# EDGAR Filing Document

**Accession Number:** 0000810332
**File Stem:** 0000950170-23-002366
**Filing Date:** 2023-2
**Character Count:** 19833
**Document Hash:** 025d0e74bd8ba157d9911b00a05453b5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-002366.hdr.sgml**: 20230209

**ACCESSION NUMBER**: 0000950170-23-002366

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230209

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230209

**DATE AS OF CHANGE**: 20230209

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MESA AIR GROUP INC
- **CENTRAL INDEX KEY:** 0000810332
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIR TRANSPORTATION, SCHEDULED [4512]
- **IRS NUMBER:** 850302351
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38626
- **FILM NUMBER:** 23606720

**BUSINESS ADDRESS:**
- **STREET 1:** 410 NORTH 44TH STREET
- **STREET 2:** SUITE 700
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85008
- **BUSINESS PHONE:** 602.685.4000

**MAIL ADDRESS:**
- **STREET 1:** 410 NORTH 44TH STREET
- **STREET 2:** SUITE 700
- **CITY:** PHOENIX
- **STATE:** AZ
- **ZIP:** 85008

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MESA AIRLINES INC
- **DATE OF NAME CHANGE:** 19950426

?xml version="1.0" encoding="ASCII"? 8-K

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549**

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**FORM** 8-K

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**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported):** February 09, 2023<br>

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Mesa Air Group, Inc.

**(Exact name of Registrant as Specified in Its Charter)**

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| | | |
|:---|:---|:---|
| Nevada | 001-38626 | 85-0302351 |
| **(State or Other Jurisdiction<br>of Incorporation)** | **(Commission File Number)** | **(IRS Employer<br>Identification No.)** |
| 410 North 44th Street, Suite 700 |  |  |
| Phoenix**,** Arizona |  | 85008 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

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**Registrant's Telephone Number, Including Area Code:** (602) 685-4000<br>

Not Applicable

**(Former Name or Former Address, if Changed Since Last Report)**

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

**Securities registered pursuant to Section 12(b) of the Act:**

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| | | |
|:---|:---|:---|
| **<br>Title of each class** | **Trading<br>Symbol(s)** | **<br>Name of each exchange on which registered** |
| Common Stock, no par value | MESA | Nasdaq Global Select Market |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On February 9, 2023, the Company issued a press release announcing its financial and operating results for its quarter ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this "Item 2.02 Results of Operations and Financial Condition" section of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | [<u>Press Release, dated February 9, 2023, issued by Mesa Air Group, Inc.</u>](mesa-ex99_1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
|  |  |  | Mesa Air Group, Inc. |
| Date: | February 9, 2023 | By:  | /s/ Brian S. Gillman |
|  |  |  | Brian S. Gillman<br>Executive Vice President and General Counsel |

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## Exhibit 99.1

**Exhibit 99.1**

**Mesa Air Group Reports First Quarter Fiscal 2023 Results**

February 9, 2023

PHOENIX, February 9, 2023 – Mesa Air Group, Inc. (NASDAQ: MESA) today reported first quarter fiscal 2023 financial and operating results.

**Fiscal First Quarter Update:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Total operating revenues of $147.2 million**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Pre-tax loss of $10.0 million, net loss of $9.1 million or $(0.25) per diluted share**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Adjusted net loss**<sup>1</sup> **of $4.3 million or $(0.12) per diluted share**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Adjusted net loss excludes a $3.7 million impairment related to intangible assets and $1.7 million related to investments in equity securities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**As previously reported, closed on United Airlines, American Airlines, and aircraft-related transactions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•**Subsequent to quarter end, closed sale of 8 remaining CRJ-550s to United Airlines**

Jonathan Ornstein, Chairman and CEO, said, "The first quarter was an important one for Mesa, as we executed several key agreements that will materially enhance our operational and financial position and alleviate significant issues that we have faced. While block hour production continued to be challenged by the industry-wide pilot shortage during the quarter, we believe all the pieces are in place to begin restoring capacity across our fleets. We are preparing for the transition of our CRJ-900 operation to United next month. Our pilot pipeline continues to strengthen and pilot attrition has remained significantly lower since we have enhanced our payscales and expanded our participation in the Aviate program with United."

**Fiscal First Quarter Details:**

Total operating revenues in Q1 2023 were $147.2 million, a decrease of $0.6 million (0.4%) from $147.8 million for Q1 2022. Contract revenue decreased $8.4 million, or 6.2%. These decreases were driven by lower block hours, offset by increased block-hour revenue for new pilot payscales. Mesa's Q1 2023 results include, per GAAP, the recognition of $5.3 million, versus the recognition of $4.2 million of previously deferred revenue in Q1 2022. The remaining deferred revenue balance of $18.8 million will be recognized as flights are completed over the remaining terms of the contracts.

Mesa's Adjusted EBITDA<sup>1</sup> for Q1 2023 was $21.8 million, compared to $17.0 million in Q1 2022, and Adjusted EBITDAR<sup>1</sup> was $25.9 million for Q1 2023, compared to $26.6 million in Q1 2022.

Mesa's Q1 2023 results reflect a net loss of $9.1 million, or $(0.25) per diluted share, compared to a net loss of $14.3 million, or $(0.40) per diluted share for Q1 2022. Mesa's Q1 2023 adjusted net loss<sup>1</sup> was $4.3 million, or $(0.12) per diluted share, versus an adjusted net loss<sup>1</sup> of $9.3 million, or $(0.26) per diluted share, in Q1 2022. The year over year increase in adjusted net income of $5.0 million was primarily due to increased block-hour revenue for new pilot payscales and lower maintenance, D&A, and aircraft rent expenses, partially offset by higher expenses for flight operations due to increased costs for training and employee wages.

Operationally, the Company ran a controllable completion factor of 99.4% for American and 99.9% for United during Q1 2023. This is compared to a controllable completion factor of 97.7% for American and 98.3% for United during Q1 2022. This excludes cancellations due to weather and air traffic control.

With respect to a total completion factor that includes all cancellations, Mesa reported a total completion factor of 97.9% for American and 99.2% for United during Q1 2023. This is compared to a total completion factor of 95.8% for American and 95.8% for United during Q1 2022.

For Q1 2023, 50% of the Company's total revenue was derived from our contracts with United, 45% from American, 3% from DHL, and 2% from leases of aircraft to a third party.

<sup>1</sup>See reconciliation of non-GAAP financial measures

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**Exhibit 99.1**

**Balance Sheet and Cash Flow:** 

Mesa ended the quarter at $56.1 million in unrestricted cash and equivalents. As of December 31, 2022, the Company had $701.3 million in total debt secured primarily with aircraft and engines. This amount includes $64.2 million corresponding to the reclassification from operating lease to finance lease on 15 CRJ-900s. Additionally, we borrowed $25.5 million in the form of a term loan from United, of which $15 million is forgivable upon the meeting of certain performance criteria.

**Conference Call Details:**

Mesa Air Group will host a conference call with analysts on February 9<sup>th</sup> at 4:30 pm EST. The conference call number is 888-469-2054 (Passcode: Phoenix (7463649)). The conference call can also be accessed live via the web by visiting https://investor.mesa-air.com.

A recorded version will be available on Mesa's website approximately two hours after the call for approximately 14 days.

**About Mesa Air Group, Inc.**

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 106 cities in 42 states, the District of Columbia, the Bahamas, and Mexico as well as cargo services out of Cincinnati/Northern Kentucky International Airport. As of December 31, 2022, Mesa operated or leased a fleet of 158 aircraft with approximately 293 daily departures and 2,500 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc. and United Airlines, Inc. and a flight service agreement with DHL.

**Forward-Looking Statements**

**Contact:**

Mesa Air Group, Inc.

Media

Media@mesa-air.com

Investor Relations<br>Doug Cooper<br>IR@mesa-air.com

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**Exhibit 99.1**

**MESA AIR GROUP, INC.**

**Consolidated Statements of Operations and Comprehensive (Loss) Income**

(In thousands, except per share amounts) (Unaudited)

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| | | |
|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** |
|  | **2022** | **2021** |
| Operating revenues: |  |  |
| &nbsp;&nbsp;Contract revenue | $128450 | $136894 |
| &nbsp;&nbsp;Pass-through and other revenue | 18723 | 10863 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating revenues | 147173 | 147757 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;Flight operations | 58320 | 47598 |
| &nbsp;&nbsp;Maintenance | 48287 | 58981 |
| &nbsp;&nbsp;Aircraft rent | 4083 | 9586 |
| &nbsp;&nbsp;General and administrative | 13988 | 12578 |
| &nbsp;&nbsp;Depreciation and amortization | 15203 | 21028 |
| &nbsp;&nbsp;Intangible asset impairment | 3719 |  |
| &nbsp;&nbsp;Other operating expenses | 1126 | 1972 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 144726 | 151743 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating income (loss) | 2447 | (3986) |
| Other income (expense), net: |  |  |
| &nbsp;&nbsp;Interest expense | (11276) | (7930) |
| &nbsp;&nbsp;Interest income | 71 | 51 |
| &nbsp;&nbsp;Loss on investments, net | (1679) | (6462) |
| &nbsp;&nbsp;Other (expense) income, net | 417 | (59) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other expense, net | (12467) | (14400) |
| Income (loss) before taxes | (10020) | (18386) |
| Income tax expense (benefit) | (930) | (4112) |
| Net income (loss) | $(9090) | $(14274) |
| Net income (loss) per share attributable to common shareholders |  |  |
| &nbsp;&nbsp;Basic | $(0.25) | $(0.40) |
| &nbsp;&nbsp;Diluted | $(0.25) | $(0.40) |
| Weighted-average common shares outstanding |  |  |
| &nbsp;&nbsp;Basic | 36378 | 35963 |
| &nbsp;&nbsp;Diluted | 36378 | 35963 |

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**Exhibit 99.1**

**MESA AIR GROUP, INC.**

**Consolidated Balance Sheets**

(In thousands, except share amounts) (Unaudited)

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| | | |
|:---|:---|:---|
|  | **December 31, <br>2022** | **September 30,<br>2022** |
| **ASSETS** |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $56077 | $57683 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 3343 | 3342 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 13115 | 3978 |
| &nbsp;&nbsp;&nbsp;&nbsp;Expendable parts and supplies, net | 25509 | 26715 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 3953 | 6616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 101997 | 98334 |
| Property and equipment, net | 945545 | 865254 |
| Intangible assets, net |  | 3842 |
| Lease and equipment deposits | 1781 | 6085 |
| Operating lease right-of-use assets | 11896 | 43090 |
| Deferred heavy maintenance, net | 10311 | 9707 |
| Assets held for sale | 73000 | 73000 |
| Other assets | 14984 | 16290 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TOTAL ASSETS | $1159514 | $1115602 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt and finance leases | $88802 | $97218 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of deferred revenue | 1204 | 385 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of operating leases | 5354 | 17233 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 51257 | 59386 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 9097 | 11255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other accrued expenses | 30561 | 29000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 186275 | 214477 |
| NONCURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term debt and finance leases, excluding current portion | 597816 | 502517 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncurrent operating lease liabilities | 9533 | 16732 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred credits | 2869 | 3082 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 16705 | 17719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue, net of current portion | 17607 | 23682 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other noncurrent liabilities | 28938 | 29219 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noncurrent liabilities | 673468 | 592951 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 859743 | 807428 |
| STOCKHOLDERS' EQUITY: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock of no par value and additional paid-in capital, 125,000,000 shares authorized; 36,378,550 (2023) and 36,376,897 (2022) shares issued and outstanding, 4,899,497 (2023) and 4,899,497 (2022) warrants issued and outstanding | 259864 | 259177 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 39907 | 48997 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 299771 | 308174 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $1159514 | $1115602 |

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**Exhibit 99.1**

**MESA AIR GROUP, INC.**

**Operating Highlights** (Unaudited)

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| | | | |
|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **Change** |
| Available seat miles (thousands) | 1175745 | 2104621 | (44.1)% |
| Block hours | 50940 | 86079 | (40.8)% |
| Average stage length (miles) | 565 | 644 | (12.3)% |
| Departures | 27776 | 43447 | (36.1)% |
| Passengers | 1746376 | 2693468 | (35.2)% |
| Controllable completion factor\* |  |  |  |
| American | 99.36% | 97.17% | 2.3% |
| United | 99.96% | 98.33% | 1.7% |
| Total completion factor\*\* |  |  |  |
| American | 97.85% | 95.76% | 2.2% |
| United | 99.21% | 95.78% | 3.6% |

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| |
|:---|
| \*Controllable completion factor excludes cancellations due to weather and air traffic control |
| \*\*Total completion factor includes all cancellations |

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**Exhibit 99.1**

<sup>1</sup>**Reconciliation of non-GAAP financial measures**

Although these financial statements are prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), certain non-GAAP financial measures may provide investors with useful information regarding the underlying business trends and performance of Mesa's ongoing operations and may be useful for period-over-period comparisons of such operations. The tables below reflect supplemental financial data and reconciliations to GAAP financial statements for the three months ended December 31, 2022 and December 31, 2021. Readers should consider these non-GAAP measures in addition to, not a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures exclude some, but not all items that may affect the Company's net income or loss. Additionally, these calculations may not be comparable with similarly titled measures of other companies.

<sup>1</sup>**Reconciliation of GAAP versus Non-GAAP disclosures**

(In thousands, except for per diluted share amounts) (Unaudited)

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2022** | **Three Months Ended December 31, 2021** | **Three Months Ended December 31, 2021** | **Three Months Ended December 31, 2021** | **Three Months Ended December 31, 2021** |
|  | **Income <br>(Loss) Before<br>Taxes** | **Income <br>Tax (Expense)<br>Benefit** | **Net<br>Income (Loss)** | **Net <br>Income (Loss)<br>per<br>Diluted <br>Share** | **Income <br>(Loss) Before<br>Taxes** | **Income <br>Tax<br>(Expense)<br>Benefit** | **Net<br>Income (Loss)** | **Net <br>Income (Loss)<br>per<br>Diluted <br>Share** |
| GAAP income (loss) | $(10020) | $930 | $(9090) | $(0.25) | $(18386) | $4112 | $(14274) | $(0.40) |
| Loss on investments, net | 1679 | (183) | 1496 | $0.04 | 6462 | (1470) | 4992 | $0.14 |
| Intangible asset impairment | 3719 | (406) | 3313 | $0.09 |  |  |  | $— |
| Adjusted income (loss) | (4622) | 341 | (4281) | $(0.12) | (11924) | 2642 | (9282) | $(0.26) |
| Interest expense | 11276 |  |  |  | 7930 |  |  |  |
| Interest income | (71) |  |  |  | (51) |  |  |  |
| Depreciation and amortization | 15203 |  |  |  | 21028 |  |  |  |
| Adjusted EBITDA | 21786 |  |  |  | 16983 |  |  |  |
| Aircraft rent | 4083 |  |  |  | 9586 |  |  |  |
| Adjusted EBITDAR | $25869 |  |  |  | $26569 |  |  |  |

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Source: Mesa Air Group, Inc.

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