Blade Air Mobility Inc. Q1 2023 Earnings Call

Speaker 1: You F.

Speaker 2: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now hand the conference over to your speakers. Thanks and good morning. Thank you for standing by and welcome to the Blade Air Mobility Conference Fall on Webcast with the quarter ended March 31, 2023. We appreciate everyone joining us today.

Speaker 2: Before we get started, I would like to remind you of the company's forward-looking statement in State Harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Security's litigation reform act of 1995. These forward-looking statements are subject to risks and uncertainties.

Speaker 2: and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences.

Speaker 2: Any forward-looking statements provided during this call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance.

Speaker 2: A reconciliation of the most directly comparable consolidated GAAP financial measures to these non-GAAP financial measures is provided in our earnings press release and investor presentation.

Speaker 2: Our press release, investor presentation, and our form 10Q are available on the Invest Relations section of our website at ir.blade.com. These non- GAAP measures should not be considered in isolation or in substitute for financial results prepared in accordance with GAP. Those things today is called our Rob Weezendall, Founder and Chief Executive Officer of Blade.

Speaker 3: and will havern chief financial officer. I will now turn the call of her Rob Weasant doll. Rob?

Speaker 4: Thank you, Robbie. Good morning, everyone. We released strong first quarter results this morning resulting in our seventh consecutive quarter with financial results ahead of our expectations.

Speaker 4: Revenue in the March 2023 quarter increased 70% to $45.3 million versus $26.6 million in the comparable 2022 period, while flight profit increased by 145% to $7.2 million versus $2.9 million in the comparable 2022 period.

Speaker 4: Adjusted EBITDAV negative 7.7 million was roughly flat versus the prior year. And as a percentage of revenue, Adjusted EBITDAV margin improved by nearly 1200 basis points to negative 17 percent in the March 20, 2023 quarter. This is particularly notable given that Q1 is seasonally one of our lightest quarters. This was driven by a significant increase in flight profit that outpaced growth in our adjusted corporate expense. Importantly, our first quarter results set a strong foundation for the balance of the year. And we remain on track.

Speaker 4: with our community to deliver a significant improvement in full year of dr.

Speaker 4: Turning to some highlights in the quarter.

Speaker 4: Short distance delivery another quarter of solid growth up 148% on a reported basis driven by our acquisitions in Europe , robust growth in Canada, and they continued ramp up of our delayed airport product which flies travelers between Manhattan and New York area airports. In delayed airport we were pleased to see revenue increase nearly 100% versus the coming year.

Speaker 4: black pricing and therefore our big bet for customer acquisition for Blade. We continue to optimize our marketing spend on Blade Airport to focus on getting even more granular and targeted with our audience and by spending more efficiently on interconnected digital channels.

Speaker 4: This strategy has increased new user visits to the airport booking page on our app and website by 300% since the start of the year, relative to the same period in 2022, showing a strong increase in awareness and engagement.

Speaker 4: Furthermore, since the start of the year, we've seen a 46% increase in first-time blade airport flyers versus the same period last year contributing to a 72% year-of-a-year growth in revenue from new customers. Remarkably, this has been accomplished with roughly 20% less media spend.

Speaker 4: Furthermore, since the start of the year, we've seen a 46% increase in first-time blade airport flyers versus the same period last year contributing to a 72% year-over-year growth in revenue from new customers. Remarkably, this has been accomplished with roughly 20% less media spend. Meanwhile, Airport PATHs Plus.

Speaker 4: which offers flyers unlimited flights between Manhattan and New York airports for $95 with an upfront cost of $795 for the year is another major driver for airport.

Speaker 4: Year to date, the number of airport passes sold is up 118% versus the same period last year, demonstrating that more and more flyers value the time savings and customer experience that Blade offers. This is extremely important given that pass holders typically fly Blade Airport in average of 10 times a year, giving a strong confidence in the lifetime value of our airport customer base.

Speaker 4: With respect to current trends in Blade Air Report, we are encouraged by the strong revenue in booking trends. We have witnessed thus far in the second quarter, including April 2023, which finished as our second best month ever for the product, giving us confidence that the investments we are making in marketing, schedule.

Speaker 4: and service offerings continue to pay off. Moving onto Europe , our performance in Europe this quarter was impacted by several factors, including an unusually warm winter ski season, fewer fly-o-l days due to weather, and longer than expected delays and scheduled aircraft maintenance.

Speaker 4: These factors reduced our available capacity during the quarter. However, this will ensure that we have adequate aircraft availability for Europe's peak season, which starts next week with the upcoming CAM film festival in addition to Can Lion, the Monaco Grand Prix, the Monaco Yashow, and numerous conferences throughout the summer with attendees from all over the world.

Speaker 4: and noticeable improvements in efficiency and conversion. We will continue to capitalize on our momentum to drive brand awareness for blade and incentivize referrals with ambassadors, promoters, concierges, and travel agencies throughout Europe .

Speaker 4: I'm also pleased to announce that we'll be running a by-the-seat helicopter service between Nice and Cannes this summer, and we look forward to welcoming flyers to our new terminals in Monaco, Nice and Cannes. All will be opening soon. This will bring us to 14 passenger terminals across the US, Europe .

Speaker 4: Canada and India. This is game changing for us as we build the brand experience that we are renowned for in the US across Europe while helping to unlock our lucrative local and global brand partnerships.

Speaker 4: It is also very encouraging that over 60 percent of Blade Europe bookings are now happening on the Blade app or website demonstrating healthy awareness and acceptance of our brands and consumer friendly technology at this early stage.

Speaker 4: In Metamobility Organ Transport, we delivered another record quarter with 111% organic growth driven by new hospital wins, continued expansion with existing hospitals, and strong and market growth. We've discussed in the past how advances in organ preservation and perfusion technology are increasing the size.

Speaker 4: of our dressable market both in terms of the number of organs being transplanted, in addition to the distance organs can travel in order to get from the organ donor to the transplant recipient. For Blade, this dynamic results in both higher traffic and higher revenue permission as longer distances typically require larger, more capable aircraft.

Speaker 4: For transplant recipients, it means the potential to receive a matching organ that might otherwise have been discarded. The perfect fit for a broad, flexible, asset-like air mobility platform, and we are incredibly well positioned to continue supporting our hospitals as they adopt this new technology.

Speaker 4: We also launched a highly targeted television video campaign to build awareness with hospitals, legislators, and investors about this very important part of our business that is both profitable and saving lives every day.

Speaker 4: On the M&A front, we continue to actively evaluate strategic bolt-on opportunities that will accelerate our path to profitability in a low-risk manner and where we can leverage our brand terminal infrastructure, technology platform, operator network, and core competencies in customer experience and operational excellence.

Speaker 4: We are fortified by our strong balance sheet, which in the current Mark environment remains a strategic weapon. Therefore, we will remain disciplined with respect to capital allocation, with a folks on creating long-term shareholder value. Separately in March, we announce the appointment of Andrew Lalkin-John Borthwood to our Board of Directors. Andrew has been a boarder's observer since January and is a partner at Redbird Capital Partners. Andrew Lalkin-John Borthwood, a member of the Board of Directors.

Speaker 4: where he leads the firm's consumer vertical, including its over 5% stake in blade, as well as Redbird's firm and investment in JetLinks, the beta technology, the EVA company, Air Center's and Redbird QSR. John Borthwick is the CEO and founder of BetoWorks, the Technology Investment Inc.

Speaker 4: and rest of the man more real time information about their flights and to collect relevant data and sites optimizing our flight economics. On the topic of electric vertical aircraft or EVA certification, we remain encouraged by the strong support shown by the FAA and acting FAA administrator, Billy Nolan, for the industry. As Mr. Nolan prepares to step down from his role this summer, we remain optimistic.

Speaker 4: exponentially grow our business globally as we add more landing zones that will enable greater convenience and lower prices for our flyers across all of our operating regions.

Speaker 4: Regardless of the ultimate timing of EVA, we remain focused on providing best-in-class air mobility services for our flyers around the world using conventional aircraft, always improving the experience, expanding our terminal infrastructure footprint, and consumer-friendly technologies that will serve to fortify our transition to EVA while continuing to scale and up.

Speaker 4: versus 4.2 million in the comparable 2022 period.

Speaker 4: Growth was driven by our acquisition of Blade Europe , which closed on September 1, 2022, a continued rebound in Canada and growth in our Blade Airport service.

Speaker 4: On a pro-forma basis, short distance revenue increased 12% first to prior year first quarter, including results from acquisitions in both periods and adjusting for currency translation.

Speaker 4: A few quick highlights from specific short distance products. In our New York airport business, we saw another quarter of significant passenger and revenue per seat growth. While Q1 is always seasonally slower than Q4, we were pleased that Q1 2023 airport revenues nearly doubled versus comparable Q1 2022 levels.

Speaker 4: and we are encouraged by continued strong, year-over-year growth in the second quarter of 2023 to date. Canada saw significant improvement versus the prior year with revenue increasing 65% versus the comparable prior year period, and it remains a profitable contributor to our sorts of business.

Speaker 4: or encourage to see this progress given demand is filled approximately 80% of pre-COVID levels in the country. As Rob mentioned, your performance in the quarter was impacted by an unfeasantly warm winter weather on the continent, which coupled with poor flying conditions in the Alps resulted in lower revenues versus the record 2022 levels. However, I'd like to emphasize again that Q1 and Q4 are Europe's slowest quarters by bar.

Speaker 4: fourth quarter of 2022. Given our acquisition of Trinity Air Medical was completed in September of 2021, all of the growth this quarter was organic, with approximately half of this quarter's growth driven by the addition of new customers, and the remainder driven by growth with existing clients in addition to strong overall market growth.

Speaker 4: As Rob touched on earlier, we're seeing new growth being driven by the deployment of perfusion technologies, which allow organs to be maintained and transport for longer than as possible with traditional cold transport.

Speaker 4: For example, in April , we service multiple trips to and from Alaska, delivering lungs from organ donors to waiting recipients on the East Coast and West Coast. This type of journey would not have been possible just a few years ago, and yet last month alone, we were proud to support multiple different developers of advancing perfusion technology.

Speaker 4: increasing organ transport volumes and saving lives.

Speaker 4: Additionally, given the longer flight times associated with these trips, which often require more capable aircraft, transport costs per organ can be a multiple of those for traditional cold transport and are often more logistically challenging. This dynamic works and blades favor given our broad aircraft availability and unique flexibility.

Speaker 4: Though we expect the vast majority of trips will continue to utilize traditional preservation methods given lower costs, perfusion technology is already proving it can increase the supply of organs to become available for transplant and proving patient outcomes and further expanding the market.

Speaker 4: We are honored to play our part in making these life-saving missions a success. Respect2C continues sequential growth in metamobility in the balance of 2023, normalizing at single-digit levels once we realize the full quarter impact of recent customer wins.

Speaker 4: And yet another revenue declined by 17% to 8.1 million in the first quarter of 2023 versus 9.8 million in the prior year period. The decline was driven by both lower volume and lower average price project charter in the first quarter of 2023 versus the prior year.

Speaker 4: As expected, particularly given the prior year first quarter benefit, it's somewhat from strong demand driven by the COVID-19 Omapron variant.

Speaker 4: We expect continued year-of-year declines in JETT hurt or volume and pricing in the balance of the year if the market normalizes.

Speaker 4: As a reminder, the jet charter is not quarter our strategy. The business helps us to secure favorable aircraft capacity for a minimability business while benefiting blade and our flyers by generating incremental flight margin dollars with very limited fixed costs.

Speaker 4: Turning to flight profit.

Speaker 4: Flight profit increased 145 percent to 7.2 million in the car quarter versus 2.9 million in the prior year period. The increase in flight profit was driven by the significant growth in metamobility, organ transport. The contribution from our acquisitions in Europe , which we did not own in the comparable prior year period,

Speaker 4: and a significant improvement in Blake Canada, which was profitable in the first quarter of 2023 after generating a loss in the first quarter of 2022.

Speaker 4: Flight margin of 15.8% also improved in the first quarter of 2023 versus 11% in the prior year period.

Speaker 4: In Blade Airport, there were encouraged by a consistent revenue and flyer growth. We continue to operate below break even in this quarter as we are rapidly growing this business.

Speaker 4: Absent the blade airport ramp up. We estimate that flight margin would have been approximately 150 bases points higher in the first quarter of 2023, which has been improvement from a nearly 200 bases points rag in the comparable prior year period. Looking ahead to the second quarter of 2023, we expect flight margin to improve to the high teams. Let's turn down the corporate expenses.

Speaker 4: which includes software development, general, and administrative, and selling and marketing expenses. When adjusting for non-cash and non-recurring items, our adjusted corporate expense total 14.9 million in the first quarter of 2023, an increase of approximately 40% versus the first quarter of 2022. This compares to a total revenue increase of 70%.

Speaker 4: and a flight profit increase of 145 percent, resulting in adjusted corporate expenses of percentage revenues declining to 33 percent of revenue in the first quarter of 2023, versus 40 percent in the prior year period. We are pleased to see the blade's underlying operational platform is creating economic leverage.

Speaker 4: We continue to look for opportunities to optimize our cost structure to drive further operating expense leverage, including making cost decisions necessary. As we look to the second quarter of 2023, we expect total adjusted corporate expense to increase by a high single-digit percentage relative to the first quarter of 2023, driven primarily by typical seasonal headcount and marketing spend, while significantly.

Speaker 4: improving as a percentage of revenues.

Speaker 4: Adjusted even down the first quarter of 2023 was a loss of 7.7 million or roughly flat versus the comparable prior year period. But improved is a percentage of revenues to negative 17 percent from the first quarter of 2023 from negative 29 percent in the comparable prior year period.

Speaker 4: This outcome was a result of strong revenue and slight profit growth, which outpaced growth and adjusted corporate expense.

Speaker 4: I would also note that this quarter includes approximately 0.7 million of expense to reflect the establishment of a short-term incentive plan, which was implemented during the third quarter of 2022, and therefore was not approved for in the prior year period. This created a particularly tough comp on the corporate expense line, which will continue in the second quarter.

Speaker 4: Additionally, Blade Europe , which did not exist in the prior year period, operated below Breakeven this quarter as expected as we felt the full burden of S-GNA related to our acquisitions despite limited revenue and slight profit during the seasonally weak first

Speaker 4: Moving to our segment results.

Speaker 4: Total medical segment adjusted EBITDA, improved to 1.9 million in the first quarter of 2023, versus 1 million in the comparable prior year period. The significant year-over-year improvement is a result of the tremendous work the Trinity team did to bring our minimability organ transport solutions to more customers and patients.

Speaker 4: coupled with significant market growth at discussed previously. In our passenger segment, which includes both our short distance and yet in other business lines, segment adjusted EBITDAO was negative 3.1 million in the first quarter of 2023 versus negative 2.6 million in the prior year period. The increased loss for the prior year primarily reflects our results in

Speaker 4: million in the first quarter.

Speaker 4: The primary driver of the difference between operating cash flow and adjusted EBITDAB negative 7.7 million was a 9.5 million investment in working capital. This was primarily driven by three items.

Speaker 4: First, we saw a 5.6 million increase in accounts receivable, primarily attributable to the rapid revenue growth and metamobility organ transport, where hospital customers require 30-60 date terms.

Speaker 4: We view this as a high class problem given the significant growth in the business.

Second, we saw a 3.4 million decline in accounts payable in accrued expenses driven by the payment of prior year incentives, including an earn-out to the Trinity team for their outstanding performance in 2022, agreed as part of our acquisition agreement.

as well as our 2022 short-term incentive plan.

Lastly, we saw a 1.6 million increase in prepaid expenses, which was driven by the positive to aircraft operators and connection with capacity purchase agreements, support or growth in medical.

This was partially offset by an increase in deferred revenue of 1.1 million.

With respect to our balance sheet, we continue to have zero debt and approximately 179 million in cash and short-term securities as of the end of the first quarter of 2023. We remain confident in our tangible and forthcoming past the profitability, and as a result, we continue to expect that a significant amount of this liquidity will be available for strategic acquisitions. With that, I'll turn it back over to Rob for a few closing remarks.

With respect to our balance sheet, we continue to have zero debt and approximately 179 million in cash and short-term securities as of the end of the first quarter of 2023. We remain confident in our tangible and forthcoming past the profitability, and as a result, we continue to expect that a significant amount of this liquidity will be available for strategic acquisitions. With that, I'll turn it back over to Rob for a few closing remarks. Thanks, Will.

Simply put, this was a strong start to the year, and we are pleased by the improved operating metrics we are seeing in the quarter. At Blade, we have built a platform that is scalable and can be profitable using conventional aircraft today, prior to the growth and volume that will be generated by our transition to EVA tomorrow. As the largest operating urban air mobility company in the world, we are currently flying people and precious cargo on the highest friction routes that exist today.

and a trended value of our business for the future. With that, I'll turn it over to Robbie for questions.

Thanks, Roth. As a reminder, we will take questions from analysts and investors on this call today. Reporters should send inquiries to me directly. Operator, we're now ready for questions.

Thank you. At this time, we will conduct a question and answer session.

As a reminder to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced.

To withdraw your question, please press star 11 again. Please stand by where we compile the Q&A.

roster and there might be a slight delay. Our first question comes from Hillary Kakanado with Joy to Bank. Go ahead with your question. Hi, good morning. Thanks for taking my question. It's great to see that the massive delay they have put you know strong even you know I guess would even do it to be session here.

increase in revenue to more to do more to you know volume increase or more due to higher pricing.

I think I got the first part of your question. May I ask you to repeat the second part of the question? It's Rob Wiesenthal speaking. Last week we actually had the highest revenue per seat for the week ever of $281. That's 13% higher than the previous record. I think we're averaging about $245.

seat right now and that's largely driven by different types of fear classes, flexible classes that allow you to move your flights to that fees, classes that allow refunds, upgrades like stage cars, cars that take you through the...

what we call ground connects that take you to ultimate destination providing multi-modality once you land on the New York City side and we've actually seen continued growth despite these overall increases in average ticket prices and I would really like to make sure that people understand that this is not necessarily a call price increases.

Overall, a lot of these are still one on E5 prices. A lot of these are driven by different fair classes and add-ons as well. Now, you had a second part of your question that may not have answered. Yeah, no, that's really interesting because I just wanted to know if there was any pushback that's given. Well, you know.

fears of recession, you know, later, later half of this year perhaps. So it's really interesting to see that the revenue, you know, the pricing went all the way up to $281 and it seems like if they're still a very strong demand. So, you know, you had said that the rate of the report revenue increased about 100% year over year. So I just kind of wanted to see what's more due to, you know, higher pricing or what did do more to increase value. And I know the volume was strong as well.

but we've had more of an impact. Yeah, it was definitely both in this quarter. You know, the volume increase was the larger driver, but as Rob mentioned, we're getting great results from the upgrades and then also we're testing higher prices at peak times and we've continued to see strong growth in all those times despite a higher base price. I would call it a dynamic pricing strategy that we...

definitely impacting a number of international passengers flying into New York and using the service to overall were very, very, very pleased. Okay, great. Thank you. And then on your chest business, I know that's not part of your core strategy, but could you talk about what's driving the lower volume and pricing? Is it just entirely due to strength, strong demand loss?

by constantly with everything from helicopters to jets all over the country. We take that tremendous throw weight we have in the industry to provide customers who do call and want jets very competitive pricing on jets when they need it. So it really is in the kind of an add-on.

type ancillary revenue. I think you're seeing a normal return to charter demand, a charter man that's normal in our numbers and in the industry. Unlike a lot of other companies, we really did not get ahead of our skis. We are AsaLite. We do not own or operate any of these aircraft. The pricing, however, is really important is leading to better availability, and that leads to

more flights available for our hospital partners. And so we get a pricing benefit on the way down that really should help, really should help us in terms of the economics and the growth of the hospital business in terms of blade minimability. But just to give you a sense of the overall industry, which is really applicable to.

other companies you may cover or be interested in. Personally, I think that during Omicron, you had a lot of people who were charting jets for safety reasons. I think that many companies in this jet business out there, you know who they are, were counting on those people coming back and no longer doing commercial. That just didn't happen. They went back to commercial, they became more price sensitive, and it just didn't stick the way.

I think some of the pure play jet companies thought it would, in terms of demand that is.

Thank you so much. Thank you. Thank you. I'll bring up the next question. Our next question comes from Jason Health Seedent with open timer. Your line's open.

Thanks, two questions. First, really nice to see the strong growth on the short distances quarter. I think there's been some question about kind of dropped your point potentially wealthy people pulling back with that segment showing strong growth. It would suggest like you're not seeing that. Thanks, two questions. First, really nice to see the strong growth on the short distances

Maybe help us understand when you look at like Heliget in Europe mentally, like how do you think about like business versus leisure, you know, within that. And then, you know, also broadly talk about, you know, fuel prices are down, something like jet fuel is down like 50%.

just overall the entire business, you know, I think that's mostly a pass-through cost for you, but, you know, is that any kind of marginal tailwind? And then just lastly, a ton of cash on the balance sheet. How are you thinking about kind of deploying that cash kind of over the next 12 months?

from an organic standpoint as far as investing in the business versus in organic doing acquisitions. Thank you. Hey Jason, Will here. On the question on business versus leisure, how we jet in Canada is mostly business actually. And we're pretty encouraged with the recovery there. Obviously

easier conferences on the home of the crime impact that we had in Q1 of 2022. But we're seeing a great recovery, great to see that business return to profitability. And Europe , a little more leisure focused and seasonality that's similar to what we see here in the United States. But we're pleased with what we're seeing. Of course, this is a very seasonally weak quarter for Europe in Q1 along with Q4.

So we're watching closely and we like what we're seeing on the booking trends going into the summer. As far as fuel price, you know, you're correct in that in the medical business we're passing that through, though you could potentially see some benefits on the way down on the passenger side. And as Rob alluded to,

On the jet side, as you see pricing come down across the board, we do see a margin benefit there on the way down. So this quarter, even though you see jet going down on the top line from a flight profit basis, you're essentially flat with the prior year. So you can make up for a lot of that because of that. And Jason, just a couple things to add on that. On the jet fuel pricing decline, which obviously is very, very helpful to the industry.

That gives us a lot more leverage when we're negotiating our hourly rates with new operators and as operator deals kind of roll off. The other thing I'd point out that hasn't been about Europe , which I think some of you will find very interesting, when I talk to our OTA online travel agency partners, I think people call it KAYAK, TripAdvisor, others.

They are seeing generally about a 77% increase in interest and bookings by Americans for Europe this summer, which I think is going to lead to a fair amount of our customers here in the US using our services throughout Europe . It was something that we did not expect and it's something that we were really looking forward to.

hopefully enjoying that during the summer quarter. And your final question on cash on the balance sheet, we're extremely well capitalized, approximately 180 million of cash and cash equivalents. We don't believe we need to raise any outside capital again to get to profitability. So we said.

We reserve the majority of that cash thinking about acquisitions, but we're going to be extremely disciplined. We think in the uncertain macro, there could be some opportunities that might pop up that are unique in this market. And so I think we've committed to be very disciplined and I think we've demonstrated to our investor base.

with transactions like the Trinity acquisition that we can find opportunities to bolt on new capabilities, quickly buy down our multiple and generate a great return. So that's kind of the template that we're going to be looking to follow, where we can leverage that blade platform and grow businesses more quickly once they're part of the blade family.

do the lower market environment. You talked about this kind of trend continuing through the year. I'm wondering if there's any aspect of this due to aircraft being repurposed for your faster growing metamobility flights. I thought in the past, a lot of these organ transplants were at different times of day or overnight. So basically trying to kind of put a finer point on the synergies of the business and how the overall scale of the combined organ transplant plus charter helps your unit economics relative to competitors or potential competitors as folks.

see the availability for our partners. So and that's something that just, you know, definitely is a flywheel in terms of them using us more and trying to get the best value for them possible and hopefully, you know, them getting, you know, seeing the value across the network. And then in terms of it is definitely an effect that.

This whole ecosystem of Jeff's no matter how you use them at night for a minimum ability and during the day when they're available again for Charter there is a bit of an ecosystem there that works to our advantage will do something you want to add there. Yeah Bill I would just say on the benefit in terms of lower pricing there's going to be more availability for our medical clients that's really the primary benefit.

As you know, we have capacity purchase agreements for those hospitals that have pricing that works to get us to those 15 to 20 percent target margins. So, it's not necessarily going to lower costs for our medical business, but it will improve the availability. And particularly with some of the new perfusion technology we've been talking about, these cases are more complex. You will work which would make an opportunity to fund those contracts. You will work which would make an opportunity to fund those contracts.

They often require multiple aircraft from multiple locations. So it's definitely helpful to have that increased availability because when you're flying farther, you might have a situation where you need multiple crews, so it does become more complex. And so we find ourselves pulling from that asset light network across the country to work more with those processes that are becoming more rapid.

existing customers. If I understood correctly, you had been running around 57 hospitals in the fourth quarter and seemed like that was continuing through the bulk of the first quarter. So trying to get a feel for how much how many new sites you added, I guess since then or in the last so eight weeks or so. And then, you know, kind of related to the previous question, how much of this business was related to perfusion?

You talked about these last few trips as an example. We understand there's at least one player that's trying to send up an operator. We're trying to understand how you guys have a competitive advantage. Again, I think you kind of explained it in your prior answer, but just to get a feel for how sustainable the growth of that new opportunity will be from these new prefers and perfusion technologies. Thanks. Yep. Happy to address those. You know, on the customer front.

And because of the terrific business, they're obviously going to be companies that want to get in this business. What I would say is having spent time with actually proficient as a specifically, there's lots of different technologies, including ones that are less expensive than some of the companies you may be thinking about that hospitals would really like to use.

And they are really, when I talk to the hospitals, they're very much thinking about, highest and best use of their vendors. And frankly, there's no one that does it better because the logistics of technology and the fact that we've been doing this for a long time and that we're 24 seven, building something from the ground up, that is a very long and arduous task, especially if your expertise is in building profusion devices as opposed to moving precious cargo from people all over the world.

Okay, it makes sense. Thanks for all the color. Thank you. Thank you for those questions. We now have one last question from this listener. Apologies for the pronunciation, but I'll bring up Até Mahale from Citi. Go ahead, your line's open. Great, thanks. Good morning, everybody. Just two follow-up stuff for me. First, going back to perfusion. I'm just curious.

Given the greater complexity of those trips, what you think that does to flight margin for metamobility over the longer term, and maybe talk about what you saw in the Alaska trips. And then secondly, hoping just maybe to mention how you see Blade Airport flight margin progress within the flight margin guidance you gave for the second quarter. Thank you..

So on the perfusion front, the trips are longer, generally, that's the benefit of the technology, and they require larger, more capable aircraft both to make the distance, but also to support the equipment. So you're talking about essentially more flight profit dollars per trip. Margin's similar.

So, you see that benefit on a per trip basis. So, if you have UNOS data telling you that you've got

low double-digit, high single-digit growth, and number of organs transplanted, that would translate to even more revenue and slight profit growth on our side, because a lot of those new trips are coming from the perfusion technology that's a longer trip. Before Will gets into the airport side, just may add one more thing.

In terms of the perfusion technology and the complexities you imagine, a lot of it is also getting the device on the aircraft. And one of the benefits we have in terms of cross fertilization of our passenger business is that we have

24-7 full-time employees that normally deal with passengers that do assist the doctors and the hospitals to get these devices on the aircraft, which is critical. So herefore with before Blade, someone would send a jet and frankly pilots may not want to touch these devices. That is isEPIC

you can just send a jet and hope for the best. And that's one of our added value. I think you had a question about the airport. Yeah, I think your question was on just where our margin expectations, flight margin expectations are for the next couple of quarters. Yes, exactly.

Yes, so with the seasonality of this work distance business, we do expect flight profit margins to get to the high teams in Q2 and then Q3, you'll be a little bit higher than Q2 because that seasonally are strongest quarter across the board for the short distance business.

That's all very helpful. Thank you. Thanks. Thank you. And with that being our last question, we'd like to thank you for your participation in today's conference. This does conclude the program. You may now disconnect your phone.