Just giving it a second for the room to populate. Okay, good afternoon everyone. My name is Aashi, and I'm an analyst here at Sidoti. Today I have the pleasure of having Matt Liotta and the CEO and Co-Founder, and Mark Heinen, the CFO of Volato Group. We have 30 minutes, including the Q&A after the presentation. If you have any questions, I request you to submit them at the Q&A function at the bottom of your screen. With that, I will hand it over to you, gentlemen. Thank you.
Thank you very much, and welcome. Thank you, everyone, for joining. I'm Matt Liotta, and as Aashi mentioned, Mark Heinen is joining us as our CFO. We have the investor presentation that's available on our investor relations website. We're not going to use the entire presentation, but it is available publicly for you if you want to follow along or if you want to get additional information. My intention is to provide an overview of the company and the business. Mark will provide a financial overview, and then we'll move into questions. So we prefer questions whenever you have them so that we can maximize your time and give you as much value as possible. So with that being said, let's get started. So real quick, what we did as a company was we identified a unique market opportunity, a white space, if you will, in the private aviation business.
Specifically, we figured out that 70% of all the private flights in the United States are four passengers or fewer. And yet the large operators in the space have planes that, at a minimum, are designed for six passengers, some even larger than that. And so what we really saw was even though this was the largest segment of flights, nobody was targeting this segment. So our thesis was relatively simple. Let's find the right plane for that mission, the largest mission, and let's find a way that we can provide all the luxury, all the safety, all the reliability that the customers are used to in other light jets, but have a more efficient jet that can deliver them what they need in a better way. And so that's what we do today. We ultimately selected the HondaJet as our answer to how to service this market the best.
The reason why we picked the HondaJet is because it is a modern jet that's designed, we think, as the best jet for four passengers or fewer. And today, if you compare it to other light jets that have previously been servicing this segment, customers on a HondaJet experience more legroom, a quieter cabin, and lower operating costs, all without giving up anything other than the unused seats that they didn't need anyway. So today, we are the largest operator of HondaJets in the world, and we've secured a number of additional HondaJets that will deliver this year and all the way into 2026. We've chosen to do a fractional ownership model, which is pretty standard in the business, but what we found is that the fractional ownership model that's used by all the other companies is a timeshare model.
We thought, based upon our own experience, that timeshares weren't great and that many people disliked them, that we would find a way to actually come up with a new fractional model, fractional 2.0, if you will, that decouples usage from ownership. So today, we are uniquely the only fractional company that is not a timeshare. Our customers enjoy the ability to fly as much or as little as they want, regardless of share size. What we've done is we've created an incentive structure for our fractional owners so that they actually buy a bigger share than they fly. We do this through not only the industry's best tax program, which provides tax benefits for offsetting income, but also provides an industry-unique revenue share model that rewards these customers with yield from their investment in the plane.
We use the extra availability of the fleet when they're not flying to go out to the marketplace and source jet card and charter customers that pay a higher marginal rate and then share that revenue with the owners. In this way, we've created a win-win model between us and our owners. The more we fly, the more they save. And, of course, the more we can attract these higher margin customers from the marketplace, the better our profitability will be. So when you look at us and how we compare to others, on a spectrum, if you will, on one side of the spectrum might be companies like NetJets and FlexJet. These are the traditional fractional models that are timeshare-based. So the customers own the planes in a fractional model, so that makes them very low risk.
Additionally, because it's a timeshare, it's relatively low margin because the customers that are associated with fractions tend to have the lowest rate in the industry. Because it's a timeshare, they've essentially pre-bought their usage. That makes it low risk, low margin, and also, unfortunately, low return, requiring a massive scale in order to make good returns, ultimately. That is working for those companies in that they have, over many decades, gotten to large scale. On the other end of the spectrum, you might have a company like Wheels Up. This company owns their fleet. The planes are not owned by the customers. That makes them high cost. In addition, there's no captive flying, so they have to go find all of the customers themselves. There's quite a bit of risk on it.
Now, the customers that they go after are the highest margin customers, so there really is an opportunity for good returns, but at substantial risk. And we think that Volato is uniquely positioned in between these ends of the spectrum. We are low risk and low cost, much like the other fractional models, because our customers own our planes and we have captive flying from them. But because of our unique structure that gives us extra availability in the fleet to go out to the marketplace for high margin customers, we also have the opportunity for high return. So we, again, think this is very, very unique in the industry. We have grown pretty quick. We're a relatively young company. We're just over three years old, and we're newly public, having completed a De-SPAC in December of 2023. Today, we have 26 HondaJets in our fleet.
We also have some additional managed aircraft, but we'll focus on the fractional planes. We have grown ourselves to be one of the top light jet operators in the space, and we've done so at an impressive Net Promoter Score through our customer service-first approach. Historically, we've been supply constrained because we've only been able to get so many airplane deliveries. In fact, in 2023, we were only able to receive two HondaJets. That changes now for 2024. This will be a pivotal year for us because we now, through our firm orders for both HondaJets and G280s, we're expecting a large number of deliveries this year. Today, we have 22 HondaJets on firm order, and we expect to get eight to 10 deliveries in 2024. Additionally, we have four G280s on firm order, and we expect to get two to four of those this year.
Let me stop there, and I'll hand it off to Mark to give a financial overview, and then we can drill down on some other aspects of our business.
Great. Thanks, Matt. And welcome, everyone. I thought it'd be helpful to take you through our revenue because this is probably the most compelling part of our financials. And so Matt's going to flip to a slide. I think it's slide 32 here. And in this one, I show you eight quarters' worth of revenue, and I split it down between the different revenue types. As Matt mentioned, we're a three-year-old company, and we completed 2023 with $73 million in total revenue. But the way we like to think of it is there's three components to our revenue. The first one is the aircraft transaction revenue or sales revenue. So anytime we have a plane on order that gets delivered, we presell that plane. And once the plane comes in, we recognize revenue, and we take that transaction revenue. So that's the first piece.
But then we also, in this model, once we have the planes in place, we start flying them. So we have a component of usage revenue. It's kind of a recurring revenue stream. So as you stare at this, you can see the darker color there is the plane sale revenue, and it's very lumpy. That is going to stabilize here in 2024 and beyond as we have a pretty consistent pattern of plane deliveries expected. But then you look at the recurring revenue piece, that usage revenue, starts off in Q1 of 2022 with $2 million in revenue for usage for flying the planes. But that was with six planes in our fleet. You fast forward to Q4 of 2023 with 24 planes in our fleet, and we were at $11.8 million in that usage revenue.
So as you can see, as we grow the fleet, that recurring revenue stream, that usage revenue is going to continue to grow quarter over quarter. And the reason I explain all this is because if you think fast forward into 2024, as Matt mentioned, we expect eight to 10 HondaJets coming online. And so we'll have plane sale revenue. The revenue for a HondaJet is anywhere between $7 milion-$9 million per jet, depending on the size of the fraction sold. If we sell a whole plane, it'll be on the lower end. If we sell all 16s, it'll be on the higher end. But that points to $70 million-$90 million in plane sale revenue alone. But then you think, okay, but you're adding 10 or eight to 10 to the fleet.
So you're going to go from 24 to 32 or 34 planes by the end of the year. That usage revenue is going to continue to scale like you've seen in the past. And then on top of this, Matt mentioned the G280s coming on. We'll have usage revenue from those as well as plane sale revenue from the G280s. And these G280s, the revenue for each one of those is anywhere between $25 million and $27 million, again, depending on the size of the fraction. So let's assume we get two G280s at $27 million apiece. That's $54 million in revenue. And then you get, call it, 10 HondaJets at $8 million apiece. That's $80 million. So you can quickly see we're already at $130 million in revenue for 2024 on plane sale. And then the usage revenue is going to grow dramatically.
So you can quickly do some math and see how we could get to $200 million or greater in 2024. And then you fast forward to 2025. We have more planes coming on. That usage is going to continue to grow. More plane sale revenue. And so 2025 is going to be even better than 2024. And I want to point this out because this is really a revenue story. Even if you take something as simple as one-time revenue as a value for the company, that points to a $200 million market cap. And if you look at our numbers today, we're well south of that. So we believe there's a lot of upside in this company with the future we have laid out. With that.
Thanks, Mark. Let me jump over to an important part of the business that I want to identify. We are providing KPIs on a quarterly basis to the market and showing how we're trending on very important things. I want to point to the empty percentage that we have. In the industry, generally speaking, the largest, most scaled operators with the most efficient fleets in the fractional space generally see an empty percentage of somewhere between 30% and 40%, with 35% being their target. As you can see, we've already brought our empty percentage down below 40%, and we've done it without our fleet fully scaled. How did we do that? We did it through our software and technology that is proprietary to the company. We've built all of our own technology stack so that we can operate this business at an advantage.
Now, how does our technology do this on empty? Well, two ways. First, it uses schedule optimization in order to manage the schedule in such a way that it limits the amount of repositioning we do. Secondly, since we sell into the charter markets, we use dynamic pricing, much like an airline would, that encourages people to fly when and where we want it to, further reducing our empty percentage. So what you can see is our software has already brought us advantages early on our empty percentage, and we will continue to bring that empty percentage down as our fleet scales. Now, we know that other operators also manage their empty percentage very carefully, and many of them use discount programs as a way to try and monetize their empty legs.
We don't believe that empty leg monetization through discount programs is entirely effective, and the industry's numbers show that there's a relatively low conversion rate. So one of the things that we've sought to do was find a way to monetize empty legs in a new way and demonstrate our first example of a tech product that can drive technology revenue to the business in addition to selling and flying planes. And so what we've introduced to the market in just the last few months is a product called Vaunt. And Vaunt is a membership program that's targeting consumers. The reason why we chose to target consumers is that we understand that the private aviation participants are used to getting what they want when they want it. And if you offer them what they don't want when they don't want it at a discount, it doesn't really excite them.
You only get conversions sort of when lightning strikes. They were going to fly there anyway. They'll take the deal. What Vaunt does is it targets regular consumers who don't have the ability to fly private but would love the opportunity to experience flying private. We use a membership program that is a low $1,000 a year, so quite affordable for most consumers. Through the app that is available today in the respective app stores, our users can see all of our empty leg flights, and they can choose to fly those flights at no additional cost. This allows regular consumers to finally experience flying private. This is not going to be a way for them to plan their vacation or a business trip because these are our empty legs that we determine when and where they're going.
It is an opportunity to experience it, and we're already seeing growth. We recently issued a press release that in March, Vaunt achieved cash flow positive results. We do intend to start reporting Vaunt results in the future, but this is just the first example of technology revenue that we can use to leverage our core business of selling and flying airplanes. With that, I'd like to move into questions.
Thank you so much, guys. I will open it up for the questions. I can ask the questions on your behalf. If you want to, if you have any questions, you can add them to the Q&A function at the bottom of your screen. We already have a couple of questions, so I can kick it off with them.
Yeah, I can read these questions just to save time.
Okay, sure.
So it looks like the first question from Joseph. What is the profile of our typical fractional owner? There is not a profile per se. We have everything from new private flyers who are looking for entry-level solutions to very high net worth people, large corporations that have been in private for a very long time that are looking for the most efficient solution for their short flights with lower passenger count. So we actually see quite an array of diversity for our fractional owners. The way they pay for the fractional ownership is via cash. There's generally not a market for financing fractions of a plane. We do incentivize larger fractions, so there's more of a premium charged for smaller fractions than for larger fractions, which is part of the encouragement for them to buy bigger.
So there is some variation in the revenue and the profitability that we have for the fractions, the smallest fractions being the one that generates the most revenue and the highest profitability for us. As far as cycles, we are the entry level of aviation. So generally, we're immune to cycles. As you get into larger, more expensive aircraft, they do tend to tie to cycles. Generally, the way it goes is as you enter into a recessionary environment, people are flying on bigger and more expensive airplanes. They don't want to stop flying private, but they do want to save money. So they start using smaller and less expensive airplanes. So given that we're at the entry level of the market, we tend to not see those effects. As far as orders go, unfortunately, there's a long lead time for orders.
We generally are having to order planes about two years in advance. So we place those orders, and then we start to sell, presell customers against that order book ahead of time. Historically, we've generally presold the planes before they take delivery. So we don't take inventory of planes on our balance sheet. And so the way that works is we usually take a 30% non-refundable deposit from the customer. And then when the plane delivers, at that point in time, they owe the balance on the plane, and we recognize the revenue. So I think Mark covered that in detail earlier. But yes, we do have to order the planes well in advance of the sales. And historically, most of our revenue has come from plane sales. But as Mark pointed out, every time we sell a plane, we build the base of the operational flying revenue.
Over time, we expect that the plane sales to stay relatively flat each year, while the flying revenue will continue to grow at an impressive rate. We expect that over time, we will be able to achieve profitability not only from the overall business, but if we break out just the flying revenue, we would expect that just from flying, we'd be able to be profitable operationally in 2026. Okay, let's see. The next question is the target for recurring revs. We believe that we need to have a fleet of somewhere between 30 and 40 HondaJets to achieve profitable revenue generation from our operation when we exclude plane sales and other aspects of the business. What's great about that is we have 22 more HondaJets on firm order.
So we already have the order book to get us there, and it's only a matter of time as we get those deliveries. Regarding market share, there's an interesting dynamics that are happening. We are growing, and generally, we are taking market share. But what we're seeing as an industry right now is that the top 10 operators are actually growing in their business, and the market itself has softened from its peak in 2022. So we expect that dynamic to continue where we will continue to grow, and the market may remain relatively flat, but it won't affect our growth. So there's much smaller operators that are being harmed by the large operators taking market share. Let's see. We're not releasing a number of subs for Vaunt just yet, but we do intend to start reporting Vaunt numbers soon. It's very early days, having only launched many months ago.
We're trying to build trends so that we can properly report on that. We are happy with the results from Vaunt so far. Again, we had our first cash flow positive month in March that we reported, and we expect to continue reporting good information and more information on Vaunt as we go. As far as fractional owners selling shares, they are allowed to sell their share during the five-year process. We have no requirement to buy it from them or to help them sell it, but they are certainly allowed to. And we do have a program that is available to them to help them sell it if they wish to do that. Otherwise, they did sign a five-year contract, and only at the end of the five-year contract is the asset sold, and their pro rata of the residual value is returned to them.
Incidentally, in the industry, the five-year contract cycle is standard, and the industry as a whole sees about an 80% renewal rate. So those customers really are ending their five-year agreement and signing up for another five-year agreement. So one way to think about this is that it's more like a recurring business with a five-year cycle and a 20% churn. So it looks like there's a question regarding profitability. We actually have in our presentation some information about our path to profitability. So we really need to do three things here. We need to expand the fleet. We do need more planes. As we get more planes and more demand, we can actually increase fleet utilization by using our optimization software to more tightly packed trips together. So as we have more demand and more planes, that optimization problem actually can be solved in a more optimal way.
That ultimately leads to more and more efficiencies, further reducing our cost. What we've done is we've actually provided this curve so you can see that the combination of flight hours on an individual plane on average and the size of our fleet, what we need to achieve in order to reach profitability. Now, these curves about profitability, this is not profitability for all things in the business. This is if you exclude all other parts of our revenue, including airplane sales, and focus only on revenue generated from flying, what does it take to be profitable? As you can see, we're trending in the right direction. Again, depending upon the hours and other assumptions we might see on our flying performance, we do think that the size of the fleet needs to be somewhere between 30 and 40 planes.
As you can see, we've provided a forecast as to where that could be at the end of this year based upon our expected deliveries and our expected improvements in annual flight hours. So as far as upfront business costs, training pilots, that is absolutely an upfront cost that we have. Then as far as fleet maintenance goes, the way we've done this is we've entered into an agreement with Honda where we pay on a schedule based upon usage, a fixed rate, and then all the maintenance risk is on Honda. So we know exactly what it costs us to fly now and into the future, and they take all the risks. So it's a little bit more like insurance. So over time, these costs scale with the business.
The overhead is the part that we really get optimization on because the number of people that you need behind the scenes to operate 10 planes is the same as 20 planes and 40 planes. So we are fully scaled out in terms of our SG&A. So really, all of the costs as we grow are going to be mostly incremental.
Got it.
Oh, it looks like we're short on time here.
Yeah, you want to take the last one, and then we can wrap it up?
Yeah. So there's a question about board changes. So we did recently announce a change to our board. We actually decreased our board from seven members to five members. And that's all part of us trying to be more nimble as a business and reduce some of our overhead costs. We do expect to announce some additional changes to the business to further enable us to be nimble and further reduce our costs.
Sounds good. Thank you so much, guys. Thank you for taking the time and speaking to us today. Thank you. Really, really appreciate your time here.
Thank you.
Thank you, everyone.
Thank you.