Summary of Sky Harbour Conference Call Company Overview - **Company**: Sky Harbour - **Industry**: Aviation Real Estate - **Business Model**: Develops private hangar campuses at major U.S. airfields, leasing to high-net-worth individuals and corporations [4][5] Key Points Business Strategy - Sky Harbour aims to secure land at key airfields, develop hangar campuses of approximately 200,000 square feet, and lease them to private jet owners [4][5] - The company targets a goal of 50 airfields, with potential to exceed this as operations become more efficient [5] - Sky Harbour is positioned as the largest hangar developer in the U.S. [5] Market Dynamics - The U.S. business aviation fleet has significantly increased over the past 15 years, with a notable rise in larger jets that require specialized hangar space [6][28] - Legacy hangar supply is becoming obsolete as newer, larger jets cannot fit into older hangars [6] - The constrained supply of hangar space in major metropolitan areas creates a favorable market for Sky Harbour [9] Competitive Landscape - Sky Harbour differentiates itself from Fixed-Base Operators (FBOs) by focusing on long-term leases and private hangar solutions rather than transient traffic [15][16] - FBOs primarily generate revenue from fuel sales, while Sky Harbour's revenue model is heavily based on rental income [23] Financial Metrics - Sky Harbour targets stabilized yield on cost in the mid-teens and aims for a return on equity close to 30% [4][18] - Construction costs are approximately $300 per square foot, with expected rental revenue around $39 per square foot and additional fuel sales [17] - The company has secured financing through tax-exempt municipal bonds, pricing debt roughly 200 basis points below market rates [18][21] Growth Projections - The company anticipates a year-over-year growth rate of approximately 7-8% in the business aviation market [28] - Sky Harbour's operational footprint includes 18 ground leases signed, with nine operational and nine in development [10] Recent Developments - In August, Sky Harbour secured a $200 million drawdown facility with JPMorgan to fund construction and stabilization of projects [21] - The company is transitioning to fixed-rate swaps to manage interest rate exposure [22] Customer Base - Approximately 60% of Sky Harbour's customers are high-net-worth individuals, 30% are charter operators, and 10% are government tenants [25] Lease Management - Ground leases with airports average around 50 years, with options to extend [25][26] - Tenant leases are staggered from one to ten years to capitalize on potential land value appreciation [25] Additional Insights - The aviation real estate market is characterized by limited new airport construction, particularly in high-demand areas like New York and Los Angeles [9] - Sky Harbour's unique positioning allows it to capture a niche market that is underserved by traditional FBOs [15][16]

Summary of Sky Harbour Group (SKYH) Conference Call - June 05, 2025 Company Overview - **Company**: Sky Harbour Group (SKYH) - **Industry**: Aviation Real Estate - **Business Model**: Focuses on hangar construction at airports, leasing to general aviation business jet owners [3][4] Key Points Business Operations - **Hangar Construction**: Acquires land through long-term ground leases (typically 50 years) at U.S. airfields, designs, constructs, and operates hangars [5][6] - **Tenant Profile**: Primarily high net worth individuals and corporate aviation fleets [6] - **Revenue Streams**: Includes hangar leasing and aviation services such as fueling [6][24] Market Opportunity - **Demand Drivers**: Increasing size and longevity of business aviation fleet leading to higher demand for hangar space [9][10] - **Supply Constraints**: Insufficient hangar supply due to local municipalities' reluctance to invest in hangar construction, typically relying on FBOs [10][12] Financial Metrics - **Target Returns**: Aims for low to mid-teen NOI yields, with current unit economics showing an average development cost of $300 per square foot and rental income of $45 per square foot [16][17] - **Debt Structure**: Utilizes tax-exempt municipal bonds for financing, with a current average yield of 4.18% and plans to issue new debt at 5.5% to 5.75% [19][20][21] Growth Strategy - **Expansion Plans**: Currently operates 18 ground leases, aiming for 23 by year-end, with ongoing efforts to secure additional leases [15][26] - **Vertical Integration**: Acquired a hangar manufacturing company to reduce costs and improve margins, targeting a 5% savings on hard costs [33][34] Competitive Landscape - **FBOs**: While FBOs have considered entering the home basing sector, they remain focused on fuel sales and have not significantly shifted their business model [39][40] - **Barriers to Entry**: Challenges in airport land acquisition and the need for established relationships with airport authorities limit new entrants [41][42] Recent Developments - **Lease-Up Strategy**: Ongoing leasing efforts at newly constructed campuses, balancing speed of lease-up with achieving target rental rates [36][38] - **Capital Position**: Currently holds $97.5 million in cash, earmarked for ongoing construction and future debt issuance [25] Shareholder Relations - **Boston Omaha Corp**: Noted as a significant shareholder, currently trimming their position to raise capital for other investments, which may impact stock performance [44][46] Additional Insights - **Operational Efficiency**: Plans to bring more construction processes in-house to enhance control over costs and timelines [32][34] - **Future Revenue Potential**: Ground leases are viewed as critical assets, representing future revenue streams post-construction [23][24] This summary encapsulates the key aspects of Sky Harbour Group's business model, market dynamics, financial metrics, growth strategies, competitive landscape, and recent developments as discussed in the conference call.

Core Insights - Sky Harbour Group Corp. (NYSE: SKYH) demonstrated strong momentum in Q1 2025, driven by the expansion of its aviation infrastructure and increased operational capacity [1][7] - The company initiated operations at its Phoenix Deer Valley campus and is preparing for openings at Dallas Addison and Denver Centennial, scheduled for Q2 2025 [1] - Sky Harbour added a new facility at Seattle's Boeing Field, with approximately 90,000 sq ft of rentable space, and signed new ground leases at Hillsboro and Stewart International [1] Financial Performance - Sky Harbour reported total revenue of $5.6 million in Q1 2025, representing a 133% increase from $2.4 million in Q1 2024 and a 20% sequential increase [7] - As of the end of Q1 2025, the company's total assets amounted to $553.7 million, with liquidity remaining strong at $97.5 million [7] Operational Expansion - The company's portfolio includes eight operational campuses, one under construction, and ten in pre-development, positioning it for significant long-term growth [1][7]