SRFM

SRFM generated ~$110 million in revenue in 2023, While third quarter 2024 saw revenues of $28.4 million as compared to $28.9 millionfor the same period of the prior year on a pro-forma basis, exceeding the Company’s expectation of $25.0 million – $28.0 million

They have Exclusive agreements with multi-billion dollar market cap companies Textron Aviation (NYSE:TXT), one of the world’s largest general aviation manufacturers and a strategic partnership with Palantir Technologies, leveraging cutting-edge AI and data analytics

SRFM was the largest commuter airline in the US by scheduled departures, flying over 4,050,000 passengers on ~715,000 flights in the US in 2023

CHECK OUT THE MOST RECENT INVESTOR PRESENTATION HERE

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Hello Everyone,

We have SRFM back on our radar for Tuesday’s session.

You might remember this one because of their unique business model.

A Quick Look at this company and you can’t help but draw comparisons to corporate giants Uber and Lyft.

The main difference is that SRFM is doing it IN THE AIR and there certainly seems to be demand for it.

Putting the infrastructure in place for something like this is no easy task. That is why the inked an agreement with AI Blue Chip, Palantir.

There is another reason you might remember this one. The last time be brought this company front and center last summer it was sitting around 2.50. When you pull it up you will notice it is sitting around 4.35 and has hit highs of 6.40 last month.

Unlike others in the space, Surf Air Mobility isn’t just a concept—it’s a fully operational business generating real revenue and focused on leading the charge in transforming regional air mobility.

The company and business model has even caught the eye of AI Giant Palantir. They have a ~17.6% stake in the company as of November 2024. I know “Smart Money” is an objective term but I will go ahead and assume that Palantir has done their research.

Surf Air Mobility is a Los Angeles-based regional air mobility platform expanding the category of regional air travel to transform flying through the power of electrification and software. In an effort to substantially reduce the cost and environmental impact of flying and as the owner of the largest commuter airline in the US, Surf Air Mobility intends to develop powertrain technology with its commercial partners to electrify existing fleets and bring electrified aircraft to market at scale. The management team has deep experience and expertise across aviation, electrification, and consumer technology.

A lot has happened with the company since the last time we put it in front of you.

Most recently we saw the chairman and also one of the co-founders put their money where there mouth is. Using our last profile on SRFM back in August as a benchmark, you can see that as of late management has the company and PPS heading in the right direction.

Surf Air Mobility Announces Open Market Purchases of Company Stock by Board Members

Chairman of the Board, Carl Albert, and Co-Founder and Member of the Board, Sudhin Shahani, purchased an aggregate total of 31,737 shares of Surf Air Mobility Inc. common stock.

LOS ANGELES–(BUSINESS WIRE)– Surf Air Mobility Inc. (NYSE: SRFM) (“the Company”,“Surf Air”), a leading regional air mobility platform, announced that Chairman of the Board, Carl Albert, and Co-Founder and Member of the Board, Sudhin Shahani, purchased 14,500 shares and 17,237 shares, respectively, of the Company’s common stock, for an aggregate purchase price of approximately $110,000, in open market transactions.

Mr. Albert said: “The Board of Directors and our senior leadership have built, approved and are executing our Transformation Plan. We have near and midterm goals to increase value for our shareholders. We are firmly and financially committed to successful execution of our Transformation Plan.”

Surf Air has made several recent announcements related to the Company’s Transformation Plan, a strengthened balance sheet, and our goal to achieve profitability in airline operations in fiscal year 2025. The Company remains focused on development and implementation of its SurfOS software to drive efficiencies in operations.

Top Reasons to Research This One

A Massive Growth Market: By 2035, the total addressable market (TAM) for small regional flights globally could reach $75 billion to $115 billion by 2035

The Largest Commuter Airline in the US: Surf Air Mobility Inc. (NYSE:SRFM)leads the nation with the most scheduled departures, carrying over 404,000 passengers on ~71,000 flights in 2023.

Impressive Revenue Performance: The company generated ~$110M in revenue in 2023.

‍Powerful Commercial Relationships: Strategic alliances with industry leaders like Palantir Technologies and Textron Aviation bolster Surf Air’s competitive edge across the value chain.

Seasoned Leadership Team: A management team with extensive experience, including past leadership roles at Bombardier Flexjet, United, Wisk, and Virgin America, is driving the company forward.

Multi-Phased Transformation Plan: Backed by its $50 million financing, SRFM is executing a four-phase transformation plan designed to optimize its airline operations and put them on a path to profitability, broadly offer its SurfOS software, expand routes, and create a platform for new electrification technology in the future.

Game-Changing Collaboration: The recent agreement with a leading tech giant is a significant step forward for Surf Air Mobility Inc.. By harnessing cutting-edge AI and data analytics, this collaboration will enable the company to deliver unparalleled operational efficiencies, setting a new standard in the air mobility market.

Massive Market Potential: The regional air mobility market is expected to grow exponentially, with projections suggesting it could reach $115B by 2035. With Surf Air Mobility Inc.’s strategic positioning, they appear well-prepared to capitalize on this immense growth potential.

Optimizing Key Operations: Part 135 operations, which account for over 2.8 Million flight hours in the US in 2023, are a crucial segment of the air mobility industry. Surf Air Mobility Inc.’s new AI-powered software platform is designed to optimize these operations, driving efficiency and innovation across the sector.

Pioneering Sustainable Aviation: Surf Air Mobility Inc. is not only focused on improving operational efficiency but also on sustainability. By developing powertrain technology to electrify smaller existing aircraft, the company is taking significant steps toward decarbonizing air travel. Imagine a future where flying between 50 to 500 miles is not only eco-friendly but also cost-effective—a vision that Surf Air Mobility Inc. is actively working to make a reality.

Strategic Partnerships and Global Reach: Surf Air Mobility Inc. continues to expand its global footprint through strategic deals in places like East Africa and Brazil

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Surf Air Mobility Unveils Four-Phase Transformation Plan

2024

PHASE 1: TRANSFORMATION | COMPLETE

The first phase of the Transformation Plan is now complete. The Transformation phase was centered around four key initiatives: 1) improving the Company’s capital structure, 2) strengthening the Company’s balance sheet, 3) appointing the right management team, and 4) realizing M&A synergies from the Company’s merger with Southern Airways.

Surf Air addressed these key initiatives in the following ways: 1) improved its capital structure by securing $50 million in funding and extended the maturities of other secured debt until December 31, 2028, 2) strengthened its balance sheet by addressing past liabilities totaling approximately $70 million with an expected target reduction of greater than 50%, 3) hired and promoted leaders with decades of aviation experience across the organization, and 4) realized M&A synergies totaling approximately $6.5 million.

2025-2026

PHASE 2: OPTIMIZATION

Surf Air is now entering the second phase of its Transformation Plan: Optimization. This phase of the plan is focused on maximizing the profitability of the Company’s scheduled service and On Demand charter operations.

As part of scheduled service optimization, the Company is implementing systems and processes to measure and drive efficiencies against real-time operational and financial KPIs. The Company is also addressing its deferred maintenance backlog to improve aircraft availability and flight completion rates. In parallel, the company is exiting unprofitable routes and redeploying aircraft. Through this reallocation of aircraft assets, Surf Air is calibrating the timing of its purchases of new aircraft to match the timing of its route expansion phase in 2026 and 2027. As a result of these initiatives, management expects airline operations to become profitable in FY 2025.

As part of the recalibration of its On Demand business, Surf Air’s go- forward strategy focuses on expanding market share in the higher margin jet category, securing inventory through advance volume purchase agreements and pursuing international partnerships. These efforts will drive revenue growth and profitability in the On Demand business over time.

Finally, the Company anticipates that further implementation of its SurfOS software solutions, which it is developing with Palantir, will continue throughout the Optimization phase to drive productivity and efficiency improvements across the organization.

2026-2027

PHASE 3: EXPANSION

The Company anticipates entering the third phase of its Transformation Plan, Expansion, in FY 2026. During this phase, the Company will profitably expand its network by launching new tier-1 routes in regions across the U.S., using data-driven insights to quantify and qualify route attractiveness. As a base case, tier-1 routes will be selected for profitability using current combustion aircraft with further margin improvements anticipated once electrified planes are commercialized.

Alongside this network expansion, Surf Air anticipates pursuing additional venture opportunities that leverage the Company’s scale, to separately capitalize high-growth initiatives with strategic partners.

During the Expansion phase, SurfOS will be broadly marketed to third-party customers (including air operators, charter brokers, and aviation OEMs) through the Surf Air Technologies LLC venture entity with Palantir, and will begin to develop revenue traction. As the largest commuter airline in the U.S. by scheduled departures, Surf Air is uniquely positioned to develop, test, and deploy software solutions that will power the emergence and growth of the Regional Air Mobility segment, which McKinsey & Co. estimates will grow to between $75 billion and $115 billion globally by 2035.

2027+

PHASE 4: ACCELERATION

The Company anticipates entering the last phase of its Transformation Plan, Acceleration, in FY 2027. During this phase, Surf Air plans to spur revenue growth and margin expansion by leveraging its air mobility platform to accelerate the adoption of new aviation technologies–its own and that of others–and leverage the network effects of its operator platform to emerge as a category leader.

A key focus of the Acceleration phase is the certification of the Company’s proprietary electrified powertrain technology for the Cessna Grand Caravan, which Surf Air currently anticipates will occur within the framework of a joint venture with a leading industry partner. Post- certification of its electrified powertrain technology, Surf Air will leverage its exclusive sales and marketing relationship with Textron Aviation, a leading general aviation manufacturer and Cessna owner, to commercialize these powertrains.

Revenue Streams

SRFM is revamping travel. They’re not just changing the game; they’re rewriting the playbook with a diverse revenue mix.

Scheduled flights linked over 40 US cities and over 70,000 flights and 400,000 passengers in 2023, making travel a breeze. Whether it’s a single seat or a private charter, Surf Air is the go-to for fast, convenient journeys.

Their role in essential air services (EAS) adds consistent, subsidized revenue.

A groundbreaking partnership with Purdue University: subsidized flights between Purdue and Chicago O’Hare. Launched in early Q2 2024, these new flights are transforming travel for Purdue’s community. Imagine simExpansion Of Surf Air’s Commuter Flight Network

As SRFM charges ahead in empowering the electrification of regional air travel, it’s also relentlessly expanding its commuter flight network to enhance convenience for travelers across America.

Let’s dive into SRFM multi-pronged strategy to transform the skies:

    • Acquisition of Southern Airlines jumpstarted operations, deploying a fleet of ~50 aircraft on a nationwide network of flights.
    • Agreement with Textron Aviation for over 100 Cessna Grand Caravan EX models

SRFM has begun making waves in East Africa and Brazil, sealing strategic MOU agreements with air operators to electrify their fleets once the technology is certified.

In a groundbreaking move, Surf Air Mobility recently announced MOU agreements with some of Kenya’s premier safari air services, Safarilink,Yellow Wings Air, and Z.Boskovic to electrify their fleets.

By upgrading existing Cessna Grand Caravan aircraft fleets with SRFM cutting-edge electrified powertrain technology, they could revolutionize air travel in Kenya and beyond.

This initiative builds upon Surf Air Mobility’s earlier collaboration with Azul, Brazil’s largest airline, to electrify up to 27 of its Cessna Caravans.

With targets of reducing direct operating costs by up to 50% and eliminating 100% of direct carbon emissions on fully electric versions of the powertrain, Surf Air Mobility Inc. (NYSE:SRFM) plans to propel the industry towards a greener, more efficient future in regional air travel.

Expansion Of Commuter Flight Network

As Surf Air Mobility Inc. (NYSE:SRFM) charges ahead in empowering the electrification of regional air travel, it’s also relentlessly expanding its commuter flight network to enhance convenience for travelers across America.

Let’s dive into Surf Air Mobility’s (NYSE:SRFM) multi-pronged strategy to transform the skies:

    • Acquisition of Southern Airlines jumpstarted operations, deploying a fleet of ~50 aircraft on a nationwide network of flights.
    • Agreement with Textron Aviation for over 100 Cessna Grand Caravan EX models

SRFM has begun making waves in East Africa and Brazil, sealing strategic MOU agreements with air operators to electrify their fleets once the technology is certified.

In a groundbreaking move, Surf Air Mobility recently announced MOU agreements with some of Kenya’s premier safari air services, Safarilink,Yellow Wings Air, and Z.Boskovic to electrify their fleets.

By upgrading existing Cessna Grand Caravan aircraft fleets with SRFM cutting-edge electrified powertrain technology, they could revolutionize air travel in Kenya and beyond.

This initiative builds upon Surf Air Mobility’s earlier collaboration with Azul, Brazil’s largest airline, to electrify up to 27 of its Cessna Caravans.

With targets of reducing direct operating costs by up to 50% and eliminating 100% of direct carbon emissions on fully electric versions of the powertrain, SRFM plans to propel the industry towards a greener, more efficient future in regional air travel.

NEWS

Surf Air Mobility Announces Open Market Purchases of Company Stock by Board MembersDec 27, 2024Surf Air Mobility Appoints David Anderman to Board of DirectorsDec 19, 2024Surf Air Mobility Announces Approximately 90% Reduction to Contemplated Future Equity DilutionDec 12, 2024Deanna White Appointed as Surf Air Mobility’s Chief Executive OfficerDec 10, 2024Surf Air Mobility Accepts Delivery of Initial Four Cessna Grand Caravan EX Aircraft in Fleet Order from Textron AviationDec 5, 2024Surf Air Mobility Unveils Four-Phase Transformation Plan and Updated Investor PresentationNov 21, 2024Surf Air Mobility Reports Third Quarter Financial Results, Exceeding Revenue and Adjusted EBITDA ExpectationsNov 14, 2024Surf Air Mobility Secures $50 Million Financing to Fund Transformation Plan and Path to ProfitabilityNov 14, 2024Surf Air Mobility to Announce Third Quarter 2024 Financial Results on November 14, 2024Oct 31, 2024Surf Air Mobility Announces NYSE Acceptance of Plan to Regain Listing ComplianceAug 21, 2024

MANAGEMENT TEAM

Deanna White CEO

Deanna White brings years of aviation experience and commitment to transforming flight. She served as COO at Kitty Hawk, where she led the business operations and commercialization of an R&D eVTOL aircraft program. She also served as CFO and CEO of Bombardier Flexjet. She holds a BS in accounting from the University of Tampa, and an MBA and MA in Cybersecurity from the University of Dallas.

Oliver ReevesChief Financial Officer

Oliver Reeves is a seasoned financial executive with a proven track record at both the strategic and operational levels. He will lead Surf Air Mobility’s financial and capital markets strategies, leveraging nearly two decades of experience in the investment management, enterprise technology, and insurance industries. Prior roles include serving as Chief Strategy Officer at Xinuos, Inc. since 2019.

Sudhin ShahaniCo-Founder

Shahani is a seasoned entrepreneur and venture capital investor with a diverse portfolio in aviation, media, technology, and education. He is the co-founder of Surf Air Mobility, where he has been steering the company’s vision, fundraising, and M&A activities since 2014. Under his leadership, Surf Air has raised over $400M and pioneered sustainable flight technologies. Before this, he was an Entrepreneur in Residence at Anthem Ventures, managing over $450M and serving on various boards. Shahani also co-founded Musicaneand RTG Animate.

Carl AlbertChairman

Albert boasts extensive experience in aviation, formerly serving as principal investor and Chairman & CEO of Wings West Airlines, acquired by AMR, and later of Fairchild Aircraft for a decade. Under his leadership, Fairchild acquired German manufacturer Dornier Luftfahrt, both companies producing regional aircraft and Dornier supplying Airbus with key components for multiple models. Albert also oversaw Merlin Express, a cargo service for UPS and FedEX. He has managed engineering programs to obtain various aircraft certifications from regulatory bodies like FAA and EASA.

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