flyExclusive Provides Aircraft Management to Volato. Has Option to Buy.

Private aviation operator flyExclusive has entered into an Aircraft Management Services Agreement (“AMS”) with Volato Group, the largest HondaJet operator in the United States. As part of the overall deal, flyExclusive also has the option to buy Volato over the next twelve months.

Aircraft Management & More

This is much more than just an aircraft management agreement, since it envisages the Volato customers moving over to become flyExclusive customers.

Under the terms of the agreement, flyExclusive will manage flight operations, sales and expenses of Volato’s fleet, consisting of 13 fully fractionalized HondaJet aircraft, 8 leased HondaJet aircraft and 4 managed aircraft. The goal is to transfer aircraft to the flyExclusive certificate, which will occur over the coming months in coordination with the FAA. The Company will also execute the flights for the Volato customer base of approximately 184 fractional customers and 265 block customers on the Volato certificate, until they are moved over to flyExclusive agreements, and will provide flights to Volato’s retail and wholesale business. This will significantly increase the flyExclusive direct-to-customer facing business.

“As a fully integrated operator, flyExclusive is well-positioned to offer synergistic value to Volato’s clients and deliver enhanced value for our overall growing customer base,” said Jim Segrave, Founder and CEO of flyExclusive. “Over the years, we’ve made strategic investments to remove industry bottlenecks and grow and maintain a leading, consistent customer experience. We’re proud to welcome Volato’s customers and look forward to offering them access to our growing fleet of light, midsize and super-midsize jets.”

Volato revenues, excluding aircraft sales, expected to transfer to flyExclusive are approximately $75m on an annualized basis. Due to the infrastructure flyExclusive has in place, the company says it is confident these flights can be executed with minimal additional overhead. Volato will continue to take delivery of new HondaJets and Gulfstream G280s that are presold as fractional aircraft, and these will become part of flyExclusive’s fleet. Earlier this year Volato had said it was anticipating between 10-12 aircraft to be delivered in 2024 - consisting of 8-10 HondaJets and 2 Gulfstream G280s.

The AMS also provides flyExclusive, with access to Volato’s technology through a software license agreement. Although, Volato is retaining control of its Vaunt product, which is a platform offering access to empty legs, and flyExclusive can add its own empty legs into the Vaunt program.

“flyExclusive is a proven operator with a robust platform and unwavering focus on the customer experience,” said Matt Liotta of Volato. “This agreement provides mutual benefit to both of our companies and, most importantly, our customers benefit by increased flight and service options with the reliable and high-quality service they have come to expect from best-in-class operators.”

flyExclusive (FLYX) told SherpaReport that Volato jet card and insider customers are being offered three options for transferring their unused account balances to flyExclusive:

Option 1 – No additional up-front funds required

• Your existing balance will be transferred to FLYX in the form of a promotional flight credit.
• Your Volato balance can be used toward FLYX flights at the rate of 30% per flight.
• You will have to fund 70% of the flight estimate via credit card or wire prior to departure. One-third of your current balance on your Volato account is available per year in this option until funds are exhausted.
• You are only able to use these funds on the HondaJet fleet.

Option 2 – Immediate Credit

• Your existing balance will be transferred to FLYX in the form of a promotional flight credit.
• FLYX will credit your account for the amount of new funds deposited toward a FLYX program, plus your remaining Volato balance, up to 100% of your Volato balance.
• There will be no restrictions on how fast you can use the And you will have full access to the entire FLYX fleet.

Option 3 – Additional Funding Credit

• Your existing balance will be transferred to FLYX in the form of a promotional flight credit.
• If you deposit twice your current Volato balance with FLYX, FLYX will give you a 130% credit on your Volato funds.
• By way of example, if you have a $50k balance with Volato and deposit $100k with FLYX, in addition to the $100k of new money funded FLYX will credit your account 130% of your $50k balance for a total of $165k in funds available.
• There will be no restrictions on how fast you can use the funds and you will have full access to the entire FLYX fleet.

The agreements for the transfer of the fractional owners are currently being finalized.

Option To Buy

As part of the Agreement, Volato has granted flyExclusive a twelve month option to cause Volato to merge with a subsidiary of flyExclusive. In other words, flyExclusive can buy Volato over the next twelve months, with a price based on Volato’s common stock price. As a point of reference, Volato Group Inc is traded on the NYSE American under the symbol SOAR and at 3rd September 2024, Volato had a market capitalization, ie value, of under $12m. It has also been loss making since it went public under a SPAC deal in December 2023.

Note, flyExclusive was the 5th largest private aviation operator in North America in 2023, flying over 55,000 hours, while Volato recorded over 1,000 hours per month and over 12,000 total flight hours in 2023, coming in at 17th on the list of largest operators.