Thank you everyone for coming to the Needham Growth Conference this year. My name is Max Barsamian. I'll be your Needham host today. Please welcome Blade Air Mobility here with CFO Will Heyburn. This will be a presentation followed by some Q&A, so leave time for questions at the end. But with that, I'll kick it over to you. Thanks, Will.
Thanks so much for the intro, Max. We're gonna start with a quick video, give you a little overview of our business, and then we'll dive in. Great! Well, good afternoon. Thank everybody for your, your interest in Blade. We'll start with kind of a quick walkthrough of our different business lines, how the unit economics works, and then would love to take some of your questions. Before we dive in, we'll talk about some forward-looking statements today, subject to risks and uncertainties. You can check more about that in our 10-K. Blade is the largest asset-light air mobility and medical logistics company in the United States. We're, we're focused on two primary areas where we offer these services. In medical, we're the largest transporter of human organs in the United States, bringing transplant organs from donors to recipients.
We work for hospitals that are transplant centers. They pay us, not insurance. It's a great, growing, profitable business for us, and we'll talk more about it later. In our passenger segment, we divide it into two business lines. In short distance, we utilize helicopters and seaplanes to take people over short distances between 10 mi and 100 mi, and we can do that for starting at about $20 a seat, in the example of flying between Manhattan and New York City airports or flying between Nice and Monaco. We also offer full aircraft charter, and we're doing this in places that are either geographically contested or very congested, like New York City.
That's really where we can find that great value prop, where you would probably pay more this afternoon to take an Uber to JFK than you would to take a helicopter with Blade, and we get you there in five minutes. So we really think it's a great value prop, and as we'll talk about a little bit more, the unit economics are fantastic for us. We start breaking even 2.5 out of six seats full, and we just had our first flight profit positive quarter for that business that we've been building diligently over the last two years, in a massive market. We'll get into that a little more. Then finally, we have our jet and other segment. This is where we fly people in full aircraft charter, fixed-wing jet aircraft.
It's a great complementary business, particularly to our medical business, 'cause we use the exact same kind of aircraft, whether it's a helicopter or a jet, to serve an organ as we do a passenger, so we get some economies of scale there, and this is good, consistent flight profit margin for us. We also have partners that pay us to get in front of our customers. That flows through this business line as well. Before we dive in a little more on the segments, wanna make sure our asset-light model is clear. Trinity Air Medical does not own or operate any aircraft.
This is what has allowed us to be so capital efficient as we scale, and it also allows us to leverage the demand that we have across medical and passenger for the same kind of aircraft to drive a great deal with the third-party aircraft operators that fly on our behalf. We fly so many hours that we're able to negotiate capacity purchase agreements with our operators that emulate the same fixed cost leverage you would get if you did own aircraft. For example, if we're committing to fly 40 or 50 hours per month to a particular operator, once we get above that guarantee, our rates will go down because that operator has covered their fixed cost leverage. So it's really important to understand that Blade is not a marketplace. We have deeply embedded long-term agreements with operators that give us great economics.
We benefit from the scale across our passenger and medical businesses to provide great availability and great pricing in both business lines, and we've done this without having to invest in capital expenditures to grow.... It gives us a ton of flexibility, and we're very careful to think about our capacity purchase agreements as almost like the base load of a power grid. It represents a little more than half the flying that we do, but then we keep a significant margin of safety because the other half we're flying out in the general spot market. So we always have flexibility, and we know we're gonna hit those commitments that we make to those operators. When you think about the financial drivers of the business, there's two primary ways that we sell our products.
In our buy-the-seat products, your revenue unit is a seat, and so there's a mismatch between our cost unit, which is an hour of flight time or a flight. So we need to get that load factor or seat utilization, as we call it, up to above break even to hit our target flight margins that are about 20% or beyond. If you look at some of our most mature businesses, think about flights between Manhattan and the Hamptons, we'll make 30%-35% plus flight profit margins in those mature business lines because our load factor is so high. Then, we also sell both passenger and medical flights through charter arrangements. In these situations, our revenue unit is a flight, and our cost unit is a flight, so we can generate consistent flight profit margins across both of these methods of selling.
We tend to make a little bit lower flight profit margin when we do it that way, but we're taking less risk, and in the case of the medical business, there's far fewer fixed costs below the flight profit line. That's why we've had consistent positive segment EBITDA in the medical business. And then complementing both of these two methods of selling our core aviation products are ancillary services that we offer both in the medical and in the passenger business. In the passenger business, 20%-30% of people who fly to the airport are picking a more expensive fare class that gives them more flexibility. They're paying us to have a car waiting for them right when they land in Manhattan. They're paying to have a pass that allows them to take $100 off every flight.
In the medical business, our customers are paying us to have lights and sirens, SUVs that are ready and waiting when the aircraft lands to get them to the recipient more quickly. So we really try to do this soup to nuts, and all of these add-on products enhance our margins, and we'll talk more about that. In short distance, we're laser focused on places where the need exists today and where the unit economics makes sense with conventional helicopters and seaplanes. So for us right now, that means that we're focused on really three primary markets for our short distance business. In Vancouver, we're flying between Vancouver and Victoria, using helicopters for between $200-$300 a seat. We can do that flight in 25 minutes.
We're competing against ferries that are much slower, much less reliable, and particularly in the summer, we have competitors that use seaplanes, but we have a big advantage in that we're instrument flight capable, so we can fly at night, and we can fly if the weather gets bad. So we're considered to be a premium product there, and it's been a nice growing business for us this year. In the United States, where you might be more familiar, we're focused on New York City, where you are right now. We fly people between Manhattan and the Hamptons for about $1,000 a seat. That's a mature, profitable business for us, and then we're two years into our airport transfer product. This is a massive market. About 27 million people a year take a private vehicle between one of the three New York airports and Manhattan.
They're often paying $200-$300 for a car service, and I would encourage you to figure out what you're paying. We can do this for starting at $195 a seat and five minutes. We're growing incredibly quickly, and we just reached a major milestone in our most recent quarter. It was our first quarter of positive flight profit for this product, something we've been working to for a very long time. You can see how we got there. When you think about the unit economics of flying between Manhattan and the airport, we have two primary cost components. We pay our operators a fixed hourly rate for flight time in the air. For the Bell 407 that we use for this product, it's about $1,500 an hour, and then we pre-negotiate how long that flight's gonna be.
So in the case of flying between Manhattan and the airport, we're always gonna pay 0.2 of a flight hour to go between those two destinations. So you've got $300 of flight costs, and then you've got a landing fee that's charged by any operator of airport or heliport infrastructure. They tend to be about $200 per landing, and because we're using the same aircraft going back and forth between the same two locations all day long, we share every landing fee with an arriving flight and with a departing flight. So think about that as being $200 of landing fees, $300 of flight time. For $500, we can move six seats to the airport, and that's how we get to our base level of 2.5 seat break even.
But we're actually, on average, charging much more than $195 because people are paying for cars. People are paying for flexible fares. Most recently, our average price per seat was in the high $200s. So we've been able to come at it both directions, consistently increasing our average price per seat, consistently increasing our volumes to get where we are today, which is a flight profit positive product for us. Jet and other much simpler business. We get a request to fly someone, and we quote it at a consistent flight profit margin. It's a great way to increase our throw weight and our scale and fixed wing. It gives us access to more aircraft that we can utilize for medical, and it's a business that we wanna stay in. Moving into our medical business, our largest product by a significant margin.
In this business, we are working with some of the 250 transplant centers that exist in America to help them solve the critical logistics problem of getting an organ from a donor to a recipient in time, and time is critical in this business. The heart has about four hours from the time it's taken out of a donor to get to a recipient. Lungs, maybe six-eight, maybe eight hours for a liver. That's where we're focused. Of the 40,000 transplants that happen in America every year, we're focused on the slightly more than a third that are heart, liver, lung because they have to use dedicated aircraft to get where they need to go in time.
The way that this business works is one of the 56 organ procurement organizations in America, they divide the country into geographic areas, and when someone is available for donation, usually a traumatic brain injury, that organ procurement organization uploads all the information about that donor into a database that's maintained by a group called UNOS. That database also contains all the potential recipients for that donor organ. An algorithmic match is created, and it generates what's called an organ offer that goes to our customer, the transplant center. They will evaluate that offer for a number of additional criteria that are specific to their hospital. They may say, "We don't want an organ that's hepatitis positive." They may say, "We don't want an organ that's this particular age or this particular lifestyle." They'll accept or reject the organ based on those criteria.
If they accept it, that's Blade's attachment point in this product. That's when they call us, and we arrange soup to nuts, lights and sirens, SUVs, going to a helicopter, maybe connecting to a fixed-wing aircraft, catering on board, and then you do the whole thing in reverse. These hospitals tend to send their own surgeons from the location where the recipient is to wherever the donor is, take it out themselves, and fly back. So a lot of moving pieces and things like this that require aircraft positioned all over the country to make it effective, you don't have very much time to respond, and to be able to do it at a low cost. So it's really important that we're able to leverage our national platform that we built for both passenger and medical. We believe that we are the low-cost provider in this industry.
We think we have about 20%-30% of the market share in organ logistics in a very fragmented market. We think there's an opportunity to be the majority of this market over time. We've been taking market share very effectively, and the market itself is growing very quickly. New technology and new positive pressure from Congress and from the government has pushed organ transplant centers to fly farther to pick up organs that maybe would not have had a match two or three years ago. There's technology that can preserve organs for longer in transplant. So when we look at our 65% growth last quarter and 99% the quarter before, roughly half of it has been same-store sales growth. It's been our existing customers flying more and flying farther.
So it's a great business to be in, and we think we can continue to grow share and grow with our customers as they use more and more of these devices that will allow them to be more aggressive, and the overall number of organs that are transplanted in America can continue to grow. Now, that's not the only way that we're growing in medical. We're launching new products to serve our customers in inventive ways and make their lives easier, and allow them to handle this influx of new volume that they're getting because of technology. The most exciting one that we just announced last quarter is what we're calling Trinity Organ Placement Services. So if you think back to the way that this product works, where they get an organ offer from UNOS, with Trinity Organ Placement Services, that offer is actually coming directly to Blade.
Medical has hired clinicians on behalf of these hospitals to evaluate that checklist of criteria on behalf of the surgeon. So instead of the surgeon waking up 10 times every night to reject nine organs, Strata Critical Medical can do that screening for them. We're paid a flat annual fee of between $500,000-$1.5 million a year, and we only wake up the surgeon once all that hospital's criteria are met, once we have all the information that surgeon wants to see, and once we're ready to present it in exactly the way that they want to see it. We've launched with two of our biggest customers in December. We think it's going great so far.
We want to get it perfect, and then we hope to roll it out to more and more of our 70+ existing transplant center customers and to others of the 250 transplant centers that exist in America. It's important to note that when Strata Critical Medical gets paid, we get paid by the transplant center. We don't have to deal with insurance at all. The hospitals, though, are dealing with insurance, and they are focused on keeping their costs down because they are typically not able to get all of these costs fully passed through to reimbursement. It's very helpful and a huge competitive advantage for us that we're able to do this at a lower cost for the hospital. We've used M&A very successfully, particularly to grow our medical business.
Before the company went public in 2018, 2019, we launched what became organically the largest organ transport company in the Northeast. We were working with NYU Langone, with Mount Sinai. We built a great product, and first order of business when we went public, was to find the best national platform and bring it into the Blade family. We found that with Trinity Air Medical. It was a company that was doing about $16 million of trailing revenues when we bought it, just under $2 million of EBITDA. Our business was a single-digit revenue business. That was two years ago. We're now run rating at nearly $120 million of revenues at approximately $12 million of adjusted EBITDA.
We've put the two businesses together extremely effectively for a company that we bought for about $24 million, and then we've paid an earn-out so far of about $6 million. So bought that multiple down to somewhere between 2x-3x very quickly. So we've been very focused on successfully growing what we have. We do see some opportunities for other tuck-ins, and we think that when you combine businesses that don't have our platform in terms of access to aircraft, you can get a result like we got with Trinity, where everybody wins and more hospitals can be served more effectively. By doing all of this, we built a great moat around our business. Infrastructure is an extremely important part, particularly of the passenger thesis. We have exclusive terminals in the markets that matter for urban air mobility.
In the example of New York, our terminal on the East Side and the West Side heliport, exclusive to Blade. Now, these are public use heliports. If you own your own helicopter, can you land on the West Side and go through a hole in the fence to your driver? Sure, but if you're trying to aggregate six, 12, 15 people all arriving at different times, that need to have IDs checked, bags weighed, you can't accomplish the logistics of that without a terminal, and these terminals are exclusive to Blade. We have them in all the areas that we operate our passenger business. We've also, over time, built a proprietary technology platform, both for medical and for passenger, that can't be replicated because it's built based on our experience of actually flying people and organs for hospitals.
You could try to build it on a whiteboard, but you don't know until you've actually used it real to understand what you need. We've had a long eight-year process to build the perfect customer-to-cockpit technology that incorporates everything from chain of custody for our organ transplant customers to automatic invoicing. We know what a flight is supposed to cost, so we tell the operator what the invoice is, not the other way around. That allows us to make sure we're getting charged the same thing, and most importantly, a great customer experience, both for our passengers and for the hospitals that rely on us every single day. Through this same process, we've built a great brand that's helped us be extremely efficient on marketing and has built trust with our flyer. We're taking people in the air every day.
This is really important for us, and it's one of the key things that we think gives us a huge advantage as we start to think about the transition into electric vertical aircraft or EVTOL, which we'll talk more about in a second. The brands also pay us to get in front of our customers. It's a great additional revenue stream that's extremely high margin, and the more scale we have, the more value we bring to those partners. So we're focused on continuing the rapid growth, particularly that we've seen in our New York airport product recently. All of this is designed with the idea of being able to strategically benefit from the transition to electric aircraft. This is not something that we need to be successful. It's not something we need to be profitable. It's not something we need to grow.
It's something that enhances an already healthy and growing business, and does it precisely at the time that the world is ready for these aircraft. Right now, there's a bunch of different companies building electric aircraft. They're making incredible progress, but we're not sure which aircraft is right for which mission. Our asset-light approach allows us to pick the aircraft that's appropriate for what we're doing on any given day, and to the extent the weather changes or the mission changes or the wind changes, still have access to traditional turbine-powered aircraft to be able to complete the mission. Because the most important thing is maintaining that customer relationship and delivering on what we said we were going to do.
If we said we were going to take you to East Hampton Airport, then we got to get you to East Hampton Airport, even if the weather is such that maybe an early EVTOL can't fly that day, because we're not going to be the ones to explain to our customers they have to miss the summer gala. That doesn't work, and that's why it's important to have this hybrid fleet, because we believe that the transition to electric vertical aircraft will be a huge positive, but it'll be very gradual. Once we get there, you have a completely quiet aircraft, emission-free, that over time will be lower cost, and we believe will encourage communities to create new places to land that they're not willing to do today because of the noise of helicopters and the environmental impact.
So we're very excited about the potential for this to transform our business. But in the meantime, we're growing really quickly. Last quarter, medical grew 65%, our short distance business 49%. First quarter of positive Adjusted EBITDA and positive free cash flow. We feel that the business is moving in the right direction across all of our different segments. Good segment EBITDA in both businesses. This is a seasonally strong quarter for our passenger business, so we have some work to do to smooth out the seasonality of passenger, but we think this is a fantastic time to invest in Blade. We're all very excited about what the future holds. We've got great opportunities to continue to grow the medical business, both in terms of our market share, in terms of our products, and expanding our margins.
The best is yet to come in passenger, with the first ever break-even flight profit quarter for our airport business. That, of course, we're working very hard to get to the overall target margins of our passenger business. With that, would love to take any questions that folks have, and not exactly sure how much time we have, but Max, maybe I'll turn it over to you.
Yeah. No, thank you. Go ahead.
I have a couple of questions.
Sure.
Can you just re-explain the landing and departing fees and how that 2.5 seat fees? If you sell 2.5 seats, that break even for a flight?
Sure.
Yeah, just go through the math again.
Sure. So we pay an hourly rate to the operator. That covers pilots, fuel, maintenance, insurance, hangar, everything associated with operating the aircraft. That, on average, about $1,500 an hour for a Bell 407, which is what we use here in New York for the airport business. Then we pre-negotiate how long the flight's gonna be. So it's 0.2 of a flight hour for the one-way.
So how many-
That's $300.
0.2 of an hour is what?
0.2.
No, no, no. 0.2 of an hour is, like, 12 minutes or like-
Yeah.
Okay.
That, that's what we get billed. That's what we get billed. So it's always gonna be $300, and then we also pay the landing fee to, to anyone who operates an airport or heliport. They tend to be about $200. But because that aircraft, when it comes in and lands at JFK, we're paying $200, we're dropping off passengers who are going to JFK, and we're picking up passengers who are going to the city.... So we split it. So think about it as $100 on each end, $200 total. So it gets you to $500.
...
What's that?
$300 landing fee.
It's $200.
Oh, $200 landing and $200 departing.
No, there's only one fee.
Right, right.
That's why we get to split it.
Say that you weren't gonna just go back and forth and back and forth. If you landed, it would be $200, and then if you departed, it would be $200.
It's only when you land.
Yeah. No, no, I understand in your case-
Yeah.
Let's just take your, your business model.
If someone was trying to compete with us, and they didn't have our scale, and they didn't have the helicopter going, it'd actually be even worse. They would be flying from a base-
Right
... to the pickup, where they would pay a landing fee.
Right.
They would also pay something to fly from the base.
Right.
Then they would go to drop off, where they would pay another full landing fee, and then they would go back to base. So if someone was trying to compete with us one-off and didn't have the scale to be just going back and forth all day, it could be double the cost.
Okay. So okay, so you're paying $1,500 an hour plus the $300, is it?
$200.
$200 .
Roughly. You know, it's different everywhere.
$200 every time that you touch ground?
Every time the skids touch the ground.
So then you do that how many times an hour?
The most we would do is three times an hour for one helicopter.
So then-
But we have multiple helicopters running.
Times $600 is $2,100, if I did the math right?
What are you trying to do?
$1,500 per hour for the helicopter, and then the back and forth, the landing fees is, like, $600, if I'm doing the math right, three times.
Think about it as $500 per leg.
Okay.
How many legs do you do in an hour?
We can do up to three in an hour, the way we program it with one helicopter.
One trip from Manhattan to LaGuardia.
Yeah, so that's like $600, $1,500 + $600. That's what I mean.
So you do three, so you've got some downtime, loading, unloading.
Exactly. Fueling. It gives us flexibility. If we get a ton of demand, we can actually tighten that a little bit, right? So it's not a 20-minute flight, so you have some extra wiggle room in there. So if it's a busy afternoon, you can turn them a little faster 'cause our customers don't see a schedule. Our customers just say, "I want to get to the airport at this time." And so we're able to have a lot more flexibility 'cause it's essentially a continuous product. Helicopters are constantly going back and forth all day long. There's no schedule.
So it's $1,500 an hour, and then with the landing fees, it's $600. So that's where I'm getting the $2,100 an hour, which is the operating cost and then the landing fees. Is that a good way to think of it?
No, I would think about it as $300 to fly one leg-
Right
... to the operator.
Right.
$200 of landing fees per leg. $500 to fly a one-way.
Right. No, I understand that. But you're doing that how many times in an hour? Like-
The unit is a flight, right? So we have six seats on a helicopter that we can fill on that flight.
Oh, I see. That's where you're getting the $2.5, 'cause you're doing the $500.
$500 is our cost to fly the flight, and then we charge-
Two hundred.
... on, yeah, $200 minimum, but on average, we're getting $300.
Mm.
You're actually making money a little before two seats right now, given what we've done with our pricing.
Okay.
Make sense?
Yeah.
Okay.
I have a couple other questions.
Go for it.
Okay. Do you have analyst coverage?
We do.
On your website? Who covers you?
Oppenheimer, JP Morgan, Citi, Deutsche Bank.
Got it. You might want to put that-
And, Ladenburg
... on your website.
Okay.
Yeah, just-
We can do that.
Yeah, just wanna put that. Okay. Then my other question is, is there any medical liability or do you need certain licenses when you're doing your technology to match the organs among each other and contact the doctor? Is there-
We don't need licenses for that. We do need trained clinicians to do that.
Okay.
So it's-
Is there a need to have, like, insurance or anything, like, let's say something gets messed up or, you know... I'm just looking at potential lawsuits, like?
We're working in the hospital systems-
Okay
... and we're working with them, and the final call is always being made-
By the doctor.
... by that doctor.
So you don't have any liability for that? Okay, and then I had one other question: Were you operating in 2006 the Nice to Monaco flight?
We were not. We entered that business through acquisition.
And when-
- a little over a year ago.
Did you buy that company, the one that was in operation in-
There's a number of companies.
Okay.
We now have an exclusive arrangement with three of them, but there are some other ones.
Oh, because I did that flight. That's why I was-
Oh, you did?
Yeah.
So very likely that you flew with-
On the-
... one of the companies that now operates as Blade.
Okay, got it. All right.
Yeah. But that's an asset-light deal, so they still own and operate the aircraft on our behalf.
How many of your segments fly at a profitable level to the number of passengers? What percentage of those are profitable?
We don't think about it in terms of what percentage are unprofitable, just to say that now, on average, we are profitable in that business line. But the great thing about it, right, is if there's a moment in, in the mid-afternoon when we don't have demand, we don't run the flight. We don't incur the cost, right? So if somebody wants to go and they're the only one, we will fly them, and we will lose maybe $200, right? But if you don't have demand for 40 minutes for some reason, you don't run the flight, you don't incur the cost.
It can self-adjust to some extent, but there are times that we don't have enough demand to make money on a particular flight, and we're more focused on delivering a great customer experience, and we think that's why we've been able to grow as much as we have over the last two years, because of that commitment to making sure people are gonna get to where they need to get.
Do you offer it seven days a week?
It's six days a week today. Yeah.
How many hours a day?
It's between 12 and 14 hours, depending on what day of the week and depending on what airport. So we really wanna make it simple. You know, we went back and forth on this. You know, it's an attractive wrong answer to say that you're only gonna have service in the afternoon for three hours when you know you're gonna fill every helicopter, because then people can't rely on you. So we decided early on, we're gonna make it simple. We're gonna let people know they can rely on us to get to the airport during the times they wanna get to the airport. And it took some time, but we've now built up that utilization to the point that it's a profitable product, and we think that we've made the addressable market much larger by making that decision.
I have another question. I was just looking at your financials, so you have, you're trading, like, around your cash value, your market cash.
Very close.
I mean, it's like, I mean, congratulations on the cash and the revenue and everything. Like, do you know what the kind of why there seems to be a disconnect with the market.
We think so, too. We think so, too. We're glad you agree.
Here's a question for you.
Yeah.
Like, the healthcare business seems pretty unique, and so does the helicopter, you know, short flights that you guys are doing. But the jet business is not, right? It doesn't seem as unique. You've got FlyExclusive in that market, NetJets, you've got, Wheels Up there. So you've got a lot of competitors that aren't doing well, by the way.
Yeah.
FlyExclusive just went public with SPAC. Like, why, why be in that business?
It's almost just free money for us, and that because of the brand, people call us and ask to fly anywhere. They don't necessarily know if it's a jet flight or a helicopter flight, and so we're in the business of pleasing our customers. And what we decided is, with very limited investment, to make sure we have a couple folks on staff that can handle those jet charter requests, and we make a-
Are you buying inventory from Wheels Up and-
No.
Okay.
It's all out in the spot charter market. We don't take any risk, and we make 10%-15% margin-
Yeah
... with limited, almost immaterial fixed costs.
So that part of the business is profitable for itself?
Yeah. It's one of those things where you just wanna make your customer happy, and we happen to make a little money doing it.
Can you place organs in the same flight, or can you?
No. Organs always go on their own flight, but there is a benefit to having that jet charter business, and that it gives us more throw weight in that market. Because we have a lot of dedicated aircraft that we use just for organs, but we also fly a lot of organs out in the spot market or on aircraft that aren't 100% dedicated to us. So the fact that we have that incremental, almost $20 million of jet charter revenue, helps us be a little more of a force in that industry and gives us better relationships that ultimately help our medical business, and we make money doing it. So we're happy to do it.
you know, you're comparing it to some businesses that have to take significant risk in order to offer that product, and so our Asset-light model enabled us to do it in a way we don't, we don't have to.
Thanks.
So, I saw that you have a presence in India and also in Nice and stuff. I have two questions: Are you gonna be expanding to other geographies? And then also, are the costs, the $1,500 and then the landing fees, are they similar in those regions?
So we think we're in the best passenger air mobility markets in the world, and we think there's a lot of room to grow in the places that we're focused today. So that's kind of our focus right now. We wanna continue to improve those markets and improve the profitability of the overall passenger business. So focused on where we are. And the answer is, you know, I think the break-even is similar, but the unit economics are gonna be a little bit different in every market, depending on what kind of helicopter we use and how far we're flying. So it's not a perfect template, but, you know, in terms of our target margins, we're targeting 20%+ flight profit margins across the passenger business.
Are they paying you in cash? Is it all in cash, I mean, U.S. dollars?
No, it's in euros, in Europe.
How about India?
In India, it's a JV. So we have a small equity stake in that business. We think it's a huge market. We're happy to have some exposure to it that doesn't require incremental investment, but it's not an area where, you know, we're having day-to-day issues with currency conversion or anything like that. Thanks for all the great questions. Max?
Yeah. Do you think the short distance business, do you think that's more a mass market product eventually, or do you think it's, for the most part, limited to a, you know, a certain income?
I think it's a mass market product today. I mean, with an airport pass, you can go to the airport for $95. You know, you're not gonna find an UberX for less than that. So I think maybe people don't understand how inexpensive it is. You know, there's definitely some... Depending on where you are in the city, it may or may not make perfect sense. But if you're in Hudson Yards, you should use it 100% of the time, and a lot of our customers do. You know, 'cause it's just, it's faster, it's more reliable. You know when you're gonna get there. So I think we're there on it, on it being a mass market product. You take the example of Canada, between Vancouver and Victoria.
Something like half of the people that are traveling are government workers or they're people going to visit government workers in Victoria, which is the provincial capital. So it's, it's a way of getting around, and that's what the future is for this business, right? It's, it's lowering the cost through electrification over time, making it more accessible, being able to fly more places, and just making it one part of the transportation fabric. So I think New York's one of those unique places where we're there today.
So it's true because we've. When I did Nice to Monte Carlo, if you go along the coast, it's like a crescent moon, and it takes four hours, or you can do five minutes in the helicopter for the same price.
I'm gonna bring you on the road with me.
Yeah, yeah. No, it's true.
How do you think about Uber and Lyft? Do you think they're more about, partners or competitors?
So you know, you'll see us on the Uber platform if you try to book an Uber to the airport now. We're an advertising partner with them. That's been a good success for us. You know, Uber had a little toe dip into vertical transportation with Uber Copter a few years back. You know, I think it was expensive for them, and honestly, it was hard for them to provide service from the places people wanna go from because we have the terminals that are exclusive to Blade. You know, so ultimately it ended up being a product they had to operate from the sightseeing terminal down at Wall Street, and for a lot of reasons, it's both inconvenient geographically, and it's just not a great customer experience.
So I think if anything, the brief forays you saw there proved out the moat that we've built around the New York City passenger market. Yeah?
Do you expect to be cash flow positive now?
We haven't given specific guidance for when we're gonna be cash flow positive, but we do expect to be cash flow positive. I think if you look at our numbers, and you look at where we've said margins can go on medical, and you look at how we've reduced our overall corporate costs, you know, you can build a model that helps you get there. We did say that we're gonna start giving some guidance for the next couple of years at our next earnings release, so we're gonna try to give you more specific building blocks for how you can get there.
You were cash flow positive on the third quarter?
We were. Cash flow and Adjusted EBITDA, so-
What, what was different in the third quarter that may not repeat in the fourth or first quarter?
Third quarter is seasonally big volume quarter for our passenger business, so it's always gonna be the best quarter. So, you know, you shouldn't expect that to be something you can run rate. But I think it shows you that when you put enough volume through this platform, it will spit out cash. You know, we've now shown you that. And so the goal now for us, it's incumbent upon us to both optimize our costs so that that bogey is a little lower and then continue to flow more volume, both through the passenger business, which we're doing, that airport product is growing fast, and through the medical business, where every quarter you see the margins pop up a little bit higher.
As we introduce more of the ground service, that's very high margin and organ placement services, you're, you're gonna see that, that business continue to look more attractive, we think.
What, what are you gonna guide to on your next call?
We're gonna give some forward guidance for the next two years on our next call.
The next two years.
Yep.
Will that include cash flow?
We haven't said what it's gonna include, but we're gonna try to give you more specificity so you can do what you're trying to do, which is build a, build a projection a couple of years out.
You do have that on your website.
What's that?
You have that, like, Excel sheet on your website.
We have a lot on our website. I think you can build it now, but we're gonna be more explicit. We're gonna be more explicit, for sure.
Out of the time.
Thank you all for the great questions. I appreciate it.