Financial Data and Key Metrics Changes - First quarter revenue was $23,500,000, at the high end of the expected range of $21,000,000 to $24,000,000, keeping the company on track to meet the full year expectation of over $100,000,000 in revenue [8][26] - Adjusted EBITDA loss in Q1 was $14,400,000, within the expected range provided in the last earnings release [8][27] - Scheduled service revenue decreased by 23% year over year, primarily due to the elimination of unprofitable routes and a brief interruption of service in January [27] - On-demand service revenue decreased by 25% year over year, driven by lower sales and flight completions [27] Business Line Data and Key Metrics Changes - The Essential Air Service (EAS) Program represents approximately 40% of revenue, with long-term subsidized contracts providing connectivity to underserved domestic markets [21] - The company is focusing on profitability in the on-demand business and has exited several unprofitable charter products [13][27] - The company returned five older aircraft to lessors during Q1, simplifying the fleet to focus on the operationally efficient Cessna Grand Caravan [10] Market Data and Key Metrics Changes - The company operates almost exclusively in the U.S., primarily flying aircraft manufactured domestically, which mitigates the impact of tariffs [4][20] - The current economic environment has benefited the company, particularly with lower fuel costs [22] Company Strategy and Development Direction - The company aims to become a premier regional air mobility platform, focusing on three growth vectors: expansion of air mobility operations, commercial rollout of the regional air mobility software platform, and sale of electrified powertrains for the Cessna Caravan [29] - The company is in late-stage discussions with key partners to advance its electrification initiative [18][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging economic, regulatory, and funding environment but emphasizes proactive management of operations and cost structure [29] - The company expects to achieve positive adjusted EBITDA in airline operations by 2025 [19][28] Other Important Information - The company raised an incremental $5,000,000 in funding subsequent to the end of Q1 [9] - The interline agreement with Japan Airlines allows for expanded access to over 435 million customers [12] Q&A Session Summary Question: Impact of changes to the essential air service budget - Management believes that being a low-cost operator provides a competitive advantage, especially if higher-cost operators face subsidy reductions [33][36] Question: Core versus non-core scheduled and charter flights - Hawaii is identified as a core area, with a focus on profitability and operational efficiency in route selection [37][38] Question: Adding new profitable routes - The company is currently focused on exiting unprofitable routes and plans to enter new tier one routes next year [41] Question: Progress on Surf OS product - The company is integrating feedback from beta users and plans a full commercial rollout of Surf OS in 2026 [44][46] Question: Service interruption details - The service interruption in January was unplanned and related to maintenance issues, which have since been resolved [48] Question: Future partnerships and geographic targets - The company is open to expanding partnerships beyond the U.S., following the successful agreement with Japan Airlines [50]

Financial Data and Key Metrics Changes - First quarter revenue was $23,500,000, at the high end of the expected range of $21,000,000 to $24,000,000, keeping the company on track to meet the full year expectation of over $100,000,000 in revenue [7][25] - Adjusted EBITDA loss in Q1 was $14,400,000, within the expected range provided in the last earnings release [7][26] - Scheduled service revenue decreased by 23% year over year, primarily due to the elimination of unprofitable routes and a brief interruption of service in January [26] - On-demand service revenue decreased by 25% year over year, driven by lower sales and flight completions [26] Business Line Data and Key Metrics Changes - The Essential Air Service (EAS) Program represents approximately 40% of revenue, with the company being the lowest cost provider on routes below 500 miles [5][21] - The company returned five older aircraft to lessors during Q1, focusing on operationally efficient Cessna Grand Caravan [10] - Flight completion factors improved to above 92% in the first six weeks of Q2, with a goal to return to 96% prior to route expansion [12] Market Data and Key Metrics Changes - The company operates almost exclusively in the US, with minimal impact from tariffs due to domestic operations and aircraft manufacturing [4][20] - The current economic environment has benefited the company, particularly with lower fuel costs [22] Company Strategy and Development Direction - The company is focused on three growth vectors: expanding air mobility operations, commercial rollout of the regional air mobility software platform, and marketing electrified powertrains for the Cessna Caravan [28] - The transformation plan includes an optimization phase, with a goal to achieve positive adjusted EBITDA in airline operations in 2025 [19][24] Management's Comments on Operating Environment and Future Outlook - Management noted substantial changes in the economic, regulatory, and political environment, but expressed confidence in the company's competitive advantage as a low-cost provider [4][5] - The company anticipates minimal impacts from potential tariffs and is actively managing operations to improve cost structure and efficiencies [20][28] Other Important Information - The company raised an incremental $5,000,000 in funding after the end of Q1 [8] - An interline agreement with Japan Airlines was announced, expanding access to over 435 million customers [12][48] Q&A Session Summary Question: Thoughts on changes to the essential air service budget - Management acknowledged the potential budget cuts but emphasized their competitive advantage as a low-cost operator [31][34] Question: Discussion on core versus non-core scheduled and charter flights - Management identified Hawaii as a core area and discussed the importance of profitability in route selection [35][36] Question: Plans for adding new profitable routes - Management indicated that while they have targeted drafts to exit, some routes are being held longer than planned due to additional subsidies [38] Question: Service interruption details - Management clarified that the service interruption in January was unplanned and related to maintenance issues [47] Question: Potential for more interline agreements - Management expressed excitement about the Japan Airlines partnership and indicated interest in expanding to other carriers globally [48]