PHOENIX – Mesa Air Group, Inc. (NASDAQ: MESA), the parent company of Mesa Airlines, has been notified of non-compliance with Nasdaq's Listing Rule due to a delay in filing its annual report. The regional airline, currently valued at approximately $55 million, received a notice on January 15, 2025, from Nasdaq's Listing Qualifications Department for not submitting its Form 10-K for the fiscal year ended September 30, 2024, on time. According to InvestingPro data, the company has been facing significant financial challenges, with a concerning debt burden and rapid cash burn rate.
The company clarified that the delay in filing is not due to any anticipated restatements of financial statements or disagreements with auditors. The notice does not immediately affect the trading of Mesa Air's securities on the Nasdaq Capital Market. Mesa Air has been given 60 days from the receipt of the notice to present a plan to regain compliance. If the plan is accepted, Nasdaq may allow up to 180 days, or until July 14, 2025, for the company to file its overdue annual report and regain compliance. InvestingPro analysis reveals the company's current ratio stands at 0.45, indicating potential liquidity challenges, with short-term obligations exceeding liquid assets.
Mesa Air is working to complete and file the Form 10-K within the 60-day notice period and expects to meet the Nasdaq's compliance requirements. The announcement of receiving the deficiency notification is in accordance with Nasdaq Listing Rule 5810(b), which mandates immediate public disclosure.
Headquartered in Phoenix, Arizona, Mesa Air Group operates as a regional carrier, providing passenger service to numerous destinations across the United States, Cuba, and Mexico. As of the end of the last fiscal year, Mesa Air managed a fleet of 67 aircraft and maintained approximately 265 daily departures. The airline employs roughly 1,838 people and conducts all flights under the United Express brand through a capacity purchase agreement with United Airlines, Inc. Despite recent challenges, the stock has shown resilience with a 38% return over the past year, though InvestingPro analysis indicates the company remains undervalued relative to its Fair Value.
The information provided in this report is based on a press release statement from Mesa Air Group, Inc.
In other recent news, Mesa Air Group Inc (NASDAQ:MESA). has announced two major deals to sell aircraft and airframes, yielding a total of $248.1 million. The company has sold eighteen Embraer ERJ 175 aircraft to United Airlines, with eight sales completed and the remaining expected by January 2025, bringing in an anticipated $229.1 million. Additionally, Mesa Air has agreed to sell fifteen CRJ-900 airframes to an undisclosed party, with an expected yield of $19.0 million.
These transactions come amidst significant financial pressure on the company, highlighted by a debt-to-equity ratio of 2.74. The sales are considered vital, as Mesa Air has reported a negative free cash flow of $12.59 million in the past twelve months. The proceeds from the CRJ-900 airframes sale are intended to reduce the company's loan with the U.S. Treasury.
The sales to United have already resulted in $35.8 million in net proceeds for Mesa Air after paying off associated debts. Notably, the agreement with United includes leaseback terms, allowing Mesa to lease the aircraft from United post-sale. These recent developments are part of the company's strategic asset sales as it adjusts to the evolving aviation market.
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