Mesa stock going public...again.

A1TAPE

Well-Known Member
This might be a dumb question but whats the reason behind the heavy reduction in fuel expenses? Are there just not as many flights being operated by Mesa the past few years? Or did they get a great deal on fuel prices through hedging?
 

milleR

Well-Known Member
This might be a dumb question but whats the reason behind the heavy reduction in fuel expenses? Are there just not as many flights being operated by Mesa the past few years? Or did they get a great deal on fuel prices through hedging?
The only possible explanation I can come up with is somebody else is paying for it. Whether that's part of their contracts with United/American I have no idea. They might have also created a separately owned company that's absorbing the expense. But there's no way you're operating 145 airframes doing over 600 daily departures on $400K in fuel.
 

Cessnaflyer

Wooooooooooooooooooooooooooooooo
The only possible explanation I can come up with is somebody else is paying for it. Whether that's part of their contracts with United/American I have no idea. They might have also created a separately owned company that's absorbing the expense. But there's no way you're operating 145 airframes doing over 600 daily departures on $400K in fuel.
Yeah, the costs are being shuffled elsewhere as you describe. Creative accounting!
 

milleR

Well-Known Member
Yeah, the costs are being shuffled elsewhere as you describe. Creative accounting!
It is. They're showing over $55m in expense reduction with fuel, aircraft and traffic servicing, promotions and sales, and asset impairment. Wish I could find a full income statement but nothing comes up newer than 2009. Very interesting. Any new ground handling companies been created recently?
 

A1TAPE

Well-Known Member
But how does it look to potential buyers if they see the creative accounting? Is it saying to them, we are operating not as well as we hoped so we are shifting expenses around?
 

Cessnaflyer

Wooooooooooooooooooooooooooooooo
But how does it look to potential buyers if they see the creative accounting? Is it saying to them, we are operating not as well as we hoped so we are shifting expenses around?
If you have Netflix, watch the Dirty Money Valeant Pharmaceuticals episode and you can get an idea of crazy stuff that can be done and even trick some of the better investors like Bill Ackman.
 

milleR

Well-Known Member
But how does it look to potential buyers if they see the creative accounting? Is it saying to them, we are operating not as well as we hoped so we are shifting expenses around?
This is just my un-informed opinion from reading the non-appendixed income statement in the article so there could be a lot more to this story, but it looks like a cash grab to me. Mesa's interest expenses have been growing like gangbusters over the last five years as have their flight operations and maintenance expenses. Despite zeroing out the fuel, services and marketing lines their net income has been in steady decline since 2013, and if it weren't for that oddball income tax benefit they're showing for 2018 they'd really be in the dirt. Add to all that the non-cash expense of $15.1 from the lease termination with GECAS then it starts to add up that they need a cash infusion and they need it right now.
 

Troy McClure

Ah say boy...Whattcha got there son?
Hey milleR, wow...dude...step away from the bong!!! "MESA'S CASH STASH REHASH"! There's your headline!! You are flying down a rabbit hole that is gonna swallow you..or already has. I can tell you that all of your projections, predictions...or what I call "gossip" is...far far from the truth. Companies that are failing do not relist on the NYSE. Unless you think that Wall St is in on the whole deal and the SEC cuz they approved the deal before it goes out.
The one factoid you get right is that someone else is paying for the fuel...and its not some offshore shell company run by the Russians...oooohhh "creative accounting" ....Nope. Its AA and UA. Simple. They are actually sitting on a nice bucket of cash. They want to do this IPO so they can dilute expectant risk. ie..Economic downturn. That, is big secret I pretty sure.
If you read the entire prospectus you might learn a bit more about the company. Sadly, for as well as they are doing, dispatcher pay is horrible.
 

milleR

Well-Known Member
Hey milleR, wow...dude...step away from the bong!!! "MESA'S CASH STASH REHASH"! There's your headline!! You are flying down a rabbit hole that is gonna swallow you..or already has. I can tell you that all of your projections, predictions...or what I call "gossip" is...far far from the truth. Companies that are failing do not relist on the NYSE. Unless you think that Wall St is in on the whole deal and the SEC cuz they approved the deal before it goes out.
The one factoid you get right is that someone else is paying for the fuel...and its not some offshore shell company run by the Russians...oooohhh "creative accounting" ....Nope. Its AA and UA. Simple. They are actually sitting on a nice bucket of cash. They want to do this IPO so they can dilute expectant risk. ie..Economic downturn. That, is big secret I pretty sure.
If you read the entire prospectus you might learn a bit more about the company. Sadly, for as well as they are doing, dispatcher pay is horrible.
Ok.

Like I said, just going off the income statement things don’t exactly look amazing but there’s certainly more to the picture than just that. Sorry if I struck a nerve. Planning for an economic downturn is definitely smart though.
 

bimmerphile

SuperCritical™ Member
Hey milleR, wow...dude...step away from the bong!!! "MESA'S CASH STASH REHASH"! There's your headline!! You are flying down a rabbit hole that is gonna swallow you..or already has. I can tell you that all of your projections, predictions...or what I call "gossip" is...far far from the truth. Companies that are failing do not relist on the NYSE. Unless you think that Wall St is in on the whole deal and the SEC cuz they approved the deal before it goes out.
The one factoid you get right is that someone else is paying for the fuel...and its not some offshore shell company run by the Russians...oooohhh "creative accounting" ....Nope. Its AA and UA. Simple. They are actually sitting on a nice bucket of cash. They want to do this IPO so they can dilute expectant risk. ie..Economic downturn. That, is big secret I pretty sure.
If you read the entire prospectus you might learn a bit more about the company. Sadly, for as well as they are doing, dispatcher pay is horrible.
Can you post the entire prospectus so us non-dispatchers can read it? Thanks
 

manniax

Well-met in the Ka-tet
Shareholders got hosed last time Mesa was public during their Chapter 11, when they got taken private. Having worked there under the same CEO they still have, I wasn't surprised. I did read that it's not currently a good marked for airline IPO's right now...I guess we'll see what happens. Glad I'm not there any more though.
 

Delta Echo

Well-Known Member
Shareholders got hosed last time Mesa was public during their Chapter 11, when they got taken private. Having worked there under the same CEO they still have, I wasn't surprised. I did read that it's not currently a good marked for airline IPO's right now...I guess we'll see what happens. Glad I'm not there any more though.
One thing is close to certain, JO knows there is big payday for himself in this IPO.
 
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