IPO Alert: What to look for when Surf Air Mobility goes public

The aviation industry is gradually gaining altitude after a prolonged slowdown marked by travel restrictions and flight cancellations during the pandemic. However, inflation and financial uncertainties have dampened the recovery to some extent. Against this backdrop, electric aviation pioneer Surf Air Mobility, Inc. recently announced its intention to become a publicly listed company.

The Los Angeles-headquartered company is on a mission to develop a regional air mobility ecosystem for operating flight services in a sustainable manner.  The goal will be achieved by expediting the adoption of green flying through the development of hybrid-electric and fully-electric powertrain technology, in association with commercial partners.

Direct Listing

The company has chosen to go for a direct listing, considering the convenience and flexibility that offers. While the direct listing procedure does not require underwriters, the management is engaging Morgan Stanley as the financial consultant. Though the initial plan was to go public through a SPAC merger, it was later scrapped.

NYSE Listing

After securing the required regulatory approval, Surf Air Mobility will list on the New York Stock Exchange under the symbol SRFM. Ahead of the listing, the company will also acquire Southern Airways, which will become its wholly-owned subsidiary. It is expected that the transaction would create significant value for Surf Air and its business while creating stockholder value for the company’s shareholders following the listing.

As far as achieving long-term operational success and creating shareholder interest in investing in the business are concerned, Surf Air Mobility bets on the extensive experience and expertise of its management team in the multiple areas of aviation, electrification, and consumer technology.

Financials

In a regulatory statement submitted to the Securities and Exchange Commission, the company said its revenues climbed 14% annually to $5.51 million in the quarter ended in March 2023. A 31% growth in the core On-Demand division more than offset a decline in revenues in the Scheduled segment. Meanwhile, net loss widened to $20.6 million from $10.6 million last year.

In the fiscal year that ended in December 2022, total revenues surged to $20.3 million from $11.8 million in 2021. The net loss more than doubled to $74.4 million. As of March 31, 2023, Surf Air had $24.4 million in debt outstanding.