মেসা এয়ার গ্রুপ মঙ্গলবার প্রকাশ করেছে যে তারা তার চূড়ান্ত চিন্তিত চীন উদ্যোগটি নগদ করার আশাবাদী, এটি বহাল থাকার লড়াইয়ের সর্বশেষ প্রমাণ।
The Phoenix-based commuter airline operator said it has a letter of intent to sell its interest in tiny Kunpeng Airlines, in business barely a year, to partner Shenzen Airlines for an estimated $4.8 million. The airline will continue to lease five regional jets from Mesa Air Group for the service out of Xian, China.
Mesa Air Group, best known as a commuter carrier for US Airways, United and Delta, said in a securities filing that Kunpeng has incurred losses since its inception and is expected to lose money for the “foreseeable future.”
“Clearly it’s not the big hit we hoped for,” Mesa Air Group CEO Jonathan Ornstein said on a conference call with analysts and investors Tuesday.
He said airfares have been “reasonably good,” but passenger traffic has fallen short of expectations. It is turning out to be a longer-term payoff than expected, and the airline doesn’t have the time to stick it out at this point, he said. “Frankly, the cash right now is valuable to us,” Ornstein said.
The airline has major debt payments looming in late January and is short on cash for a variety of reasons, from a Hawaiian lawsuit settlement to operating losses there and elsewhere.
It also faces the potential loss of a large contract with Delta. The company has conceded a bankruptcy filing is a possibility if it loses a court battle over the Delta business.
According to its fiscal third-quarter financial results out Tuesday, Mesa Air Group ended the April-June quarter with $60 million in cash, about $46 million of which is unrestricted. That compares with $158.1 million in cash, $55.3 million of it unrestricted at the end of the second quarter in March.
The airline reported a quarterly loss of $3.8 million, dragged down by $7.4 million in pre-tax losses at its Hawaiian interisland shuttle service, Go!, and big losses at its discontinued Air Midwest subsidiary. That compares with a profit of $2.6 million in the same period last year. Revenue rose 4 percent to $353.9 million.
Excluding the discontinued operations, its net income from continuing operations was $1.8 million, down from $4.4 million in the same period in 2007.
Ornstein cautioned against reading too much into the losses at Go!, saying the situation has improved recently with fuel prices falling and airfares rising on the routes.
“If you add those numbers up, you can draw some conclusions as to why we continue to move forward and are committed to the Go operation,” he said.
In addition to the challenges with Delta, Ornstein said the airline needs to figure out how to pay off its bondholders. It has talked about issuing stock but that would severely dilute other stockholders’ holdings because its stock price is below $1.