May 24, 2024
GAAP Q2 Net Loss at Surf Air reduced to $27.0 million compared to $44.5 million in the prior year.
Surf Air Mobility, which went public last year via a direct listing after merging with Southern Airways, doubled its on-demand charter flights year over year in the first six months of 2024.
According to its Q2 financials, Surf Air flew or arranged via third-party operators 1,902 flights in H1 2024, up from 953 during the same period of 2023.
Q2 2024 on-demand revenues increased 58% year-over-year, producing $8.1 million.
H1 2024 on-demand revenues increased 61% year-over-year, producing $15.8 million in revenues.
Total H1 revenues were $62.9 million.
The company said, “The increase in on-demand charter flights was driven by increases in marketing efforts for our on-demand product and service strategy growth. Price per trip increased during the second quarter of 2024 compared to the second quarter of 2023, primarily driven by a shift in customer preference to more expensive aircraft to service charter trips in 2024. These variables accounted for roughly $2.1 million, or 69% of the total on-demand revenue increase period over period.”
It added, “Absent the impact of the acquisition of Southern, the company conducted 692 on-demand charter flights during the second quarter of 2024 compared to 531 on-demand charter flights during the second quarter of 2023.”
Over the past several years, Surf Air has attempted to move from its by-the-seat Pilatus PC-12 flights to a force in urban mobility, electric, and hybrid flight.
“Our financial results for the second quarter demonstrate strong execution by the Surf Air Mobility team. Revenue exceeded our expectations, and Adjusted EBITDA was materially higher than our initial plan. We remain focused on executing our strategy and on our unwavering commitment to expanding our footprint and leadership position in the regional air mobility market,” said Deanna White, Chief Operating Officer and Interim CEO of Surf Air Mobility.
White, a former Flexjet chief appointed in May, added, “In the last 90 days, we have moved rapidly to implement operational improvements and stringent management of operating expenses. These efforts resulted in a positive adjusted EBITDA for our regional airline operations, formerly known as Southern Airways, in the second quarter, reversing a longstanding trend. In addition to driving substantive improvement in those operations, we are simultaneously advancing our Technology operations, including the SurfOS technology platform and our EP1 Caravan electrification initiative.
White concluded, “We are fundamentally improving our operating model and refining strategies to reduce our cost of operations. In addition, we plan to sub-capitalize key initiatives to drive efficiencies and more effectively manage capital. To that end, we recently announced a ground-breaking new venture, Surf Air Technologies, powered by Palantir Technologies. Together with Palantir, we will develop, market, and sell AI-powered software tools to create a category-defining operating system for the advanced air mobility industry. This venture uniquely places Surf Air Mobility at the forefront of innovation in our industry.”
Revenue of $32.4 million for the second quarter of 2024 rose 13.2% compared to $28.6 million for the same period of the prior year on a pro-forma basis, exceeding the company’s expectation of $28.0 – $31.0 million.
GAAP Net Loss reduced to $27.0 million compared to $44.5 million in the prior year.
It includes investment in R&D for electrification and software technology, stock-based compensation, transaction costs, and other non-recurring items.
Net loss of $27.0 million for the second quarter of 2024, compared to a $16.7 million loss for the same period of the prior year on a pro-forma basis, which includes investment in R&D for electrification and software technology, stock-based compensation, transaction costs, and other non-recurring items.
Adjusted EBITDA
Adjusted EBITDA loss of $11.8 million for the second quarter of 2024, compared to a loss of $1.1 million for the same period of the prior year on a pro-forma basis.
The company said the result “materially” outperformed its $18.0 million to $16.0 million loss guidance.
Adjusted EBITDA includes investment in R&D for electrification and software technology.
Scheduled service revenue was primarily driven by the launch of subsidized flight operations on the Lanai route in Hawaii and the Purdue and Williamsport routes in the Continental U.S.
Surf Air also announced its plan to form a new venture, Surf Air Technologies LLC, and entered into an agreement with Palantir Technologies Inc. to power the operating system for the Advanced Air Mobility industry.
It said its aircraft electrification program “remains on track to complete the conceptual design phase by the fourth quarter of 2024 and STC in 2027.”
The company “is also actively pursuing other strategic initiatives with partners and affiliates, including the creation of one or more joint ventures or partnerships, to separately capitalize the company’s electrification and other related efforts.
Surf Air is guiding Q3 2024 revenue from $25.0 million to $28.0 million.
It forecasts Pro forma Adjusted EBITDA in the range of $13.0 million to $10.0 million loss.
That excludes the expected impact of stock-based compensation, changes in fair value of financial instruments, and other non-recurring items.
Surf Air offers a fixed-segment price as-available jet card program on the PC-12 in Calforinia.
Separately, Surf Air said the NYSE had accepted its plan to regain compliance with the exchange after receiving a non-compliance notice in May.
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