Volato, a private aviation company, has made a historic announcement of its intention to go public by partnering with PROOF Acquisition Corp I (PACI) for a strategic business combination.
The agreement, approved by the respective boards of directors of both companies, will result in Volato becoming a publicly traded company with the ticker symbol “SOAR” and adopting Volato as its corporate operating brand.
The deal is expected to be completed in 2023, subject to customary closing conditions and approval from PACI stockholders.
Disruptive Business Model
Volato’s journey as an innovator in private aviation began with its unique asset-light business model, a floating fleet of private jets, and an array of customer-focused programs.
The company offers fractional ownership, jet card and deposit programs, aircraft management services, and on-demand charter solutions, catering to the needs of discerning travelers across the United States.
Under the leadership of CEO and Co-Founder Matt Liotta, Volato has already made significant strides in the private aviation market, generating nearly $100 million in revenue during FY 2022.
With this strategic merger, the company is poised to accelerate its vision of transforming the industry by delivering innovative solutions that enhance the aviation experience for all customers.
IPO: A New Milestone in the Company’s Legacy
Matt Liotta, expressing his excitement for the merger, commented that Volato is well-positioned to be a change maker in the private aviation industry. He highlighted their asset-light business model designed to maximize fleet utilization and profitability and their unwavering commitment to delivering a seamless and elevated aviation experience for owners and passengers.
Both parties view the merger with PACI as an ideal partnership. John Backus, CEO of PACI, lauded Volato’s management team for their depth of experience and innovative yet simple business model within the highly regulated and traditional private aviation industry.
Backus acknowledged Volato’s entry-point positioning, protected by its efficient best-in-class HondaJet fleet, making it a solid operating company with high-growth potential and low volatility.
Nicholas Cooper, Chief Commercial Officer and Co-Founder of Volato added that the merger will provide them access to capital needed to fund their business plan and execute against their near-term objectives, further reinforcing the company’s commitment to providing unique and customized travel experiences.
In addition to the business combination, Volato has completed a $48.4 million initial closing of a Series A preferred equity funding. The proceeds from this raise will be used to fund Volato’s working capital needs, including deposits for future aircraft deliveries.
CEO: His Vision for the Future of Aviation
Volato, according to CEO Liotta, was envisioned as a game-changer in affordable private jet travel. He reveals to Business Traveler USA, “Seventy percent of private aviation missions are for four passengers or fewer.”
Aside from full or fractional ownership, Volato also offers leasing and private charter services.
Becoming the first non-timeshare fractional provider, Volato has innovated how one can own a fraction of an airplane and operate a fleet. Liotta elaborates, “We took the typical whole plane ownership concept and applied it to fractional freight. Our model allows any usage of our fleet, regardless of share size.”
In addition, the brand also offers users a revenue share, which is unique to the industry. “They are owning the aircraft, and every commercial revenue that we produce from the aircraft, they’re able to participate in, whether it’s them flying or somebody else, so that alignment of interest is there.”
“Quite a bit of the business is just a few passengers, and what I think so many of the participants share is that we don’t like to waste. When you see that you’re sort of wasting the space of a larger jet than you need, it becomes potentially interesting to find a solution that has less waste. It’s not necessarily giving something up to be cheaper, it’s just a matter of wasting less so you get more value for your spend.”
When the company was first established, Liotta faced various challenges, including the long lead times to acquire the aircraft. “There’s a good bit of overhead in establishing a business in this space because of the expectation of customers to have an always-available operation,” he explains.
“For us, while those issues were daunting, we saw a chance to change things and be innovative and offer solutions that were not previously available in the market, which we thought other people were looking for, and we’ve been proven right because we now have a number of customers and this is what they were looking for.”
View: The Evolution of Private Aviation
Liotta emphasizes how newer, more efficient planes are transforming the aviation business. “They offer operation cost savings and a smaller carbon footprint,” he says. Using the HondaJet, the most efficient in its class, Volato is able to carbon offset all its flights, assuring customers of a minimal environmental impact.
He further elaborates on the changing landscape of aviation. With pilot shortages and decreased regional services by major airlines, private aviation is stepping in. “Private aviation is filling the void, especially in underserved areas not covered by commercial airlines. It’s even becoming a commuting option for some,” he discusses.
Historically, Volato focused on a four-passenger mission, but the brand is now broadening its horizons with the introduction of larger G280 aircraft.
“We aimed for a plane that could handle more passengers or traverse greater distances without compromising on efficiency or cabin experiences. The G280 perfectly fits that bill,” says Liotta. This efficient, ten-passenger aircraft is Volato’s latest addition.
While Volato aims to cater to as many destinations as possible, the brand is cautious not to dilute its resources and compromise on customer relationships.
“Our focus is to deepen our reach in the existing markets and be strategic about any further expansion, ensuring operational efficiencies and superior customer service,” Liotta elaborates.
Volato currently has a strong presence in the Southeast, with its top markets being Florida, Texas, and California. Going forward, the brand aims to branch out more in the Midwest, all while refining its current services.
The company’s decision to go public marks an important milestone in the company’s growth. This strategic move not only reflects Volato’s robust financial health but also underscores its commitment to usher in a new era of transparency and accountability. It also signifies the company’s optimism about the future prospects of the private aviation industry.
As the CEO mentioned, this event is just the beginning of a series of exciting developments that Volato has in store for its customers and stakeholders. As we keep a close watch on Volato’s journey, it will be interesting to see how the company navigates the challenges and opportunities that come with being a publicly traded company.
— Story written by Enrique Perrella and Rachel Dube