Shares of Mesa Air Group (NASDAQ: MESA) skyrocketed by almost 50% on Friday following the announcement of an agreement with United Airlines (NASDAQ: UAL).
Mesa Air and United Airlines have recently announced changes to their capacity purchase agreement and some credit agreements. The changes involve an increased block hour rate, paying off $12.6 million debt from a credit agreement, and using the company’s equity investment in Archer Aviation (NYSE: ACHR) as collateral.
Mesa Air anticipates these modifications will yield substantial benefits, boosting operating income and liquidity over the next year. The company projects $63.5 million in incremental revenue within the same period.
In addition to the agreement, Mesa Air Group (NASDAQ: MESA) shared updates on its ongoing asset sale initiatives. The company has successfully sold $198 million worth of CRJ-900 aircraft, intending to utilize the proceeds to pay down $174.3 million in debt.
Jonathan Ornstein, Chairman and CEO of Mesa Air, expressed confidence in the company’s transformative journey, stating,
“Without a doubt, the past twelve months concluded a year of restructuring for Mesa’s operations and finances, culminating with the significantly improved agreement with United. I am confident we have the dedicated people to be a strong regional operation for United and for the over six million passengers we safely flew last year.”
As a result of these positive developments, MESA stock skyrocketed by 49.99% on Friday. The trading volume reached 62,082,133 (62.08 million) shares, significantly surpassing the daily average trading volume of 565.44K.