Volato to Drop 5 Leased Jets, Furlough Pilots

The move comes as the CEO of the fractional aircraft operator said the company is 'facing financial pressure.'

Caleb Revill

Monday, August 19, 2024 at 05:45 PM ET

Verified

Edited By:

Kimberly Johnson

In a company letter from Volato CEO Matt Liotta obtained by FLYING, he explains his decision to ‘rightsize’ the company’s fleet and crew by removing five leased planes and furloughing some of its pilots. [Courtesy: Volato]

Key Takeaways:

Volato is facing severe financial distress, including a $34.3 million net loss and negative working capital, which has raised "substantial doubt about the company's ability to continue as a going concern" and led to a NYSE non-compliance notice.
To address these issues, Volato is "rightsizing" by removing five leased planes and furloughing pilots due to delayed HondaJet deliveries and lower-than-anticipated demand growth, aiming to increase fleet utilization and profitability.
The company has submitted a plan to the NYSE to regain compliance by December 2025, while management believes current cash will fund operations for at least one year.
The article draws parallels to the failure of Jet It, a similar fractional ownership operator that struggled with a business model reliant on new aircraft sales and market rate discrepancies.

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Volato (NYSE: SOAR) has notified employees of plans to remove five leased planes from its fleet and furlough pilots in an attempt to lessen financial pressure gripping the fractional ownership charter jet operator.

A Form 10-Q—a quarterly financial report submitted to the Securities and Exchange Commission— filed by Volato on August 14 showed the company spiraling into the red, recording a net loss of $34.3 million for the six months ending June 30. The same form stated Volato has a negative working capital of $18.2 million and an accumulated deficit of $98 million as of June 30. Net cash used in operating activities for the six months was $7.4 million.