November 22, 2024
FT: VistaJet, XO parent Vista Global debt, net losses mounting. Founder Thomas Flohr counters that the results were the ‘consequence of conservative accounting of non-cash items such as depreciation’.
This morning, the Financial Times published a lengthy front-page feature on VistaJet and XO parent Vista Global Holding titled, “Private jet disrupter: the debt-fuelled ascent of Thomas Flohr’s VistaJet.”
According to the report, Vista has accumulated $436 million in net losses over the past four years, citing disclosures to bond investors.
The FT also reports total debt, driven by its acquisition spree, including Jet Edge and Air Hamburg, doubled to $4.4 billion.
During that period, revenues grew from $678 million to $2.49 billion.
According to the FT, Vista Global’s Adjusted EBITDA last year was $576 million.
It also points out that as of December 2022, Vista had been paid $831 million from customers for future flights.
However, it only had $134 million in cash, according to documents reviewed by FT.
The article also cites an EY auditor statement about its 2022 accounts that “a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.”
The FT interviewed Flohr, who countered the negative outlook by pointing to Vista’s EBITDA profits, saying net losses are a result of non-cash items such as depreciation.
Flohr also pointed to the fact Vista was recently upgraded by Moody’s with a B3 rating and from stable to positive.
B3 is speculative and subject to high credit risk, according to Investopedia.
Flohr told the FT, “Moody’s upgraded our ($500 million) bond after deep studies, including the recent audit, because we’re transparent and predictable as a company.”
Speaking about the $831 million of flight time the company had taken in jet card and membership deposits, Flohr said the cost to fly those clients on its fleet of over 360 jets was a fraction of the revenue.
READ: What happens to your jet card and private jet membership deposits?
A couple of points relevant to jet card buyers were not covered in the FT article.
Last year, Vista ended its XO Elite Access fixed hourly rate program, moving to dynamic pricing.
That means the company can mark up flights to ensure profits on a flight-by-flight basis.
For its VistaJet jet cards, marketed as the Program and VJ25, the commitments are for three years and carry cancelation penalties.
Yesterday, Vista reported program sales increased 55% in Q1 2023.
A spokesperson notes to Private Jet Card Comparisons that customers fund the VistaJet program on a quarterly or annual basis.
The spokesperson did not provide any additional response to the FT article.
READ: These Jet Card providers offer an escrow account option
Still, the FT report comes as Wheels Up has had to publicly state it’s not considering bankruptcy against mounting losses.
Wheels Up, however, is making losses on both a net and EBITDA basis.
Vista’s operators ranked as the fourth-largest private jet company in the U.S. last year based on charter and fractional flight hours. Wheels Up is third.
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