Volato posts $17.4m loss; delivery delays shrink revenue in Q1

Private aviation company and largest operator of HondaJet in the US Volato announced financial results for the first quarter of 2024 posting a net loss of $17.4m.

The company did not book any revenue from aircraft sales owing to push back in delivery dates by OEMs due to supply chain challenges.

However, the company saw strong growth of 72% year-over-year in aircraft usage revenue reaching $11.5m from $6.7m in the corresponding period last year. This was due to 39% growth in flight hours and 7%YoY increase in blended yield. In addition, the company achieved demand mix of 50% owner and 50% program & ad hoc in the first quarter.

Meanwhile, revenue from the managed aircraft segment nearly halved to $1.7m from $3.3m a year ago.

Overall, the company’s first quarter revenue stood at $13.2m, down 16%YoY from $15.7m.

“While OEM aircraft delivery delays put pressure on our revenue in the first quarter, we achieved strong year-over-year growth across our key metrics as we executed on our strategy to drive more favorable demand mix and higher yield per flight hour,” said Matt Liotta, co-founder and CEO, Volato.

In terms of expenses, the company’s cost of services remained relatively stable at $17.5m from a year ago while the first quarter SG&A expenses witnessed a sharp uptick of 89%YoY to $11.7m from $6.2m in Q1 23.  

Volato ended the quarter with $6.4m of cash, and cash equivalents.

The company said it is optimistic on deliveries in the second quarter. “Given the well-known OEM supply chain challenges which have pushed back delivery dates, we continue to expect the delivery of 8 to 10 HondaJets but now expect delivery of two Gulfstream G280s in 2024 [instead of four announced earlier]. These deliveries, including 2-3 HondaJets which we are scheduled to receive in the second quarter, will provide us with an immediate cash benefit as we execute on our backlog of fractional sales,” said CEO Liotta.

Subsequent to quarter end, Volato also signed a term sheet for $14.5m in financing, including a $13.0m financing to unlock deposits for its Gulfstream G280 orders and a $1.5m equity commitment.

“Our aircraft deliveries in 2024 will provide additional cash as well as more capacity to grow our network and better leverage our cost base. With an expected revenue of over $120m this year from fractional sales alone, continued revenue growth from aircraft usage and our cost-savings measures, we expect that we can achieve positive gross margin and EBITDA in the fourth quarter of 2024,” said the company’s CFO Mark Heinen.