Mesa Air Group, Inc.

Please continue to stand by. Today's conference will begin momentarily. Hello and welcome to the Mesa Airlines Q2 Fiscal 2022 Earnings Conference Call. My name is Ilan and I will be moderating today's call. This call is being recorded and a replay will be available on mesa-air.com in the Investor Relations section. After today's prepared remarks, there will be an opportunity to ask questions. It is now my pleasure to turn the conference over to Susan D'Onofrio, Head of Investor Relations. Susan, you may begin.

Thank you, Elan, and welcome everyone to Mesa's earnings call for its second fiscal quarter ended March 31st. On the call with me today are Jonathan Ornstein, Mesa's Chairman and CEO, Brad Rich, EVP and COO, Michael Lotz, President, and Tork Zubek, CFO, and 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 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 second fiscal quarter earnings release, which is available on our website for the reconciliation of our non-GAAP measures. With that, I will turn it over to Jonathan for his opening remarks. Jonathan?

Thank you, Susan, and thank you, everyone, for joining us today. While not entirely unexpected, This quarter was clearly very disappointing. Brad and Tork will walk through more of the details, but the overarching issue is our current level of pilot attrition, hiring, and training brought about by an industry-wide pilot shortage that has led to our current inability to generate sufficient block hours to operate profitably under our existing agreement. We are addressing this through a number of initiatives including but not limited to increased training capacity, pilot retention, and cost efficiency. Beyond providing valuable regional fees for over two decades, MESA's position as an independent regional low-cost carrier has provided additional strategic value to both United and American. We believe our partners recognize the value of our relationship and will work with us cooperatively through this challenging environment. Some of you may have heard me saying this before, but the founder of Mesa and my mentor, Larry Risley, once told me that in this industry, something happens every year that happens every 10 years. The last couple of years, it was COVID. This year, it's the pilot shortage and the associated pilot attrition prevalent throughout the regional industry, as pilots are recruited away primarily by major carriers and heavy equipment cargo operators. The sheer magnitude of attrition has created significant backlogs in training further exacerbating an already difficult situation. While we believe our attrition is in line with the rest of the regional industry, we are taking important steps to further attract and retain qualified pilot candidates. We appreciate the support of our airline partners and pilot leadership who are working with us cooperatively to help us as we attempt to successfully navigate through this period. What is most unfortunate is the fact that this shortage is a result of ill-conceived, ill-advised, and politically motivated government regulation that by most independent accounts has absolutely nothing to do with the enhancement of safety. The problem, which will cost consumers millions of dollars in higher fares, has cut off dozens of communities from the national air transportation system and has already reduced service in hundreds more as airlines are unable to fly their aircraft due to lack of pilots. All this could be solved with the stroke of a pen. It's important to note that no other country has adopted these rules, and everyday flights are flown by foreign carriers with pilots who the U.S. would deem to be unqualified. It is a stunning realization that our government has determined that foreign pilots are somehow more qualified than our own U.S. pilots with the same amount of experience and trained in the United States. What has now become apparent is the undue burden this places on minority and other disadvantaged communities which has been effectively blocked from entering the pilot profession due to the prohibitive costs associated with these regulations. On a more positive note, while COVID-driven absence rates impacted us in January, we ended the quarter with absence rates across the board that had returned to pre-pandemic levels. We appreciate the real bravery of our people over the past few years, and we're thankful we all can come to work in a safe and healthier environment. While both American and United have been supportive, we are disappointed in our inability to produce the block hours requested by our partners as demand has increased. This single issue continues to be the primary focus of our management team. Turning to our DHL cargo operation, in the quarter we continue to perform well with our two dedicated Boeing 737-400 aircraft. We had a third 737-400 aircraft delivered in March and expected to be entering revenue service for DHL in May. These larger aircraft have the added benefit of attracting regional pilots who have an opportunity to fly larger jet aircraft at the highest rates in the regional industry. While the growth of our cargo business has initially been slower than we anticipated, going forward, we believe that cargo can be an increasingly important part of our business. Our partnership with Gramercy Associates Limited is on track and we expect to have European certification completed in the third quarter of 2022. We own 49% of this multi-based regional jet operation and we're looking forward to introducing the regional business model to Europe. One of our most exciting initiatives we have been continuing to pursue collectively is finding new ways to participate, invest and partner in newer environmentally friendly technologies. These partnerships are designed to position Mesa as the first regional airline to fly electric aircraft and to meet the forefront of decarbonizing air travel and reducing our reliance on fossil fuels. We also think it will likely be an answer to providing flight service to smaller communities that are now facing the loss of flight service as pilot challenges have resulted in the mainline carriers reducing or eliminating flight service. Another significant benefit is that it could provide MESA with a future pilot pipeline that can build hours in smaller aircraft not subject to the 1500-hour rule. Our two electric aviation partnerships with Archer and Hart that we entered into alongside United are reaching production development milestones. Regent, which is developing an all-electric sea glider, also continues to make progress towards commercialization. Going forward, our strategy is to selectively look at other opportunities in aviation-related green technologies to ensure our leadership role in this area. With that, I will hand it over to Brad to go over more of the details of an update on our operational performance this quarter.