Mesa Provides Additional Detail on Holdings in XTI Aerospace
Mesa Air Group provided details on its holdings in XTI Aerospace, which is developing the TriFan 600, a VTOL aircraft that can transport up to six passengers. XTI Aerospace began trading on the Nasdaq (symbol: XTIA) on March 13, 2024, following a merger with Inpixon. Mesa received 283,734 shares of XTI Aerospace upon exercising warrants and holds additional warrants for 189,156 shares subject to vesting milestones. Mesa's obligations for purchasing 100 TriFan 600 aircraft are contingent on FAA certification and future agreements. The TriFan 600 offers a range of 700 miles and a cruising speed of 345 mph, with the potential for sustainable aviation fuel.
Mesa's chairman, Jonathan Ornstein, emphasized the aircraft's benefits for urban and rural communities and its potential impact on the Essential Air Service markets. Mesa holds investments in other innovative aviation companies like Archer Aviation and Heart Aerospace, reflecting its commitment to regional aviation innovation.
- Mesa holds 283,734 shares of XTI Aerospace, indicating a substantial stake in the company.
- The TriFan 600's versatility with vertical and runway takeoff options could revolutionize urban and rural transportation.
- TriFan 600's range of 700 miles and 345 mph cruising speed surpasses most helicopters and VTOL aircraft.
- Mesa's additional warrants for 189,156 shares could further increase their holdings in XTI Aerospace.
- Potential use of sustainable aviation fuel highlights environmental consciousness.
- Mesa's investments in other aviation startups like Archer Aviation and Heart Aerospace show a diversified innovation portfolio.
- Mesa's purchase obligations are contingent on FAA certification and future agreements, introducing uncertainty.
- The TriFan 600 project is still in development, and its success is not guaranteed.
- Mesa's additional warrants are subject to vesting milestones, adding another layer of uncertainty.
- Investment in XTI Aerospace and other startups may carry higher risk due to the unproven nature of the technology.
Insights
The announcement that Mesa Air Group now holds 283,734 shares of XTI Aerospace following a merger, along with warrants to purchase an additional 189,156 shares, is noteworthy. From a financial perspective, this could signify a strategic investment aimed at future growth. The key aspect here is the potential value of these shares, particularly given that XTI Aerospace is developing the TriFan 600, a promising aircraft model. However, it is important to recognize the inherent risks. The success of XTI Aerospace's TriFan 600 is contingent on several factors, including FAA certification and the achievement of specified milestones, both of which are uncertain. Investors should consider the speculative nature of this investment and the potential for volatility in XTIA's stock price. In the short-term, the impact on Mesa’s stock might be limited unless XTI Aerospace demonstrates significant progress or secures major customers. Long-term, this could be a profitable venture if XTI's aircraft development succeeds and gains market acceptance.
The TriFan 600, being a fixed-wing vertical lift crossover airplane, represents a significant innovation in the aviation industry. This aircraft's capability to take off and land vertically or conventionally from short runways could revolutionize regional aviation, especially in areas with limited infrastructure. Mesa's strategic alignment with XTI Aerospace positions it well to benefit from this emerging technology. However, the market adoption of such innovative aircraft depends on numerous factors including regulatory approvals, infrastructure development and market readiness. The mention of sustainable aviation fuel and potential hybrid-electric propulsion indicates a forward-looking approach towards sustainability, aligning well with global trends towards greener aviation. If XTI Aerospace succeeds in delivering on these promises, there could be significant long-term benefits not only for Mesa but for the broader aviation market, potentially reshaping regional air transport.
The integration of sustainable aviation fuel and the evaluation of hybrid-electric or all-electric propulsion for the TriFan 600 highlight a growing industry trend towards sustainability. This is notable for investors focused on ESG (Environmental, Social and Governance) criteria. The ability to operate on 100% sustainable fuel could offer a viable alternative to traditional fossil fuels, reducing the carbon footprint of aviation. However, the practical implementation of such technologies depends heavily on regulatory frameworks, fuel availability and infrastructure for electric charging. While the short-term financial impact may be limited, the long-term potential for environmental benefits and compliance with stricter emission regulations presents a compelling case for investment. This also aligns with broader market trends towards sustainability, potentially attracting ESG-focused investors and improving the long-term outlook for companies like Mesa that are early adopters of such technologies.
PHOENIX, June 05, 2024 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) (“Mesa” or the “Company”) today provided additional detail around its holdings in XTI Aerospace, Inc. (“XTI Aerospace”), which is developing the TriFan 600, a unique, fixed-wing vertical lift crossover airplane (VLCA) that can take off and land like a helicopter and is configurable to transport up to six passengers.
XTI Aerospace began publicly trading on the Nasdaq (symbol: XTIA) on March 13, 2024, following the closing of the merger between XTI Aircraft Company ("XTI") and Inpixon, a provider of real-time location systems, on March 12, 2024 (the “Merger”). In connection with the closing of the Merger, Mesa received 283,734 shares of XTI Aerospace common stock upon exercising certain warrants for XTI common stock (the “XTI Warrants”) that were assumed by XTI Aerospace in the Merger.
Mesa initially received the XTI Warrants in February 2022 in connection with entering into an Aircraft Purchase Agreement with XTI for 100 TriFan 600 aircraft. Mesa’s obligations under the Aircraft Purchase Agreement are subject to customary conditions for transactions of this nature, including FAA certification of the aircraft and future agreement between the parties on a number of terms and conditions, which may or may not be met. Mesa currently holds warrants to purchase another 189,156 shares of XTI Aerospace common stock, which are subject to certain vesting milestones.
“We are pleased to support XTI Aerospace as it seeks to bring an unprecedented level of versatility to commercial and private aviation,” said Jonathan Ornstein, Mesa Chairman and CEO. “Passengers in urban environments and smaller or rural communities across the United States that Mesa had served historically have been relatively disadvantaged by larger jets, which need substantial infrastructure and obligate passengers to find last-several-miles’ transportation, and by other expensive options like helicopters, which are limited by the distances, speeds, and altitudes that they can fly. One opportunity of particular interest is the Essential Air Service markets, in which Mesa was a large participant. XTI Aerospace is working on not just a future solution, but one that is expected to be more efficient than existing business-jet or vertical take-off-and-landing (VTOL) alternatives.”
The TriFan 600 platform would be capable of vertical takeoff, conventional runway takeoff, or short runway takeoff, enabling it to operate from helipads, airports, or any improved surface without new infrastructure or airspace regulations. With a vertical takeoff and landing, the TriFan 600 is expected to have a range of 700 miles, twice the range of most helicopters and seven times the range of most battery-only VTOL aircraft under development. The TriFan 600 is projected to cruise at 345 miles per hour, powered by two turboshaft engines that can be operated on
“Our position in XTIA enhances our commitment to the next wave of innovation in the regional aviation industry,” Ornstein said. “We look forward to providing the XTI Aerospace team with our understanding of regional and local air markets and knowledge of commercial aviation dynamics.”
Ornstein continued, “Along with XTI Aerospace, we are pleased with our holdings in Archer Aviation, Inc. and Heart Aerospace Incorporated and in ventures like REGENT and Elroy Air. Mesa is proud to be an early investor in these companies as they gain momentum with customers, regulators, and the investment community and achieve milestones toward commercialization.”
About Mesa Air Group, Inc.
Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 79 cities in 36 states, the District of Columbia, Canada, Cuba, and Mexico. As of March 31, 2024, Mesa operated a fleet of 80 aircraft, with approximately 263 daily departures. The Company had approximately 2,110 employees. Mesa operates all its flights as United Express pursuant to the terms of a capacity purchase agreement entered into with United Airlines, Inc.
Forward-Looking Statements
This press release includes information that constitutes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “might”, “will”, “should”, “can have”, “likely” and similar expressions are used to identify forward-looking statements. These forward-looking statements are based on the Company’s current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to the Company. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. A variety of factors could cause actual events and results to differ materially from those expressed in or contemplated by the forward-looking statements. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to the Company’s filings with the SEC, including the risk factors contained in its most recent Annual Report on Form 10-K and the Company’s other subsequent filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.
Contact:
Mesa Air Group, Inc.
Media
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investor.relations@mesa-air.com
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