Good afternoon, everyone. My name is Sheila Kahyaoglu with the Jefferies Aerospace, Defense, and Airlines Equity Research team. Thank you so much for being part of the Jefferies Industrials Conference. We have Blade Air Mobility, official name, for Rob Wiesenthal's company, who's founder and CEO. In case you don't know of Blade, this is a good informational session, starting off with a video, Rob. So thanks. We're going to kick it off with that, then we'll go into a few questions.
Great. Thanks.
Great! Thanks so much, Rob, for being here again, and I definitely would pay $195 to get to work, because that's about my Uber ride from Soho to Times Square today. But just to start, maybe outside of that informational video, give us a little bit of background on Blade. What markets do you operate in? How do you think broadly about the opportunity for the business?
Sure. So we started the company in 2014, so we're actually, coming this summer, will be our tenth anniversary. My background is I was at Sony Corporation for a long time, at both as head of corporate development globally and CFO of the Americas. And we spent a lot of time on `lithium-ion batteries. All consumer electronics products have them, and procurement strategies, you know, how to, how to make them lighter, how to make them more efficient. And it was clear that the battle on the ground in EVs was going to happen in the air, but it was going to take some time, and that there needed to be some kind of ability to go from kind of point A to point B, so to speak, from conventional helicopters to EVA, Electric Vertical Aircraft.
And so what we set out to do was to build the entire ecosystem that is required to operate them and offer a consumer product. So it's everything from infrastructure on the ground, where you can aggregate people, turn people on flights, do luggage assessment, security, creating a brand that people felt comfortable with, having technology that goes from consumer to cockpit. So we do everything from a consumer-facing app to logistics on our side and with our operators, that are all vetted operators that we have long-term agreements with. Even in cockpit, where we do weight and balance so people can fuel properly.
So it was clear to us that, you know, you can't just build an aircraft, an electric vertical aircraft, put it on the ground at a heliport or a vertiport, and hope people buy tickets, so to speak. And so we realized that the only difference was going to be that actual aircraft. It wasn't going to be all the stuff around it, and no one was focusing on that. So now we have 19 lounges or terminals across the world. We're operating in the United States, India, Canada, and Southern Europe.
You know, essentially, when we look at it, the same experience you have today flying for Blade for the price of an Uber Black from Manhattan to, say, Kennedy or Newark, when we transition to EVA, there's not really going to be much of a difference besides that aircraft will be electric, emission-free, and quiet. And quiet is the big unlock because with quiet, you get more places to land, and our business is exponentially grows with more places to land. Because if I can land a block from where you guys live, that's going to be pretty convenient. If I can only... you have to get into a car and go 20 minutes to a Blade heliport, that's less convenient.
What we did is we picked these three, the greatest markets in the world, you know, Western Canada, with Vancouver and Victoria, where over 150,000 people fly by helicopter a year. It's not a high-end product. It's not a leisure product. It's government workers a lot. It's some, you know, some tourists, some residents just commuting. Southern Europe, where there's a great infrastructure there, and then in New York. So the idea was to not go wide, but go deep. And at some point, you know, the analogy, and I think you and I have spoken about before, is if you look at the early days of Netflix, they were moving DVDs in a bag. They didn't call their company DVDs in a bag. It was called Netflix because they were waiting for streaming to come online.
So what streaming was to Netflix, EVA is to Blade. You know, we have the product. We got a great experience. We got terrific brand, and at some point, probably early 2026, you'll start seeing them, 2028 for commercialization. You'll have that asset swap, and we'll be able to transition very quickly and be in a better position. So but the idea is to be profitable along that way, and as you know, and we'll talk about in a bit, we've now moved into our medical business, which has now been, you know, you know, now actually the largest part of our business, which is moving precious cargo.
Talk to us a little bit about the medical business. Pro forma revenues increased 42% in the second quarter, with 99% growth within MediMobility alone. You know, what's, what's sort of driving that, and how do you think about the growth going forward?
Yeah. So, we literally had 60% consecutive growth this quarter, and, the, what's great about the business is that it really used our core competencies. So when we work with a helicopter operator, we basically spend, we buy hours. We don't lease aircraft, we don't, we're asset-light. We don't own aircraft. But those, our aircraft are dormant at night. So now, the same helicopter that you may go to, say, JFK Airport during the day, at night, early morning, call it midnight to 5AM , is still flying, doing medical missions for Langone or Columbia, Weill Cornell. And, so what happens is the operator can now amortize the cost of hangars, insurance, pilots against a lot more hours. So it makes it more efficient for them.
It allows us to get better rates on our aircraft and keeps those helicopters flying because, you know, when we first started the company, the only time a helicopter would fly after midnight is when a couple of people who maybe had too much to drink at a restaurant and want to go to Atlantic City. That, you know, has changed dramatically. But there's no marketing budget. It's all B2B. It's long-term contracts. We deal directly with hospitals. We do not deal with insurance companies. We improve outcomes, but also, as important or almost as important, I would say, it's much less expensive.
So when we got our first client, NYU, what they would do, NYU Langone , which literally, you know, is right across from Blade Terminal East, they would literally get an ambulance for $2,000, go to Teterboro, take a jet for $40,000, go to Philadelphia Hospital with doctors in tow, do an extraction of an organ, actually get an ambulance there to the hospital, then back in another ambulance with the organ on the jet back to Teterboro, another ambulance. We now fly a helicopter from directly in front of Langone, then land in Philadelphia Hospital at $65,000 what they used to pay, versus about $6,000 to us today. So they're saving a lot of money, and we've professionalized the business.
We have a lot of technology, chain of custody, and the same logistics muscles that we have moving people efficiently, we apply to medical. We're now the largest in the business. We have about 20% market share. I think we can get to 50% market share. It's a very fragmented business, a terrific business for us to be in, and it really leverages all the core competencies we have at the company.
Just curious, how did that business come about ? Somebody just was like, "The hospital's right there, and we have a terminal," you know?
It's terrifying, but I was at Blade Terminal, and I was on the tarmac, and I looked up, and I saw NYU Langone. And then one of our early shareholders, board member David Zaslav, the CEO of Discovery, I knew he knew Ken Langone, and I was thinking, you know, maybe EMS. And EMS is a very difficult business, as some of you may know, because you get paid by insurance companies. It's a very difficult business. And they said, "You know what? We could really use you for organ movements." And the United States has one of the greatest organizations to facilitate organ movements in the United States, as opposed to, say, Europe, that, you know, we now pretty much saturated, you know, a lot of these key markets with assets, so we can continue to grow.
And that's a very big growing business because many of you guys may not have heard about this stuff because of perfusion technologies, which allow organs to last out of the body much longer than they used to. So, basically, we did the world's longest organ mission from Boston to Alaska recently. The idea that an organ could live outside a body for so many hours is only because of this technology, which is causing a lot of growth in the industry, potentially, you know, high teens growth in the industry as a whole. So we see a lot of upside on the medical side. And the more we fly medical, the better the economics are on the passenger business. The more we fly in passenger, the better the economics are on the medical business.
It really, really helps, and it also helps because it has. You know, we've spoken to a lot of ESG funds and a lot of, you know, our communities, when we talk about why Blade is important, the medical part definitely plays a role, even with our passengers.
On just the North, you know, how much of the medical business is within North America, and how do you think about expanding outside of it?
It's 100% US right now. And I think that, you know, Europe is extremely fragmented the way they do things. They, you know, most of it is ground, and they just don't have the organizations to do this. You know, there's organizations that are kind of semi-governmental that deal with who gets organs, what hospitals are working on them, how it all works together. I don't need to give you details about it, but those types of massive organizations that create tremendous opportunity to save lives and improve outcomes don't exist in the same way in Europe. So we think we have so much room to grow in Europe, in the United States. When you think about 99% growth within MediMobility, it's just phenomenal.
So we're gonna keep digging deeper. There are other businesses within it that we're looking at. We're actually all heart, liver, lung. Kidneys can actually be shipped. But there is services like Next Flight Out, where we can, you know, actually get organs on next flights , and make sure you have the same type of level of service that people have grown to expect with Blade MediMobility.
When you think about your business, what do you see as the most significant near-term and long-term growth drivers? I mean, some of it is super clear in the medical business, and, you know, how do you think about that passenger growth?
Well, if you think about it, like the business that you know, if you think about the paradigm of urban air mobility, which is, you know. We started this company thinking about we wanna bring a lot of people to the same place at the same time. And if you find a place like New York City, certain places in Europe and Canada, that exists. But you have to find a place that's either geographically contested or highly congested, as we like to say. And New York is great because we take wo and a half hour drives to Kennedy or 1 hour, even call it a one and a half hour drive, and turn it to five minute flights. 28 million people go between the New York City airports and Manhattan by private transportation. So no super buses, no trains, no public transport.
That's just basically ride-sharing, rental cars, your own car, limo service, what have you, and we're doing such a fraction of that. Yet we're flying 12 hours a day, six days a week, Newark and Kennedy. It's a great service, and that is growing, you know, year-over-year for the quarter, 65%. And I think that there's also, in our more mature businesses like, you know, the leisure business, you know, we're having a lot of pricing power. We've introduced fare classes where, you know, a basic fare class might be the lowest fare, but it's non-refundable. You have fares where you can change without change fees. We have fares where you can get cash back if you're only visiting, you're not gonna be in the area again.
A lot of add-ons, excess luggage, cars that connect to you, so when you land at a Blade terminal, there's a car staged and waiting for you. All that has, has proven to bring, give us a lot of growth on the pricing side. We've found a lot of elasticity, a lot more than we ever expected, on the pricing side, both for airport and for, you know, our leisure routes. In Europe, we basically rolled up the three largest companies in Southern Europe, which are, Héli Sécurité, Monacair, and Azur Hélicoptère, and it's all under the Blade brand now. We have a terminal in Nice Airport. We can get you behind the tarmac, straight, you know, past security, past passport control, with our own badge and credentialed executives.
It's a terrific service, but the integration's taking a little bit longer than we expected, and we haven't really started the kind of marketing and integration that we wanted to with hotels and concierges, with interline agreements with Air France and Delta, who are introducing a lot more daily flights. As you probably know, this has been the largest summer on record for Americans going to Europe, and they have a great infrastructure. Right now we're flying, you know, Monaco, Nice, Cannes, Saint-Tropez, Geneva, Courchevel in the winter. One of our investors from RedBird Capital took a stake in our company, and they're also on the board. They bought the AC Milan football team. We'll be flying from Milan to Monaco, which is actually only about a 35-minute flight.
There's a lot of, you know, Milan's enjoying a little bit of a renaissance, and that plus, the sports angle , I think that'll be a very interesting.
I've come up with a few Investor Day ideas for you, just by the cities you've listed.
No, I think there's a lot of European, Southern Europe opportunity for future growth.
Just talk about your operating model a little bit, because I think people might have missed it. You operate a fairly asset-light model by not actually owning the helicopters. So how do you think about how that impacts your return on margin profile?
Yeah. So, you know, I think that for us, when we started the company, especially with leisure routes, we were using excess capacity. So you might have a company that was doing tours, a company that was doing something else with their helicopters. You know, maybe they had private owners. But at where we are right now, we have a seven-member safety team, and it takes a lot of work to get on the Blade platform. So as much as people kind of think, "Oh, you're kind of the Uber of the skies," we really are not. You can't just own a helicopter and take, you know, a phone with a suction cup, put it on your window, and do a couple trips. It doesn't work that way. So you get vetted from a safety perspective.
You get vetted financial, financial wherewithal, age of aircraft, age of airframe pilots, number of hours and type, number of hours in general, maintenance logs, pilot logs, you name it. The diligence is proctological, to use that term. You know, once you get approved for that, you use our technology platform, and what actually happens is that you have less marketing costs, you don't have any customer experience costs, you don't need anyone on the ground. Credit card issues, we deal with. Passengers who are upset because they're late because of weather or whatever, we deal with, and they reduce their costs. But the deal, the way it works is we buy hours from you.
And so we come up with an hourly rate, and if it's on a by-the-seat basis, you know, for airport, we break even at 2.5 passengers out of 6 seats. We decide where the aircraft goes. You have to use our livery or our logos on all your aircraft. And so during COVID, when we had to pull back, that was terrific because we didn't have idle pilots with salaries, insurance, hangars, all that. We were able to pull back, and then we can also flex depending on demand as we see it. And there's some operators that are solely dedicated to Blade, and there's some that are not solely dedicated to Blade. And in fact, you know, we have, you know, Airbus and Textron owns Bell.
They'll actually call us and say, "Such and such company wants to buy a new Bell 407, you know, and they're on the Blade program, do you think they can really use it? How many hours do you think? 'Cause they'll finance against the number of hours that we do." That being said, medical, we have 17 fully dedicated jets right now. And at some point, as much as we're asset light, you get to a point where, you know, from a free cash flow perspective and a return on, on assets, it's a great model to be asset light. But at a certain point, you're using it so much that you can get better margins. So I think certain areas like medical, you may see us getting a little bit more asset-heavy in deals that where it feels like we're responsible a little bit more for the iron.
Licensed sirens, ambulances, we now do own because our medical business is so big, as you saw in that video, that SUV. And when we buy them, our payback on the ambulances are four months. So it's incredible. So why would we be doing asset light? It doesn't make any sense. So we're trying to be smart about it. But on the helicopter passenger side, I think the model really works extremely well on asset light. The medical stuff, where you need 24/7 coverage, and you are just doing so many hours, and it has to be completely dedicated, because when a hospital needs an aircraft, they need it, we need it, and that's, so you will probably see us getting closer to the asset. The reason, I'm not trying to be vague, but it may not be as simple as, you know, writing a check for any aircraft.
Can you just specify your margins? I think you target 20%-30% margins for passenger on mature routes and break even, airport are lower, but I might be wrong on that. Then MediMobility, I think you're in the 15%-20% range.
Yeah.
Just talk about-
So yeah, 15%-20% for MediMobility. We target 20%-30% for passenger, but we have mature routes that are 35%. You know, and leisure routes and such that, you know, a lot of pricing elasticity, and such. You know, I think about, you know, our passenger routes to, you know, Long Island, which are, you know, you know, huge. You know, we started the business, it was $595 a seat, and now it's, with tax, it's $1,100 a seat. You know, we're still growing on both, you know, on a, on a, on a revenue basis, completely, and I think we're probably slightly up on a volume basis. So mature routes, 35%.
We always try to break even on a route with at least 50% capacity, airports, much less, two and a half seats out of six seats. I think that in terms of expansion, we still see so much—like, we think we know we have the three biggest markets in the world, and we talked about when we started this conversation today about the great unlock being noise when you think about EVA. So until they're great places to land that are convenient to everybody in this room and elsewhere, we're gonna pick on these fantastic markets and go deeper and get a better share of market. Because our big competition right now, let's think for airport, is ground. In Europe, we have one competitor.
In Canada, we do compete from time to time with seaplanes, depending on the season and the weather, 'cause they're not IFR. But you know, when we think of a core airport product, we're competing with ground.
I skipped all my EVA questions because we did a whole summit devoted to that a few months ago, so, with you. You alluded to, you know, potentially, doing more tuck-ins and, expanding your portfolio inorganically. Can you maybe expand upon, you know, what makes sense? And your liquidity, I think, stood at $170 million at the end of Q2. How are you thinking about near-term capital needs?
Yeah, I mean, right now, we have a very, very low burn rate. You know, I think that, you know, profitability is in sight, and we do have a lot of capital, and we are seeing opportunities. I think that when I think of organs, I think of precious cargo, and we're really good at it. There's certain things that anything that needs to get someplace quickly, and it's critical. For those of you who know about it, radioisotopes that are used in medical devices, they don't live out of the, they don't live out in the environment very long. That's an opportunity. There's clearly, we talked about while we're number one in heart, liver, lung, kidney for next flight out, which we're not doing a lot of, I think that's a great opportunity there.
And then when it comes to passenger, it really is gonna be going deeper and probably a lot more business to business. We finally have started breaking the code of consulting firms, investment banks, hotels, you know, you, which is exactly the way it works in Europe, by the way. We have a lot. You know, 40% of our bookings are done through hotel concierges and third-party websites and brokers and stuff. We've always been direct to consumer, but it's clear that, you know, we now have in the hopper, people, especially in New York City, are now seeing the benefit of saving time and a competitive kind of vertical transportation model that makes sense, that's competitive with ground. So a lot more business to business, you know, to say the least.
Maybe just one final question to close the loop. How do you think about the IP of Blade around technology as you know, your biggest competitive advantages, thinking about Blade as a more technology and lifestyle company rather than just transportation?
Sure. I think, look, when electric vertical aircraft come, I think... You know, and we speak every day to Joby and to Archer and to all the folks who do it in Beta, where we did a test of the very first EVA in the greater New York City market. They're gonna need our customers. We're flying hundreds of thousands of people vertically every year, and you need that infrastructure. But a lot of it is exclusive or just nothing else can be built. And in the beginning, when EVA is here, they'll be using existing infrastructure. It's not like the aircraft are ready, and all of a sudden, you're landing on top of buildings. That's just not realistic. It's gonna take some time for that.
So I believe that, you know, the combination of the trust and the brand of flying people in conventional rotorcraft switching to EVA, the first people who are gonna feel comfortable, clearly, are gonna be people who've already been in helicopters. People, other people may wait and see, you know, what it's all about. The technology, clearly, you know, our economics are torqued and refined by placement of aircraft in various locations and understanding how to use flights, which aircraft to use and which missions, depending where they are, which is all done by technology that has to be developed by the consumer-facing app in cockpit. And then, as you said, the brands, which takes years to, you know, really build up that kind of trust. So for us, it's an asset swap.
I think all these manufacturers know that they'll, If in order to be profitable, they need to get to some kind of scale and will have to be doing business with us.
Great.
I think it'll work.
Well, thank you for sharing the story, and thanks, everybody, for listening in. That concludes.