Mesa Air posts $31 millon loss, faces uncertain future

— -- Mesa Air Group closed out a rough year with a $31 million quarterly loss and acknowledged a long list of remaining challenges.

The Phoenix-based regional airline, which operates commuter flights for US Airways, United and Delta, still must repay or renegotiate $92 million in bonds coming due in the next two months, resolve a potentially costly contract dispute with Delta and sell its interest in a poorly performing Chinese joint venture.

The company's problems and shrinking cash balance, which stood at $65 million at the end of September compared with more than $200 million in the previous year, have had Wall Street on alert for a year. Mesa Air's cash total did inch up from the previous quarter, however.

Despite the challenges, longtime Mesa Air Chief Executive Officer Jonathan Ornstein expressed optimism that Mesa Air would work its way through its problems. Among the positives he noted: Mesa's small Hawaiian shuttle service, Go! Airlines, has seen strong advance bookings, sharply lower fuel prices and is growing; its partnerships with US Airways and United remain strong; and talks with bondholders are progressing.

The company doesn't have enough cash to pay the bondholders off in full but recently received shareholder approval to issue more stock to repay all or a portion in stock.

For the quarter that ended Sept. 30, Mesa reported a net loss of $31 million on revenue of $325.3 million.

That compares with a net loss of $68 million on revenue of $327.8 million a year earlier.

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