The company this week reported fourth-quarter and full-year 2023 earnings, revealing that it recorded revenue for the first time and announcing plans to ramp up testing, certification, and manufacturing activities. Joby also said it became the first eVTOL manufacturer to complete the third of five stages in FAA type certification, and the firm is now turning to stage four: for-credit flight testing with the regulator.

Let’s start by breaking down that certification update. 

Joby will need type certification to fly commercially in 2025, the year it predicts it will enter service. The company’s air taxi is designed for a pilot to fly up to four passengers on 100 sm (87 nm) trips at cruise speeds as fast as 200 mph (174 knots). Due to its unique design features—including electric batteries and tilting propellers—the aircraft must go through a rigorous, five-stage gauntlet before the FAA approves it to carry passengers.

Joby on Wednesday said it wrapped up the third stage in that process, claiming to be the first in the industry to achieve the milestone. Stage three covers certification plans for the aircraft’s structural, mechanical, and electrical systems, as well as Joby’s approach to cybersecurity, noise, and human factors. Each component required a separate document defining the testing and analysis used to certify it for commercial service.

“From the carbon fiber composites to the metallics, the flight electronics to the control systems, the batteries to the electric propulsion systems, and much more, we now have a well-defined path to certification,” said Didier Papadopoulos, president of aircraft OEM at Joby, on the company’s earnings call.

All certification plans—including those for approving the aircraft’s novel propulsion system—have now been reviewed and, crucially, accepted by the FAA. Joby said it can now submit detailed test plans for the fourth phase: for-credit testing and analysis of aircraft components and systems, as well as the aircraft itself, with the regulator.

If it receives a passing grade, the company will enter the final phase, in which the FAA may issue the air taxi a type certificate and operational specifications.

“With all of our aircraft certification plans accepted, we’re able to map out dozens of upcoming visits with the FAA, focused on dry running our system level and aircraft level tests,” said Papadopoulos.

First Revenue and Rising Net Loss

Joby on Wednesday also reported earnings for the fourth quarter and full year 2023. Among the highlights was the company’s first reported revenue: $1 million from early flight services provided to the Department of Defense, conducted in Marina, California, using a prototype aircraft.

The manufacturer also reported $1 billion in cash and short-term investments at the end of the quarter, giving it significant liquidity heading into 2024. However, its full-year net loss of about $513 million was nearly double that of 2022.

Net cash used in operating activities and purchases of property, plant, and equipment totaled $91 million in Q4 and $344 million for the full year, below what the company expected it would spend. However, its net loss grew $48 million year over year, which the company attributed to higher operating costs and lower favorable revaluation of warrants and earnout shares.

Joby’s Q4 net loss of $115 million included operational losses of $128 million, about the same as the prior quarter, partly offset by interest, revenue, and other income of $13 million. The company attributed this to increased operating expenses due primarily to costs to support certification and manufacturing of the company’s prototype aircraft, parts, and test articles.

The manufacturer’s adjusted earnings before income, taxes, depreciation, and amortization (EBITDA) was minus-$96 million in Q4, widening $18.6 million year over year and $3.1 million quarter over quarter. That figure mainly reflects employee costs associated with development, certification, and manufacturing, Joby said.

Joby’s Big 2023

While small, Joby’s first $1 million in revenue gives it reason to celebrate. But the manufacturer spent 2023 laying the groundwork to make much more in the future.

Joby ends 2023 with plenty of momentum, having launched initial manufacturing and delivered the first of nine air taxis to Edwards Air Force Base (KEDW) in California ahead of schedule. At Edwards, NASA, U.S. Air Force, and Joby pilots are using it to conduct testing, evaluations, and training. Crewed flight tests began in October, and the company says it now has more than 100 such flights under its belt.

The “most significant commercial development of the quarter” according to Joby CEO JoeBen Bevirt, however, was Joby’s exclusive six-year agreement to operate air taxis in Dubai, United Arab Emirates. The deal shuts out competitors such as Archer Aviation and Embraer subsidiary Eve Air Mobility, who had previously announced plans to fly in the city. Joby also partnered with Skyports, which will fund, develop, and operate four initial vertiports in Dubai.

“The government of Dubai wants this service to be the first in the world, and their actions certainly reflect that ambition, with support from the very highest levels of government and a regulatory pathway that builds on FAA processes that allows for operations ahead of achieving type certification in the U.S.” said Bevirt on the company’s earnings call.

Joby also participated in the first eVTOL test flights in New York City, one of its planned initial service locations in partnership with Delta Air Lines. The company flew its air taxi out of the Downtown Manhattan Heliport (KJRB) in front of Mayor Eric Adams and other city stakeholders. 

Adams also announced plans to electrify the heliport, where Archer is also planning a service that would connect it with Newark Liberty International Airport (KEWR). In addition, Joby on Wednesday said it will work with the Port Authority of New York and New Jersey and the New York City Economic Development Corporation to develop eVTOL infrastructure at John F. Kennedy International Airport (KJFK) and LaGuardia Airport (KLGA).

“This was a seminal moment for our company,” said Bevirt. “Seeing a Joby aircraft lift off from a Manhattan heliport and complete a flight against the backdrop of the New York City skyline was quite literally a dream come true for me, and it moved the needle.”

Toward the end of the year, Joby announced agreements with U.S. FBO networks such as Clay Lacy Aviation and Atlantic Aviation to expand the deployment of its global electric aviation charging system (GEACS) in New York and Los Angeles. It also partnered with Japan’s Nomura Real Estate Development to install GEACS chargers in Tokyo.

Joby positions GEACS as a competitor to the combined charging system (CCS) standard that has been endorsed by the General Aviation Manufacturers Association (GAMA) and several competitors, including Archer, Beta Technologies, Lilium, Volocopter, Overair, and Boeing’s Wisk Aero. 

Both GEACS and CCS are billed as universal charging systems designed to accommodate all electric aircraft. But the industry may adopt only one proposal, making these early FBO agreements valuable.

As it works to add launch and infrastructure partners, Joby simultaneously has leveraged stakeholders such as NASA, with which it conducted groundbreaking air taxi simulations in December. The partners studied how existing air traffic control and airport procedures could accommodate eVTOL aircraft alongside conventional models.

“During the simulation, air traffic controllers were able to integrate up to 120 eVTOL operations per hour, arrivals and departures, from [Dallas/Fort Worth International] Airport’s [KDFW] central terminal area,” said Papadopoulos.

The Outlook for 2024

With the third stage of Joby’s type certification process now complete, the company is gearing up for its final FAA exam. But there’s plenty more on the horizon.

“Our priority in 2024 will be progressing the certification and manufacturing of our aircraft,” the company said in a letter to shareholders. “We expect to increase our focus on commercialization as we prepare to enter commercial service in 2025.”

Joby estimated it will use between $440 million and $470 million in cash, cash equivalents, and short-term investments during 2024. 

A significant portion of those funds will support the beginning of component manufacturing at the company’s scaled production plant in Dayton, Ohio, as well as the expansion of its low-volume manufacturing site in Marina. Papadopoulos said on the earnings call that the manufacturer has one aircraft in final assembly, with two more expected to roll out shortly after.

“We expect to reach a production run rate equivalent to one aircraft a month by the end of the year as we continue to ramp production in support of certification and commercialization,” said Bevirt.

Joby said the Marina expansion will more than double its footprint and support flight training, aircraft storage, and expanded manufacturing. It would also double the site’s annual production capacity, allowing the firm to manufacture 25 aircraft per year as its larger facility comes online. The Dayton site is expected to initially churn out 500 aircraft per year.

Joby also intends to extend flight demonstrations to more key markets and expand its relationship with the DOD. It plans to commit to at least two more aircraft deliveries under its current $131 million contract with the Air Force.

“Our revenue this year will be driven by on-base, government-directed flights that are part of the contract that we signed with the DOD in April of last year,” said Matt Field, chief financial officer of Joby, on the earnings call.

Joby expects revenue generation in 2024 will be “lumpy,” owing to the unpredictability of DOD test campaigns. However, the company’s focus is not on making money now, but later.

“While we aren’t blind to the challenges ahead of us, we believe that we are best positioned to succeed with the strongest balance sheet, the best team in the industry, and most important, a laser focus on delivery,” said Bevirt.

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The post Joby Aviation Reports 2023 Earnings, Achieves Key Air Taxi Certification Milestone appeared first on FLYING Magazine.

Net income for the recent quarter rose 1.3 percent to $1 billion, or $3.64 diluted earnings per share, compared with $992 million, or $3.58 per diluted share. Revenue increased 7.5 percent to $11.7 billion.

• READ MORE: Engine Certification Brings Gulfstream G700, G800 Closer to Market Debut

For the full year, net income totaled $3.3 billion, or $12.02 per diluted share, compared with 3.4 billion or $12.19 per diluted share. Revenue increased 7.3 percent to $42.3 billion from $39.4 billion in 2022.

“We had a solid fourth quarter, capping off a year that saw growth in all four segments and continued strong cash flow,” said Phebe Novakovic, chairman and CEO of General Dynamics.

During a call with analysts, however, Novakovic noted that results for the quarter and year are “4 and 9 cents below consensus. This miss was exclusively because G700 did not certify before year-end,” she said, adding that the delay “deprived us of slightly over $1 billion of revenue and $250 million in earnings.”

• READ MORE: Gulfstream G700 Sets Speed Records During 20-Country Tour

In the company’s aerospace business, which includes Gulfstream, orders totaled $3.2 billion, resulting in a 4.8 percent increase in backlog to $20.5 billion. Across all of its operations, which include marine systems, combat systems, and technologies, year-end backlog grew to $93.6 billion, which is the highest in the company’s history.

Novakovic said customers whose G700s have been completed should anticipate delivery soon. “We have 15 airplanes ready to go, and the hope is that we deliver them this quarter,” she said.

The post General Dynamics Says Q4 Earnings Grew but Were Hurt by Gulfstream G700 Delays appeared first on FLYING Magazine.

The company reported a net loss of $148 million, or $1.88 per share, for the full year compared with net income of $5.07 billion, or $50.54 per share. The company said adjusted net income, including continuing operations, only totaled $101 million or 74 cents per share. Revenue for the year rose to $6.91 billion from $6.09 billion a year earlier. 

Backlog totaled $14.8 billion, an increase of $2.6 billion from a year ago, reflecting “strong order intake and a steady demand profile,” Bombardier said.

• READ MORE: Bombardier Shrinks Q3 Debt Amid Strong Aircraft Demand

“The 2022 results we are presenting today are a resoundingly positive culmination of a strong year, and a testament to the team’s effort to execute in the fourth quarter,” said Eric Martel, Bombardier’s president and CEO. “We exceeded commitments across the board, be it on deliveries, our growing aftermarket business and profitability.

Martel also said the company repaid $1.1 billion of debt during the year with cash from its balance sheet and operations, giving it “the flexibility to be even more proactive and opportunistic going forward.”

Bombardier said it expects 2023 revenue to rise above $7.6 billion, driven mainly by continued growth in deliveries. The company said executives will further discuss its strategic plans during its Investor Day event on March 23.

The post Bombardier Reports Growth of Revenue, Deliveries in 2022 appeared first on FLYING Magazine.

Southwest Airlines (NASDAQ: LUV) shared earlier today in its third-quarter report that it generated a record operating revenue of $6.2 billion, which was 10.3 percent better than the third quarter of 2019, in which travel was last considered “normal.” The resulting $277 million quarterly profit reflects a 33 percent improvement from last year. 

“Following record summer leisure travel demand, revenue trends remained strong in September 2022, bolstered by improving business travel trends post-Labor Day,” Southwest CEO Bob Jordan said. 

The carrier achieved that even with an 85.4 percent load factor, which is a few points better than the 83.5 percent it had for the third quarter of 2019. 

Despite the trend, Southwest reported—while bookings for the final quarter of the year look strong—that it “continues to experience inflationary cost pressures in fourth quarter 2022, in particular with higher rates for labor, benefits, and airports.” The airline also said it expected a decrease in productivity from not having enough workers, eating into its earnings in the fourth quarter. Still, the company said it was on track to meet its 2022 goal of hiring 10,000 employees.

High Profits, Not Enough People

This trend isn’t unique to Southwest. The U.S. Department of Commerce GDP Report published Thursday also showed the U.S. economy grew at a 2.6 percent annual rate in July, August, and September, compared to the first half of the year, where the overall economy shrank. Even with the Federal Reserve’s commitment to raising interest rates as a way to combat inflation, the travel market is one of the few sectors benefiting from pent-up pandemic demand but grappling to keep up because of staffing issues.

Despite raking in $695 million of quarterly profit on a record $14 billion revenue, Delta Air Lines’ CEO Ed Bastian expressed on the airline’s early October earnings call that a workforce shortage prevented the airline from realizing its full potential. 

“We continue to make good progress in clearing those bottlenecks and getting our pilots into seats and categories every week,” Bastian said of the pilot training bottleneck. “Our goal is to be in a position to have our network fully restored by the summer, and the pilots are obviously a big part of that.”

Even United Airlines (NASDAQ: UAL) and American Airlines (NASDAQ: AAL) have shared the same sentiment, especially around the training backlog.

When United reported a third-quarter profit of $942 million on $12.88 billion in revenue, its president, Brett Hart, shared that United was “dedicated to hiring at least 200 pilots a month.”

Andrew Nocella, an executive vice president and chief commercial officer, painted a more critical picture.

“Pilot recruiting, training, and retention, we believe, are real constraints for the industry for years to come,” Nocella said.

• READ MORE: United Airlines Will Spend $100 million to Expand Pilot Training Center Amid Pilot Shortage

American, the largest operator, whose revenue rose to a record $13.46 billion for the third quarter, admitted that it, too, had its hiring challenges.

“There are constraints out there, notably pilot constraints, both for the regional side and just the massive amount of training that we have to do on the mainline side,” said American’s CEO Robert Isom on the company’s October 20 earnings call. He explained that is partly why the airline still hasn’t been able to deploy its entire fleet and that it would take some time.

• READ MORE: American Airlines Grounds Almost 100 Airplanes Because It Doesn’t Have Enough Pilots To Fly Them

Fortunately, the other headwind—which comes in the form of higher fuel prices following supply constraints from the disruption of the Russian-Ukraine conflict—has allowed airlines to pass through higher prices to customers who have yet to flinch. For American, the company said its fuel bill for the quarter—more than $3.8 billion—was nearly twice what it paid last year in the same period. Though each airline has its strategy for saving on some of its fuel prices, the persistent travel demand remains in its favor.

• READ MORE: Southwest Airlines Fuel Bet Will Pay Off

As for the rest of the year, the airlines are optimistic, provided they can find the people they need to fulfill their planned activity.

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