Group Also Sees Net Income In Q1 2009

Mesa Air Group announced Wednesday net income of $15.5 million in the first quarter of FY 2009, on operating revenues of $265.1 million. That compares to a net loss of $2.8 million recorded by the regional operator over the same period in FY 2008.

Perhaps even more amazing, however, was performance by Mesa's fledging go! Airlines subsidiary. The small Hawaiian inter-island carrier posted its first-ever profit in the first quarter, following almost three years of staggering losses.

That profit wasn't much -- a meager $500,000, on $11.6 million in revenue -- but it still allows Mesa to thumb its nose at naysayers who questioned whether the loss-leader airline would ever pay for itself.

"We are encouraged by this quarter's performance and the strides we have taken to put some difficult hurdles behind us. We are also very pleased to report go! achieved its first quarterly profit and we remain committed to our independent inter-island operation," said Mesa Chairman and CEO, Jonathan Ornstein.

"We continue to execute our restructuring plan and take steps needed to improve the financial and operational performance of the Company. We would like to thank all of our constituents who have worked with us including our airline partners, vendors and suppliers, bondholders and our hard working employees and employee leadership team. While the environment continues to be challenging we remain confident that working together our company can build upon the success of this quarter."

Systemwide capacity cuts led to a $61.5 million drop in operating revenues for the quarter. Total Available Seat Miles for the first quarter of fiscal 2009 decreased 18.4% from the first quarter of 2008, primarily due to a reduction in the number of aircraft flown from 183 as of December 31, 2007 to 151 as of December 31, 2008.

As ANN reported, Mesa finalized plans to launch service in Hawaii in 2005... and promptly shook up what had been relatively stable (some would say "noncompetitive") market dominated by two airlines -- Aloha, and Hawaiian Airlines. Offering much lower fares than its rivals -- to the point of operating routes at steep losses -- go! promptly commanded a large share of the market, eating into its rivals profits.

Critics say go! brought about the demise of Aloha Airlines, which ended scheduled passenger service in March 2008 after 61 years serving the Hawaiian airline market. In November 2007, a US Bankruptcy Court judge ruled Mesa illegally used confidential information obtained from Hawaiian Airlines to launch its new go! interisland airline... and ordered Mesa to cough up $80 million in damages.

To add insult to injury for fans of the former Aloha, go! is now negotiating with the primary stockholder in Aloha to take over the "Aloha" brand.

FMI: www.mesa-air.com