Mesa Air Group, Inc (NASDAQ:MESA) Q2 2019 Earnings Conference Call Transcript
May 10, 2019 • 01:00 pm ET
Welcome, and thank you all for standing by. At this time, all participants are in listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator instructions) This call is being recorded. If you have any objections, you may disconnect at this point.
And now, I will turn the meeting over to your host, Jonathan Ornstein. You may begin.
Thank you, Kirby. Thanks, everyone, for joining us on the call today. As the operator indicated, this is Jonathan Ornstein. I'm the Chairman and Chief Executive Officer of Mesa Airlines.
On the call with me today is Mike Lotz, President and Chief Financial Officer; Brian Gillman, Executive VP and General Counsel; a new addition to our call, Brad Rich, Chief Operating Officer; and Darren Zapfe, Vice President of Finance.
I'd like to ask Brian to read the Safe Harbor statement, please.
Thanks, Jonathan. Before the presentation comments begin, Mesa would like to remind you that some of the statements and responses to your questions in the conference call today may include forward-looking statements. As such, they are subject to future events and uncertainties that could also affect our actual results to differ materially from those statements. Also, please note the company undertakes no obligation to update or revise these forward-looking statements.
Any forward-looking statements should be considered in conjunction with the cautionary statements in our press release and the risk factors included in our filings with the SEC, which Mesa encourages you to read. In addition, please refer to our press release in the Investors section of Mesa's website to find additional disclosures and reconciliations of non-GAAP financial measures that will be used on today's call.
Okay. Thank you, Brian. Okay, we had a pretty nice quarter. We continue to execute our plan to increase block hour production on our existing fleet. As a result, block hours were 112,030 for Q2 fiscal '19, which represented a 14.5% increase from the same quarter last year. We're also providing guidance for third quarter. We believe the block hours will be about 115,203, which is an 11.9% increase from the same quarter last year.
Given our partner's desire of increased block hour production and to position ourselves for future growth opportunities, we have continued to overstaff, hiring more pilots than we are losing. We continue to see excellent results on our pilot recruiting front and attrition has been stable to slightly lower than anticipated. Our quarter two fiscal '19 adjusted earnings before taxes were $21 million, which compares to $3 million for the same quarter last year. However, earnings before taxes were $4 million lower than our previous quarter, primarily due to the timing of heavy maintenance events, engine, C-checks and landing gear.
As you know, our earnings are very sensitive to the timing of these major heavy maintenance events since we expense these costs in the period they occur. On March 6th, we finalized our purchase agreement with GECAS for 10 CRJ-700 aircraft currently leased from them and operating at United. Upon completion