US HondaJet operator Volato has forged an agreement with flyExclusive to transition the management of its fleet operations to flyExclusive. This move is expected to bring substantial cost savings and provide Volato with the opportunity to focus on its high-growth areas, including aircraft sales and proprietary software.

Under the terms of the aircraft management services agreement (AMS), flyExclusive will take over all aspects of operating Volato's fleet, including both revenue and expenses. This transition will allow Volato to reduce its cost base by transferring the operational responsibilities to flyExclusive, which anticipates that the fleet will be profitable under its management.

“We are excited about the potential of this agreement, which provides significant benefits to both Volato and flyExclusive,” says Matt Liotta, CEO of Volato. “By shifting fleet operations to flyExclusive, we reduce our operational costs while continuing to focus on delivering value through our aircraft sales and expanding our software solutions, such as the Vaunt empty leg programme.”

Volato will continue to take delivery of new HondaJets and Gulfstream G280s, and these aircraft will become part of flyExclusive's managed fleet. Volato will benefit from the margins on aircraft sales without the burden of operational costs, while also generating revenue from its proprietary software, including the cash flow-positive Vaunt programme, Volato's successful empty leg consumer app.

flyExclusive will also add a portion of its empty-leg flights to Vaunt. In second quarter of 2024 Vaunt listed over 600 available flights. flyExclusive has a fleet of over 80 aircraft, and by adding select flyExclusive aircraft, the inventory of flights in Vaunt may increase by up to 500% of current levels.

Additionally, Volato and flyExclusive remain in discussions about a potential merger, which could further integrate the strengths of both companies and enhance their collective offerings in the private aviation sector.

“As a fully integrated operator, flyExclusive is well-positioned to offer synergistic value to Volato's clients and deliver enhanced value for our overall growing customer base,” adds Jim Segrave, founder and CEO of flyExclusive. “Over the years, we've made strategic investments to remove industry bottlenecks and grow and maintain a leading, consistent customer experience. We're proud to welcome Volato's customers and look forward to offering them access to our growing fleet of light, midsize and super-midsize jets.”

Under the terms of the agreement, the company will manage flight operations, sales and expenses of Volato's fleet, consisting of 13 fully fractionalised aircraft, eight leased aircraft and four managed aircraft. The goal is to transfer aircraft to the flyExclusive certificate, which will occur over the coming months in coordination with the FAA. The company will also execute the flights for the Volato customer base of approximately 184 fractional customers and 265 block customers on the Volato certificate, until they are moved over to flyExclusive agreements, in addition to Volato's retail and wholesale business. This will significantly increase the flyExclusive direct-to-customer facing business as planned nearly immediately.

The AMS will be immediately accretive to both the top and bottom line of flyExclusive. Volato revenues, excluding aircraft sales, expected to transfer to flyExclusive are approximately $75 million. Due to the infrastructure flyExclusive has in place, the company is confident these flights can be executed with minimal additional overheads.