For the last 18 months, airlines have been waiting for passenger demand to come back, but now that people want to fly again, challenges caused by Covid-19 are proving more of a disruption to operations than initially thought.
“Who would have anticipated that coming out of Covid would be more difficult than going into it,” Jonathan Ornstein, CEO and chairman of Mesa Air Group (Nasdaq: MESA), said in a Q4 earnings call on Dec. 9.
The Phoenix-based regional airline, which operates flights for American Airlines and United Airlines, reported disappointing quarterly earnings this week, sending its stock price down 20% at one point. (See where Mesa Air’s stock price is now.)
The company reported a loss of $7.5 million for the quarter that ended on Sept. 30 and revenue of $130 million, but Wall Street expected revenue around $150 million.
The latest loss is being attributed to higher-than-expected expenses – specifically $9 million on maintenance, $3 million on parts and another $2 million on training.
All of those additional costs are either directly or indirectly connected to the pandemic, Ornstein said and he expects these headwinds to continue into 2022.