Mesa Air Announces Potential Pricing for IPO

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Mesa Air Group has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 10.7 million shares in the range of $14 to $16, with an overallotment option for an additional 666,667 shares. At the maximum price, the entire offering is valued up to $184.58 million. The company intends to list on the Nasdaq under the symbol MESA.

The underwriters for the offering are Raymond James, Merrill Lynch, Cowen, Stifel and Imperial Capital.

This company is a regional air carrier providing scheduled passenger service to 110 cities in 38 states, the District of Columbia, Canada, Mexico, Cuba and the Bahamas. All of its flights are operated as either American Eagle or United Express flights pursuant to the terms of capacity purchase agreements it has entered into with American Airlines and United Airlines.

Mesa has a significant presence in several of its major airline partners’ key domestic hubs and focus cities, including Dallas, Houston, Phoenix and Washington-Dulles. This company has been the fastest growing regional airline in the United States over the past five fiscal years, based on fleet growth, with a cumulative increase in aircraft of 137%.

In the filing, Mesa detailed:

As of March 31, 2018, we operated a fleet of 145 aircraft with approximately 610 daily departures… Over the last five calendar years, our share of the total regional airline fleet of American and United has increased from 7% to 11% and from 4% to 15%, respectively. Driven by this fleet growth, our total operating revenues have grown by 55% from $415.2 million in fiscal 2013 to $643.6 million in fiscal 2017, respectively.

The company intends to use the net proceeds from this offering to repay its indebtedness, with the remainder going toward general corporate purposes.