ materially from those reflected by the forward-looking statements including the risk factors discussed in our reports on file with the SEC. We undertake no duty to update any forward-looking statements. In comparing results today, we will be adjusting all periods to exclude special items. Please refer to our first fiscal quarter earnings release, which is available on our Web site, for the reconciliation of our non-GAAP measures. With that, I will turn it over to Jonathan for his opening remarks.

Thank you, Susan, and thanks, everyone, for joining us today. Obviously, this has been a very tough quarter for Mesa, and the one piece of good news I can report is that demand for our products has never been stronger. Our primary challenge will be meeting that demand. While COVID now appears to be received and in some quarters referred to as a controllable endemic, its impact to our operation and financials is still evident, however, and its effect on this quarter was significant and unlike anything we have seen in 20 years. While COVID had by far the greatest impact, we had other items that negatively impacted the quarter as well. We continue to have a catch-up in heavy maintenance expense that we deferred at the start of COVID, which was discussed last quarter. We experienced unprecedented volatility in sick calls, which we believe are COVID Omicron related. In November and December, we had days with sick rates as high as 23% compared to our historical average of 5%. This continued for the first three weeks in January. Fortunately, since January 23rd, we have seen a measurable reduction in sick call rates, which we are obviously monitoring closely. While COVID's effects are lessening, we are also contending with a significant increase in pile of attrition as mainline carriers begin hiring to refill depleted pirate ranks caused by early and statutory retirements. Additionally, the national and cargo carriers continue to have a strong demand for pilots. That being said, by far the biggest impact on the current pilot shortage is the ill-advised 1,500-hour requirement for commercial pilots, a rule adopted by no other country. Unfortunately, our financial performance this year will be highly correlated to our ability to deal with this pilot attrition successfully. On a personal note, I could not be more proud of our people who bravely continue to work through the pandemic, providing safe transportation to our passengers. Managing through the challenges of our four regional operations remains our team's top priority. Brad will go into more detail with some of these initiatives. As far as some of the areas we have invested in parking and outside of our four regional operations, they continue to make progress and reach company milestones. These partnerships will help Mesa diversify its revenue and add to our future growth opportunities. As an update, turning to our DHL cargo operation, this continues to perform well with our two dedicated 737-400F aircraft. We have consistently met or exceeded DHL's operational performance requirements. We recently leased a third 737-400F aircraft and expect to take delivery this month. Going forward, we think that cargo can be an increasingly important part of our business. Our partnership with Gramercy Associates Limited is on track to have certification completed in the first half of 2022. We own 49% of this multi-base regional jet operation, and we're looking forward to introducing our regional business model to Europe. In spite of the difficult environment, we have selectively continued to invest and partner in newer environmentally friendly technologies. These partnerships are designed to position Mesa to be the first regional airline to fly electric aircraft and be in the forefront of decarbonizing air travel and reducing our reliance on fossil fuels. Our electric aviation partnerships with Archer and Hart that we entered alongside United are reaching product development milestones. At Archer, the company has received a special airworthiness certificate from the FAA covering its maker-demonstrator aircraft in early December. This was followed by completing its first successful test flight in December 2021. This moment is a significant step forward for Archer's overall certification timeline and serves as a key enabler for the company's mission to launch its first commercial eVTOL flight in 2024. HART Aerospace Our other electric aircraft partnership is also reporting progress and development of its 19 passenger electric aircraft. For the first time, the scale model of the plane took flight at the HART Aerospace Headquarters located in Sweden this past December. Going forward, our strategy is to selectively look at other opportunities in aviation-related green technologies to ensure a leadership role in this area. During the quarter, we signed a letter of intent and entered into a partnership agreement with the region to support the development of their electric power transportation, utilizing wing and ground effect technology, which is designed to significantly expand the range over other electric designs. With that, I will hand it over to Brad Rich to go over more of the details of an update on our operational performance this quarter.