Electric aviation specialist Surf Air (URF, Santa Monica) and Jetstream Aviation Capital have announced the lessor's intention to purchase up to 250 hybrid- and fully-electric powertrains over five years subject to, and post Federal Aviation Administration (FAA) certification of the technology.
In a statement on October 11, 2022, they announced the intention to purchase was subject to negotiation of pricing, terms, minimum commitment and definitive documentation. Each powertrain is expected to create one-time revenue at sale, and multiyear recurring revenue streams once used by the operator.
In addition, the parties announced an arrangement to finance up to USD450 million through a customised operating lease and sale structure to fund the planned growth of SAM's fleet of turboprop aircraft.
SAM will access this financing facility over the next six years for new and used Cessna (single turboprop) 208B Caravans and PC-12s, subject to the entry into separate, binding sale and purchase and lease agreements for each aircraft.
"This agreement will help SAM grow its fleet to meet route expansion plans and customer demand as it seeks to expand its regional air travel footprint and sustainable flying solution," the company said in the statement.
"SAM intends to accelerate the adoption of green flying by developing hybrid electric powertrain technology to reduce direct operating costs and emissions from regional air travel by offering original equipment manufacturers (OEMs) and third-party operators the ability to order new or upgrade existing aircraft with hybrid electric powertrains," it added.
SAM plans to deploy hybrid electric aircraft on regional routes being serviced today and on additional routes in new markets. Its immediate focus will be on scaling operations using the Cessna Grand Caravan, the first aircraft to be electrified using SAM's hybrid electric powertrains. It will not require charging infrastructure targeted for commercial certification by 2025.
"We believe the customised aircraft leasing structure from Jetstream will provide us a capital-efficient way to more rapidly expand our operations at the scale necessary for a future when electrified aircraft unlock the latent demand for convenient, affordable regional travel on new routes across the US," commented SAM founder Sudhin Shahani. "Jetstream's proven record of leasing aircraft in this asset class at scale, especially for the Cessna Grand Caravan, will help strengthen Surf Air Mobility's position in the regional mobility and turboprop category," he said.
"We believe the regional turboprop asset category is positioned for significant growth over the next decade as electrified aircraft enter operations," added Jetstream Aviation Capital Chief Executive Officer Stuart Klaskin.
Jetstream has long-standing relationships with Southern Airways Express (9X, Memphis International) and its subsidiary Mokulele Airlines (MHO, Kona), which have entered into a definitive agreement to merge with SAM, subject to closing conditions and regulatory approval. Surf Air Mobility intends to upgrade Southern Airways Express's fleet of nearly 40 Cessna Grand Caravans to hybrid electric aircraft.
