Months of relative quiet at Hawthorne-based Surf Air Mobility Corp. ended on May 18 with an announcement of a flurry of deals, including an agreement to acquire a Florida commuter air carrier, a move to go public through a SPAC in a transaction valued at $1.4 billion, and a pair of agreements with other companies to develop and deploy hybrid gas-electric commuter aircraft.
Surf Air Mobility, which operates a subscription-based private aviation service called Surf Air, announced an agreement to acquire Palm Beach, Florida-based Southern Airways Corp., which operates two commuter airlines: Southern Airways Express and Mokulele Airlines in Hawaii.
Southern Airways Express is the largest passenger operator of Cessna Grand Caravans in the U.S., serving more than 300,000 customers in 39 cities with more than 60,000 flights in 2021.
Financial terms of this deal were not disclosed.
Once the acquisition takes effect, Surf Air Chief Executive Sudhin Shahani is expected to become chief executive of the combined company, while Southern Airways Corp. founder and Chief Executive Stan Little would be president.
In a separate deal contained in the same announcement, Surf Air said it has agreed to merge with a special purpose acquisition company called Tuscan Holdings Corp. II with plans for the combined entity to go public in the second half of this year under the Surf Air Mobility name. The announcement said this transaction has a pro forma equity value of $1.42 billion and is expected to provide up to $467 million in gross cash proceeds to Surf Air Mobility. This latter figure is to include capital from a consortium of investors, including San Antonio, Texas-based mass media company iHeartMedia Inc. and San Francisco-based private equity firm Partners for Growth.
Also in its May 18 announcement, Surf Air detailed another pair of deals with two separate companies to jump start its effort to build and deploy hybrid gas-electric aircraft. Seattle-based AeroTEC, an aerospace testing and engineering company, will develop and supply power train technology. And Everett, Washington-based magniX, a subsidiary of Singapore-based Clermont Group, will supply electronic propulsion units.
Surf Air Mobility said that with the help of these two companies, it intends to deploy a fleet of hybrid-electric Cessna Grand Caravan aircraft, though no timetable was given.
Last July, Surf Air announced an agreement to buy 100 Cessna Grand Caravan EX single-engine turboprop aircraft from Textron Aviation Inc., a subsidiary of Providence, R.I.-based Textron Inc. The agreement contained an option for Surf Air to buy 50 more Cessna Grand Caravans at a later date. At the time, Surf Air said it was aiming to install hybrid-electric powertrains in these and put them into service in regional markets by the end of 2024.
A Surf Air spokeswoman said last week that Textron is still performing due diligence on portions of the deal, which would mean that those 100 aircraft had not yet been delivered to Surf Air.
The agreements announced May 18 with AeroTEC and magniX replace another deal that Surf Air Mobility announced last year to acquire Hawthorne-based Ampaire Inc., which has also been developing hybrid-electric Cessna Grand Caravan aircraft. That deal fell apart earlier this year and Ampaire is continuing its work on its own.
Surf Air chief executive Shahani said that with this new pair of agreements, the company plans to deploy hybrid electric aircraft on both current and new routes.
“We believe deploying hybrid electric propulsion technology on existing aircraft at scale will be the most significant step we can take toward decarbonization of aviation in this decade,” Shahani said. “We’re at a moment when the increasing consumer demand for faster, affordable and cleaner regional travel will be met with (Surf Air Mobility’s) electrification ecosystem to accelerate the industry’s adoption of green flying.”
Surf Air laid out one more transaction in its May 18 announcement.
The company said it has entered into a memorandum of understanding with London-based Signature Aviation, the world’s largest private aviation terminal operator, to support Surf Air’s flight operations. Surf Air and Signature Aviation plan to co-market and scale the availability of sustainable aviation fuel and co-develop technology to support the eventual rollout of electrified aircraft charging infrastructure at Signature terminals, the announcement said.