April 18, 2024
2021 fractional start-up Volato says its differentiated model is providing a pathway to profits following its December IPO.
A new investor presentation from Volato gives a window into its operations and path to profitability.
According to the company, “Management believes with current cash on hand, and 2024 forecasted sales we have sufficient cash to reach profitability.”
The Atlanta-based flight provided, however, didn’t give a specific timetable.
It expects nine to 12 new aircraft deliveries this year, compared to just three last year.
Plans call for eight to 10 HondaJet Elite IIs and one or two Gulfstream G280s in the year’s second half.
It initially expected four super-midsize jets to be delivered in 2024.
Fractional sales and management fees are projected to produce $99 million to $145 million of revenue and $22 million to $32 million of margin.
Fractional sales can only be booked as revenue when the aircraft are delivered.
That means fractional share operators, who profit from those sales, can see their results skewed if OEMs fall behind on scheduled deliveries, which has been the case as COVID-related supply chain issues continue.
Volato says its orders will make up 35% of HondaJet production through 2026.
Currently, it has 29 aircraft in its fleet and 26 on order, including the quartet of G280s.
The 2021 start-up says it is already the 6th largest U.S. light/very light jet operator.
The company says its differentiated ownership structure, giving fractional owners a share of the revenue their tail produces, encourages them to buy more than they need for their flights.
That extra inventory becomes capacity Volato re-markets via on-demand charters and as-available jet cards.
Since Q1 of 2022, the demand mix of non-owner flights increased from 9% to 48% in Q4 of 2023.
Volato expects non-owner flights to increase to 63% of revenue legs.
The non-owner flights are expected to generate $6,500 per hour, compared to $4,700 per hour for owners.
While Volato is considered a fractional program, a fleet chart shows that 13 of its 24 tails were leased at the end of Q4.
Based on Q4 estimates, Volato projects $73.3 million in revenue for 2023.
That’s down from $96.6 million in 2022.
Delayed deliveries sliced aircraft transaction revenue from $67.6 million in 2022 to $21.4 million last year, including $15.7 million in Q4.
Recurring revenue from usage and management fees increased from $14.4 million to $37.8 million.
In January, Volato released additional data about its operations and customer satisfaction.
In the presentation, Volato said it has a “clear opportunity to acquire more HondaJets.”
The operator has a letter of intent to acquire Honda’s planned long-range light jet, the Echelon.
Following the December SPAC IPO, the company has not posted a date to announce Q4 earnings.
Read the full presentation Volato Group SOAR Investor Presentation February 2024
