When a newly public company is months late filing its quarterly financial reports, concerns often mount about the holdup.
But Kinston-based flyExclusive came through last week with its belated first quarter results, followed a day later by its second-quarter financials. New CFO Matt Lesmeister promised to get the news out on a timely basis in future quarters.
The reports suggest that the private-jet charter operator controlled by CEO Jim Segrave is showing nimbleness in the face of lots of turbulence. It still has to prove it can make money as the fifth-largest company in the business of arranging private-jet service for companies and wealthy individuals.
Net loss before taxes totaled $27.9 million in the first quarter, then $60.8 million in the second quarter. Revenue declined to $159 million during the first half of the year, versus $177 million in the year-earlier period.
About 90% of flyExclusive’s first-half revenue, or $147 million, came from its Jet Club and charter service.
For the full year, flyExclusive is likely to post revenue of about $331 million and a pre-tax operating loss of $51 million, according to analyst Marvin Fong of the BTIG investment firm. He predicts the company will swing to an $18 million profit in 2025 with revenue gaining 31% to $428 million. (Two years ago, a flyExclusive report projected net income of $102 million and revenue of $726 million in 2024.)
flyExclusive’s results suffered when it broke up with its largest customer, Wheels Up, which had made up 38% of revenue in the first half of 2023. The companies have pending litigation to sort out their business ties.
Meanwhile, flyExclusive had been spending more than $1 million a month for various consultants related to its December IPO with a New York-based special-purpose acquisition company, or SPAC. Those expenses have now been mostly eliminated.
flyExclusive is changing its fleet from 37 large cabin and super-midsize jets that Segrave says were losing more than $3 million per month. Because of maintenance, repairs and other issues, those planes were unavailable nearly 70% of the time on a given day, he says.
So far this year, the company has sold 15 of the 37 jets, reducing its losses by more than a third. The company is also making a profit from those sales because of strong demand for aircraft in the secondary market, the CEO says.
flyExclusive is shifting to relatively new Challenger 350 jets, which Segrave says operate more efficiently and require fewer workers. The smaller jets are made by Canada’s Bombardier.
In the process, the company has cut its payroll from as many as 750 to about 620 with plans for about 20 more positions to be eliminated, the company said. Most of those workers are based in Kinston, where the company has its main maintenance operations.
In 2025, “[we] estimate the fleet of 20 Challengers will generate around $80 million per year of contribution profit, versus the $39 million peak annualized loss of the non-performing fleet,” analyst Fong said, according to Private Jet Cards Comparisons, an industry website.
flyExclusive arranged a $25 million capital infusion last week. As of June 30, the company reported cash and cash equivalents of $11.6 million.
flyExclusive and Wheels Up are among the market leaders for price-conscious travelers, often undercutting market leaders NetJets and Flexjet by 30% to 60% on transcontinental flights, Private Jet Cards reported.
The company’s shares closed Wednesday at $4.32, for a market cap of nearly $600 million. The shares have traded between $3.39 and $24.21 since the IPO. Segrave controls a majority of the company’s voting power.