Q1 2021 Mesa Air Group Inc Earnings Call
Thank you for standing by and welcome to the Mercer Airlines, One Q Investor Conference call. This call is being recorded if you have any objections you may disconnect at this time.
All participants are in a listen only mode until the question and answer session.
At that time, you May press star, one and make sure. Your phone is on muted and record your name for question and introduction.
I would now like to turn the call over.
Your host chairman and CEO, Jonathan Ornstein. Thank you Chairman you may begin.
Thank you operator, and thank you everybody for joining us this afternoon and this is.
Jonathan Ornstein I'm, the chairman and Chief Executive Officer of Mesa Airlines on the call with me today is Mike Lotz, our President and Chief Financial Officer, Brian Gillman, Our executive VP, and General Counsel and Brad Rich, our Chief operating officer.
I'd like to open up with our forward looking statement.
For the presentation and comments begin Mesa would like to remind you that our press release comments made on the conference call and responses to your questions. During this call may include forward looking statements as defined under the private Securities Litigation Reform Act of 1995.
As such they are subject to future events and uncertainties that could also reflect our results to differ materially from those statements.
And so please at the company undertakes no obligation and makes no commitment to update or revise these forward looking statements any forward looking statements should be considered in conjunction with the cautionary statements and press release and.
And the risk factors included in our filings with the FCC, which Mesa encourages you to read.
In addition, please refer to our press release and the investors section of the Mesa Airlines website and find additional disclosure and reconciliations of non-GAAP financial measures that will be used on today's calls.
Okay now that we have that out of the way.
Like to start the call and unusual way with a big thanks to all of our people and the field.
And despite the obvious risks continue to exhibit incredible bravery and dedication and service to our passengers.
That dedication.
Pace of a deadly pandemic I believe is nothing short of outstanding I'd like to thank each of our pilots flight attendants mechanics operations control personnel all the other frontline employees.
While we remain cautious our view was tempered with some optimism as we are starting to some glimmers of improvement.
Primarily tied to vaccine distribution, which we believe is key to the recovery of the industry.
And also like to take a moment just to up.
While we're all concerned about our daily lives and being at home and some of the things have changed just to take a moment to think about the many people thousands of people have lost their lives and this terrible pandemic.
We have a number of highlights this quarter as mentioned in our press release.
Delighted to report a net profit and positive cash flow.
For our partner flying.
We signed a five year extension with American Airlines for 40 aircrafts.
We launched cargo operations for DHL with $2 737 and 400.
Freighter aircrafts.
And we placed 12, new Embraer 175 aircraft into service with United Airlines.
We also received $195 million loan under the cares Act program and we chose not to furlough any employees. Despite the expiration of the payroll support program.
Our operational performance shows a significant improvement.
Even with the additional fly this quarter.
Despite the challenges and the industry, we continue to move forward and look for new areas of growth.
One area, which I already highlighted is our recently launched cargo partnership with DHL.
It is the first and only regional airlines and to begin cargo operations with narrow body aircraft and we will continue to pursue dedicated cargo opportunities.
I'd like to take a second to talk about something special that occurred in the quarter.
And I believe this is a real.
Example of what Mesa Airlines is all about.
Following the exploration of the cares Act, we approached our pilots about a temporary pay cut to avoid furloughs within literally only a few weeks we came to an agreement and avoid furloughs when the PSB ended on September 30.
Two months into the quarter it became apparent to us.
Company would operate profitably and as a result, we informed alpha that we intended to repay the pilots for the wages they had voluntary given up.
In addition, other work groups have taken pay reductions are in voluntary time off all of which were restored back to previous levels.
I'd like to thank all of our employees for their cooperates and offers of assistance and these difficult times and are thankful that our financial performance enabled us to do what we were able to do.
We believe that the support we received from our employees has been a critical aspect of our success and will remain so going forward.
Our primary focus however remains with our existing partners and opportunities to expand and grow our overall business with them.
And we believe that our industry, leading cost structure and operational excellence position.
And as well and this environment, especially as the industry continues to consolidate.
I'd like to turn things over to Brad Rich, our Chief operating officer to give you an update on the level of our operations as well as American United and D. H L.
Brad.
Thank you Jonathan.
First off I'd like to bench and some of our top operational priorities it probably goes without saying.
And our highest priority at this time are the health and wellness of our people and our passengers now we continue to be and very close contact with our major partners. Following there.
Guidance and their protocols as well as the information received regularly from the CDC.
Next we remain very focused on continuing to improve our operational performance and finally, strengthening our relationships and working collaboratively collaboratively with our partners.
We do believe that consistent operational performance and industry, leading economics are the most effective way to develop and maintain long term relationships with our partners.
By way of review for the December quarter, we generated 69247 block hours, which was down 40% from last year.
Based on current guidance for our partners, we expect the March quarter production to be at about 70% of pre COVID-19 levels and roughly 75% to 80% for the June quarter.
We do anticipate a gradual increase and block hours throughout the year as outlined in our press release.
As far as operational performance, we continue to see improvements and our key operational performance metrics.
During the December quarter, our controllable completion factor was 99, 9% compared to 99, 8% a year ago and our controllable on time departures was 91, 1% compared to 81, 3% a year ago.
Focus on continual improvement and operational performance will remain one of our highest priorities.
I'd now like to provide an update on our American operation.
First of all we're very pleased with our improving and strengthening relationship with American Airlines as evidenced by the previously announced five year extension that was finalized and the December quarter and.
Additionally, we formalized an agreement with American to add five additional C. R. J aircrafts above our CPA levels and late December and we believe there may be additional opportunities.
<unk> current fleet as many of you know consists of 64 C R J and 900.
We own 48, and 41 of those are financed under our previously announced U S Treasury loans the.
And the remaining seven aircraft are financed with export development, Canada or EDC.
We also have 15 aircraft lease through 2024.
We will be using the majority of these aircraft to support the American operation.
However, we are reviewing several new opportunities that would productively you utilize some of these aircraft.
Given the attractive financings and the low debt balance on the majority of the fleet. We believe these aircraft are valuable assets and will remain productive.
We have completed our first month of operation under the New American CPA and we are seeing some of the best performance since the beginning of the American relationship.
And competent and our ability and to meet the operational requirements of the new agreement.
Now moving to an update of our United Operation, our relationship with United remains strong and productive.
And we are working together on many strategic and operational initiatives that we feel will create additional value and a relationship.
We're proud to be one of very few airlines, taking delivery of new aircraft and today's difficult environment.
And as mentioned previously we now have 16, new E 107, and five L. L. L aircrafts.
We're all placed into service between November of 2020 and February of 2021.
The last four aircraft will be delivered by the end of June of 2021.
As we add these aircraft and the United Fleet, we are removing our C. R. J seven hundreds on a one for one basis.
These aircraft will be leased to go jet airlines for a nine year term.
That was previously announced as a seven year term.
We are re training most of the current C. R. J 700 pilots and Washington Dulles on the E. One seven and five and most of that training expense will be covered by the training credits that are part of the E. One seven and five purchase agreement.
Within the next six months, we will be operating a single fleet of 80, <unk> hundred 70, fives with United which we believe will enhance operational performance and improve our cost efficiencies.
In fact, we are already seeing significantly improved operational results.
And finally in regards to our cargo operations.
As previously mentioned, we have two 737 and 400 cargo aircraft and service with DHL.
Both aircraft are based and Cincinnati, where we have a pilot domicile and a maintenance space.
So far we have been pleased with the operation and believe we are well positioned to grow this line of business.
With that I'd now like to turn it over to Mike Lotz to walk through our financial performance.
Okay. Thanks, a lot Brad.
And then you do a quick recap on the earnings from the first quarter of fiscal 2021 and reported net income of $14 1 million or 39 per share.
This compares favorable to net income of $10 8 million for the same quarter.
Last year with 31 cents per diluted share as noted in our press release. The primary reason for the increase in earnings from 'twenty. One from Q1 'twenty to Q1 'twenty. One is due to a combination of $11 3 million pre tax benefit received from PSP under the cares act offset by the 26% reduction and contract.
Net revenue related to reduced flying as a result of Covid and by $5 2 million of deferred revenue as a reminder, the $5 2 million of deferred revenue.
And as revenue, which was billed and paid by American and United during the quarter and will be and will be recognized over the remaining terms of their respective contracts.
We did report $4 $8 million of income tax expense for the quarter. However, we do not pay any cash taxes as we have over 500 million and valuable NOL carryforward.
Let me move to cash and liquidity.
Cash for the quarter, excluding restricted cash increased by $82 million.
$181 million.
Of the $181 million cash at quarter and $48 million is the balance of the United CPA agreement prepayment, which was made in November.
This was subsequently reduced to zero at the end of January 'twenty one.
As previously reported we do draw and and received $195 million this quarter as the secured loan under the cares Act as a five year term interest at LIBOR, plus 350 with no prepayment penalty.
During the quarter, we also extinguished $164 million of debt related to 44 aircrafts three seven hundreds and 41 nine hundreds. This debt is amortizing debt that was due to mature between January of 'twenty, One and June 24.
And the addition, and addition to the $164 million extinguishment, and we also paid $25 million and scheduled principal payments.
Total debt and 700 $746 million up slightly from Q4 of 2020, and assuming no new debt the balance sheet, we reduced by approximately $96 million over the remaining three quarters of fiscal 'twenty one.
<unk> and fiscal year 'twenty, one total debt.
Ending debt with total amount of $650 million.
Principal payments currently scheduled for fiscal year, 'twenty, two and fiscal year, 'twenty, three and $200 million and total.
Bringing total debt down to approximately $450 million by fiscal year and 23 to put this into perspective $450 million is not too far off from the purchase price of just 20, new regional jets.
Also total debt continues to decline from previous levels.
A year ago, or and that was $822 million and December 19, and and December 18, two years ago was $892 million.
There was $2 million of Capex and the quarter and our only current plan capital is the acquisition of new engines from GE. We originally ordered 20 engines are in discussions with them on the timing of deliveries and the total number of engines required given the new Covid environment, which obviously had changed has changed the dynamics with an increase in use and.
And is available and the marketplace, we expect to finance most of the purchase price of any engines delivered.
As the daily cash burn as we have said since the start of Covid back and Mark you had been and expect to continue to remain cash neutral or better going forward.
Lastly on liquidity, we did receive $24 million from the U S Treasury and February for PSP, too, which covers a four months period December one through March 31, we.
We expect to receive the balance of 25 million by March 31, and.
System with PSP, one you'll have discussions with all of our partners and temporarily reducing rates.
True that same period December one through March 31.
Let me touch on guidance, although the environment is still volatile we didn't want to provide guidance and a few areas.
Block hours, which are fairly straightforward and obviously you have we have much more confidence in the March quarter than we do looking out at June and September and as Brad mentioned the March quarter is roughly 70% of pre COVID-19 levels with June at almost 80%.
For heavy maintenance, which is primarily engine and airframe C. Checks. We provided estimates these amounts are higher than what we would consider normal run rates. Much of this work is a result of deferred C checks, which will be catching up on through the end of the fiscal year.
We have also provided our current estimate and deferred revenue for the remainder of the fiscal year.
As you can see the deferred revenue and projected to be down to only 200000 and Q4 in total we are projecting total deferred revenue of $33 million combined for fiscal 'twenty and 'twenty, one and fiscal 'twenty, two and beyond we should begin to see the reversal of the deferred revenue.
I'd like to now turn it back over to Jonathan.
Thank you, Mike and thank you Brad.
Just a quick word I'd like to thank both of you guys doing a wonderful job Brad on the American side, and but my pumping the job you did putting these financial transactions together has been fabulous.
And I want you know how much it's appreciated.
And.
Let's face it and it's been a tough year for the industry.
We are more than pleased that may says weathered the storm as well as it has.
I think this has been a large part a result of the operational performance we are achieving.
Our industry, leading economics, and again I can't say enough about the support that we receive from our people and the field.
And I believe that with this strong foundation in place.
As being well capitalized as we are now.
Our cost remaining low and we will continue to seek and achieve new opportunities as the industry continues to evolve.
With that I would like to open up for any questions any of you may have.
If you would like to ask a question you May press Star one and currently record. Your name question introduction and our first question will come from Savi <unk>.
And with Raymond James Your line is now open.
Hey, good afternoon and everyone.
And just on the P. S P and I was kind of curious would be it seems like the benefit was recorded and in the December quarter, and I'm guessing the remaining $38 million will be reflected in the March quarter should we expect some of the December quarter and.
Rate reductions just show up in the March quarter, and and how should we kind of think about.
And from that perspective, just kind of the puts and takes as we think about the quarters here for this for fiscal year 'twenty one.
Yeah, So Kurt.
Savi. This is Mike for PST to the roughly $49 million, we haven't we.
We haven't booked any rate reductions related to December so any rate reductions, we do relative to TSB two will all be recorded and in the March quarter as volatile.
And the full cash impact as we are receiving that in Q2 as well.
Got it.
And then just on the American contract.
I think when you updated in December about kind of five additional aircraft flying.
I think it was considered short term, possibly going longer and has there been any kind of solidifying of of how long those extra five aircrafts will be flying.
Like how long it will stay at 45, I know you have and the guidance it kind of going out through the current fiscal year, but I'm. Just wondering just how you know how and how flexible it is for American to adjust that number.
Brian go ahead.
Okay I'll be happy to take that one first of all Savi our guidance and.
Our projected block hour production.
Includes those aircraft and the product and the.
Estimates through May.
And at this point, that's where we and that's what we have discussed with American.
And look then we just assume AR and AR and count on the quality of the operation doing a really good job.
Certainly where our costs are for that operation.
Focus is just on doing a good job with what they've asked us to do so far which is through may and hopes that it will lead to more opportunities.
Helpful. Thanks, I'll get back on the share. Thank you.
Our next question will come from Joseph <unk> with Stifel. Your line is now open.
Thanks, and good afternoon.
Jonathan you mentioned that the market is consolidating and I'm wondering if you could just talk about that a little more what sort of opportunities does that create for you and maybe what did you mean by that does it create opportunities what's the timing on realizing some of them and are the conversations still kind of preliminary at this point or more.
Or substantive. Thank you yeah, yeah, no problem I was I I really was talking about a trend that we've seen and I think to some degree.
Sped up as a result of the pandemic, we've seen you know.
Three or four or five carriers that have been ultimately liquidated.
Theres been some consolidation I think the major airlines have sort of moved and the direction of <unk>.
<unk> strong partners rather than eight 910.
And I think Mesa is positioned now to be one of those potentially three or four that you know well will survive that shake out.
And I think that you know we're also position that there are opportunities.
It would be through a merger and acquisition or increasing the fleet.
We now have the financial wherewithal to do that.
And so I think we're talking more about our basic trend.
And we joined <unk> back and you know.
And 1989, and my first or a meeting there were 113 airline regional airline members I think we're now down to 13.
The trend has been pretty.
Pretty strong and I just sense that it will continue and that Mesa is positioned well to take advantage of that future consolidation.
In a scenario, where it consolidates down to that level, how many aircraft.
And would Mesa B and are positioned to operate.
Roughly relative to what you fly now.
Well you know in the past the constraint that slowed everyone down frankly was pilots and pilot shortage you know.
And that had been induced by the 1500 hour rule.
That has not been an issue.
No I recently saw some numbers, where theres a number of pairs that over and over 1000 pilots.
And there too to be hired and I know, we have and the hundreds at this point. So I think that you know.
Our ability to grow right now, whether it's organically or through you know potential acquisition.
And like I say unlimited, but I think it would be easy to see that we could.
And one one and a half aircraft a month without any problem.
Over the next few years.
And just by organically growing and then potentially more.
So if we were to do.
And do some type of acquisition.
And again I think that it's at.
It's also being driven by our partners, who have you know said do we really want and manage 10 different partners and you've seen for example, United some consolidation there and the number of parties that theyre doing business with.
Thank you.
Our next question will come from Mike Lindenberg with Deutsche Bank. Your line is now open.
Hey, Yeah, Hey, good afternoon, everyone, Hey, Mike I, just I wanted to go over the cash numbers with you and you ended the quarter on a on a very high note $181 million and then you indicated that you did pay off the United and the rest of the United Tom that prepayment on weather.
And with a $48 million.
And then obviously youre getting some money.
And that you got I guess in February and are getting something in March as it relates to the P. S. P. Two so another 49 million there and then I think you mentioned something about 25 million of principal payments. So the pluses and minuses. It does feel like that you're going to and the March quarter with still a pretty good cash position I don't know if it's one <unk>.
41, 50, 160 kind of getting a feel that you know you've sort of been breakeven from a cash burn basis.
Is that am I and the ballpark there or you know M. I am too aggressive on your on your March Q cash position.
Yeah. So look we we.
We ended at 180.
And of that you know roughly 50 of it was United So that would bring us down.
Down two to $1 30 yep.
And then.
From there.
This PSP to money that receive that all doesn't just dropped down to the bottom line I'm. You know, we do talk to all of our partners about a temporary rate reduction and the same period and yes fair enough.
And and you know when you're flying half of the schedule than theirs.
And there's there's a different level of concession as opposed to when you're flying it at.
70, 80% mhm.
I'd just leave you with that Okay. Now that's helpful actually.
That is helpful.
My second question just to Brad I'm sure, Jay and 900 and that have come out of American I think you've talked about them.
Several new opportunities that was somewhat intrigued by that I mean, that's a very unique airplane and I don't think there's anybody out there who can fly it at a lower cost and you guys and it's a lot of seats and so I wasn't sure would this be Mesa operating on behalf of another carrier or would this be like a sublease opportunity, maybe where youre at least.
And the airplanes offshore too and to another carrier.
And and collecting rental income and any color on that would be great. Thanks, Brad.
Oh, Hey, I'll give just a couple of quick thoughts first of all I think you hit on what I think is the most important point, which is our ability to operate good quality high.
High quality high reliability operations at a really attractive.
Total economics.
The key to this to keeping these airplanes flying and so look there are some very specific opportunities that we are.
And pursuing and reviewing it and at this time and then and in the meantime, and we'll use the additional airplanes to support the American operation and you know the reliability there and.
As you know really critically important to us as well so in any event. These airplanes, we think will be put to good use.
Great. Thanks, Brad and thanks, everyone.
Okay.
Thanks, Mike.
Our next question will come from Helen and sector from Cowen. Your line is now open.
And thanks, very much operator, hi, everybody and thank you very much for the time and just have a couple of questions.
So the first question I have is that.
And you had mentioned there was incremental flying for American and the first cash at this year is that playing out the way you hoped it it would be this.
Following up on the a question.
Yeah.
Well I'll take I'll I'd like to say one thing real quickly about that is I would say that.
And.
The incremental flying as well as the baseline.
It's worked out far better than we anticipated.
And in the middle of the pandemic.
Traffic down literally 90%.
The fact that we were able to renew 42 aircraft and then for American to come back to us and add five more and you know we're in discussions with them on additional opportunities and I think it's truly amazing and and beyond our expectations on that again I want to thank Brad for his role and putting that together Brad do you want to add anything.
With that.
Jonathan I think you I think you said it very well I don't really have much more to add.
Okay.
Great. Thanks, Jonathan Thanks, Brad.
The other question is on cargoes contract.
So you're doing what did you say if I had to 400 and I think do you I assume and Charlotte and said you could add one to one and a half aircraft Inc.
Months.
And I'm, hoping that that car includes cargo.
And you know what it what is that run rate looks like right now.
You know for obvious reasons, there's so much ecommerce blah blah blah how's that shaping up.
Yeah. This is Jonathan.
You know, we think that the cargo opportunity is significant for us going forward.
And you know they don't order 40 airplanes, and a cliff like where the majors used to so I think we'd be looking at that you know and <unk>.
Argo, if we could add and aircraft every other month, we'd probably be very happy I don't think it's going to happen overnight, we have to prove ourselves.
So far so good.
You know the the.
The good news is too is that DHL, we have a lot of contacts and with their senior management through our board New Board member, Dan Mchugh, who is the former CEO of southern So I think that there's a big opportunity for us there.
And it's just a question of US you know.
And being able to.
Manage all the different pieces of those businesses successfully and as Brad said.
You know clearly.
Our operational performance is critical and you know on the other side of it which you know is sort of Mike's job has been.
You know keeping the costs, where they need to be and I forgot to mention and I've mentioned, Brian Gillman, who was our lawyer, who is stuck always having to deal with putting all this together and maybe the hardest part of all these transactions and I think between us and we've developed a good team that we can pursue these opportunities equally and aggressively.
Oh, Thanks, Jonathan that's fair and just let me just add.
And let me just add one thing too Jonathan on the cargo opportunities day there.
And just DHL two right and there may be other opportunities that present.
Present themselves to us and importantly, it's a lot easier to present yourself as a cargo operator as opposed to wanting to become a cargo operator, and we are a cargo operator now so that I think that helps us position ourselves and the market is much better as well.
They had no Inc.
And that's great. Okay. Thanks, guys have a nice afternoon and thank.
Thank you.
Thank you. Our next question will come from Joseph <unk> from Stifel. Your line is now open.
Hi, Thanks, just a quick follow up Jonathan you mentioned earlier M&A a few times I'm wondering if you could just maybe maybe talk about it I would take from your comments that maybe you have the blessing of of your partners.
And to consolidate and I'm wondering you know how.
And how you frame kind of where you are willing to take leverage or how you would finance that.
And maybe how seriously you're evaluating that opportunity. Thank you.
The partners always have the ability and these new cott and these contracts effectively to veto a deal by not passing along the.
The code share agreement. So anything you do you have to do it and cooperation with your partner.
Again, my my remarks for more general and specific I mean, clearly we've looked at opportunities from time to time, we continue to look at opportunities, but you know one of the areas that is potentially interesting to us outside of sort of our traditional business as you know the potentially to acquire two.
Our cargo business through acquisition.
The other thing that you know we've looked at is there and.
Just staying at the forefront of technology I think it's important to going forward. So there are a number of areas that we think you know there may be merger and acquisition investment.
You know just things that that to help diversify our business, one and and at the same time, you know potentially strengthen our business with our partners you know through this consolidation process. So again I think it's more general and a sense of direction than specific at this time, but you know Mesa has always been.
Pretty opportunistic some of some folks who go back with us Helane and Mike Lindenberg, no that we used to be called the deal a year, but we haven't done the deal and a long time, but I think that you know it is these kinds of situations.
You know where opportunities do exist.
Got it thank you.
And our next question will come from Savi <unk> with Raymond Jones. Your line is now open.
Thanks and just.
Thank you and a couple of quick ones just on the.
December quarter I was just kind of curious versus plan how did the corner turn and I was just the P. S. T D on the kind of variable or its just kind of the budget and the way you were thinking about the quota share.
And how does it quite a progressive and I'm curious.
Yeah.
There was no surprises for the quarter it was pretty much as we had projected.
Okay, and I actually along those lines and so just I'm trying to follow up on that on the cash question that Mike had earlier.
Should we think about kind of X P S. The steel and cash flow positive for the for the year and based on kind of current levels of flying.
Well, when we talk about cash flow neutral or better and it includes any PSP money that we would receive.
Yes.
Going forward and is that like even without the PSC and the past and and I know not all of that follows true are you in kind of cash generation and character yes.
Yes, yes, we are.
Yeah.
And if I could sorry, I'll, just add I mean and.
This has been a source of what seems to be some level of confusion with all of us, including myself, but you have to remember on the PSP I mean, the alternative which you know if we had to and obviously we've been delighted to avoid it we can furlough people and downsize the operation to fit the number of aircraft full flight.
And thankfully the government has chosen to give us the opportunity to avoid that by making those payments, but I think it's it should be clear that there would be if there was no P. S. P and we were flying it 50% of our flying we would go back to our pilots to go back to our mechanics go back to our flight tests and you know sort of structure the.
Same deal that we did when we we didn't think there was a P. S P.
And able to you.
You know structure something that worked.
You know and just to mention I mean, there was a period of time when we did not have the P. S. P for a couple of months and.
And we did structure those deals and the company was cash flow positive.
And that's good color I appreciate that and then just one last question on the cargo is it still the thinking sales at close to breakeven here with two aircrafts and really to kind of get the.
And on the earnings higher there you just need more scale.
Mike do you want to answer that yeah.
Yeah, No that's a fair assessment savi.
Savi, we said that.
Our goal was not to.
And the two air operation, obviously spreading the cost.
Over his two aircrafts are is not nearly as.
And economically feasible.
10, and 12 aircrafts, so yeah as we grow they will.
And certainly become more.
More profitable and they are like we said, they're there they're contributing some but not much given the startup.
Alright, Thanks Ross.
Yeah.
And our next question will be from Mike Lindenberg from Deutsche Bank. Your line is now open.
Oh, Hey, Jonathan if you could just kind of indulge me and a are you know a plane spotter question here I just I wanted to know if there was any accuracy.
Two the fact that you did take delivery of the 737 and 800 freighter I'm just I thought it was and the blogs a few weeks back and I just wasn't sure. If there was any sort of accuracy around that but.
Yeah, Mike, It's it's really funny that you mentioned it because my DHL contact our DHL Goddam said that they do and he said is this true or is this a mistake and at first I wasn't sure.
And if that because they had the L. R cereal, which originally we name of planes after Larry but I can tell you that after doing a little checking.
It was not our aircraft and we don't have any intentions on the eight hundreds at least not and the in the near term, although I will say I think that's the direction things are going.
In terms of the freighter business is that.
And I wouldn't be surprised if the next aircraft that we did put on certificate that would be a 737 and 800, okay very good Jonathan great. Thanks.
No.
And I'm currently showing that that was our last question.
Okay.
Thank you very much and thank you all for you.
Your continued interest and support of Mesa.
We're working hard through obviously this tough time to provide as much opportunity.
For the company as possible we're.
And we're all significant shareholders we loved.
Love to see our share price.
True.
We think that the company has lots of opportunity.
We've strengthened the management team and a number of areas to help take advantage of that.
And I think you know again.
The support that we receive from our partners has been nothing short of outstanding given the environment that they deal with every day.
Both American and United have been incredibly supportive.
And then lastly.
And I think again I can't tell you enough how strongly I feel about the relationship that we've developed with our people and the field.
I also want to thank all of our shareholders and everyone else that's been patient with us I mean, there's nothing we'd rather do that and see them also benefit from all this work and we hope that as we go forward and 'twenty 'twenty, one and things begin to improve that.
And that we can see some improvement there as well so again as always thank you and if you have any additional questions feel free to call myself, Michael Brad directly have a great day, and we'll talk to you next quarter.
Thank you.
This concludes today's conference all participants may disconnect at this time. Thank you for your participation on today's call.