Very pleased to have Blade back with us at the Citi Tech Conference for a fireside chat. A lot going on in the business, and for those who are new to the business, a great opportunity to get to know it. From Blade, very pleased to have Will Heyburn, the company's CFO. And of course, if you have any questions, just feel free to raise your hand. We'll get a mic to you, and we'll go ahead. Maybe
Happy to be here. Thanks.
Absolutely. Well, thank you. We welcome. Maybe just for those who are new to the story, maybe a brief overview of the company, the value proposition you offer customers, kind of the business model, and then we'll start to get into some deeper topics.
Absolutely. Look, we're taking a little bit of a different approach to air mobility, and what we think is a better risk-adjusted return in air mobility. And that we're looking for who are the customers, where are the geographies and routes in air mobility that can be profitable today with conventional aircraft, grow today with conventional aircraft, and be unlocked in terms of addressable market and in terms of economics by the future introduction of eVTOL, or as we call it, Electric Vertical Aircraft, EVA. And we're doing this in an asset-light model, meaning we don't own or operate any aircraft. We contract with long-term agreements with operators to do that on our behalf, where we actually emulate a lot of the fixed cost leverage you would get if you owned the aircraft yourself.
This model has allowed us to be extremely capital efficient as we've grown. We've grown very rapidly without having to spend any CapEx on buying aircraft, and then we're doing this today across two markets. Our largest business is medical, where we are the largest transporter of human organs for transplant in the United States. It's a great market that's not correlated with the overall economy. We have good two-three year contracts with most of our customers, and we are the largest player in that space in the United States. And then separately, we have a passenger business, where we very strategically focused on what we believe are the best markets for air mobility that exist today in the world. That's Vancouver, traveling between Victoria and Vancouver. You can do that for $200-$300.
That's New York City, where we offer everything from a $195 trip between Manhattan and commercial airports to a more expensive trip to leisure destinations out on Long Island, and Southern France, where we fly between Nice and Monaco for starting at $200 a seat, Nice, Saint-Tropez, Monaco, Saint-Tropez. These, we believe, are the best markets in the world. They're working today and growing today with conventional aircraft, and then the second you have a quiet, emission-free aircraft, the biggest limitation for us in terms of growing this business is noise.
We think the addressable market will expand dramatically, particularly because you should be able to create more places to land that are more convenient for the customers we already have, or you can use locations, many of which are exclusive to Blade, much more because there are noise restrictions in place at a lot of the landing sites we use, particularly in Southern France. So we think we're really set up to have two ways to win for our investor base. On the one hand, we've got a near-term opportunity to take the company to profitability with conventional aircraft. We're already seeing the fixed cost leverage, particularly in our medical business, where last quarter, 100% revenue growth is a 174% EBITDA growth. So you're seeing the power of that platform.
And then in the longer term, as we start to transition to EVA, you're going to have more places to land, you're gonna have better economics, not, not paradigm shift in economics on day one, but better economics. And then ultimately, we believe we're in the, in the catbird seat, as they say, where I grew up, to take what's initially gonna be transitioning to EVA and markets that already work for helicopters, and then take that and expand that to many locations that can't support helicopter service today, either 'cause they don't have the infrastructure or because the economics don't work.
Terrific. Yeah, that's a great overview, and we will definitely touch on a lot of these really key topics. Maybe just starting off with a short-term question. You're coming off a strong, you know, Q2 revenue growth, as you mentioned, flight margin, strong balance sheet position. It's a seasonal business. Q3 is an important business for you. How's the quarter going thus far relative to your expectations?
I'll take on kinda passenger and medical. You know, passenger business, as you mentioned, this is a seasonally very strong quarter for us, and so far it's been seasonally very strong. You know, some of these mature businesses, you're growing a little more by making tactical changes to pricing. We've been very successful in introducing fare classes this year in some of our legacy leisure markets, where you can pay a little bit extra to have some flexibility in terms of changes and cancellations, so that's gonna contribute to some revenue growth and some profitability growth. And then on the medical side, as you know, it can be a little lumpy. It's a long sales cycle, and so we've had some quarters where we've doubled the medical business year-over-year.
You know, this quarter's probably more in that 50% growth range year-over-year. But it's really fantastic to see us continue to take market share and continue to grow well ahead of the overall volume growth in organ transportation, which it's incredibly exciting to see that volume growth accelerating with the advent of new organ preservation technology. So I think we're very pleased with the progress we've made, and particularly, we're pleased with the progress we've made on the cost side. You know, last quarter in particular, if you look at our unallocated corporate expense, kind of just the cost to run the business, we're actually able to decrease that year-over-year. So we're controlling the things we can control on the cost side. We're getting fixed cost leverage in the mature businesses.
Then on growth areas, you know, airport in particular is a growth area for us. You know, the last update we gave was last quarter, but we're seeing everything move in the right direction, and that 60% growth year-over-year in that airport business, it, on a route basis, is still not profitable. But as long as we see growth going the direction that we want it to, the unit economics are set up such that we break even at two and half out of six seats sold. So long as we keep growing, eventually, that product will get to our target passenger flight profit margins of 20%-30%. So we're overall very pleased with how everything's shaping up.
Perfect. Good, good to hear. Maybe before we dig into the individual businesses and, of course, technology, as it is a tech conference, maybe just reflecting back on being public now for two years, what's been some of the biggest changes in the business, since going public?
You know, the biggest change has just been our ability to help hospitals lower their costs and our ability to gain scale quickly, which creates a flywheel on that project for us. You know, 'cause when you think about the cost of flying, at the end of the day, the most important thing is your scale, right? Because whether you're doing it on an asset-light basis like we do, or whether you're an operator, the math is the same. You need to put more hours on aircraft to amortize those fixed costs, and the more you can fly, the less it's going to cost you per flight hour.
And so we've been able to build scale very quickly in that medical business, and importantly, the same aircraft we use in our passenger business, same helicopter that might take you to JFK today, could be moving a heart for NYU Langone tonight. There, there's fleet commonality across those businesses, so we get shared leverage across the medical and the passenger business, both on the rotorcraft side, which is mostly here in the northeast for medical, and on the fixed-wing side, which is coast to coast for that business. So we've been incredibly pleased that that's resonated with our customers, and I think very happy with the acquisition we made in that space, with Trinity Air Medical. You know, about a year and a half ago, we acquired that business.
They were doing, on a trailing basis, about $16 million of revenues, a little less than $2 million of EBITDA. Our own medical business was maybe $5 million at that time. This last quarter for us was $34 million of revenue for medical in the quarter, and $3 million of segment adjusted EBITDA. So really great to see the plan take hold, set a strategy out for our investors and ourselves, and enable ourselves to exceed that plan.
Absolutely. That's great color. And so maybe we could touch upon the Blade technology platform, and specifically, maybe a quick overview for those who are-
It is a tech conference, right?
It is a tech conference after all, yeah. And then not only an overview, but also touch upon what kind of competitive advantage it ultimately gives you, both pre-eVTOL EVA, and then post. And maybe even touch upon just the overall barrier to enter in the space.
Well, I think the big advantage we have is that this technology grew and evolved with Blade. You know, it's built based on feedback from our customers, from our operators, from our internal operations team as the business has scaled, both on the medical side and on the passenger side. So it's not something you can just sketch out on a whiteboard and put into action. This is customer-to-cockpit technology. So you book a seat on our Blade App, that's getting communicated to our operations team, that's managing what tail it's going to go on based on the weight. It's getting communicated to the operator, to the pilot on an in-cockpit dashboard, names, weights. They can run their weight and balance based on that information.
And then also, on the accounting side, we know, because we have fixed price agreements for these trips, how much it's going to cost, and we can manage our profitability and our yields that way. And all the invoicing is then done automatically. So, so instead of our operators invoicing us, we invoice them. We say, "This is how much it's going to cost based on the agreement that's loaded into our software. We know how much it's going to cost. If there's a reason you think this particular flight should be different, let us know, and the system will flag if there's a variance," right? So we've built this over years of actually flying people and actually flying organs for hospitals, and you just can't replicate that iterative process. So I think that's the biggest competitive advantage.
It would be easy for someone to think they had built some technology that would work really well for both of these use cases, but if you've never actually served a customer, definitely not served a customer for years, it's hard to know that it'll actually work and give them what they need when they need it.
Perfect. And then, let's touch on eVTOL EVA, well, of course, on topic of technology. You mentioned larger addressable market. Maybe go back to that and maybe quantify a little bit how you see it. But overall, how should investors think about the eVTOL journey? It sounds like it's initially more about new routes and low noise and quiet and expanding just overall route base. How are you planning for that ahead of time? And then ultimately, where you see the unit economics going, as well.
Sure. For us, EV, like most things, is going to be crawl, walk, run. And we think we are uniquely set up to be the leader in all three phases. So phase one, you might have an aircraft that actually could be a little more expensive from an acquisition cost than a used rotorcraft that we might utilize on one of our routes. The cost in terms of the direct operating costs should be lower, the maintenance costs should be lower. These are simpler machines, but your fixed costs, you know, what you have to pay your pilots, what you have to pay for insurance, what your cost of equity is to actually acquire that aircraft, could be a little higher.
The hope is you can fly these machines a few more hours than you can fly a rotorcraft, and so you can get to a cost that we believe could be 10%-20% lower per hour than what we pay for a helicopter today. That's on day one. And so what does that do for us on day one? It makes routes that are profitable with helicopters a little more profitable. It allows you to show municipalities that, "Look, here's this great, quiet, emission-free machine that can do what we've been doing with helicopters, but do it in a way that is not going to be noise pollution to the community." And then convince them to create more convenient places to land, expanding that addressable market. Some places, like in Saint-Tropez-...
We already have specific limits in terms of how many times we can land because of noise; you might have an immediate unlock. You could land a multiple of the number of times in certain landing locations in Saint-Tropez if you had something that was quiet. So when we talk about the addressable market expanding, some of it is unlocking infrastructure that already exists. That's where we kinda see the platform that Blade has created as the layup for EVA. These are the things that absolutely should work because they work with helicopters, and you're only gonna create something the community's gonna be more accepting of at a lower cost. Now, over time, that cost advantage should become much more dramatic. Over time, as the FAA starts to realize that maintenance is simpler, fewer moving parts, maybe you have to do fewer inspections.
Maybe the aircraft are down materially less than rotorcraft are down for maintenance. Now, you can put many more flight hours on those machines, and as you create places to land that are custom-built for eVTOL only, you know, perhaps you don't get charged the landing fee that for airport to Manhattan makes up about 40% of our cost. You know, what you pay to the Port Authority, what you pay to Signature, Atlantic, you know, it's a real cost. That will take time, though, and so that's why, you know, start with the crawl, change nothing except for the aircraft. Use the same operators we use today, pilots that hopefully get cross-trained on these aircraft, land at the same places, fly the same people, and the same organs for the same hospitals. Now, let's start with that.
That's the easy layup, and then that enables us to see the initial cost advantage, and over time, we think we would be the, the preferred trusted partner for municipalities that want to expand that network of places where these quiet aircraft can land.
Awesome. I love the crawl, walk and run, that kind of analogy. Let's maybe put some timing around that. What is the crawl period, the walk, and the run period as you see it over the next, I think, 10+ years? And given the opportunity for route expansion, what's Blade doing now to plan? I mean, is there sort of like a land grab around finding the right routes and sort of planting yourselves early to kind of be ready for it? I guess that's maybe more in the walk and run phase, but how do we think about this journey in these three stages?
Well, well, look, first, I'll say that the folks that are building these machines are a lot smarter than I am. So all I can do is tell you what they're saying, and it does seem like we're gonna have some of these aircraft, hopefully, that are available to be flown on a Part 135 certificate by maybe 2026. I will say we've set up our business specifically so that that doesn't matter, right? So we can continue to grow, continue to compound EBITDA growth over time. And so if there is a delay, I think our business is uniquely set up to avoid that duration risk on when these things get introduced. But that seems to be maybe when the crawl phase could begin.
And again, at that point, we think it's a little bit of a helicopter substitute with economics that are maybe a little bit better, but also maybe some operational limitations. You know, the aircraft on day one, if you listen to most of the manufacturers, probably gonna be visual flight rules only. So for markets like flying out to Long Island, if you fly out to the Hamptons or a place like that, a lot of times you need to use instrument flight rules if the clouds are a little low. If you're trying to compete with us, and you can't do that, if you're a pure-play EVA company, you might be canceling a lot of the time. That's not gonna be a great customer experience.
So we think it's really important during that crawl, walk phase to have a hybrid fleet. You know, we think there's gonna be trips and days where eVTOL can be used for a lot of trips, and then sometimes you might need to call in a helicopter. You know, you might be okay to go to Teterboro on an eVTOL, that might be enough range, but if you need to take a heart for NYU Langone, you know, all the way down to Philadelphia, you might need to use a traditional rotorcraft to be able to make that trip. So we think we will uniquely have the right fleet combination to create reliability for that end customer in the crawl, walk phase. And then, over time, these should be instrument-capable aircraft with much lower cost, with much better range, with much more broad acceptance from the community.
And by that point, we should be able to pick from a lot of different aircraft, and like conventional aircraft, no one machine is gonna be perfect for every mission. You know, the Bell 407 that we utilize here in New York to fly between Manhattan and the airports, great machine for this environment. But in Vancouver, because we're flying instrument flight rules a lot of the time, we use a bigger Sikorsky S-76. You know, you might use a seaplane more often to fly out to East Hampton because you can also land in Sag Harbor, and it's got that nice capability.
So it really depends on the use case as to what machine you're gonna use, and we expect, as we get to know these new aircraft as they get introduced, we'll continue to be agnostic in terms of what aircraft we use, and we'll use the best one for the mission, and that's what's given us our competitive advantage. It's all part of the asset-light model today. We give hospitals the right size aircraft for the trip they need, when they need it, and that's what we think will continue to give us that competitive advantage with an asset-light model after the introduction of EVA.
Great, great answer, and appreciate all the detail. Maybe it's a bigger picture question, and we'll kind of come back to the current businesses. As you think about the opportunity and the advantage of building now pre-EVA, the brand, of course, the technology platform, the customers that you're growing, and it seems like now, of course, you're trying to get the EBITDA positive, free cash flow positive, which makes sense. I'm sure we'll come back to that. How are you thinking about investing and growing the Blade network, even beyond your strongest regions in that initial crawl period, to really be able to leverage the most in the walk and run period?
I know it's maybe a longer-term question, but how do you think about the vision for the company and leveraging what you have today... to really be super optimized for those phases?
Well, well, today, we think there's a lot deeper we can go in the passenger markets we're already in, and we're particularly encouraged to see the airport product, it's a relatively new product for us, showing the kind of growth numbers. It's showing, you know, 60% last quarter. And so we think there's a lot deeper we can go in all those markets we're in. And we're optimistic about our joint venture in India, where all the conditions exist for an absolute slam dunk air mobility product, because as we always like to say, we need a place that's congested or geographically contested, and most of the routes in India are both. And so you have a really great opportunity to save people time without having to fly very far as the crow flies.
And, when you pay by the minute, that's the recipe for a great consumer value proposition. So I think we believe in the conventional aircraft phase, we're in the right places. And I think as you start to evolve into early days of Electric Vertical Aircraft, it's really gonna be around where does the infrastructure come, and is it in a place where we can tell our customers: "It's worth it to pay us $200 to save you this time?" You know, it's kind of how long would it take to drive, and how long would it take to fly, and how much do you have to pay? And, you know, you can answer that question just as well as I can as to whether or not that would be worth it for the individual consumer.
And so that's the math that we'll be doing. Right now, there's not enough infrastructure in the obvious places you would expect Blade to go. We talk about Los Angeles as the best urban air mobility market in the world, just there's nowhere to land.
Yeah.
You know, you got a bunch of helipads that are for emergency use only, that you can't utilize for helicopters for passenger transport today. So it's not a place we're gonna focus on right now. In the medical business, multiple huge growth opportunities. You know, in terms of our market share today for just heart, livers, and lungs, that's the area we're focused today in medical, we think we're in the high 20%. See no reason we shouldn't be the majority of that market. But then we're also really encouraged that the number of hearts, livers, and lungs that are being transplanted in America right now is growing in the mid-teens year over year.
That is because we now have great new technologies from a variety of companies, perfusion technologies, and just organ preservation technologies, more advanced cool boxes, that allow you to fly much farther than you've ever been able to fly to pick up an organ. A heart kinda used to have to be where it needs to go in four hours. We recently set a record with one of our partners, Paragonix, to fly from Alaska to Boston, the longest a heart's ever flown to reach a transplant recipient. So really incredible what technology has enabled. And then when you think about that 15% volume growth in hearts, livers, and lungs, that incremental organ is flying much farther than the average organ, right? So when you think about the unit from Blade's perspective, it's not actually number of organs, it's number of flight hours.
Right.
If you're flying farther, you might need to use a more capable aircraft that's gonna be more expensive per hour. So that's why you see a multiplier effect with Blade's growth versus the market, because that growth is coming from flying farther, and we're also taking share at the same time. So we're really excited about the growth prospects we have at present in the markets we're in. We think there's a lot deeper we can go, and then we're always keeping an eye on how we can expand vertically and horizontally. In the medical business, we've continued to push into ground transportation, lights and sirens, SUVs.
In many cases, we now own lights and sirens, SUVs, and some of our most dense markets, we can get payback that we measure in months on buying those vehicles, and then 40%+ margins on the ground portion of those trips. So it's an easy return on investment math for us to do. We've looked at helping to expand and help our hospitals with even more of the clinical work around matching organs to recipients, and there's a lot of horizontal expansion that at some point we're gonna focus more on. Right now, we have so much growth in heart, liver, lung, that's our focus, but kidney is an area that we haven't spent a lot of time on, that actually represents two-thirds of the 40,000 organs that get transplanted in America.
Other critical cargo, whether that's for manufacturing companies, could be a growth area, and other medical tissue samples, radioisotopes. We actually move radioisotopes in Canada already.
Right.
So, so there's lots of other opportunities, but we're gonna focus on the big, growing, proven markets first, and I think you've seen the results from that.
Absolutely. Well, yeah, so maybe just to dig into the financial outlook for MediMobility, you know, it looks like I think my market share could be 50% +, the market's growing. I imagine you also have some pricing opportunities, just given the value proposition. So maybe just at a high level, how do we think about this business growth, EBITDA margin-wise over the next few to several years?
Well, you know, the biggest thing we've tried to do to improve the margins, and you've seen them kinda tick up quarter-over-quarter, is bring in more dedicated aircraft. So maybe it's worth providing a quick explanation on how we think about our arrangements with the operators that fly on our behalf. And sort of analogy I like to use, you can kind of think about it like the power grid, okay? So we have a base load capacity, and these are operators where we have long-term capacity purchase agreements, multi-year. They're backed up on the medical side with two-three year contracts from the transplant centers that we serve. And in those contracts, we're gonna promise a certain number of flight hours that we'll fly per aircraft. Of course, the aircraft has to be available, you know, crew has to be available.
You know, if any of those conditions aren't met, we don't need to meet the guarantee. But what it allows the operator to do is to offer us a much lower rate than if they didn't have the certainty of how much we're gonna fly. And in fact, in many of these agreements, we emulate the same fixed cost leverage that you would get if you own the aircraft, because once we hit that guarantee, you start paying less, 'cause that operator's now covered their fixed cost. So we've kind of been able to have it both ways with that base load capacity. And depending on the business line and medical, that's probably most of the flying we do is on that base load capacity. And then above that, you kind of have your peaking capacity.
You have operators that maybe we have shorter term agreements with, or more flexible agreements where we're not making a guarantee, or just folks that have been through our safety vetting process, so we know we can call them, we know they're reliable, we know they're safe, but we're not making any kind of commitment to them to fly a certain number of hours. So in medical, we've been able to expand our margins by moving more towards those dedicated aircraft, which are gonna be located closer to the hospitals we serve. That saves the hospitals money, 'cause you're not repositioning aircraft, and it also allows us to improve our profit margins without having to charge those hospitals more. On the passenger side, really depends on the market. You have some markets like New York, where there's a lot of excess capacity for tours.
We don't have to make a lot of commitments, though we still have some base load capacity. So it sort of depends on where we are, but we think about it as that layer cake, and the peak capacity gives us the flexibility, the shock absorber, if you will, to weather any market condition, and, you know, you've seen our historical financial results through COVID. You don't see a significant decrease in our flight profit margin, because we were able to rightsize our capacity almost instantly because of our ability to tweak that peak capacity. So I think we're set up in a really nice way, and, and, you know, on the medical side in particular, we're probably growing faster than we're adding base load capacity.
And so what we tell people is, as we're adding new customers, might be closer to that 15% contribution margin, but as we bring in the right base load capacity located in the right places, you can, you can start to get towards the 20%, and, and that's what you've seen us do over time.
Perfect. Very helpful explanation. Well, any further M&A opportunities in medical we should be thinking about as we take your market share by 50% +?
You know, I think it's all about build versus buy. You know, that's the discussion we're constantly having with our senior management and the medical team of, "Hey, if we wanna help hospitals more with the clinical matching side, do we wanna build that? Do we wanna buy that?" You know, so those are always discussions we're having. You know, I think as we look at the $170 million on the balance sheet, and knowing that significant, significant majority of that we can utilize towards strategic acquisitions, it's always top of mind, and particularly as you see a little bit of disruption in the jet charter market in the United States right now, you know, you see some large providers that are having some trouble, there may be some opportunities there.
You know, when you think about the base load capacity, you know, we're not allergic to some sliver of our base load being some aircraft that we own if the payback is there. We're, we're economic animals at the end of the day, and so if we're gonna generate more free cash flow by owning some aircraft, you know, that's something we'd look at, particularly if there was a market dislocation that allowed us to make an opportunistic entry there.
Interesting.
So I think we'll always keep our eyes open. The asset light model is always gonna be our focus. We're always gonna be asset light. The vast majority of the flying we're gonna do is always gonna be asset light. But we're also always thinking about the economics of the decisions we're making, and if we have a way to deploy that capital at a great return, we're gonna do it.
Absolutely. Maybe we could talk, switch to the passenger business, both for leisure, airport, now you've got Europe, and maybe an update there and how you're thinking about the growth drivers for the different verticals within passenger.
Really, the focus in passenger is on improvement in EBITDA right now. As you know, historically, the passenger segment has been segment EBITDA positive. Right now it is not, and that is largely because of our investment in the extremely high growth area of airport here in New York City.
Yeah.
So we're seeing the KPIs go the direction that they should. You know, as we talked about earlier in this conversation, that tells us that over time we're going to get to those target 20%-30% contribution margins, but we are not there yet. Our focus is all around how can we optimize pricing, how can we optimize capacity, and how can we optimize our marketing in order to get that product to where it needs to go quickly? And what you've seen in recent quarters is we've already significantly reduced the drag that that airport product was on our overall flight profit margins. You know, it was a 150-200 basis point drag, if you recall, looking back as recently as last year. Most recent quarter was only a 100 basis point drag.
We actually talked about on our earnings call how the West Side of Manhattan to JFK route became profitable on a flight margin basis for the first time ever in the most recent quarter. That's the route that's been around the longest, and so we do feel we're seeing the signals that tell us this is gonna be a profitable, growing product for us, and that's really where you see us focused in the U.S. In Europe, as we talked about on the call, these were three businesses, distinct businesses, that we acquired on the commercial side, we didn't acquire the assets that have to be integrated, and we have had some delays on the integration front that have caused the financial performance to not be quite as good as we hoped.
That's gonna be a huge focus for us, because this is a great, long-standing business that's always made money. We think when you layer the Blade brand on top of that, you should only make more money. So it's all about just maximizing aircraft, where are they located, who's in charge of them, who's talking to which concierge, making sure everybody's singing from the same song sheet, and so we're really confident that we're gonna be able to make that business better than it's ever been over time.
Awesome. Hey, well, maybe, maybe on, on the demand side, what are you seeing just in terms of customer, you know, retention, first-time flyers? I think it was a pretty impressive number in last quarter, as well as just folks who use the airport product and leisure. Do you see a lot of kind of cross-usage? If I'm a first-time Blade flyer... What are you expecting from me six months, 12 months out in terms of additional flights or other parts of the platform?
Well, it's amazing that, you know, most of the folks that fly in any month on the airport product are brand new to Blade. So it really tells you that the flywheel is building, and that's ultimately, once you have that installed base of users, it tells you that the product's gonna work, and it's gonna have that staying power. The other thing that's really exciting is hundreds of people are buying our airport passes. This is an $800 per year product, auto-renews every year, allows you to save about $100 every time you fly Blade Airport. You can do the math. These people are telling you they're gonna fly at a minimum 8x , or they're gonna lose money.
So we've been really impressed to see the growth in kind of our super users, and even folks that don't buy passes like that, we expect you to fly more than once. And on average, that's where we're getting. If you look at all customers, and remember, a lot of people don't live in New York. You know, we got a lot of people that may be visiting from London or something. They don't have the opportunity to fly very many times, certainly not in the period of time that this has been open since COVID. We emerged from COVID.
We're already seeing the average person, you know, flying multiple times, you know, close to two, and then, of course, once you cut out the people that maybe don't live here in New York or maybe live abroad, those numbers start to go up dramatically. We're really happy with the repeat usage that we've seen, and of course, that helps you in terms of thinking about what's your lifetime value of your customer, and how much can you spend to acquire customers. I think we've done a really nice job of getting those metrics to where they should be, so that we can have that flywheel of customer acquisition costs that are gonna give us an immediate return.
Absolutely. There's a question. Get your mic.
Can you guys hear me? Oh, yeah, here we go.
Yes.
Yeah, thanks for taking my question. So, I guess in some of the illustrative unit economic slides you put out on EVA or eVTOL, I think you assume 1,000 or 1,500 hours of operations per year. Can you just walk me through the assumptions that you're using there? Like, how many trips are we doing per hour, and then per day to get to that number? And then what's kind of like the implied issue uptime for your EVAs? Thank you.
So, it's actually simpler than that. This is based on what aircraft in the Blade network fly the most. So when we look at the aircraft that fly the most in a place like New York, it would be a rotorcraft that, during the day, is flying for an airport route. So that would be 7:00 A.M. to 8:00 P.M., flying every 20 minutes, and then at night, is also flying for a hospital with 24/7 crewing. And so when you look at an aircraft like that, and we find it a little hard to believe that people could use these machines more than we do, you know, you're talking about 600, 700, maybe 800 hours a year that you're flying for a machine like that.
We believe on the eVTOL, or EVA, as we call it, side, you're gonna have less maintenance downtime, so we're adjusting that up a little bit. Because a helicopter, when you add it all up over the course of the year, it could be down a month or more, you know, month or two. Many of our aircraft have backups here in New York, so that's not, that's not a problem. But hopefully, when you move to electric, 'cause there are fewer moving parts, you're gonna have less downtime, and so you could fly much more. We don't think it's a multiple necessarily of the number of flight hours, 'cause there's a lot of other considerations that go into how much you can fly. You've got the time it takes to load and unload passengers.
You've got how much pilots can actually fly in a given day, and how many crews you want to invest in flying that incremental one or two hours during the day. And so we think we have pretty good experience to tell you what it could be, and we think that's the right number of hours for now. But over time, and it might not be that long, it might be the run phase as we've been talking about in this chat today, where maybe some rules change in terms of the number of inspections you have to do for aircraft that don't have the turbines, and maybe some of the pilot requirements with automation get reduced a little bit.
Maybe you can fly much, much more, but you're always gonna run into that limit of how many times can you turn the aircraft during the day, and that's about what our experience has been is possible with the way air traffic control works today and how long it takes to load and unload an aircraft. Does that answer your question?
Um,
Sure.
I guess, just to be clear, so that number, does that include... Just to be clear for me, so does that number assume medical and passenger, or is it just passenger only?
That, that's for a rotorcraft-
Yeah.
-that flies both for medical and for passenger.
Got it. Okay, thank you.
Yeah.
Perfect. Thank you for the question. Well, we have a few minutes left. I wanna touch on the path to profitability, EBITDA positive, cash flow to high level. How should we think about that? You've narrowed your EBITDA losses quite a bit already. You've done some investments. You're making an airport, of course, the Europe acquisition integration. What kinda has to go? Give us a scenario and roughly timetable to achieve those metrics.
Well, look, we're not ready to give a timetable today, but what we've said is that we expect significant year-over-year adjusted EBITDA improvement in the remaining quarters of the year. And I think, you know, there's some assumptions you can make about our medical growth if EBITDA doesn't keep growing at 175%. You know, if it grows at something less, how long does it take to cover the loss that exists today? And also, how successful are we gonna be at getting the passenger business back to profitability? We've said that we believe very strongly that's gonna be a profitable segment for us, and we've shown you in the past that when we're not growing a new business line, it is profitable.
So I believe that we can, we can get that business where it needs to be very soon, and ultimately get the overall company to profitability faster than it would take if you just had medical growing at the pace that it's growing today. But, you know, given the lumpiness and the long sales cycle in the medical business, and given some of the uncertainty around integrating our acquisitions, and the time it's gonna take to get to that break-even utilization in the airport business, we're not ready to put a specific stake in the ground as to when there's gonna be a full year of profitability.
But we do think we're showing you that things are going in the right direction, and it shouldn't be that hard to do a little math on the side to see that profitability should be right around the corner for us.
Absolutely. That, that's helpful. And then once you get there, how do you balance incremental growth versus, you know, having folks like myself ask you about more profitability? Because you mentioned the flywheel, it's going well. Airports are a really important vertical for you. Yeah, I guess there is some pain initially when you launch a new route, but how do you think about, you know, once you get to your EBITDA positive objectives, you're balancing growth with continued profitability?
You know, the great thing about particularly some of the businesses we're trying to grow on the passenger side, is that once you get above that break even, every seat you sell is 100% incremental margin.
Yeah.
I think what we wanna be able to demonstrate to our investors is continued compounding of EBITDA growth. And we might be able to do that without growing the volumes that much, because it's gonna drop straight down to the bottom line. So that's what we're really excited to get above that boiling water mark and show folks that we can really kick it into gear, as you've already seen in the medical business. You know, a little more of a mature business, though we did it very quickly than passenger, just given the new growth areas we have on airport transportation here in New York City.
But I think that's what we're excited to show people, is that the fixed cost leverage is there, and I think we're already demonstrating it in parts of our business today and in our overall corporate costs today.
Yep, absolutely. Well, any other key messages, I think in the minute we have left, that you wanted to convey to investors in Blade about, you know, the state of the business, the future? Kind of you mentioned two ways to win earlier. Maybe just kind of wrapping up the thesis for those who are, you know, particularly newer to the story in terms of how to think about it.
Sure. I, I think it's an extremely exciting but also complicated evolution that's taking place in, in air mobility today. And I think, at least for, for me and for a lot of the investors I speak with, it's easy to, to get to a place where you see the future coming, and you see the impact it's gonna have on, on aviation. It's not as easy to figure out exactly what manufacturer that's gonna come from, or when, and exactly when a municipality might decide to create a new landing zone and what they might charge to land there. And so I think Blade creates a really unique opportunity where we're Switzerland in this respect.
You know, we'll work with whatever manufacturer has the aircraft that makes the most sense and is gonna be profitable with our existing routes, and we've picked routes that already work with helicopters. And so the underwriting of the unit economics, there's less uncertainty there. And then on top of that, we have this great, growing, non-correlated medical business, where you can expect continued growth irrespective of when Electric Vertical Aircraft come into play. So I think it's a really nice combination, and go back to a great risk-adjusted return.
Perfect. Well, thank you so much. I think we're out of time, so we'll go ahead and end it there, but great conversation. Really appreciate all the detail today.
Thanks so much.
Great.
Appreciate it.
Thanks, everybody. Thank you.