Volato's Timeline and How We Got Here

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Volato has been making a lot of the wrong-kind of headlines recently. Once upon a time, Volato was churning out press releases of expansion, growth, SPACs, partnerships...

Oh wait, they were a startup in 2021.

This sounds familiar!!!

Recently the press has been going in the wrong direction.

Volato Timeline: how we got here

Let me lay out a timeline for you as I understand it, some of these dates may be a touch off but I'm citing sources, many of which is news by Private Jet Card Comparisons, the leading voice in news in this space.

September 2021: Volato founded by serial entrepreneur, Matt Liotta, with the idea to create the Netjets experience on Very Light Jets, while making it more palatable for business jet fliers. Liotta's family office puts up $3m of the initial $5m raise.

Spring 2022: Volato acquires Gulf Coast Aviation for their 135 certificate, operating team, and allows them to expand west. Terms unknown.

September 2022: Volato expands their fleet offering, including the Gulfstream G280, marking a pretty significant shift away from the HondaJet. Also expanded their charter operation.

Spring 2023: Not a whole lot is happening, mostly integrating all the expansion from 2022.

May 10th, 2023: Volato places order for 23 HondaJets, estimated over $16m in value.

May 26th, 2023: Volato's largest competitor Jet It shuts down abruptly, leaving owners stranded. Some owners move to Volato.

October 4th 2023: Volato launches Vaunt, a mobile app for $1,000 per year where you can book empty legs for free.

December 2023: Volato goes public via SPAC merger with the ticker SOAR.

Q1 2024: Volato doesn't recognize any revenue of fractional ownerships because of HondaJet delays, reports Adjusted EBITDA loss of $13.1m. Raises $13m to "unlock G280 deposits."

June 2024: Volato receives a non-compliance notice from NYSE. Told they need to get a plan together to fix it.

July 20th, 2024: Rabin (former CFO and then President during the SPAC) resigns from Volato.

July 30th, 2024: Volato takes delivery of Gulfstream G280, according to some people I know, immediately offers it for sale as a whole aircraft.

August 17th, 2024: Vaunt (the empty-leg app for the Volato Hondajet fleet) was sending out text messages with a new offering called the Priority Upgrade which guaranteed you skip the line. One follower on twitter said that they cost $500 a pop and "never expired" (assuming the company stayed around).

August 31st, 2024: Volato announces they have offloaded management of their fleet to FlyExclusive and lay off basically all staff immediately.

September 9th, 2024: NYSE accepts Volato's plan for restructuring following the FlyExclusive deal.

September 12th, 2024: Volato facing a class-action lawsuit from employees.

September 15th, 2024: HondaJet terminates Volato's aircraft purchase agreement even though Volato had still planned to act as a sales agent for fractional aircraft being operated by FlyExclusive.

Here's a chart. It's more bad news lol.

Alright, that's a whole lot of stuff, but hope you understand how we got here.

With HondaJet terminating the contract and Volato having to to sign new purchase agreements to take delivery of aircraft, I'm actually not sure what core business function Volato currently serves.

According to my LinkedIn feed, they fired everyone and there are a lot of HondaJet pilots looking for work. There is also a lot of confusion around what is actually next for Volato fractional owners.

Different than Jet It?

Jet It, which was the other fractional operator of Honda Jets and at the time, larger than Volato, ended things abruptly for owners. They basically said "good luck, here are the other people who own your airplane" and the CEO disappeared from the zoom call.

Those owners, usually 8 of them, had to decide what they were going to do. It was a madhouse of shuffling during that period of time, and everyone (including Volato) was jockeying for position.

This is the tough part of fractional ownership, you actually own the asset. If the operator managing the asset goes under, you're still holding part of the airplane title.

I have received some communication from a Volato fractional owner that basically the 16 owners of their airplane need to agree to a new contract with FlyExclusive that changes the terms on how the revenue share works (Volato paid owners for charter hours somehow. Even owners didn't understand how it worked).

This is an operational nightmare for the owners and for the folks at FlyExclusive trying to transition those owners onto the new platform and program.

What's next for Volato and HondaJet?

The Vaunt App, according to Volato's 10-K, is a subsidiary of Volato. The future of that application is currently in the balance. I have heard really mixed reviews of the Vaunt experience, and I've written about it before.

As a reminder, take all my suggestions with a grain of salt and do your own research. I have a slightly more informed opinion, but doing your own due diligence is always required.

I figured for $1,000 and you could get a decent empty leg, that's a decent deal.

Now, it looks like that might have been a bit of a cash grab for Volato.

HondaJet has an even bigger problem, with their two largest customers going belly up within 18 months.

The used Jet It HondaJets haven't even been absorbed into the market yet. (2020 Jet It, 2021 Jet It, there's another one that's off market). Now they've lost their top two customers in 18 months. We'll see what they decide to do going forward.

Key Takeaway: If it's to good to be true, it usually is

The private plane is a time machine that saves hours a day and nights away. It will never be cheaper than flying first class. Time is the only thing you can't buy more of. Private aviation is as close as possible.

Volato promised cheap flights. It made zero sense to buy any more than 1/16th of an aircraft because Volato promised every owner too much.

I can't figure out how Volato made money (but some did really well in the IPO).

Until next week,

Preston Holland

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