Mesa Air November Block Hours Drop 38% Hit By Pandemic; Shares Fall

Mesa Air reported a 38.2% year-on-year decline in block hours, a measure of aircraft utilization, in November, due to reduced travel schedules amidst the coronavirus pandemic. The drop is an improvement to the 48.2% plunge in block hours experienced in October. Shares slipped 1.1% in Tuesday’s pre-market trading.

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During the month of November, Mesa Air (MESA) counted a total of 23,144 block hours. The commercial aviation holding company also reported a controllable completion factor, which is the percentage of completed scheduled flights, of over 99% for both its American Airlines and United Airlines operations, during the month of November.

Earlier this month, Mesa Air posted a year-on-year Q4 revenue decline of 42% to $108.04 million, beating analysts’ estimates by $15.09 million. The company’s Q4 EPS declined by 9% to $0.32, but exceeded the Street’s estimates by $0.42.

Meanwhile, Mesa Air shares have lost 28% year-to-date. On Dec. 10, Cowen analyst Helane Becker reiterated a Hold rating on the stock but doubled the price target from $4 to $8 (24% upside potential).

The PT change came after Mesa posted Q4 results, which Becker said were largely inline but above the Street consensus. (See MESA stock analysis on TipRanks)

The analyst believes that there will be a lot of fleet movement over the next six months, and she sees room for growth in Mesa Air’s cargo business.

From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 1 Buy and 2 Holds. The average analyst price target of $8.33 implies upside potential of 29% at current levels.