Q4 2024 Surf Air Mobility Inc Earnings Call
Operator: Thanks for watching! Thank you for standing by.
Speaker Change: [music].
Thank you for standing by my name is Eric and I will be a conference operator today.
Eric: My name is Eric and I will be a conference operator.
Operator: At this time, I would like to welcome everyone to the Surf Air Mobility fourth quarter and full year 2024 earnings call. All lines have been placed on mute to prevent any background noise.
At this time I would like to welcome everyone to the surf Air mobility fourth quarter and full year 2024 earnings call.
All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again.
After the Speakers' remarks, there will be a question and answer session.
Who'd like to ask a question. During this time simply press star followed by the number one telephone keypad.
I would like to withdraw your question Press Star one again.
Sam Levenson: I would now like to turn the call over to Sam Levenson. Please go ahead. Thank you, Operator.
Sam 11th: I would now like to turn the call over to Sam 11th.
Speaker Change: Please go ahead.
Speaker Change: Thank you operator, welcome to <unk> fourth quarter 2024 earnings call.
Sam Levenson: Welcome to Surf Air Mobility's fourth quarter 2024 earnings call. I'm joined today by Deanna White, Chief Executive Officer and Chief Operating Officer, and Oliver Reeves, Chief Financial Officer. Our earnings release can be found on the SEC EDGAR website and on our Surf Air Mobility Investor Relations page at investors.surfair.com. During this call, we will discuss our outlook and expectations for future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate, or other similar statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today.
Dr White: Joined today by Dr White, Chief Executive Officer, and Chief operating Officer.
Speaker Change: And Oliver Reeves Chief Financial Officer.
Speaker Change: Our earnings release can be found on the SEC Edgar website and owner of surfing on mobility Investor Relations page at investors <unk> Dot com.
Speaker Change: During this call, we will discuss our outlook and expectations for future performance. These forward looking statements may be preceded by words, such as we expect we believe we anticipate or other similar statements.
Speaker Change: These statements are subject to risks and uncertainties and our actual results could differ materially from the views expressed today some.
Sam Levenson: Some of these risks have been set forth in our earnings release and in our periodic reports following the SEC.
Speaker Change: Some of these risks have been set forth in our earnings release and in our periodic reports filed with the SEC.
Sam Levenson: During today's call, we will present both GAAP and non-GAAP measures, additional disclosures regarding non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures, are included in the earnings release we issued earlier today, posted on the Surf Air Mobility Investor Relations website, and in our filings with the SEC.
Speaker Change: On today's call, we will present, both GAAP and non-GAAP measures.
Speaker Change: Additional disclosures regarding non-GAAP measures, including a reconciliation of GAAP to non-GAAP measures are included in the earnings release, we issued earlier today.
Speaker Change: Most of them are surfing with Dougherty Investor Relations website and in our filings with the SEC.
Deanna White: I'll now turn the call over to Surf Air Mobility's CEO, Deanna White. Deanna. Thank you, Sam. And thank you to everyone who has joined our call today.
Speaker Change: I'll now turn the call over to surf on mobility CEO DIY Jana.
Speaker Change: Thank you Sam and thank you to everyone, who has joined our call today.
Deanna White: I would like to start by saying that I am very pleased with what our team accomplished in the fourth quarter and for the full year of 2024. Despite being capital constrained for much of the year. In November of 2024, we successfully raised a $50 million term loan at attractive rates. Lowering our cost of capital and positioning us for strong execution of our transformation plan.
Speaker Change: I would like to start by saying that I'm very pleased with what our team accomplished in the fourth quarter and for the full year of 2024.
Speaker Change: Despite being capital constrained for much of the year.
Speaker Change: In November of 'twenty 'twenty, four we successfully raised a $50 million term loan at attractive rates.
Speaker Change: Lowering our cost of capital and positioning us for strong execution of our transformation plan.
Deanna White: Turning to our results, revenues for the fourth quarter exceeded the upper end of our guidance range. coming in at $28.05 million for the period. During the quarter, we continue to focus on the bottom line by capturing efficiencies and driving costs out of our business. As a result, adjusted EBITDA loss improved by 11.5 million, or 63%, to 6.9 million for the fourth quarter of 2024. and within the guidance range of $5 million to $8 million.
Speaker Change: Turning to our results revenues for the fourth quarter exceeded the upper end of our guidance range.
Speaker Change: Coming in at 28.05 million through the period.
Speaker Change: During the quarter, we continued to focus on the bottom line by capturing efficiencies and driving costs out of our business.
Speaker Change: As a result, adjusted EBITDA loss improved by $11 5 million or 63%.
Speaker Change: $6 9 million for the fourth quarter of 2024.
Speaker Change: And within the guidance range of 5 million to $8 million.
Deanna White: For the full year, revenue rose $6.5 million, or 6% year-over-year. to $119.4 million. and our adjusted EBITDA loss improved by 6.8 million or 13% to 44.1 million for the full year of 2024.
Speaker Change: For the full year revenue rose $6 5 million or 6% year over year.
Speaker Change: Two $119 4 million.
Speaker Change: And our adjusted EBITDA loss improved by $6 8 million or 13% to $44 1 million for the full year of 'twenty 'twenty four.
Deanna White: We achieved several other financial accomplishments during 2024. including a substantial improvement in our capital structure through both new financing and reduced liabilities. as well as a reduction in potential delusion from our share subscription agreement.
Speaker Change: We achieved several other financial accomplishments during 2024.
Speaker Change: Including a substantial improvement in our capital structure.
Speaker Change: Through both new financing and reduced liabilities.
Speaker Change: As well as a reduction in potential dilution from our share subscription agreement.
Deanna White: Oliver will share more detail on these significant accomplishments in a few moments. During 2024, we designed and implemented our transformation plan. which is comprised of four phases. Transformation, Optimization, Expansion, and Acceleration. During 2024, we completed the transformation phase. In our earnings release issued today, we provide detail on all the milestones achieved in 2024 across each phase of our transformation plan. If you have not yet reviewed the release, I urge you to do so. as well as the videos we have made available on our IR website regarding our transformation plan and our air mobility business. We are intensely focused and currently executing on Phase 2 of the plan, which we call Optimization.
Speaker Change: Oliver will share more detail on these significant accomplishments in a few moments.
Speaker Change: During 'twenty 'twenty four we designed and implemented our transformation plan.
Speaker Change: Which is comprised of four phases.
Speaker Change: Transformation off.
Speaker Change: Optimization expansion and acceleration.
Speaker Change: During 2024, we completed the transformation phase.
Speaker Change: In our earnings release issued today we.
Speaker Change: We provide detail on all the milestones achieved in 2024.
Speaker Change: Across each phase of our transformation plan.
Speaker Change: If you have not yet reviewed the release.
Speaker Change: I urge you to do so.
Speaker Change: As well as the videos, we have made available on our IR website regarding our transformation plan and our air mobility business.
Speaker Change: We are intensely focused and currently executing on phase two of the plan, which we call optimization.
Deanna White: It is within this phase that we plan for airline operations to be profitable. defined as positive adjusted EBITDA for the full year of 2025. Through a disciplined, data-driven approach to rationalize every route we fly, we're ensuring our entire network consists only of those routes we can profitably scale. As a result, we have exited several unprofitable routes in 2024. These operational savings allow us to focus on driving more revenue and expanding margins on our most successful routes. for our essential air service or EAS business. which makes up a large portion of our network. We believe we have a major tailwind by incorporating the recent FAA Reauthorization Act into our EAS bidding strategy.
Speaker Change: It is within this phase that we planned for airline operation to be profitable.
Speaker Change: Defined as positive adjusted EBITDA for the full year of 2025.
Speaker Change: Through a disciplined data driven approach to a rationalized every route we fly we're ensuring our entire network consists only of those routes we can profitably scale.
Speaker Change: As a result, we have exited several unprofitable routes in 2024.
Speaker Change: These operational savings allow us to focus on driving more revenue and expanding margins on our most successful routes.
Speaker Change: For our essential air service or E. A S business, which makes up a large portion of our network.
Speaker Change: We believe we have a major tailwind by incorporating the recent FAA Reauthorization act into our E. I S bidding strategy.
Deanna White: which now requires equal weighting of total cost in air carrier proposals. We believe we can create an edge for Surf Air's low-cost caravan fleet, which has lower operating costs when compared to jet engine counterparts. The company was recently awarded a renewal in Du Bois, Pennsylvania, that incorporates the updated passenger subsidy economics. We've intensely focused on fleet management, which is expected to have a significant positive impact on the fundamental performance of our airline operations. including completion factor, on-time departures and arrivals, and lower operating costs. Specifically, we have developed a fleet lifecycle management program that better ensures our aircraft are maintained, upgraded, and replaced as needed to meet safety, performance, and financial targets.
Speaker Change: Which now requires equal weighting of total costs and air carrier proposals.
Speaker Change: We believe we can create an edge for surfers low cost caravan fleet, which has lower operating costs when compared to jet engine counterpart.
The company was recently awarded a renewal in the boys, Pennsylvania that incorporates the updated passenger subsidy economics.
Speaker Change: We are intensely focused on fleet management, which is expected to have a significant positive impact on the fundamental performance of our airline operations.
Speaker Change: Including completion factor on time, departures and arrivals and lower operating costs.
Speaker Change: Specifically, we have developed a fleet lifecycle management program that better insurers. Our aircrafts are maintained upgraded and replaced as needed to meet safety performance and financial targets.
Deanna White: In the fourth quarter of 2024, we accepted four brand new Cessna Caravan aircraft and deployed them into our operation. These new aircraft enable us to remove older, inefficient, or high-operating cost aircraft from our fleet. We disposed of our saw pleat and replaced the capacity with lower operating cost Cessna Caravan. In addition, in Q1 of 2025, we returned five older caravans to their lessor. We optimized our schedule to reflect this reef leading without impact to reliability. We are continually working on the optimization of our in-house maintenance facilities and third-party network. Improving the reliability of our aircraft keeps assets available for services on a more predictable basis.
Speaker Change: In the fourth quarter of 2024, we accepted for brand, new Cessna caravan aircrafts and deployed them into our operations.
Speaker Change: These new aircrafts enable us to remove older inefficient or high operating cost aircraft from our fleet.
Speaker Change: We disposed of our salt Lake and replace that capacity with lower operating costs Cessna caravans.
Speaker Change: In addition in Q1 of 2025, we returned five older caravans to their lessor.
We optimized our scheduled to reflect this re fleeting without impact to reliability.
Speaker Change: We are continually working on the optimization of our in house maintenance facilities and third party network.
Improving the reliability of our aircraft keeps assets available for services on a more predictable basis.
Deanna White: Within our Surf OS Operator Tool, we launch direct integrations with CAMP and Veron software to streamline airline maintenance processes.
Speaker Change: Within our surf O S. Operator tool, we launched direct integrations with camp and Vir on software to streamline airline maintenance processes.
Deanna White: Finally, we announce the relocation of our operations center to a central location in Dallas, Texas. This relocation will help us attract and retain high-quality aviation talent and reduce costs. For example, we recently announced the appointment of Bob Waltz as VP of Flight Operations and Linda McCaskill as Director of our System Operations Center, or SOC. Two executives with extensive aviation experience from their tenure at Southwest, Sun Country, FlexJet, JetSuite, and Transmedic Aviation. Additionally, we are centralizing flight operations and maintenance control functions at our Texas-based SOC, staffed with licensed dispatchers and aircraft mechanics. We are also using the implementation of our transformation plan and relocation of the SOC as a catalyst to redesign our operating procedures to state-of-the-art practices aided by SurfOS tools.
Speaker Change: Finally, we announced the relocation of our operation Center to a central location in Dallas, Texas.
Speaker Change: This relocation will help us attract and retain high quality aviation talent and reduce costs.
Speaker Change: For example, we recently announced the appointment of Bob Walsh as V. P of flight operations.
Speaker Change: Linda the castle as director of our system Operation Center or SSC.
Speaker Change: Two executives with extensive aviation experience from their tenure at southwest Sun country, Flexjet jet suite and transmit aviation.
Speaker Change: Additionally, we are centralizing flight operations and maintenance control functions at our Texas based SSC.
Jeff: Jeff with license dispatchers and aircraft mechanics.
Jeff: We are also using the implementation of our transformation plan and relocation of the SFC as a catalyst to redesign our operating procedures to state of the art practices aided by surf O S tools.
Deanna White: For example, we launched a self-service chat feature that assists with flight changes and cancellations. Reducing the company's call center traffic by approximately 20%. To streamline our flight operations, we introduced a mobile crew app, which improves pilot workflows and time management. and designed a weight and balance tool in compliance with FAA regulations. Additionally, we created financial and operational business intelligence dashboards, providing real-time operations data for decision-making. We're in the process of recalibrating our on-demand business. And I believe there's a lot of opportunity to optimize and profitably scale this business. We're expanding our client base from short-haul turboprop charters into midsize and heavy jet aircraft types.
Jeff: For example, we launched the self service chat feature that assist with flight changes and cancellations, reducing the company's call center traffic by approximately 20%.
Jeff: To streamline our flight operations, we introduced a mobile crew app, which improves pilot workflows and time management.
Speaker Change: And designed a wait and balanced tool in compliance with FAA regulations.
Speaker Change: Additionally, we created financial and operational business intelligence dashboards, providing real time operations data for decision making.
Speaker Change: We're in the process of Recalibrating, our on demand business.
Speaker Change: And I believe there's a lot of opportunity to optimize and profitably scale. This business.
Speaker Change: We're expanding our client base from short haul turboprop charters into midsize and heavy jet aircraft types.
Deanna White: and expect revenue per trip to increase and margins to expand as our mix shifts. In 2025, we exited several charter products to focus on profitability rather than near-term market penetration. We realigned our salary and commission structures to reduce both fixed and variable costs. We are currently rebranding our most profitable membership program into an industry standard easily marketable product, the Surf On Demand Jet Card. To accelerate achieving profitability in the on-demand business, we are moving to secure inventory with volume purchase agreements, and we are working to further rationalize our cost structure. We will continue to invest in the differentiated customer experience that Surf Air has been known for.
Speaker Change: And expect revenue per trip to increase and margins to expand as our mix shifts.
Speaker Change: In 2025, we exited several charter products to focus on profitability rather than near term market penetration.
Speaker Change: We realigned our salary and commission structures to reduce both fixed and variable costs.
Speaker Change: We are currently rebranding of our most profitable membership program into an industry standard easily marketable product the surf on demand jet card.
Speaker Change: To accelerate achieving profitability in the on demand business, we are moving to secure inventory with volume purchase agreements and we are working to further rationalize our cost structure.
Speaker Change: We will continue to invest in the differentiated customer experience that <unk> has been known for.
Deanna White: We completed the incorporation of the SurfOS Broker Module, laying the foundation to optimally recalibrate the business. which allowed us to reduce the on-demand sales team by 50%. We launched direct integrations with charter supply partners, including FlyEasy and Avanode, which allowed for improved real-time pricing and aircraft availability. We launched Surf Air On-Demand Sales and Sourcing Toolkit, including quote generation, pricing, and automated payment options. We will continue to expand the number of operators we work with in order to form relationships with as many high quality partners as possible.
Speaker Change: We completed the incorporation of the surf O S broker module laying the foundation to optimally recalibrate the business.
Speaker Change: Which allowed us to reduce the on demand sales team by 50%.
Speaker Change: We launched direct integrations with charter supply partners, including fly easy and Avenue.
Speaker Change: Which allowed for improved real time pricing and aircraft availability.
Speaker Change: We launched surf air on demand sales and sourcing tool kit.
Speaker Change: Including quote generation pricing and automated payment options.
Speaker Change: We will continue to expand the number of operators, we work with in order to form relationships with as many high quality partners as possible.
Deanna White: In the first quarter of 2025, we began rolling out SurfOS to six beta users, and for certain users, we designed their white-label apps and front-end websites to improve direct-to-consumer distribution. Once we've achieved scalable economics in our on-demand business, we'll return to executing on growth. through bringing even more operators onto the platform and expanding into new U.S. and international markets.
Speaker Change: In the first quarter of 2025, we began rolling out surf OS two six data users and for certain users. We designed their white label apps and front end web sites to improved direct to consumer distribution.
Speaker Change: Once we've achieved scalable economics, and our on demand business will return to executing on growth.
Speaker Change: So, we're bringing even more operators onto the platform and expanding into new U S and international markets.
Deanna White: As you can see, the proprietary software we're developing with Palantir has rapidly begun to impact every part of our business. SurfOS is an all-in-one AI-enhanced software platform designed to support the growth and operations of the regional air mobility industry. As the first users of SurfOS, we're gaining an intimate understanding of what solutions are necessary to advance the emergence of regional air mobility. Our expertise and scale as one of the largest commuter airlines positions us to identify and address the most pressing needs for operators like us, as well as brokers, charter operators, and aircraft owners. With every new feature and tool we successfully roll out, we expect the efficiency and productivity gains from SurfOS to positively impact our top and bottom lines.
Speaker Change: As you can see the propriety software, we're developing with patented <unk> has rapidly began to impact every part of our business.
Speaker Change: <unk> is an all in one AI in hand software platform designed to support the growth and operation of the regional air mobility industry.
Speaker Change: As the first users of Serco as we're gaining an intimate understanding of what solutions are necessary to advance the emergence of regional air mobility.
Speaker Change: Our expertise and scale as one of the largest commuter airlines positioned us to identify and address the most pressing needs for operators like us as well as brokers charter operators and aircraft owners.
Speaker Change: With every new feature and tool we successfully rollout, we expect the efficiency and productivity gains from cfos to positively impact our top and bottom line.
Deanna White: SurfOS applies leverage to our commercial initiatives by streamlining our sales, sourcing, and distribution. Revenue management features such as dynamic pricing, predictive demand, and flight distribution are key to maximizing revenue. Additionally, the software improves critical functions of the airline operation, such as crew scheduling, maintenance, and resource planning. ensuring that planes, pilots, and airport staff are exactly where they need to be when they need to be there.
Speaker Change: <unk> supplies leverage to our commercial initiatives by streamlining our sales sourcing and distribution.
Speaker Change: Revenue management features such as dynamic pricing predictive demand and flight distribution are key to maximizing revenue.
Speaker Change: Additionally, the software improves critical functions of the airline operation such as crew scheduling maintenance and resource planning.
Speaker Change: Ensuring that plains pilots and airport staff are exactly where they need to be when they need to be there.
Deanna White: In 2025, we established multilingual and multi-currency marketplace capabilities within SurfOS. Moreover, SurfOS is being built to expand the concept of connected aircraft, a physical bridge between the aircraft and the software that will allow for near real-time insight into airplane health, maintenance needs, pilot performance, and flight tracking.
Speaker Change: In 2025, we established multilingual and multi currency marketplace capabilities within surf O S.
Speaker Change: Moreover, <unk> is being built to extend the concept of connected aircraft.
Speaker Change: Physical bridge between the aircraft and the software that will allow for near real time insight into airplane health maintenance needs Harley performance and flight tracking.
Deanna White: Now let me take a moment to discuss our electrification initiatives. The company's electrification project spans multiple years. During 2024, we engaged with the FAA on certification planning for our Cessna Caravan Supplemental Type Certificate, or STC. which remains on track for completion in 2027. We finalized the selection of key suppliers and completed major system architecture and integration for electric and hybrid powertrains, including proprietary system performance modeling tools and battery cell testing protocols to optimize performance and cost. We established a Cessna Electrification Customer Advisory Board comprised of representatives from Textron Aviation and key electrification customers from four continents.
Speaker Change: Now, let me take a moment to discuss our electrification initiatives.
Speaker Change: The company's electrification project spans multiple years.
Speaker Change: During 2024, we engage with the FAA on certification planning for assessing their caravan supplemental type certificates or STC.
Speaker Change: Which remains on track for completion in 2027.
Speaker Change: We finalized the selection of key suppliers and completed major system architecture, and integration for electric and hybrid powertrains, including proprietary system performance modeling tools and battery cell testing protocols to optimize performance and cost.
Speaker Change: We established a chestnut electrification customer advisory board.
Speaker Change: Comprised of Representatives from Textron aviation and key electrification customers from four continents.
Deanna White: The Customer Advisory Board's purpose is to facilitate the sharing of use cases and data that will guide the setting of requirements for the electrification program. In addition, we also signed MOUs with seven customers to upgrade approximately 100 Cessna Caravan aircraft once the STC is approved. We entered into a bilateral agreement with Electra Aero to bring eSol to market, incorporate Surf Air technology into joint systems, and create a leasing partnership. The agreement with Electra Arrow illustrates the company's ambitions to leverage its platform to support, through direct-to-consumer distribution, to scale through its flight network and to accelerate with SurfOS tools.
Speaker Change: The customer advisory boards purpose is to facilitate the sharing of used cases and data that will guide the setting of requirements for the electrification program.
Speaker Change: In addition, we also signed Mou with seven customers to upgrade approximately 100 Cessna caravans aircraft once the STC is approved.
Speaker Change: We entered into a bilateral agreement with Electra arrow to bring <unk> to market incorporate surface technology into joined systems and create a leasing partnership.
Speaker Change: The agreement with Electra Arrow illustrates the company's ambitions to leverages platform to support through direct to consumer distribution.
Speaker Change: To scale through its flight network and to accelerate with surf O S tools, the sales trajectory of third party electrified aircraft.
Deanna White: The Sales Trajectory of Third Party Electrified Aircraft.
Deanna White: Let me now turn back to what you should expect to see from Surf Air Mobility during 2025. We are entering 2025 from a position of strength, and we expect to achieve explicit goals. First, we will achieve profitability in our airline operations for the year. driven by further process improvements, exiting unprofitable routes. Terminating Leases on Aging Aircraft Improving Route Completion Factors Retooling Our On-Demand Business. and Capturing Efficiencies Driven by SurfOS.
Speaker Change: Let me now turn back to what you should expect to see from surf Air mobility during 2025.
Speaker Change: We are entering 2025 from a position of strength and.
Speaker Change: And we expect to achieve explicit goals.
Speaker Change: First we will achieve profitability in our airline operations for the year.
Speaker Change: Driven by further process improvements exiting unprofitable routes.
Speaker Change: Terminating leases on aging aircrafts.
Speaker Change: Improving route completion factors.
Speaker Change: We totally in our on demand business.
Speaker Change: And capturing efficiencies driven by start by Wes.
Deanna White: Second, we will continue the development and rollout of our SurfOS operating system platform to beta users over the course of the year. in advance of the planned commercial rollout in 2026.
Speaker Change: Second we will continue the development and rollout of our circle was operating system platform to beta users over the course of the year.
Speaker Change: In advance of the planned commercial rollout in 2026.
Deanna White: Finally, we will continue to strengthen our investor engagement, and you will begin seeing our team participate in bank-sponsored conferences and non-deal roadshows. We are entering 2025 with a strength and balance. Strong Operating Momentum A broader and deeper operational team state-of-the-art technology tools, and an unwavering commitment to improve operations and profitability in our airline operations.
Speaker Change: Finally, we will continue to strengthen our investor engagement and you will begin seeing our team participated in bank sponsored conferences and non deal Roadshows.
Speaker Change: We are entering 2025 with a strengthened balance sheet strong.
Speaker Change: Strong operating momentum a broader and deeper operational team.
Speaker Change: State of the art technology tool and an unwavering commitment to improve operations and profitability in our airline operations.
Deanna White: It's an exciting year ahead for us, and we look forward to keeping you apprised of our progress.
Speaker Change: It's an exciting year ahead for us and we look forward to keeping you apprised of our progress.
Oliver Reeves: With that, let me now turn the call over to Oliver to discuss our results and outlook in a little more detail. Oliver Thank you, Deanna, and good afternoon, everyone. Let me begin with a brief review of our fourth quarter and four year results before touching on our Q1 and four year outlook. For the fourth quarter of 2024, revenue rose 5% to $28.05 million, exceeding the high end of our revenue guidance of $25 to $28 million. Scheduled service revenue decreased by 6%, primarily driven by the elimination of unprofitable routes. On-demand service revenue increased by 58% over the comparable period, driven by a mix of higher sales and flight costs.
Oliver Reeves: With that let me now turn the call over to Oliver to discuss our results and outlook in a little more detail.
Oliver.
Oliver Reeves: Thank you Deanna and good afternoon, everyone.
Oliver Reeves: Let me begin with a brief review of our fourth quarter and full year results before touching on our Q1 for your outlook.
For the fourth quarter of 2020 for revenue rose, 5% to 28.05 million exceeding the high end of our revenue guidance of $25 million to $28 million.
Oliver Reeves: Scheduled service revenue decreased by 6%, primarily driven by the elimination of unprofitable routes.
Oliver Reeves: On demand service revenue increased by 58% over the comparable period, driven by a mix of higher sales completions.
Oliver Reeves: Fourth quarter adjusted EBITDA loss improved by $11.5 million or 63% to $6.9 million within the guidance range of $5-8 million as we continue to aggressively manage costs and prioritise our shift to profitability in our airline operations over top line growth. For the full year, revenue rose 6% to $119.4 million as compared with pro forma revenue of $112.9 million in 2023, which assumes that Sudden Airways have been acquired as of the beginning of 2023. Scheduled service revenue was flat with the prior year. Eliminated unprofitable routes were offset by the addition of subsidized route revenue for Williamsport, Purdue and Lanai.
Oliver Reeves: Fourth quarter, adjusted EBITDA loss improved by $11 5 million or 63% to $6 9 million within the guidance range of $5 million to $8 million as we continued to aggressively manage costs and prioritize our shift to profitability in island operations over top line growth.
Oliver Reeves: For the full year revenue rose, 6% to $119 4 million as compared with pro forma revenue of $112 9 million in 2023, which assumes a sudden airways had been acquired as of the beginning of 2023.
Oliver Reeves: Scheduled service revenue was flat with the prior year.
Oliver Reeves: Related unprofitable routes were offset by the addition of subsidized route revenue for Williams could you in Mumbai.
Oliver Reeves: On-demand service revenue increased by 28% over the comparable period, which was primarily the result of improved charter sales and increases in completed departures. Four year adjusted EBITDA loss of 44.1 million, improved by 6.8 million or 13% versus the prior year on a pro forma basis.
Oliver Reeves: On demand service revenue increased by 28% over the comparable period, which was primarily the result of improved truck sales and increases in completed departures.
Oliver Reeves: Full year, adjusted EBITDA loss of $44 1 million improved by $6 8 million or 13% versus the prior year on a pro forma basis.
Oliver Reeves: As Deanna mentioned, our new and expanded management team is moving aggressively to execute our transformation plan, and we are working diligently to optimize our business, including rolling out SurfOS across both our scheduled and our on-demand operations to drive efficiency. exiting unprofitable routes, changing pilot and station staffing and compensation practices, centralizing our airline operations in Dallas, and finally, returning aging and non-caravan aircraft to less or As the results of 2024 demonstrate, we are already gaining traction in our efforts to bring the airline operations profitable in 2025.
Oliver Reeves: As Gavin mentioned, our new and expanded management team is moving aggressively to execute our transformation plan and we are working diligently to optimize our business, including rolling out SAP across both our scheduled in our on demand operations to drive efficiencies.
Oliver Reeves: Exiting unprofitable routes changing pilot and station staffing and compensation practices.
Oliver Reeves: <unk> all airlines operations in Dallas, and finally, returning aging of non caravans aircraft to lessors.
Oliver Reeves: As a result of 'twenty 'twenty four demonstrate we are already getting traction in our efforts to bring the airline operations profitable in 2025.
Oliver Reeves: Let me now take a moment to recap developments with respect to our balance sheet and liquidity since the end of the third quarter. In November 2024, we secured a $50 million term loan with ComBest Partners to accelerate our transformation and put us on a path to profitability. We continue to anticipate that the successful implementation of our transformation plan and a separate capitalization of our software and electrification initiatives will result in a company business plan that is profitable and more efficiently capitalized. Further, during the fourth quarter, we also extended the maturity of all of our other secured debt to December 31, 2028, and we reduced liabilities by over $42 million, exceeding the targeted reduction of over 50% of $70 million of past liabilities.
Oliver Reeves: Let me now take a moment to recap developments with respect to our balance sheet and liquidity since the end of the third quarter.
Oliver Reeves: In November 2024, we secured a $50 million tablet with called best partners to accelerate our transformation and put us on a path to profitability.
Oliver Reeves: We continue to anticipate that the successful implementation of our transformation plan and a separate capitalization of our software and electrification initiatives will result in the company business that is profitable and more efficient we capitalized.
Oliver Reeves: Further during the fourth quarter, we also extended the maturity of all of our other secured debt to December 31, 2028, and we reduced liabilities by over 42 million exceeding the targeted reduction of over 50% of $70 million of past liabilities.
Oliver Reeves: We have entered 2025 having addressed near-term liquidity constraints and lowered our cost of capital. As the efficiencies we are driving in our airline operations take hold, we expect to achieve profitability in that portion of our business and to substantially improve cash flows in 2025.
Oliver Reeves: We've entered 2025, having addressed near term liquidity constraints and lowered our cost of capital.
Oliver Reeves: As the efficiencies we are driving in our Atlanta operations take hold we expect to achieve profitability in that portion of our business and to substantially improve cash flows and towards towards five.
Oliver Reeves: Which brings me to our first quarter and full year out. For the first quarter, we are guiding to revenue of 21 to 24 million and adjusted EBITDA loss in the range of 12 to 15 million. As noted in our press release, these estimates consider the exiting of unprofitable scheduled routes, increased focus on profitability in the on-demand business, and the ability to and the deployment of capital raised in November towards clearing the aircraft maintenance backlog as well as addressing certain interior and corrosion items which impacted aircraft availability during the course of the year. As the year unfolds, we expect to see positive impacts of the transformation initiatives that Deanna discussed reflected in our financial results.
Oliver Reeves: Which brings me to our first quarter and full year outlook.
Oliver Reeves: For the first quarter, we are guiding to revenue of 21% to 24 million and adjusted EBITDA loss in the range of $12 million to $15 million.
Oliver Reeves: As noted in our press release. These estimates consider the exiting of unprofitable scheduled groups increased focus on profitability in the on demand business and the deployment of capital raised in November towards clearing the aircraft maintenance backlog as well as addressing certain interior and corrosion items, which impacted aircraft availability during the quarter.
As the year unfolds, we expect to see positive impacts of the transformation initiatives that Deanna discussed reflected in our financial results.
Oliver Reeves: As noted in today's press release, we are reiterating our expectations of achieving at least 100 million in revenue, as well as achieving profitability in our airline operations for the full year of 2025.
Oliver Reeves: As noted in today's press release, we are reiterating our expectations of achieving at least $100 million in revenue as well as achieving profitability in the airline operations for the full year 2025.
Oliver Reeves: I want to complete the Surf Air Technology Ventures with Palantir and collaborate with industry partners on our electrification initiative. As previously disclosed, it is our intent to separately capitalise those ventures. Until those ventures are formed, however, we will continue funding these initiatives for which we expect to record certain expenses during the year. As always, we will keep you apprised of those developments as they unfold.
Oliver Reeves: I wanted to compete the surface technology ventures, with talented and collaborate with industry partners.
<unk> initiative continues as.
Oliver Reeves: As previously disclosed it is our intent to separately capitalize those ventures.
Oliver Reeves: Until those benches are formed however, we will continue funding these initiatives for which we expect to record certain expenses during the year.
Oliver Reeves: As always we will keep you apprised of those developments as they unfold.
Oliver Reeves: Before I turn this call back to Deanna, allow me to remind you of the strategic differentiators which form our competitive advantage in the regional air mobility market. Scale. We are one of the largest commuter airlines in the U.S. by scheduled departure.
Oliver Reeves: Before I turn this call back can be either allow me to remind you of the strategic differentiators, which form a competitive advantage in the regional AD mobility market.
Oliver Reeves: Scale.
Oliver Reeves: We are one of the largest commuter airlines in the U S by scheduled departures.
Oliver Reeves: Experience. We have over a decade of experience operating in the highly regulated aviation industry and we have flown millions of passengers millions of miles.
Oliver Reeves: Experience, we have over a decade of experience operating in the highly regulated aviation industry, and we have float millions of passengers millions of miles.
Oliver Reeves: Depth. We have deep and unique ties across the industry with exclusive relationship with Textron Aviation, manufacturer of the Cessna Caravan aircraft that we operate, and with Palantir, a global leader in AI, enterprise data analytics, and business intelligence that we have partnered with to power the SurfOS operating system for regional air mobility.
Oliver Reeves: We have deep and unique times across the industry with exclusive relationship with Textron aviation manufacturer of assessed the car about aircraft that we operate with Pelletier, a global leader in AI enterprise data analytics and business intelligence that we have partnered with to power the Cfos operating system regional epilepsy.
Oliver Reeves: Reach. We have expansive reach and relationships with over 400 regional air operators who have provided charter flights to us and will form the initial customer base of our SurfOS platform. In addition, we have interline agreements with United, American, Alaska, and Hawaiian Airlines that extend our reach to over 430 million of their customers.
Oliver Reeves: Reach we have expansive reach and relationships with over 400 regional operators, who have provided charter flights to us and will form the initial customer base of our southwest platform.
In addition, we have interline agreements with United American and Alaska, and Hawaiian Airlines that extend our reach to over $430 million of that customers.
Oliver Reeves: Technology. We are developing AI-enabled software in partnership with Palantir to drive our growth and profitability and, in the future, do so for hundreds of brokers, charter operators, and aircraft owners.
Oliver Reeves: Technology, we have.
Oliver Reeves: Developing AI enabled software in partnership with pallet to drive our growth and profitability.
In the future due so for hundreds of brokers charter operators and aircraft owners.
Oliver Reeves: Execution. We have brought together leaders and experts in aviation, software, and electrification to synergistically execute our vision, drive profitable growth over time, and create shareholder value.
Oliver Reeves: Execution.
<unk> brought together leaders in excess in aviation software and electrification to Synergistically execute our vision drive profitable growth over time and create shareholder value now.
Deanna White: Now let me turn the call back to Deanna for some brief closing thoughts before we take your questions. Thank you, Oliver. The results from 2024 demonstrate that we are already achieving significant progress in our newly implemented transformation plan. The operational achievements during 2024, despite our significant financial constraints, clearly demonstrate the commitment and capabilities of the Surf Air Mobility team. We have resolved our near-term liquidity needs. We are deploying capital where we know we can get the greatest return. We have and will continue to recruit some of the best professionals in the aviation industry and we will make our airline operations profitable this year.
Oliver Reeves: Now, let me turn the call back to the other for some brief closing thoughts before we take your questions.
Oliver Reeves: Thank you Oliver.
Speaker Change: The results from 2024 demonstrate that we are already achieving significant progress in our newly implemented transformation plan the.
Speaker Change: The operational achievements during 2024, despite our significant financial constraints.
Speaker Change: Clearly demonstrate the commitment and capabilities of the surf air mobility team.
Speaker Change: We have resolved our near term liquidity needs.
Speaker Change: We are deploying capital, where we know we can get the greatest return.
Speaker Change: We have and will continue to recruit some of the best professionals in the aviation industry.
Speaker Change: And we will make our airline operations profitable this year.
Deanna White: In addition, we are gaining excellent traction on our SurfOS initiative with Palantir. having already rolled out the platform to beta users in the first quarter of 2025. SurfOS has the potential to completely transform the regional air mobility sector. Increasing Revenues and Driving Efficiency. not only for us, but also for brokers, charter operators, and aircraft owners. Finally, we also have made significant progress on our electrification initiative.
Speaker Change: In addition, we are gaining excellent traction on our <unk> initiative with talented <unk>.
Speaker Change: Having already rolled out the platform to beta users in the first quarter of 2025.
<unk> has the potential to completely transform our regional air mobility sector.
Speaker Change: Increasing revenues and driving efficiencies not only for us, but also for brokers charter operators and aircraft owners.
Speaker Change: Finally, we also have made significant progress on our electrification initiatives.
Deanna White: Summing this all up, we have three clear drivers of shareholder value. In 2025, we have the catalyst of profitability in our airline operation. In 2026, we will commercialize the SurfOS platform and expand our regional network. And in 2027, we expect to receive certification for the electrified powertrain on Cessna Caravan aircraft. We have strong momentum coming into 2025 and exceptional opportunities before us that we are laser focused on executing against.
Speaker Change: Summing this all up we have three clear drivers of shareholder value.
Speaker Change: In 2025, we have the catalyst of profitability in our airline operations.
Speaker Change: In 2026, we will commercialize the <unk> platform and expand our regional network.
Speaker Change: And in 2027, we expect to receive certification for the electrified powertrain on Cessna caravans aircraft.
Speaker Change: We have strong momentum coming into 2025 and exceptional opportunities before us we are laser focused on executing against.
Deanna White: With that, we would be pleased to take your questions.
Speaker Change: With that we will be pleased to take your questions.
Operator: Operator. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad.
Speaker Change: Operator.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Austin Moeller: Your first question comes from the line of Austin Moeller with Canaccord Genuity. Please go ahead. Hi, good afternoon. Just my first question here.
Austin Moeller: Your first question comes from the line of Austin Moeller with Canaccord Genuity.
Speaker Change: Please go ahead.
Speaker Change: Hi, good afternoon.
Austin Moeller: Just my first question here.
Deanna White: Does a full year continuing resolution being passed by Congress impact when you can receive new contracts or renewals on the essential air service flights?
Austin Moeller: Full year, continuing resolution being passed by Congress impact when you can receive new contracts or renewals on the essential air service flights.
Austin Moeller: Okay.
Deanna White: Deanna White, thank you for your question. Right now the DOT has a number of awards and bids that are sitting on their desk and they have yet to act upon. There are a few that do affect routes in which we operate today, and in those cases, we have received notices from the DOT to hold us in or continue the service there past the expiration date and a new carrier potentially stepping into our place. So it is done route by route, so it's not a blanket specific, but we have had some held in 90 days, four months.
Speaker Change: C N Hawaii. Thank you for your question.
Speaker Change: Right now the D. O T has a number of awards and then that are sitting on their desk and they have yet to act upon.
Speaker Change: There are a few that do in fact route in which we operate today and in those cases, we have received notices from the TNT to hold them and our content continue to service their past the extra exploration date, and a new carrier or potentially stepping into our place.
Speaker Change: It is done route by route so it's not a blanket specific but we have had some held in 90 days.
Deanna White: So we're already starting to experience that. They are We are we are able to run those routes when we do get held in at the higher subsidy rates that the FAA Reauthorization Act allows. So that that is a potential upside on our revenue.
Speaker Change: Four months, so we're already starting to experience that they are.
Speaker Change: We were able to run those routes when we do get held in at the higher subsidy rates that the FAA Reauthorization Act allows.
Speaker Change: That is the potential upside on our revenues.
Deanna White: Okay, and given the strong revenue growth on the higher mix from the on demand service, and you you had mentioned that you're offering a jet card, do you plan to shift more the fleet's airframes over to flying on demand flights from scheduled air service? Or do you expect the mix to be more even? No, we currently use our on fleet or a fleet owner certificate to mainly buy our scheduled service, both in the EAS program and in unsubsidized situations. We use operators to service most of our on-demand business. And as we've talked about before, we have roughly 400 operators that we work with on our on-demand platform to service those trips.
Speaker Change: Okay, and given the strong revenue growth on the higher mix in the on demand service and you. You had mentioned that you are offering a jet card do you plan to shift more of the fleets airframes over to flying on demand flights from scheduled Air service or do you expect the mix to be more even.
Speaker Change: Okay.
Speaker Change: No we currently.
Speaker Change: Even as our on fleet or a pre owned our certificate to mainly by our scheduled service both in the <unk> program and then on subsidized.
Speaker Change: Situations, we use operators to service most of our on demand business and as we've talked about before we have roughly 400 operators that we work with on our on demand platform to service those trips.
Austin Moeller: Great, thanks for the insight, sir.
Speaker Change: Okay.
Speaker Change: Great. Thanks for the insights there.
Speaker Change: Okay.
Amit Dayal: The next question comes from the line of Amit Dayal with HC Wainwright.
Speaker Change: Your next question comes from the line of Amit Dayal with H C. Wainwright.
Amit Dayal: Please go ahead. Thank you. Good afternoon, everyone. Good to see all the progress and, you know, some of these results. in the financials.
Speaker Change: Please go ahead.
Thank you and good afternoon, everyone.
Speaker Change: Good to see all the progress.
Speaker Change: Some of those results.
Speaker Change: And the financials.
Amit Dayal: With respect to, you know, the recently announced Surfers, Customers. Could you maybe give us some additional color on you know, what specific offerings you are providing to those customers and whether they will, you know, be monetized in 2025 or is this Still sort of a pre-revenue type arrangement.
Speaker Change: With respect to the recently announced.
Speaker Change: So for us customers.
Speaker Change: Could you maybe give us some additional color on what specific.
Offerings youre, providing to those customers.
Speaker Change: Whether they can win.
Speaker Change: It will be monetized in <unk> or is this.
Speaker Change: Sure.
Speaker Change: Sort of a pre revenue type arrangement.
Deanna White: So thank you, Amit, for that question.
Speaker Change: So thank you for that question and I'll turn it over to Susan Hardy Who's with me to discuss that.
Sudhin Shahani: I'll turn it over to Sudhin Shahani, who's with me to discuss that. Thank you, Deanna.
Susan Hardy: Thank you Deanna.
Sudhin Shahani: Anaheim, thank you for your question. So to answer the areas which we're, which these customers now have are our broker OS platform, and our operator OS platform. Both of those are things that we've been testing internally. We're now testing with these customers, they're beta customers, they've been involved kind of as we have done product development around these areas. They're currently pre-revit. Okay.
Speaker Change: Amit. Thank you for your question John.
Susan Hardy: John said the areas.
Speaker Change: These customers now have our broker OS platform and our operator Atlantis platform.
Speaker Change: Both of those are things that we've been testing internally. We're now testing with these customers that beta customers they've been involved kind of as we have done product development around these areas that currently pre revenue.
Amit Dayal: And, you know, again, sort of adjacent to this, the JVs for the electrification opportunity, are these potentially 2025 milestones or maybe a little further? So as you've seen, you know, we've announced that we're actively engaging, we've mentioned we're actively engaging with various potential JV opportunities in the supply chain to make the electrification program more efficient. As I said, we're still we're still in pretty deep discussions there. We haven't yet, we haven't made any final decisions yet.
Speaker Change: Okay.
Speaker Change: And again sort of adjacent to this the JV will be electrification opportunity are these.
Speaker Change: Potentially turning to rephrase milestones or maybe a little further out.
Speaker Change: So as you've seen we've announced that we're actively engaging we've mentioned, we've actually proactively engaging with various bulk potential JV opportunities in the supply chain to make the electrification program more efficient.
Speaker Change: I think we're still we're still in pretty deep discussions there we haven't yet we haven't made any final decisions yet.
Deanna White: And, you know, we will announce to the market as soon as we have. Okay.
Speaker Change: And we will announce to the market as soon as we have.
Speaker Change: Okay.
Deanna White: From an operating cost perspective, should we... Assume operating costs are going to be roughly flat in 2025 to 2024 or do you potentially in research You know, cost savings coming into play, you know, with the turnaround efforts underway right now.
Speaker Change: From an operating cost perspective.
Speaker Change: Three.
Speaker Change: Zoom operating costs are going to be roughly flat in 2021 2024, or do you potentially new surge.
Speaker Change:
Speaker Change: Cost savings coming into play.
Speaker Change: The turnaround is underway.
Speaker Change: Under way right now.
Deanna White: Hi, I'm glad to talk to you again.
Speaker Change: Pardon me.
Speaker Change: Hey, guys.
Deanna White: Oh, and I don't know if Sudhin wanted to answer some of that. No, as you know, we have a very keen focus on reducing costs, wherever we can. Deanna's done a fantastic job of doing as much as possible in the time that she's had to reduce operating costs going forward. As we've said, the focus, the laser focus that we have is on getting our airline profitable, as we've defined as positive adjustability for 2025. And so you can assume that those costs, the airline operations are going to go down to allow that to happen.
Speaker Change: Thanks.
Speaker Change: Does it move to account for some of that as you know we have a.
Speaker Change: Very keen focus on reducing costs.
Speaker Change: We kind of again has done a fantastic job.
Speaker Change: Doing as much as possible in the time that she's had to reduce operating costs going forward as we've said.
Speaker Change: Focus laser focus that we have is on getting our airlines profitable as we can.
Speaker Change: The findings positive adjusted EBITDA for 2025.
Speaker Change: You can assume that those costs.
Speaker Change: A lot of operations you got to go down to allow that to happen.
Speaker Change: Yeah.
Unknown Executive: Unknown Executive, Benjamin Johnson, Oliver Reeves, Deanna White, Sudhin Shahani, Sam Levenson, Surf Air Mobility Unknown Executive, Benjamin Johnson, Oliver Reeves, Deanna White, Sudhin Shahani, Sam Levenson, Surf Air Mobility I think, as we talked about a lot, you know, we intend to be strategic with our capital raises. We see a lot of opportunities that we would generate high returns on invested capital. And so to the extent that we do think about liquidity and, you know, raising capital, we would do so with the knowledge that we'd be creating shareholder values. So we would only do so with that in mind, and we intend to be very strategic when we think through that.
Speaker Change: Understood.
Speaker Change: Just last one from me with respect to liquidity.
Speaker Change: Comfortable with you know the balance sheet too.
Speaker Change: Execute this plan and maybe even your initiatives any.
Speaker Change: Growth.
Speaker Change: Strategies.
Speaker Change: In 2025, maybe 2026.
Speaker Change: I think I'm going to be because we've talked about a lot.
Speaker Change: We intend to be strategic with our capital raises we see a lot of opportunities.
Speaker Change: We will generate high returns on invested capital and so to the extent that we do.
Speaker Change: Think about liquidity and raising capital we do so with notice that we'd be creating shareholder value. So we would only do so.
Speaker Change: With that in mind, and we intend to be very strategically we think through that.
Speaker Change: Understood that's all of it.
Amit Dayal: That's all I have, guys. Thank you so much for taking my questions.
Speaker Change: Thank you so much for taking my questions.
Speaker Change: Yeah.
Dave Storms: Your next question comes from the line of Dave Storms with StormGate. Please go ahead. Good afternoon and thank you for taking my questions.
Speaker Change: Your next question comes from the line of Dave storms with Stonegate.
Speaker Change: Please go ahead.
Dave Storms: Good afternoon, and thank you for taking my questions I wanted to start by circling back to the circle of West Bay to launch if there was any early feedback there now that that's in the field, maybe if theres any next milestones that we should keep an eye out for as you get closer to that commercial launch.
Dave Storms: I wanted to start by circling back to the SurfOS beta. that's in the field. Maybe if there's any next mile...
Sudhin Shahani: Sudhin, do you want to go ahead and take that? Yeah, absolutely. So look, I would say, I mean, big picture, it's early days yet. There's, as I mentioned, there's been feedback from the beta customers through kind of the development process. And this was something that we tested first ourselves and shared with beta customers. But as you may have seen, even in a in kind of a recent press release, one of the things that we're seeing a lot of positive feedback on from the early customers are that we're actually building things that they didn't have before.
Speaker Change: They didn't do you want to go ahead and take that.
Speaker Change: Yes, absolutely. So look I would say I mean big picture, it's early days yet.
Speaker Change: As I mentioned has been feedback from the beta customers through kind of the development process and this is something that we've tested first ourself that shared with beta customers.
Speaker Change: As you may have seen even in a in kind of a recent press release one of the things that we're seeing a lot of positive feedback on from the early customers are that we're actually building things that they didn't have before and specifically we're building something that allows operators to go direct to consumer.
Sudhin Shahani: Specifically, we're building something that allows operators to go direct to consumer. Which is, which, you know, has been very well received. And, you know, they're starting to see early results from it. It's too early to sort of share, you know, meaningful results, given the timeframe that they've been using it. But early feedback has been that it's a product that's valuable for them and is unique for them.
Speaker Change: Which is which has been very well received.
Speaker Change: They are starting to see early results from its too early to sort of share meaningful results given the timeframe that had been using it but early feedback has been that it's product that's valuable for them and is unique for them.
Sudhin Shahani: I'd like to additionally add that internally, as we're developing the software with Palantir and using it ourselves, a lot of the new talent that I brought in is participating in that development process and has commented that these tools are more advanced than things that they've seen at their other places they've worked and are real excited about being part of developing them. So therefore, even though they're internal, they're also commenting on the pilot crew app that we've done that allows for workflow and time management that we've rolled out. The crew and the pilots haven't seen anything like that before, and also the weight and balance application that we developed is pretty great as far as efficiency and productivity to do.
Speaker Change: I'd like to say Additionally, add that internally as we're developing the software with talented and use it on ourselves a lot of the new talent that I brought in on.
Speaker Change: He has participated in that development process and his comment is that these tools are more advanced and things and thanks to you know there are other places they worked and I'm real excited about being part of developing them. So therefore, even though they're not they're internal internal they're also colony.
Speaker Change: On like the pilot crew ask that we've done that allows for workflow and time management that we pulled out.
The crew and the pilots have I haven't seen anything like that before and also the weight and balance them application that we developed is.
Speaker Change: Pretty pretty great as far as efficiency and connectivity to do to now a preflight requirement that takes a lot of time.
Sudhin Shahani: To do a pre-flight requirement that takes a lot of time. And I would also add to that that we've actually seen there's metrics that we've seen internally, like reducing our on demand sales team by approximately 50% and our call center volume by approximately 20%.
Speaker Change: And I would also add to that that we've actually seen those metrics that we've seen internally like reproducing our on demand sales team.
Speaker Change: Only 50% and our call center volume by approximately 20%.
Dave Storms: So that's all very helpful, thank you.
Speaker Change: Understood. That's all very helpful. Thank you.
Dave Storms: And then my second question, maybe more of a modeling question. You know, you've made clear that the focus on is getting.
Speaker Change: And then my second question, maybe more of a modeling question you've made clear that the focus is on getting the airline business profitable part of that is working through the maintenance backlog is there any runway or cadence of go into that backlog that you are you willing or able to share with us.
Deanna White: Okay, so, good to talk to you. I think that what you can assume is, as you can see, in the first quarter with our guidance, that assumes that we have resolved a pretty substantial amount of the maintenance backlog in that first quarter. I think that you will see some continuation of that, but it should reduce from here.
Speaker Change: Okay.
Speaker Change: <unk> I think that what you can assume as you can see.
Speaker Change: In the first quarter without without EBITDA guidance that assumes.
Speaker Change: Do we have resolved.
Speaker Change: A substantial amount.
Speaker Change: The maintenance backlog in that first quarter.
Speaker Change: I think that you will see some continuation of that but it should reduce from here.
Speaker Change: Understood so more weighted towards the first half. Thank you for taking my questions and good luck in Q1.
Dave Storms: Thank you for taking my questions and good luck in Q1.
Speaker Change: Thank you.
Deanna White: I will now turn the call back over to Deanna White for closing remarks. Please go ahead. Yes, I just wanted to end with thanking everyone for joining. I appreciate all of your questions.
Speaker Change: I will now turn the call back over to Deanna White for closing remarks. Please go ahead.
Speaker Change: Yes, I just wanted to end with thanking everyone for joining I. Appreciate all of your questions I appreciate all of your.
Deanna White: I appreciate all of your interests in our company and look forward to future earnings calls where we're able to demonstrate that we can clearly execute on the transformation plan, the transformation phases that we're doing, the optimization that we're doing this year, and also all the strides we're making on our Surf Air OS and our electrification initiatives. So once again, thank you all for joining.
Speaker Change: Interest in our company and look forward to our.
Speaker Change: Future earnings calls, where we're able to demonstrate that we can clearly execute on the transformation plan. The transformation phases that were doing the optimization that we're doing this year and also all of the strides we're making in all of our software and our electrification initiatives. So once again. Thank you all.
Speaker Change: For joining.
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
[music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change:
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].