Blade Air Mobility is eyeing an overseas expansion of its urban air mobility (UAM) platform, but the company is offering few specifics as it prepares to launch a new European division headquartered in Paris.
The company said it is focusing on “high friction routes” that would allow it to replicate its North American commuter service, which caters to highly-congested tracks in major cities.
Still, the company is promoting a cautious approach, and Blade executives stopped short of naming which European markets they will target in a first quarter earnings call last week.
“We do see high friction routes where we think we can replicate our model … and it can be done at an economical cost,” said Rob Wiesenthal, CEO of Blade. “This is something that we’ve been working on for quite some time, but we’re going be very prudent in our strategy in terms of how we execute and when.”
Airbus VP to guide Blade Europe
Blade Europe will begin operations from its Paris office in earnest on June 1, when Sabrina Barbera officially takes over as the company’s first executive director.
Barbera is currently a vice president with Airbus Helicopters, overseeing its training and simulation division. She previously spearheaded an investment by Airbus in Blade in 2018, when she was head of company development for Airbus Helicopters.
“The scale and global strength of Airbus Helicopters has enabled me to appreciate the significant growth opportunity in urban air mobility,” Barbera said in a press release. “This, coupled with my work with Rob and Blade’s senior management team on Airbus’ investment in Blade, crystalized for me the sizable addressable market Blade has in Europe. This is a new phase of my career that I am both excited and well prepared for.”
Blade relies on helicopters and amphibious aircraft for its passenger business, which is focused on short-distance flights in major centers like New York City and Vancouver, British Columbia.
The company’s flagship Blade Airport service provides five-minute helicopter flights from Manhattan to New York City airports, a commute that can take hours by land. Blade also provides commuter flights between Manhattan and the Hamptons, and acquired commuter passenger routes in Vancouver from Helijet last year.
Blade has said it plans to eventually transition from traditional aircraft to a fleet of eVTOLs, and has entered into a purchase agreement with Beta Technologies for up to 20 Alia eVTOL aircraft. The first aircraft is scheduled for delivery to Blade in 2024.
In the meantime, Blade Europe will be tasked with laying the groundwork for operations in a market the company acknowledged is fragmented. Blade also noted its European operations may include routes that run seasonally rather than year-round.
The strength of land transport networks in Europe, including high-speed rail on the Heathrow Express, is a complicating factor for Blade’s air mobility model. The company said it will continue to focus on high-friction routes, where air travel is more efficient than land.
“The areas we’re looking in, we’re not looking to do science experiments,” said Will Heyburn, Blade’s chief financial officer. “We want to do proven routes that reduce friction to people … I think the opportunity is there. We’ve been looking at it for some time, and it was time that we had people on the ground that can take us to the next level.”
First quarter earnings
Blade reported a net loss of $11 million in the first quarter of 2022, driven primarily by a $9.2 million increase in general and administrative costs, the company said.
Total revenues for the quarter were $26.6 million, compared with $9.3 million in the same period in 2021, exceeding expectations.
Revenue growth was largely driven by Blade’s MediMobility division, an air medical transportation service that delivers human organs to transplant centers in 20 U.S. states. MediMobility has added 14 new clients this year, Wiesenthal said.
“It is very rewarding for us to provide this critical service,” he said.
Blade’s consumer-facing business endured headwinds due to the Omicron variant of the virus that causes COVID-19, leading to decreased flight margins for Blade Airport, as well as on Helijet commuter routes in Vancouver.
The company expects those numbers to rebound in future quarters.
“Now that COVID restrictions are being lifted, folks are getting back to enjoying the travel they’ve missed for leisure, and getting back on the road for business meetings and conferences,” Heyburn said.
eVTOL plan meshed with short-term growth
Heyburn acknowledged concerns in the travel industry about pilot availability and inflation — particularly the cost of fuel — but said Blade is uniquely positioned to mitigate those challenges.
He noted the company has long-term agreements with its operator partners, with pricing often locked in for multiple years. The company’s MediMobility contracts are generally structured to neutralize the economic impact of fuel, he added.
On the consumer-facing side, low fuel consumption and short flight times make Blade’s costs less sensitive to a crisis, he said. Heyburn said Blade Airport uses Bell 407 helicopters that burn just 1.3 gallons of Jet A fuel per seat on a flight between Manhattan and New York airports.
“We do not expect fuel cost increases to have a material impact,” he said.
The long-term transition to eVTOLs is expected to reduce costs further, but Wiesenthal said the business does not require electric aircraft or further capital to reach profitability.
“I cannot emphasize enough that we are not waiting idly for the day these next-generation aircraft arrive,” he said. “We are extremely well capitalized not only to continue scaling our business, but also to take advantage of potential opportunistic acquisitions that may present themselves.”