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Global Industry News

Surf Air secures financing as it reports third-quarter results

Policy

By Sky Industry News

Nov 18, 2024

Surf Air has announced securing approximately $50 million in new financing, a move aimed at supporting its transformation plan and paving the way for future profitability. This development was reported alongside the company's financial results for the third quarter of 2024.

The Los Angeles-based air mobility company recorded revenue of $28.4 million during this period, slightly down from $28.9 million in the same quarter last year but exceeding expectations of $25 to $28 million. The net loss also improved significantly, with Surf Air reporting a GAAP net loss of $12.2 million compared to a $45.4 million loss last year.

Interim CEO and COO Deanna White highlighted the progress on their transformation plan: "The financial results for the third quarter demonstrate our continued progress on our transformation plan. We are rightsizing our air mobility operations, implementing new processes, driving improved efficiency and repositioning our air mobility operations for sustained profitability."

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Despite an adjusted EBITDA loss of $8.9 million, consistent with last year's figures, the company outperformed its projections of a $10 to $13 million loss due to better on-demand operations and reduced compensation costs.

Chief Financial Officer Oliver Reeves addressed the recent financing: "Today we have fundamentally restructured our balance sheet – addressing our near-term liquidity constraints, lowering our cost of capital, minimizing potential dilution under our equity share subscription facility, and repositioning Surf Air Mobility for profitable growth."

The new funding includes a $44.5 million term loan and a $5.5 million delayed draw term loan from Comvest Partners. These funds will further support Surf Air's ongoing transformation plan which is structured into four phases: transformation, optimization (2025-2026), expansion (2026-2027), and acceleration (starting in 2027).

In addition to financial restructuring, Surf Air has made strides in software development and fleet expansion by taking delivery of two new aircraft from Textron Aviation and continuing improvements to its proprietary software SurfOS.

Looking ahead, Surf Air expects fourth-quarter revenue between $25 million and $28 million with an adjusted EBITDA loss projected between $5 million to $8 million.