Mesa Air Group, Inc.

Thank you for standing by and welcome to the Mesa Airlines Q1 fiscal year 2023 conference call. All participants are in a listen-only mode until the question and answer session of today's call. At that time, to ask a question, please press Star 1 on your touchtone phone. This call is being recorded. If you have any objections, please connect at this time. I would now like to turn the call over to Doug Cooper, Head of Investor Relations. Mr. Cooper, you may now begin.

Thank you, Christina, and welcome, everyone. to MESA's earnings compass call for its fiscal first quarter 2023 ended December 31st, 2022. On the call with me today are Jonathan Orenstein, MESA Chairman and Chief Executive Officer, Brad Rich, Executive Vice President and Chief Operating Officer, Michael Lotz, President, and Tork Zubek, Chief Financial Officer, and other members of the management team. Following our prepared remarks, there will be a question and answer session for this outside analyst. We also want 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 could 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 fiscal first quarter earnings release, which is available on our website for the reconciliation of our non-GAAP measures. With that, I will turn the call over to Jonathan for his opening remarks. Jonathan?

Thank you, Doug, and thank you, everyone, for being on with us today. We're pleased to be speaking to you again after introducing several major developments at MESA on our fourth quarter call. six weeks ago. As you may know, we had a busy December quarter negotiating and finalizing significant agreements with our airline partners and other key financial parties. We expect these new agreements will substantially enhance our operational performance and both our income statement and balance sheet. Since our last call, we have been working diligently as we prepare to wind down our loss-making operation with American Airlines and transition our CRJ900 flying to United Airlines next month. For the quarter, we had an adjusted net loss of $4.3 million on revenue of $147.2 million. While traffic remains strong and our pilot pipeline has improved significantly, capacity remains constrained as we catch up with unprecedented attrition experience as a result of the industry-wide pilot shortage. Here's a quick overview of what we have recently accomplished. First and foremost, we eliminated our loss-making operation at American Airlines effective April 3rd, 2023. Pursuant to that wind down, United agreed to add up to 40 CRJ900s previously operated for American. To improve our balance sheet, we sold our remaining eight CRJ550s and agreed to sell down 11 CRJ900s and 30 GE engines, reducing approximately $90 million of debt and generating approximately $70 million of cash. Additionally, United replaced our $16 million balance on our revolving credit line and provided an additional $25 million loan. We also restructured our RASPRO leases and EDC debt. Finally, we implemented new pay scales with our pilots and a new agreement with our flight attendants. Looking forward, the current quarter is all about a successful transition. Working closely with United, we intend to keep all the related crew domiciles and maintenance bases open. With our significant focus on operations, we believe the new United 900 flying will perform at levels similar to our existing EJET flying at United. In some good news on the pilot front, we continue to see strong levels of applications and reduced attrition. Currently, our monthly pilot attrition declined and is now stabilized approximately near pre-COVID levels. This week, we announced a direct entry captain position for qualified candidates. Highlights of the program include a 24-month float to United Airlines and an industry-leading $110,000 sign-on bonus. Combined with our industry-leading pay rates, we believe this may be the best opportunity in the history of regional aviation for pilots to advance their careers. We are continuing to focus on pilot training throughput and have increased our resources around it. Brad will get into more detail on this later on. Last fall, we officially launched our Mesa pilot development, or MPD program, and recently welcomed our first graduates to the Mesa regional pilot ranks. With our significantly increased pay scale and participation in United's AVA program, as well as our expanding training pipeline provided by MPD program and our new direct entry captain program, We believe MACE provides a reliable and rapid path for pilots to join the regional industry and transition to United Airlines. We are pleased to be within the United ecosystem and are committed to training, retaining, and promoting pilots through to United. I'm also pleased to announce that we are adding a 737-800 freighter to our DHL operation. We have taken delivery of the aircraft and expect it to enter service in March. This brings our total cargo fleet to three 737-400s and one next-gen 737-800. At this point, I'd like to turn to highlights from the past few months that speak to the leadership position that MESA is building in the future of regional aviation and the greater sustainability that we hope to help enable the industry in years ahead. The two electric flight partnerships we invested in with United, Archer, and ARC recently achieved significant milestones. Archer unveiled its new five-seat eVTOL, titled Midnight, in November. Midnight is set to provide a sustainable form of aviation that can service short-distance trips between regional airports and city centers. HART Aerospace also continued to make progress, meeting a number of milestones and garnering additional commercial aircraft orders. We believe MACE is the vanguard of innovation in eco-friendly electric aviation and will continue to assess opportunities going forward. Meanwhile, our European joint venture, Flight, is on track to complete its operating certificate this spring. While it initially operated regional jets, we believe Flight could also be a platform for us to expand new technology and eco-friendly flying in environmentally sensitive European markets. With that, I will hand it over to Brad Rich to go over more of the details of our operational performance this quarter.