Mesa Air Group, Inc.

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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 disconnect 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, Brad, and welcome everyone to Mesa's earnings conference call for its fiscal second quarter, 2023, ended March 31st. On the call with me today are Jonathan Ornstein, Mesa's chairman and chief executive 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 the Southside analysts. We also want 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 fiscal second quarter earnings release. This is available on our website for the reconciliation of our non-GAAP measures. With that, I'll turn it over to Jonathan for his opening remarks. Jonathan?

Thank you, Doug, and thanks, everyone, for joining us today. As we mentioned before, fiscal year 2023 is a transition year, and our numbers reflect that. With that said, our results were largely in line with our internal expectations as we execute the transition of our CRJ900 flying to United Airlines. In addition to the transition, we're still continuing to ramp up our more profitable EJET flying. While we are experiencing significant improvement of pilot retention and output, this quarter our EJET utilization was still under six hours. Turning to the transition, We currently have 24 of the 28 planned CRJ900s in service, albeit at lower block hours than initially anticipated due to a more conservative approach taken by United. I'd like to thank all of the hardworking people at MESA who have helped make this transition happen and United for their support. While we continue to see strong demand for regional flying and our pilot pipeline has recovered significantly, Our focus over the past several months has been on ensuring the United transition and the numerous actions we have taken to strengthen our balance sheet are executed successfully. I want to take a moment to highlight the cornerstones of our plan moving forward. First and foremost, we have a strong relationship with United Airlines, which as we work through the transition has been supported both operationally and financially. We are now flying 20 of the CRJ900s with United. As we return to normalized operations and flying higher block hours, there may be an opportunity to restore some regional jet service in neglected smaller and rural markets nationwide. Three-quarters of these markets have seen service reductions in recent years, with the average reduction eliminating 30 percent of flights in a given market. This deficit is magnified by the fact that regional flight service accounts for 50% or more of the total air service in 29 U.S. states and accounts for over 75% of service in 11. That's per the Regional Airline Association. Our new CPA with United contemplates the addition of over 100 daily regional jet flights across the country, representing a solid step for the regional airline industry. Unfortunately, without legislative action to counter the significant negative impact of the 1,500-hour rule, we are still concerned about the long-term future of regional aviation service to rural America. Further to our mission to improve mobility, reduce congestion, and decarbonize travel, we remain excited about the potential of our previously announced co-investments with United on new technology and electric aircraft, including Archer and Hart Aerospace. We believe eVTOL and short distance electric aviation will be integral to addressing transit needs in smaller and congested communities moving forward. While the current pilot shortage continues and needs to be addressed industry-wide through legislative action, the current industry bottleneck is now ensuring an adequate number of qualified first officers to upgrade to captain. As a result of United's new AVA program requiring that candidates have flown as captains for two years, as well as our pilot labor agreement, we believe we have a sufficient number of first officers to fill our captain requirements going forward. Without captain upgrades, most airlines find themselves with an imbalance of first officer and captains, and as a result have paused hiring first officers. This is just another downside created by the 1,500-hour rule. With that said, we have positioned ourselves to rebuild our pilot pipeline and now have three significant pilot initiatives in place. Again, with the support of United, Mesa offers an industry-leading pilot pay scale. This has been a major benefit for retention, as fewer pilots are leaving to go to other carriers, most notably national and low-cost carriers, which in the past may have offered higher wages. Our participation in United's AVA program which is one of the most rapid paths for pilots to join the regional industry and transition to a major airline, has proven successful in attracting and retaining pilots. Mesa pilots are afforded an opportunity to transition to United within four years. Lastly, the Mesa pilot development program, which was launched in September in Inverness, Florida, is one of the fastest and most cost-creative paths for pilots short of the 1,500-hour threshold to accumulate hours. This program has already graduated a cadre of 11 pilots to MESA training and has had so many enrollees that we are now preparing to launch a second location in Arizona. To support this expansion, we have taken delivery of four more Pipistrelle Alpha Trainer II aircraft, with 21 more on the way. Finally, as you may know, Mike Lotz, who has previously served as chief operating officer at MESA and Virgin Express, is stepping in and taking on expanded responsibilities. Mike continues his role as president and will be overseeing all of Mesa's operating groups following the retirement of Brad Rich. With that, I'll turn the call over to him.