Blade Air Mobility, Inc. (NASDAQ:BLDE) Q4 2022 Earnings Call Transcript

We’ve always looking for opportunity to push more into corporate travel. That is extremely important, that connectivity between especially our airport products and the customer can’t only be direct to consumer, but also has to be in corporations, and I think we’re making some great headway there with 50,000 people who live and work in , in Hudson Yards, travel agents, already a big part of the business in Europe. And also, corporates like JetBlue. We have a tremendous program going out with JetBlue with — where with every Mint seats sold, they bundle it with an airport seat in addition to significant discount for Mosaic members in addition to TrueBlue members. Also, we’re looking at opportunities to add what we call Next Flight Out capability.

As you know, while our Medical business with respect to organ transport is growing incredibly, we’ve done that without the largest part of the business, which is kidneys. And that’s because kidneys can actually survive out of the body for a longer period of time. Hospitals tend to use Next Flight Out services, that is an area we’re looking very seriously at and should provide incremental, very strong growth outside our core transplant businesses, which are at liver, heart and lung.

Ravi Jani: Great…

Rob Wiesenthal: Thank you.

Ravi Jani: Operator, we can take the next question.

Rob Wiesenthal: Thanks, Jason.

Operator: Thank you. And our next question coming from the line of Bill Peterson with J.P. Morgan. Your line is open.

Bill Peterson: Yes. Hi. Thanks for taking the question. Can we dive in a little bit more on the flight margins for Passenger in particular? You discussed the impacts of COVID, the reintroduction of airport. On the other hand, even though you raised prices, I believe, it’s like 30% for Hampton airport and pricing and $245, that’s well above the base price. I think you also raised prices in Europe and maybe a little bit in Canada as well. So, I guess, looking ahead, how should we think about margins? I know you talked about seasonality. But I guess, how should we think about full year when you get back to sort of 20% level? Again, maybe thinking about that in the current context of the business of Canada and Europe, what’s the right way of thinking about this moving forward in terms of the (ph)?

Will Heyburn: Sure, Bill. Will here. Thanks for the question. I’ll hit a couple of the different points. On the seasonality side of things, just to reiterate, we’ll always see our best margin in Q3. We can still think that is true even pro forma for the acquisitions we’ve made, particularly Europe. It had that same summer, spring, where you’re going to see slightly better margins. We, obviously, see that in our U.S. Short Distance business as well. Q2 will be second best in terms of margins. And then, from a flight margin perspective, Q1 and Q4 are going to continue to be lighter. And that’s really driven by mix shift to Medical and Jet and Other, which are going to make up a larger percentage of revenues in Q1 and Q4. However, we don’t think that blended overall flight margin is really the right thing to focus on given the massive growth in Medical, because it’s going to be driven more by mix shift than anything else.

And as you can see from the segment reporting, though Medical does have a slightly lower average flight margin in that kind of 15% to 20% range as we’ve talked about, there are fewer fixed direct costs in that business. And so, it’s a great contributor to our overall adjusted EBITDA. So, we’re not as concerned about the blend toward a slightly lower flight margin, though, Europe, you’ll see be closer to our average mature route flight margin for Short Distance around that 30% range. So that should be a boost to overall flight margin in 2023. And then, of course, we continue to have a slight drag on flight margin from our Blade Airport product, which is still ramping up to that breakeven utilization. We talked about that being about 150 basis point drag in this quarter.