On the other hand, MESA's recent financial performance hasn't been stellar as revenue inched higher by only 4% over the six months ended March 31, 2018, while EBITDA fell by 11%. Additionally, the IPO market in general has cooled off over the past couple of weeks as investors seem to be taking a more risk averse turn.
As for the deal, MESA generated $115.2 mln in total gross proceeds, which is about 28% less than anticipated. The IPO was led by Raymond James and BofA Merrill Lynch and it is slated to open for trading later this morning on the Nasdaq. MESA opened at $12.
MESA 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 entered into with American Airlines and United Airlines. MESA actually has been the fastest growing regional airline in the United States over its last five fiscal years, based on fleet growth, with a cumulative increase in aircraft of 137%.
As of March 31, 2018, the airline operated a fleet of 145 aircraft with approximately 610 daily departures. In terms of the aircraft, it operates 64 CRJ-900 aircraft under its capacity purchase agreement with American and 20 CRJ-700 and 60 E-175 aircraft under its capacity purchase agreement with United. Over the last five calendar years, MESA's share of the total regional airline fleet of American and United has increased from 7% to 11% and from 4% to 15%, respectively. MESA believes it has expanded its share with the major airline partners because of its competitive cost structure, access to pilots under its labor agreements and track record of reliable performance.
MESA's long-term capacity purchase agreements provide guaranteed monthly revenue for each aircraft under contract, a fixed fee for each block hour and flight flown, and reimbursement of certain direct operating expenses, in exchange for providing regional flying on behalf of its major airline partners. Further, its capacity purchase agreements shelter it from many of the elements that cause volatility in airline financial performance, including fuel prices, variations in ticket prices, and fluctuations in number of passengers. In providing regional flying under capacity purchase agreements, MESA uses the logos, service marks, flight crew uniforms and aircraft paint schemes of its major airline partners.
While maintaining its low-cost structure, MESA will look to drive growth through a few different means. For example, over the next five years, capacity purchase agreements representing up to 300 aircraft currently flown by its competitors on behalf of major airlines will expire, becoming subject to rebidding ore replacement. The company believes that its cost structure positions it well to compete for these agreements. Additionally, MESA may evaluate the strategic acquisition of other regional air carriers. The opportunity to make an acquisition may arise if, for example, a major airline makes a divestiture of a captive regional airline, as major airlines have done in the past.
Turning to the financials, MESA provided its 3Q18 outlook in its IPO prospectus. For the quarter, the company is projecting total operating revenue of $171.5 mln, with operating income between ($2.8) mln and $200K. Adjusted EBITDA is expected to be $40.3-$41.3 mln. On the balance sheet, MESA is forecasting cash & equivalents of $41.7 mln and long-term debt of $994.1 mln.
For the six months ended March 31, 2018, operating revenue increased by 4% to $332.3 mln. For this period, it had net income of $25.0 mln compared to net income of $11.9 mln in the year ago period. Most of the increase, however, is due to income tax benefits resulting from changes in tax laws.