Jetstream Aviation Capital has expressed its intent to commit to purchase for up to 250 hybrid and fully-electric powertrains from Surf Air Mobility.
October 11, 2022 08:00 AM Eastern Daylight Time
LOS ANGELES--Surf Air Mobility Inc. (“SAM” or the “Company”), a regional air travel company working to accelerate the adoption of green aviation, and Jetstream Aviation Capital, LLC (“Jetstream”), the largest global aircraft lessor focused exclusively on commercially-operated turboprop regional aircraft and engines, announced today an agreement regarding the principal terms of an arrangement to finance up to $450 million through a customized operating lease and sale structure that will fund the planned growth of SAM’s fleet of turboprop aircraft. SAM will have access to this financing facility over the next six years for both new and used Cessna Caravan and Pilatus PC-12 aircraft, subject, among other things, to the entry into separate binding sale and purchase agreements for each individual aircraft and a separate binding lease agreement for each individual aircraft.
In addition, Jetstream has expressed its intent to commit to purchase up to 250 hybrid and fully-electric powertrains from SAM over the course of five years, subject to and post FAA certification, and the negotiation of pricing, terms and the minimum commitment and definitive documentation, demonstrating a meaningful commitment to SAM’s mission to electrify the regional air ecosystem. Each powertrain is expected to create one-time revenue at sale and multiyear recurring revenue streams as it is being used by the operator.
This agreement will help enable SAM to grow its fleet to meet route expansion plans and customer demand as it seeks to expand its regional air travel footprint and sustainable flying solution.
SAM is seeking to build a regional air mobility ecosystem that will sustainably connect the world’s communities. SAM intends to accelerate the adoption of green flying by developing hybrid electric powertrain technology in order to reduce direct operating costs and emissions from regional air travel by offering original equipment manufacturers (“OEMs”) and third-party operators the ability to order new or upgrade existing aircraft with hybrid electric powertrains. SAM plans to deploy the world’s largest fleet of hybrid electric aircraft on regional routes being serviced today and on additional routes in new markets. SAM’s immediate focus will be on scaling operations using the Cessna Grand Caravan, which will be the first aircraft to be electrified using SAM’s proprietary technology, hybrid electric powertrains, that will not require charging infrastructure targeted for commercial certification by 2025.
“We believe the customized aircraft leasing structure from Jetstream will provide us a capital efficient way to more rapidly expand our operations at the scale necessary for a future when electrified aircraft unlock the latent demand for convenient, affordable regional travel on new routes across the U.S.,” said Sudhin Shahani, founder of SAM. “Jetstream's proven record of leasing aircraft in this asset class at scale, especially for the Cessna Grand Caravan, will help strengthen Surf Air Mobility’s position in the regional mobility and turboprop category.”
SAM continues to create the platform for regional air mobility, bringing together the ecosystem of partners and services necessary to deploy, operate, maintain, and sell electrified aircraft at scale. By creating a single platform that benefits the entire value chain of regional mobility, SAM can better serve operators, airports, OEMs, and the consumer.
“We believe the regional turboprop asset category is positioned for significant growth over the next decade as electrified aircraft enter into operations,” said Stuart Klaskin, Chief Executive Officer of Jetstream Aviation Capital. “With electrified commercial aviation around the corner, we’re looking forward to lending our expertise in this growth segment of the aircraft market.”
Jetstream has long-standing relationships with Southern Airways Express and Mokulele Airlines, two companies who have entered into a definitive agreement to be acquired by SAM, subject to closing conditions and regulatory approval.