Q1 2023 Mesa Air Group Inc Earnings Call
Speaker 1: I re.
Speaker 2: Thank you for standing by and welcome to the Mesa Airlines Q1 fiscal year 2023 conference I'll participate in the finalist and only mode until the question and answer session of today's call. At that time to ask a question please press star one on your touchtone phone.
Speaker 3: This call has been recorded if you have any objections. Let's connect at this time. I would now like to turn the call over to Doug Cooper, Head of Investor Relations. Mr. Cooper, he may now begin.
Speaker 4: Thank you, Christina, and welcome everyone to MESA's earnings conference call for its fiscal first quarter 2023 ended December 31, 2022. On the call with me today are Jonathan Orenstein, MESA Chairman and Chief Executive Officer, Ed Rich, Executive Vice President and Chief Operating Officer.
Speaker 5: like the lots, President and towards Zubek, Chief Financial Officer and other members of the Management team. Following our prepared remarks there will be a question and answer session for the Salps Out of the Attlemies.
Speaker 6: We also want to remind everyone on the call today that today's discussion today is forward looking statements that are based on the company's current expectations and are not a guarantee of future performance. There could be significant risk and uncertainties that could cause actual results to differ from it to your own. We also want to remind everyone that today's discussion today is forward looking
Speaker 7: from those reflected by the forward-looking statements, including the risk factors discussed in our reports on file with the SEC. We undertake no duty to update any forward-looking statements.
Speaker 8: In comparing results today, we will be adjusting all periods to exclude special items. Please refer to our fiscal first quarter earnings release, which is available on our website for the reconciliation of our non-GAAP measures. With that, I will turn the call over to Jonathan for his opening remarks. Jonathan?
Speaker 9: Thank you, Doug, and thank you everyone for being on with us today. We're pleased to be speaking to you again after introducing several major developments at Mesa on our fourth quarter call six weeks ago. As you may know, we had a busy December quarter, negotiating, finalizing significant agreements.
Speaker 10: with our airline partners and other key financial parties. We expect these new agreements will substantially enhance our operational performance and both our income statement and balance sheet.
Speaker 11: Since our last call, we have been working diligently as we prepare to wind down our loss-making operation with American Airlines and transition our CRJ-900 Flying T-Nighted Airlines next month.
Speaker 12: For the quarter, we then adjusted net loss of 4.3 million on revenue of 147.2 million. While traffic remains strong, and our pilot pipeline has improved significantly, capacity remains constrained as we catch up with unprecedented risk and experience as a result of the industry wide pilot shortage.
Speaker 13: Here's a quick overview of what we have recently accomplished.
Speaker 14: First and foremost, we eliminated our loss-making operation at American Airlines' effective April 3rd, 2023. Pursuant to that, wind down, United agreed to add up to 40 CRJ 900s, previously operated for American.
Speaker 15: To improve our balance sheet, we sold our remaining 8 CRJ 550s and agreed to sell down 11 CRJ 930 GD engines, reducing approximately 90 million of debt and generating approximately 70 million of cash.
Speaker 16: Additionally, United replaced our $16 million balance on our revolving credit line and provided an additional $25 million loan.
Speaker 17: We also restructured our RASFRA releases and EDC death. Finally, we implemented new pay scales with our pilots and a new agreement with our flight attempts.
Speaker 18: Looking forward, the current quarter is all about a successful transverse scene.
Speaker 19: Working closely with United, we intend to keep all the related crew domiciles and maintenance bases open.
Speaker 20: With our significant focus on operations, we believe the new United 900 flying will perform at level similar to our existing EJET flying at United.
Speaker 21: In some good news on the pilot front, we continue to see strong levels of applications and reduce detrition. Currently, our monthly pilot's Trisha decline in his mouth stabilizes approximately near pre-COVID levels.
Speaker 22: This week, we announced a direct entry captain position for Qualify candidates, highlights of the program include a 24-month flow to United Airlines and an industry leading $110,000 sign-on bonus. Combined with our industry leading pay rates, we believe this may be the best opportunity in the history of regional aviation for pilots to advance their careers.
Speaker 23: We are continuing to focus on pilot training, throughput, and have increased our resources around it. Grave will get into more detail on this later on. Last fall, we officially launched our Mesa pilot development or MPD program and recently welcomed our first graduates to the Mesa regional pilot ranks.
Speaker 24: With our significantly increased pay scale and participation in the United's AVA program as well as our expanding training pipeline provided by MPD program and our new direct entry captain program, we believe MACE provides a reliable and rapid path for pilots to join the regional industry and transition to United Airlines.
Speaker 25: We are pleased to be within the United ecosystem and are committed to training, retaining and promoting pilots through to United.
Speaker 26: I'm also pleased to announce that we are adding a 737-800 freighter to our DHL operation. We have taken delivery of the aircraft and expect it to enter service in March. This brings our total cargo fleet to three 737-400s and one next-gen 737-800.
Speaker 27: At this point, I'd like to turn to highlights from the past few months that speak to the leadership position that Mesa is building in the future of regional aviation and the greater sustainability that we hope to help enable the industry in years ahead.
Speaker 28: The two electric flight partnerships we invested in with the United, Archer and Archer recently achieved significant milestones. Archer unveiled its new 5C EVstore, Serbia, Lundgren ?????akov viral Network P lumase basis Integrate conference and online networks.
Speaker 29: titled Midnight in November . Midnight is set to provide a sustainable form of aviation that can service short distance trips between regional airports and city centers. Heart Aerospace also continued to make progress, meaning a number of milestones and garnering additional commercial aircraft orders.
Speaker 30: We believe Macy is the Vanguard of Innovation and Eco Friendly Electric Aviation and will continue to assess opportunities going forward.
Speaker 31: Meanwhile, our European Joint Venture flight is on track to complete its operating certificate this spring. While initially operate regional jets, we believe flight could also be a platform for a new technology and eco-friendly flying in environmentally sensitive European markets.
Speaker 32: With that, I will hand it over to Brad Rich to go over more of the details of our operational performance of this cord.
Thank you, Jonathan, and good afternoon to everyone. I'd like to start by reviewing our quarterly operating results. In the December quarter, we flew 50,940 block hours, 9.6% below last quarter, roughly in line with our previous forecast.
Our March quarter block hours are projected to be roughly flat versus the December quarter.
Mesa, like many regional airlines, continues to contend with the challenges of the industry-wide pilot shortage on our block-hour production. However, we finally have a line of sight to relief.
As Jonathan mentioned, attrition has come down materially over the past few months, and our classes are filled with a combination of new hires and captain upgrades.
Pilot production remains our highest priority.
We continue to increase our in-house training capacity from the additional CRJ and EJED instructors that we have hired. We have also contracted with CAE to provide both instructors and more SIM capacity this year.
We remain focused on our transition to United and are continuing to work closely with their teams to prepare facilities, crews, and maintenance efforts for CRJ-900 flying.
The rollout that we outlined on last quarter's call remains unchanged. We expect to operate our current 24 lines of flying with American through February 28 before reducing flights throughout March and seizing American operations on April 3.
We will begin operating CRJ 900s for United on March 3rd and will transition all the flying by May.
As previously mentioned, United is covering the expenses to reconfigure and rebrand the CRJ-900 aircraft.
With that, I'll now turn the call over to Torc to walk through our financial performance.
Thank you, Brad. I'll take this opportunity to now review our financial performance and our value sheet. For the first quarter of fiscal year 2023, revenue was 147.2 million, relatively flat compared to 147.8 million in Q1 2022.
contract revenue fell by 8.4 million year over year. Here been primarily by lower block hours, partially off that by increased block hour revenue for a new pilot paid skills.
Pass-through and other revenue increased by $7.9 million, primarily due to E-Jet maintenance, maintenance, pass-through revenue and deferred revenue.
MASIS Q1 2023 results include per gap the recognition of $5.3 million in previously deferred revenue versus the recognition of $4.2 million 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.
On the expense side, Macy's overall operating expense is for Q1223, where 144.7 million, down 7 million versus Q1222. This decrease is driven by a lower maintenance expense, which fell 10.7 million or 18.1% versus Q1222.
to $48.3 million. It was primarily due to fewer sea checks than in the first quarter last year, as well as lower aircraft rent, which fell by $5.5 million, and depreciation and amortization expense, which fell by $5.8 million.
The decline in depreciation amortization expense is primarily due to reduced asset values as a result of assets held for sale and year-end impairments.
These factors were partially offset by higher flight operations expense of 10.7 million due to increased training costs and the implementation of higher pilot pay scales as well as 3.7 million in intangible asset impairment.
On the bottom line, we reported a net loss of 9.1 million or 25 cents per diluted share compared to a net loss of 14.3 million or 40 cents per diluted share for Q1 2022.
An adjusted basis makes it report a loss of $4.3 million or 12 cents per share compared to a net loss of $9.3 million or 26 cents per share a year ago.
The adjusted loss of Q1, 2023 excludes a $3.7 million impairment loss and another $1.7 million mark-to-market non-cash loss on our investments in equity securities. Adjusted results from Q1, 2022 excluded a $6.5 million mark-to-market non-cash loss on our investments in equity securities.
Next, let me turn to cash and liquidity.
Cash for the quarter, excluding restricted cash, decreased by $1.6 million from the prior quarter ending September 30, 2022 at $56.1 million, in line with the projection on our fourth quarter call. This amount excludes net proceeds from the sales that were not closed as of December period and.
including our eight CRJ 550s, 11, 900s, and the spare agents that John reviewed at the top of the call.
Total debt at the end of the quarter was $701.3 million, up 86 million from the prior quarter. This amount includes $64.2 million, forced money to the GAAP re-classification from our operating lease to finance lease on 15 CRJ 900. Additionally, we borrow $25.5 million in the form of term loan from United.
of which $15 million is forgivable upon the meeting of certain performance criteria. During the quarter we also made scheduled debt payments of $17.5 million and finance lease payments of $3.5 million.
As a reminder, we have 74 million of scheduled principal payment remaining in 2023. And after the repayment of debt associated with asset sales, we expect fiscal year 2023 year in debt of approximately $535 million. This updated total from $435 million that we were expecting at the last course.
than the block hours for the March quarter that was discussed by Bratler Linger.
in a total debt figure that I just mentioned.
We would like to point out that this quarter had favorable adjustments of $7 million. Based on our transition with American, we expect our deferred revenue to decrease by $11 million next quarter. Additionally, given United's equity stake in Mesa is 10%, our current share count is approximately $40 million.
With that, I'd like to now turn it back on the closing remarks. Thank you, Chork. In summary, our first fiscal quarter of 2023 was a critically important one for Mesa, and one in which we believe we achieved a lot and made significant progress. That said, we have a lot of work ahead of us.
We continue to focus on pilot development in order to increase our block hour production first and foremost. At this point, please open up for additional questions that the analysts may have.
Thank you. If you would like to ask a question at this time, please press star one on your phone and be sure that your line is unmuted. Again to ask a question, please press star one.
Our first question today comes from Savi Scythe with Raymond James. Go ahead, please. Your line is open.
Good afternoon, everyone. Just wondering, with this December quarter, you know, you talk about losing about 5 million a month on the American contract and in light of that, it seems like the earnings result is pretty good. Is that a function of...
some of that different revenues showing up or if this trend holds, why shouldn't we expect profitability by the June quarter?
Yeah, hey, Bobby, this is torque. Yeah, we recognize a fair amount of deferred revenue just given the change in the contract term with American Airlines. That's the biggest change in the quarter.
Okay, so I was kind of going forward, I should kind of consider the underlying X-stat as the
forward, I should kind of consider the underlying X-stat as the base.
going forward.
Not quite clear, Saba, could you restate? So just adjust for the, I guess as we think about the core United earnings power here.
Should we think about it as, you know, take out the revenue recognition, maybe take out, you know, 50 million in losses that will go away and that's your core until you start building up your block hours? Is that how we should think about it?
Yeah, we have some tail with American Airlines expenses that aren't covered for the next upcoming quarter, but if you defer the or eliminate the deferred revenues, then that would be close to what we would expect moving forward.
Got it. And then if I'm on the pilot side, which is kind of good news, if kind of the attrition levels here hold at close to pre-pandemic levels, how long, given you're kind of increased training through for it, how long do you think we will take to...
then be able to fly the full complement that you want to fly.
This is Jonathan. It's really a depend on, to some degree, the mix of aircraft. We are moving CRJs over, but I mean, I think our preference and the United's preference should be to apply as many of the 175s as we can.
And so we've got sort of two training pipelines going. I would suggest, depending on what you call maximum utilization, for example, if we could fly 11 and a half hours, we'd probably be at the outside. Call it, it could be as long as 18 months, and that would be conservative. However,
you know, inspired the fact that we'd like to fly as much as possible. Sometimes network is just not capable of getting that much time on every airplane. So, you know, if we were around 10 hours, you know, it could be, you know, probably 12 months, you know, maybe a little better than that, you know, based on the current trends, but I do have to warn everyone.
I mean, these trends are very volatile. And you know, we got a good jump with what we did in terms of the pay rates and some of the programs we put in place. We've got, you know, a really strong development program now with Mesa Pilot Development. But as you know, one of the problems that has been created by this legislation is that
has been the fact that we've had this big attrition throughout the regional industry and we're just running out of people to upgrade to captain and that is becoming an overwhelming issue where you're going to end up with trying to get people to a thousand hours.
and get them to upgrade and not immediately get hired away by another carrier. Now, you know, with the ABA program in place and with our pay structure, we think we will have addressed that to some degree, but there is definitely still a big logjam on the FOs.
that has been, again, another unforeseen consequence of this ill-conceived and ill-advised legislation.
That's helpful. Thank you.
Our next question comes from Halein Becker with Cuff.
Please your line is open
Thanks very much, operator, and thanks for the time, everybody, this afternoon. So just a couple of questions, and these are just kind of clarifying questions, Torc. On the investment loss in the quarter, can you just mention what that's related to?
Yes.
May we have a big improvement from September to December and I'm just wondering how I should think about that from December to March.
Yeah, so Lane, this is one that you know, I have been involved in so I can answer quickly if you want to be able to judge whether we're going to have investment gain or loss you just can look at the price of archer because that's really all it amounts to is just the price of archer We are currently long
as part of our deal about 2.2 million shares of Archer. We have more coming down the road, but that really, and torque correct me, but I think that really is the entire marked market is on Archer's yacht.
Okay, and then my other question is just again a clarification question as I and it's kind of what Savi asked I think just differently as we think about the line down of American
How am I thinking about...
the block hour, the revenue components, is the increase that we saw from 10 million to 18 million because that's where the United reimbursements are showing up related to the pilots.
the decrease from 137 to 128 is related to the block hour decline. I don't mean to be stupid, but obviously I'm not getting it.
Yeah, so Elaine, yeah, our block hours were down about 41% from the year over year piece. But our revenue was roughly flat. That's because we did get increase in for pilot pay from United as well as we had the...
The deferred revenue that we recognized in the quarter, those are the two big pieces that made the overall revenue about flat with last year. Did that help?
So in moving forward, we're obviously that there's not a lot of different revenue to recognize that there'll be some that will recognize in other quarters, but moving forward, it'll be, you know, we'll have compensation for the new pilot rates. But in this next quarter, we also we still have the American wind down that we aren't, you know, we aren't getting fully compensated for pilots and that just.
that you're aware. Okay, that's very helpful. Thanks very much.
Keep that, Helene.
Our next question comes from Andrew D'Dora with Bank of America. Go ahead, please. Your line is open.
Hey everyone, good afternoon.
Similar line of questioning to the revenues, but on the cost line, when we take a look at cost per block hour in the quarter, it seems like kind of reset around $1100 per block hour, I think 20% step up from where you were kind of trending in those.
back half of last year, is this a good sort of run rate going forward any one timers in that number? I'm just trying to think of a baseline here given the new pilot pay and I know a lot more training costs.
Hey, this is Mike Loss, I Andrew. The, I think, you know, the $1,100 is, the only thing that will change down the road from that is that we are on the maintenance side, probably a little lower.
then then we would be on a normal run rate just because of the timing. We hit a peak last year and we're on the lower side of that. And then offsetting that I think is the pilot cross because we have so many pilots in training.
And, you know, we're hoping that that, you know, if the attrition kind of levels out and we catch up, then the pilots for blockout would start to come down. Certainly not to where it used to because of the pay scale difference, but those are the two items that we need to continue to look at.
Okay, got it.
And I mean, Jonathan, what is the risk that the CRJ flying for United just gets pushed out a little bit just in terms of like who's doing the retrofits for the planes? You know, it's the space already locked in for this type of work. Just curious what you think the risk is there.
You know, I think it's a fair question. I mean, it took a little time for us to come up with a LOPA that would work for everyone. We went back and forth a few times just to try to keep it as simple as possible. But I think we're able to do that. Now my understanding is... It is one again. LCraig?
the conversion. Well, now the excuse me, I take that back that the there had been some discussion about changing the seat. But now we you know, the position that we always recommended was that we just have them remain at 76 seats. And so there won't be a change there. We're sprucing up the cabins we're taking out
a bunch of them. Right, why don't you go because you... Yeah, I mean, look, we don't expect any real delays or issues with the fleet itself. We've got a good transition plan. The plan's being executed and involves, as Jonathan said, some refreshing of the cabin in some cases, not extensive, but...
I just call them more refreshes and then exterior paint. We've got all that lined out in scheduled and I don't expect any delays relative to the fleet. Yeah, I think it's fair to say and I think understandably that, you know, obviously both American, excuse me, United and Mesa.
You know, we're taking a reasonably cautious approach. We're not going to just throw 38 airplanes into service. I think we're going to just schedule them in over time and just make sure that everything goes smoothly. And so far, the schedules that we've been receiving have been very productive. It's going to keep all of our pilots in place.
We do plan on opening up a new base in Denver, which is going to be very popular with our crews. And so, you know, we think the transition will, you know, will go well. And again, the biggest variable, and I hate to keep saying this, but it's just, it's not going to be equipment. It's not going to be, you know,
Our maintenance capability, it's really boils down to pilots and you know, a trition and an our ability to continue to put out you know, a good number of pilots through our training program, which we have worked really hard on expanding. And I think we've done a decent job and we're starting to some of those results.
Thank you.
Question comes from Michael Lindemberg with Deutsche Bank. Go ahead, please. You mine is open.
Oh yeah, hey, good afternoon everyone. Jonathan, I just have 38 TRJ 900s. How do we think about some sort of longer term? Are they more of a stop gap measure? Once you start to staff up the embryos that are currently parked. Like if we were to fast forward two or three years from now.
Is it 38 CRJ 900s or is it maybe a dozen? Is it 20 or is it going to be a core fleet? I'm just sort of thinking about it within the context of, you know, some of the restrictions out there within, you know, your partner's contracts, etc.
Yeah, no, obviously what will come into play here is the scope restrictions and just to be clear. I mean, we are well within the scope. We're not going to, you know, that's not going to be an issue, obviously. But...
you know with that I think the ultimate goal would be to have to operate you know all 80 of our our eget. So from that standpoint there may not be room for or 900s. Now that being said there are a lot of other operators that may or may not be able to operate you know the 76-year-old aircraft that they have.
know the 900s may go to 70 seats and you know fill in so I think the idea and you know and I feel pretty confident you know I would agree on this is you know we have training capability and we've got you know almost 300 pilots flying the 900s we're not gonna just turn around and tell them we don't need them anymore I'm pretty sure we're out of way to keep everybody you know
fully utilized it's gonna take a while for the industry to recover from this and so I think they'll be room for those airplanes for a while I and I say for a while, you know, I'm not saying for 10 years, but I you know I would think that we'd be operating the airplanes and you know two years down the road. I don't I don't think that
I don't think everyone will recover by then and we'll still have room for those aircraft within the existing scope
Jonathan, I'm at Mark. Is it still true that the CRJ 900s are potentially the lowest cost? 76.
76 ceteers in the market today. Those costs, as I recall, you really had a pretty meaningful advantage there historically with the new pay rates, that's still the case. And what is the differential in costs between maybe the E-175 and 76 cete in the CRJ-976 cete, you know, with the new LOPPA?
fuel burns. It's about 8% more fuel effective. However,
you know when you look at regional aircraft and it's just so outside that you have to take it into account It really depends on where you are on your engines and what aircraft. I mean you can normalize your engines But the fact of matter is You know, there's probably aircraft out there that
you know, will come to an LLP event, which is a, you know, up to, you know, almost $5 million event, and it just will never be done. And so, you know, if you take that expense out over the lifetime of the aircraft, that makes whatever aircraft it is, is going to be very inexpensive.
So everything really revolves around engine management and how you look at owning engines or leasing engines. We had been five years ago when I looked back and you know...
Clearly, given where we are, I don't think anyone would argue that we haven't made mistakes. But the one thing that we did do was make a lot of investment in engines. And we just realized that these engines would be strong assets. And we went out and literally started buying every engine we could get a hold of. Use, new, it didn't matter.
I mean, we had 51 extra engines and we just sold 30 G and I did and we'll net somewhere between 50 and 60 million dollars net of the debt and we still have another 21 engines that we own. So I mean, I think that it really revolves around where you are in the engine cycle, but you know town for town.
The 900 is definitely a more fuel efficient, faster, lower cost alternatives than an Embrero 175. Now that being said, on a shorter haul flight, it doesn't make as much of a difference. And there are no doubts that the benefits of the cabin on the 175.
is obviously very attractive. And the major carriers have no problems putting 175 into very highly traveled business routes, shuttle markets, for example, that I don't think they would put a CRJ into.
So, you know, there is offsetting benefits that, you know, a newer to the 175 in terms of passenger comfort acceptance and, you know, the satisfaction.
On that just last point, if I could just sneak in one more about capability, as I recall that at least the CRJ 700s, the capability that they had to go into some of the ski destinations, which is obviously a very important market for United, can the CRJ 900s...
go into those same ski, you know, the mountain destinations and, you know, whether it's Aspen, for example, the ones where I don't think you can fly in E 175 and ask and fully loaded. I could be wrong on that. Do the CRJ 900s have that same capability or are they just too heavy versus the 700s?
Well, you write about the 175. There have been ongoing discussions regarding the 900s in terms of their capability. You know, depending on who you ask, but I think our view here is that in all probability the 900 would not work in places like Aspen or Tell Your Ride. Okay. Okay, just probably would not work.
Okay, fair enough. Thanks for the time.
Okay, fair enough. Thanks for the time. Sure, thank you.
Just a reminder to please press star one if you have a question at this time. Our next question comes from Savi Scythe with Raymond James again. Your line is open.
Hey, thanks for the follow up. I just wanted to kind of come back to that cargo announcement that you made that you have one more aircraft that you'll be flying there. I think the previously was a, you know, you had three aircraft, but maybe the third was kind of a backup aircraft. And just if you can just provide an update on, you know, what you think cargo block hours are going to be doing and how that program is to go.
this 800 which I personally feel that it really puts us in a sweet spot with DHL. I was just on the phone with them today they they've been very complimentary about our operation. They actually made a comment about how you know our people have really worked well with their people and it's just good to hear that there will be opportunity. You know that being said
It's obviously taken a long time and we've been patient. And given the downturn recently in cargo activity, it's probably going to be a little bit slower than we'd hoped for. But we are going to add the fourth airplane. We'll look to figure out what we're going to do with 708, which is the third, seventh, three, seven.
which came into service, but that aircraft was in fact flying a full line. So we will now move from three lines, full lines of flying to four full lines of flying. And Brad, correct me if I'm wrong, but they do between like 120 hours a month.
You know, about 120 hours a month in utilization. So you could, you know, work the math from that. So that's super helpful. And is that so is it still kind of a mildly profitable business, would you say, or is it kind of still, you need more scale to really drive profits there?
No, we were fortunate that...
Like the other major carries, DHL appreciated the fact that things have been difficult. So we've made the transaction structure so that our feeling is on a run rate basis going forward. We've been at no worse than break even.
And again, we put a lot of money into the operation to start, so obviously we have a way to go to recruit our investment. But we've now in the 737 business, we have a nice cargo business, and I think that over time, particularly now that we have 800s on certificate, it could be an opportunity for us going forward.
to grow that business as cargo recovers because there's no doubt that things have slowed down right now.
If I might on the European JV any updates on that, I know it's been six weeks, probably not a lot new there, but just curious on how that's progressing.
We're still working on getting the certificate finalized and I think Mike you feel will be done in March, March or April . And then we look to place a couple of regional jets out there and we're talking to a number of carriers about operating those aircraft.
I think the feeling that we have is, I mean, it's a very long-term project in that, you know, we think that this could be a platform, for example, for us to operate electric aircraft, which we think will be, you know, really in high demand in Europe , just given the direction things are going.
towards sort of environment and friendly alternatives. And I think that we can continue to find a home for some of the regional jets out there that have been made excess post-Govid, and particularly in the CRJ 900 or in Europe , CRJ 1000.
And it's just a matter of finding the right customer to make that happen. So, you know, we continue to plug along. I think that, you know, we feel that it's just going to be good to have an operating certificate. And to be frank, I mean, the backstop always was just the fact that we have a certificate is valuable.
for what we have invested in it. We think we could easily get, frankly, a multiple of that back if we wanted, if we just were gonna sell the certificate. So we've always utilized that method as a backstop. But we have wonderful partners over there, guys who have a tremendous amount of experience in Europe .
who really is why we made the investment because we have so much confidence in them. And I think over time, you know, we'll be as well positioned to take advantage of opportunities that will develop in Europe . And particularly, you know, given the gaps that have now occurred as a result of so many bankruptcies in the regional business over there. And, you know, how it's, the regional business is much different there than it is here in terms of...
Beacuse I am showing no further questions at this time, you may proceed.
Okay, well thank you, everybody. I think it's fair to say that we clearly have gone through a rough patch. We had a lot of work to do in terms of putting together multiple agreements all at the same time. We barely mentioned some of the things like the RASPAR agreement, the EDC agreement.
You know, the treasury, we made a significant modification for treasury, who by the way was very helpful. And now we just have to put it together operationally. We are very focused on pilot production because clearly that makes a big, big difference. You know, for the last couple months we've been on the plus side.
In other words, we're putting out more pilots than we're losing. We want to see that number continue to increase. We've added sims, we've added instructors, we've employed CAE. So I'm hoping, and I think we believe that over time, we'll start to see the benefit of all this.
and it'll all come together in terms of a much more stable operating platform and, you know, renewed profitability. I also, it would be remiss not to mention the fact that, you know, through the wind down, we've been working very closely with Americans and maintained, you know, really good relationship with them and I think that, you know,
Since we began the wind down, I think we've canceled two flights. We really want to do a good job right to the last day with Americans. We appreciate their understanding of our situation. And certainly, United is really stepped up and helped us. And it's a good thing to know so many people that we have over there, the support that we've gotten from United has been fantastic.
and you know, we're on the phone with them literally on the phone every day. And I have to tell you, we've been really appreciative of what they were able to do to help us work through this difficult period. So with that, I'd like to thank everybody for joining us. You know, we're continuing to work hard, get the company turned around, and we look forward to talking to you at next quarter.
That will conclude today's conference and we thank you for participating. You may disconnect at this time.