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Operator
Good morning, ladies and gentlemen, and welcome to the Blade Air Mobility Fiscal First Quarter 2024 Earnings to Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a -and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference over to Matt Schneider, Vice President of Invest Relations and Strategic Finance. Matthew, you may begin.
Matthew
Thanks and good morning. Thank you for standing by and welcome to the Blade Air Mobility Conference Call and webcast for the quarter ended March 31, 2024. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement in Safe Harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K filed with the SEC for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during the conference call are made only as of the date of this call. As stated in our SEC filings, Blade disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical, comparable, consolidated GAAP financial measures to those historical non-GAAP financial measures is provided in our earnings press release and investor presentation. Our press release, investor presentation, and our Form 10-Q and 10-K filings are available on the investor relations section of our website at .blade.com. These non-GAAP measures should not be considered in isolation or as substitute for financial results prepared in accordance with GAAP. Hosting today's call are Rob Wiesenthal, founder and chief executive officer of Blade, and Will Hayburn, chief financial officer. I will now turn the call over to Rob. Rob?
Rob
Thank
Matthew
you,
Rob
Matt, and good morning, everyone. I'm very pleased to report a strong start to 2024 that represents an early but important first step in achieving the 2024 and 2025 financial guidance that we provided last quarter and reaffirmed today. Most notably, this was the best quarter in company history for our medical business. We achieved a record revenue segment adjusted EBITDA, building upon our dramatic growth driven by increased trip volumes and trip distances, both from existing and newly added hospital clients. This should address issues that have been raised on the impact of competition. We are America's largest dedicated air transporter of human organs for transplant, and we are confident we are the most cost effective as well. Total revenue in the first quarter ending March 31, 2024, increased .8% to $51.5 million versus the comparable period in 2023. Excluding the impact of last year's discontinuation of Blade 1, our scheduled jet service between New York and South Florida, total revenue increased .5% year over year. Profitability continues to improve across the business driven by several initiatives, including a shift to dedicated aircraft and vehicles in our medical business, meaningful profitability improvements in our New York by the seat airport service, and a continuation of cost rationalization programs across the company, including the elimination of unprofitable services such as Blade 1. While total revenue increased .8% year over year, total flight profit increased by .5% year over year as flight margins rose to .7% in Q1 2024 as compared to .8% for the comparable period last year. We achieved significant year over year improvement in both medical and passenger segment adjusted EBITDA, which when coupled with a 19% year over year decline in our adjusted unallocated corporate expenses, drove a strong $4.2 million improvement in adjusted EBITDA in Q1 2024 versus the comparable period last year. Medical revenue increased .6% in Q1 2024 year over year, and importantly, we saw the resumption of sequential revenue growth in the quarter with revenues increasing .6% versus the fourth quarter of 2023. Medical segment adjusted EBITDA increased .5% year over year as adjusted EBITDA margins rose over 500 basis points versus the comparable period last year. Additionally, our clients' use of perfusion and other organ preservation devices continues to grow the overall market beyond industry expectations, given the ability to move organs over much longer distances and accept organs that just a few years ago would not have been suitable for transplant. When our contracted clients utilize these devices, they continue to use Blade's logistic services. We have now closed on seven of the eight jet aircraft acquisitions that we announced last quarter. This is a win-win as it enables lower cost and improved service delivery for our clients and improved flight margins per trip for Blade. The vast majority of our flying will remain with third-party owned and operated aircraft as part of our layered, asset-light approach, enabling maximum flexibility and availability for the hospitals we serve. In our passenger business, despite inconsistent year over year revenue comparisons due to the discontinuation of our Blade 1 scheduled jet service, poor flying weather for ski season in Europe, and lower passenger volume in Canada, the passenger segment still reported a .4 million year over year improvement in adjusted EBITDA. Importantly, we continue to see improvement in our New York -the-seat airport service with revenues increasing 26% year over year and our third consecutive quarter of positive flight margin. The airport business remains our most strategic route, given the combination of the large addressable market of 27 million annual flyers and our proprietary passenger infrastructure in New York City. We have also seen continued growth in revenue per seat, while the total number of airport passes outstanding, which allow flyers to travel between Manhattan and JFK or Newark Airport for as low as $95 per seat, rose more than 30% year over year. Given the annual cost of our passes of $795 per pass, purchasers are signaling that they expect to fly Blade Airport more than eight times during the course of the year. As a reminder, Q1 is the seasonally lightest quarter for short distance business. Regardless, I'm pleased to see that we're delivering on the cost savings and profitability improvements we promised both in the passenger segment and on the corporate level. Before I turn the call over to Will, I would like to address our long-planned management transition in the medical division. Seth Bacon, founder of Trinity Air Medical, which we acquired in September 2021, will assume the role of executive chairman of Blade Medical. He will continue to be involved in all strategic matters, key client relationships, and high value sales processes. Our current medical COO, Scott Wunsch, will assume the role of chief executive officer of Blade Medical. Scott has been with Trinity since 2018 and previously spent 13 years at one of the largest organ procurement organizations in the country. Scott has served as Trinity's COO for the past four years, where he's been responsible for -to-day oversight of Trinity and following our acquisition, Blade Medical Operations. Seth has built an incredible team in Phoenix. He is a large shareholder, and from his new position, he will continue to foster the culture of excellence that has led to our incredible success. With that, I'll turn it over to Will. Thank
Seth
you, Rob. I'll now walk through a few financial highlights from the quarter. Starting with medical, we're benefiting both from solid industry fundamentals and our strategy to establish and refine the most cost-effective and reliable -to-end organ logistics platform in the United States. Nationwide, heart, liver, and lung organ transplants rose approximately 9% -over-year in the first quarter of 2024. Blade's growth, both in terms of trip volumes and in terms of revenues, continues to exceed that market growth, given new client additions and strong trip growth within our existing client base. We continue to see growth related to our clients' use of multiple new perfusion and organ preservation technologies, which have expanded the transport market by enabling organs to travel over longer distances and by increasing the pool of viable organs for transplantation. Market growth and company initiatives are evident in the commercial momentum we're seeing in the business. Medical segment revenue rose .6% -over-year in the first quarter to $36 million and rose .6% sequentially versus Q4 2023. New clients represented approximately half of the growth in the quarter, and we continue to drive strong revenue growth with our existing clients. We're pleased with the sales pipeline and expect to onboard several new clients, both for logistics and for TOPS, our organ matching service, over the coming quarters. We also wanted to highlight how our ground strategy is allowing us to build a deeper, more integrated, and more cost-effective relationship with our clients. Blade now directly operates more than 30 medical vehicles, with many more available through our growing network of third-party drivers, all deployed in our densest markets. Ground represented more than 10% of medical revenue this quarter at above average margins and it grew more than 70% versus the prior year. Several factors are contributing to improved profitability in the medical segment. Our increased use of dedicated aircraft at ground vehicles provides a mutual benefit to our clients and Blade. We also continue to see an increase in average trip distance, which all translates into improved profitability metrics within our medical business. Medical flight profit rose .5% year over year to $8 million in Q1 2024. Medical flight margin increased 6 points to .3% in the quarter versus the comparable period last year and 2 points versus Q4 2023. Medical segment adjusted EBITDA rose .5% year over year to $4.4 million in Q1 2024 as margins rose over 500 basis points to 12.2%. Going forward in medical, we expect to average single-digit sequential -over-quarter revenue growth for the remainder of the year. As always, the timing of new client onboarding and other factors influences the sequential growth rate in any quarter and can result in some -to-quarter lumpiness. Our next quarter, ending June 30, 2024, is a particularly tough -over-year comp given our support of a large hospital on a temporary basis during the 2023 period, which we have discussed on our prior earnings calls. For medical SG&A, we continue to expect single-digit sequential -over-quarter growth for the remainder of the year as we ramp up our organ placement and ground offerings. As Rob mentioned, we closed on seven of the eight previously announced aircraft acquisitions. While these closings happened after quarter end, we're pleased with the free cash flow and the benefits we've seen in these early days, and we look forward to providing a more thorough update once we close on all the aircraft and have accumulated more operating data. Turning to the passenger business, in short distance, 26% growth in airport this quarter was more than offset by poor flying weather for European ski routes and lower passenger volume in Canada, leading to a .9% revenue decrease -over-year. In Europe, where travel to and from the Alps is the primary driver in the first quarter, weather-related cancellations approximately doubled compared with last year. In jet and other, revenues decreased .7% -over-year, driven by our decision to discontinue Blade 1 at the end of the 2023 winter season, which had generated losses and $2.9 million of revenue in Q1 2023. Excluding Blade 1, jet and other revenue rose .4% -over-year, driven by increased jet starter activity and growing brand partner revenues. Q2 will be our last quarter for this Blade 1 revenue headwind, expected to be in the range of $1 million. We are delivering on the profitability improvements we promised in passenger, cutting loss, making products like Blade 1, and optimizing the cost structure. Importantly, passenger segment adjusted EBITDA improved by 0.4 million -over-year, even in the face of disappointing weather in Europe. Going forward in passenger, we expect continued -over-year improvement and passenger segment adjusted EBITDA, driven by SG&A cost deficiencies. On the corporate cost side, we once again reduced our adjusted unallocated corporate expenses with a 19% decline in Q1 2024 versus the prior year period. This combined with our improvement in both passenger and medical segment adjusted EBITDA led to a 4.2 million improvement in adjusted EBITDA versus the prior year period to negative 3.5 million in Q1 2024. For the remainder of the year, we expect adjusted unallocated corporate expenses to be flat to death. On the cash flow front, cash from operations was a 15.6 million usage in the quarter. The difference between adjusted EBITDA and cash from operations in the quarter was primarily driven by a 2.6 million increase in accounts receivable and a 10.2 million reduction in accounts payable and accrued expenses, which was driven by cash payments for the Trinity contingent consideration resulting from our acquisition and by our 2023 short-term incentive plan. Please note that this will be the last Trinity contingent consideration payment. Capital expenditures of 1.1 million were driven primarily by leasehold improvements related to the buildout of larger office space in Tempe, Arizona for our growing medical business along with investments in software development. We ended the quarter with no debt and 151 million of cash in short-term investments providing flexibility for strategic investments, acquisitions, and opportunistic share repurchases. On the guidance front, we are reiterating the 2024 and 2025 guidance we introduced last quarter, most notably for positive adjusted EBITDA in 2024 and double-digit adjusted EBITDA in 2025, and we believe this quarter's results represent an important first step in achieving those goals. Last but not least, I'd like to take this opportunity to welcome Matt Schneider to the team as VP of Investor Relations and Strategic Finance. Matt has had a long career spanning sell-side research and public equity investing with a focus on aerospace. We're lucky to have him on board, and I look forward to introducing many of you to him in the coming weeks. With that, I'll turn it back over to Rob.
Rob
Thank you, Will. I just have a few catch-up items to review. From time to time, we receive questions regarding quarterly stock sales by senior executives. Please note that these sales represent a -to-cover mechanism whereby the company transfers vested RCUs to executives net of shares sold to pay taxes owed and due at the time of investing. This program is clearly noted in our form for filings. With respect to our corporate SEC disclosure and investor materials, given the intense interest and a rapidly growing medical business blade metamobility, we are refocusing these materials to provide greater clarity and insight into this business, which is now the largest in our company. In closing, we are off to a great start to the year, and we're increasingly confident in the improving profitability outlook for our businesses. And now, I'll turn it over to Matt for questions.
Matthew
Thanks, Rob. We'll start by taking questions from the analyst community, and we'll follow with a few questions from the Say Q&A platform. I'll now turn it over to the operator for analyst questions.
Operator
Thank you. As a reminder, to ask a question at this time, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. One moment while we compile our Q&A roster. And our first question is going to come from the line of Jason Helstein with Oppenheimer. Your line is open. Please go ahead.
Jason Helstein
Thanks. Two questions, first on medical mobility and the second on passengers. So you've kind of given us pretty much detailed kind of growth guidance for the rest of the year. You know, as we think about next year, do you think about kind of, can you still grow faster than the industry next year or just kind of, you know, you just start to look more like the industry next year and maybe just talk about kind of the factors around growth of that as we're thinking of maybe a year or two. And then second, in passenger, I think gross margin, you know, came in a little bit weaker than we expected. Maybe just talk about the dynamics there and how you're thinking about passenger gross margin or gross profitability for the rest of the year. And just, you know, whatever initiatives you have that might factor into that. Thank you.
Seth
Thanks for the questions, Jason. Will speaking. On the medical side, yes, do believe we continue to outpace the market growth and medical because remember when you think about the unit as of an organ, our unit is a flight block hour and then we have a lot of ancillary revenues that we can make on a trip as well, particularly the growth in our ground business and the introduction of the top service. So if you still see that high single digit growth in the number of organs that are being in the science plant in America because of some of the new technology and centers getting more aggressive, that incremental organ is often coming from farther away. So there's a multiplier on the growth for us. And then we hope to be able to continue to go deeper with all of our customers, help them on the ground and help them with organ matching as well. So I think there's multiple ways to exceed that market growth in medical.
Rob
Let me talk about passenger for a second. I think in terms of the margins, obviously, Q1 is historically the lightest quarter and it's very easy to have noise in those numbers. As I mentioned previously, Europe had a really difficult ski season in terms of cancellations of flights due to weather. And the best way we look at that is to take a look at bookings versus revenue. And when you look at bookings versus revenue, you see a much stronger picture in terms of flights that would have happened if it were not for weather. And then on the US side, we saw a really solid improvement in the performance there. So I think we remain confident on the passenger side. I really look at this as kind of the…it's really just kind of an enlargement of the performance of any kind of performance that you notice for Q1 just because it's such a small quarter
spk02
historically. And just for the business in general. Anything else, Jason? I mean, just any thoughts just about how you think passenger margins trend
Jason Helstein
the rest of the year?
Seth
You know, you're always going to see better margins once you get into our summer season. Those are our highest gross margin products and it's also our opportunity on growing products like Blade Airport to get the highest load factor in terms of number of seats that are full on the aircraft. So you should see improvement particularly going into Q2 and Q3. And of course, when you think about something like Europe, almost half of the revenue comes through in Q3. So that's really the most important quarter. And we do expect to see pretty significant -over-year segment adjusted even down improvement in passenger this year. And if you take a look
Rob
at the market also taking on the US side, increases in perceived prices, you know, that's something that's held really well. We expect that to continue. And I think now that we have a new management team in place in Europe, you're not, you're going to see stronger pricing in terms of perceived basis because we're starting to introduce fair classes like we have in the US. We've just been a huge driver of incremental pricing for passengers. So they have the choice to get a kind of low-cost opportunity to fly Blade safe from between East and Monaco, but then also can pay for flexibility that can add 20, 30 percent to the price of its seat. So that's starting to be adopted in Europe. So a lot of the strategies in the US are starting to move to Europe with this new management team that we have in place. So I'm pretty confident about that flowing over the Atlantic and enjoying, you know, continued improvement, especially as Will said, in
spk02
our most important quarter, which is Q3. Thank you.
spk01
Thank you. In one moment, as we move on to
Operator
our next question. Our next question is going to come from the line of Edison Yu with Deutsche Bank. Your line is open. Please go ahead.
Edison Yu
Great. Thanks for taking our questions. One, to maybe get your thoughts on the buyback. Obviously, you do have a lot of cash and you launch them, which I think is very encouraging. What are the thoughts into the quantity and the timing, the potential timing of it going forward?
spk02
Sure, I'll take that. We have not purchased any stock yet.
Rob
We did authorize a repurchase program, so we have that tool in our toolbox to further enhance shareholder value when we see major disconnects between the trading value of our company and the intrinsic value. But at the same time, we need to evaluate that option in the context of organic growth investments and accretive acquisitions that we're focusing on finding and analyzing, considering almost every day. And that's the right way to supercharge the growth of the company and to create the most value for shareholders of the long term. And clearly right now, when you take a look at our interest rates right now being so high, we're at a huge competitive advantage versus our competition in terms of evaluating acquisitions because we don't have that need to lever up any kind of deal, given our cash balance. It makes it a lot more competitive versus private equity or any kind of management LBO. So again, it's to have another tool in our toolbox and whatever number we would ever in terms of buying back stock,
spk02
it would be prudent in the context of our overall capital structure. Understood. And a separate follow up,
Edison Yu
I'm curious if you looked at some other areas of expansion, the groundside. I saw you recently had this partnership with the JET. I'm just curious if there's more kind of niche opportunities there you maybe actually could have happened to.
spk02
Sure.
Rob
Look, I think there are two things. Just to mention about the partnership with the JET, that really was driven by marketing. As you saw, I think we even announced that we had strong performance in our brand partnership revenues. Tons of brands on a global basis want to get in front of our passengers and are willing to pay for that privilege. So that product, while not incredibly meaningful in terms of scale, gives what our brand partners want, which is another canvas to get in front of passengers, this time for a longer period of time than by air. And it's something they want and it's something they're willing to pay for and we're happy to oblige. But in terms of what you said, the kind of expansion in terms of movements and such, we view ourselves as a company that moves critical cargo, whether passengers or surgeons with organs. So we are hard at work looking at everything from moving blood samples, tissue samples, other types of critical cargo, AOG parts for aircraft, and anything that needs to get someplace quickly, have a good chain, a kind of very visible chain of custody, and a really strong logistics background. And I think we're really well equipped because of our logistics strength on the passenger and especially on the medical side to move a lot of other critical cargo besides organs.
spk02
And I think you'll hopefully see more to come in the coming year. Great. Thank you.
spk01
Thank you. And one moment for our next
Operator
question. Our next question is going to come from the line of John Hickman with Ledenberg Solomon. Your line is open. Please go ahead.
John Hickman
Hi. I just have two questions. Could you just talk about why Canada was weak for a minute? And also, what are we supposed to expect from depreciation as you now own seven, well, potentially
Seth
eight aircraft? Thanks for the question, Sean. In Canada, we're still seeing some weakness in terms of overall seats flown that we believe is driven by a shift towards still more remote meetings with government officials and the provincial capital of British Columbia versus what we saw in the pre-COVID period. So we think that's the major driver there. In terms of what we expect to see on the new aircraft that we own, it's early days. We closed on 78 aircraft after the quarter end, but we're already seeing an overall free cash flow benefit. And we still expect to see on a free cash flow margin basis a five to 10 point increase in the performance for those owned aircraft versus aircraft that we use under a capacity purchase agreement. So irrespective of the depreciation, you'll be creating some expense that was an hourly rate paid to a third party for some depreciation. But what we care about is the free cash flow, and that's where we expect to see a five to 10 point expansion. And once we have a little more data, a quarter or so, we'll come back to you with some more specific details about all the different line items. But we're definitely seeing the performance benefit we expected so far in this early days.
John Hickman
So from a model point of view, the expense that would have been kind of a cost of goods sold, that should go down a little bit. And then on the SDNQA, on your upbringings, there'll be more higher depreciation from those, and you'll have to pay for your own gas and stuff like that.
Seth
It's sort of just moving into different buckets, but the overall bucket of the cash that we pay to get the lift that we need for our medical customers, we're going to spend less, we believe, on a per hour basis. And you'll see that benefit in the cost of revenue line, correct?
Rob
Just one thing I'd add, I mean, we're looking still at a very small percentage of overall being owned, but I have to admit that I believe that you're going to see very meaningful increase in margins that more than make up for any concern you might have on the free cash flow in terms of depreciation and looking at depreciation or capex. So it really is a balancing act where we believe we're still at the light, but we were trying to do is just make sure that we have 24-7 access for all our customers and are able to accommodate them when needed. And we see something opportunistic, like these acquisitions, these planes, and to have them well placed, we can just enjoy so much better margins than we could if we were not owning them. And essentially what it works out to is when you're operating a plane 24-7, you're pretty much just giving money away if you're not owning them. But again, we've just got to be very careful and we are being prudent and making sure that the vast majority of our lift is on a NASA light basis.
John Hickman
And just one more question there. On the pilot side, do you, is that still a cost of goods sold? I mean, paying the pilot. Remember we're
Seth
not operating. We're not going to take these aircraft. We just own them. So we're going to be benefiting from pass-through billing. But you'll still see that come through on the COGS line for something like pilots. Okay. So we'll now get the fixed cost leverage of that. Instead of paying a fixed hourly rate per hour that we fly, now you're going to have the fixed cost leverage of the pilot salaries are what they are. And as we fly more, of course, we're only acquiring aircraft in areas where we have multiple overlapping contracts with different hospitals. And we're highly utilizing the aircraft in terms of hours flown per month. So you'll be able to get that incremental fixed cost leverage through the pass-through economics that we couldn't get before when we were just paying X rate flat per hour flown.
John Hickman
And can I just ask, so I noticed you've started this luxury bus service from Manhattan to the Hamptons. Is that
Rob
true? Yeah, I think we just covered that real quick. That's not going to be any type of, in the short term, any kind of meaningful driver revenues, but it's not going to be any kind of drag on profit whatsoever. Again, this was really driven by our brand partnerships, where our brand partners wanted an additional canvas to kind of market their products. But also, when you think about weather in the New York area in the summer, this gives us an opportunity to kind of keep people with our ecosystem. So if there's a flight that's canceled for weather, they can go on the streamliner. If people have excess luggage, which sometimes they do, we can easily move it to their destination on the streamliner and charge them for that. So it does fit in nicely with our core leisure business as well. So I think it's a good thing to have on two prongs.
John Hickman
OK, thanks.
Operator
Thank you. And one moment for our next question. And our next question comes from the line of Bill Peterson with JPMorgan. Your line is open. Please go ahead.
Bill Peterson
Hi. Good morning, and thanks for taking the questions. I wanted to first start with medical and about the competition. So I guess, first of all, are you seeing any shifts in terms of the transport for our customers as a result of competition? For example, are most choosing a dual source for these services if they weren't doing this prior? Are any new customers changing their contract lengths or sizes versus historical norms? And I guess the context is, I guess there's about 250 transplant centers. One competitor now is talking about 105. So I guess trying to get a sense of how to think about the growth of this business and how to think about it in the context of potential dual sourcing for these transplant centers.
Seth
Thanks for the question, Bill. We've seen nothing but really positive momentum in the medical business, both in terms of new customer acquisition. We've got a great pipeline for the rest of the year. You saw about half of our growth was for new customers. But we've also seen incredible growth within all of our existing customers. That's any way you slice it. That's the number of trips that we're doing with them. That's trip distances. That's overall revenue from our existing customer base. So if there's a shift, what we're seeing is that our customers are getting more aggressive in terms of how far they're willing to fly to pick up an organ. And they're taking advantage of a bunch of new technologies, both perfusion and other organ preservation technologies that are enabling some of those efforts. And our model remains a contracted first call model. That's how we're able to position aircraft strategically to lower costs for our customers and eliminate repositioning. And so that's what we've continued. And we've seen great progress from folks in the industry that are making perfusion equipment that's growing the market. And it's been a benefit to us across the board. Bill, I
Rob
just want to add in here, because I'm glad you asked the question. And I think that the quarter speaks for itself. We had a record high revenue of $36 million in medical. And we grew 135% in EBITDA. And we've gotten this question before. We continue to see growth. We think our competitive stature is strong. We are the largest in the industry. And with respect to any competition, not only are contracts, people obviously buy by all their contracts. And we're getting new customers every day. But the perfusion devices that are out there have only supercharged our business by the ability to move these organs longer distances. So I cannot be more confident about our competitive stature. I'm someone who's not prone to hyperbole.
Seth
And Bill, if it's helpful, we're still seeing kind of a teens percentage of trips that use some kind of perfusion or organ preservation equipment. The vast majority of the flying that we're doing for our customers is still using traditional cold storage. And it's really been a positive on all fronts.
Rob
And we're
spk02
moving organs with perfusion devices every day.
Bill Peterson
OK, thanks for that. I want to pivot over to the passenger business. So especially against the context of the revenue growth in medical and your reiteration of guidance and focus on profitability. Want to kind of talk about the seasonality of the business, how to think about it from here, from a passenger volume. But then, I guess, as the other component of revenue and profitability about pricing, I believe your airport was around maybe 300 exiting for Q on an average sort of average seat basis. Kind of wondering how the trends were in the first quarter and how we should think about trends and pricing for the second quarter and back half of the year. And then I think you alluded to earlier, maybe some potential for uplift in European pricing. Should we is there any benefit there this year or is that more maybe beyond this year? So components about the passenger business, please.
Seth
Yeah, so Bill, I think the seasonality is going to remain pretty consistent with what you've seen in short distance historically. Just just looking at kind of the general distribution of revenues last year in short distance should still be a really good guide as to what we expect for this year. In terms of pricing, we continue to see benefits. We're above that 300 dollar per seat pricing on average in the airport product here in the U.S. today. We're seeing the ability to take some price and some of our seasonal products here in the northeast. We're also seeing the ability to pass through some expenses like credit card fees on the much more expensive charter products, which is something that we hadn't done in the past. So I think there's a bunch of different ways that we can benefit on those mature routes. And that's really our focus, kind of doubling down on the profitability in places where we have great scale and we have customers that love the experience, love the brand and love to come back.
Bill Peterson
Okay, thanks. If I can speak one more and just kind of housekeeping. So thanks for the guidance on the medical SG&A. And I guess with past SG&A seems to remain flat or to down, the medical SG&A growing. How should we think about SG&A in aggregate through the course of the year, maybe trajectory wise and then in aggregate, sort of kind of flattish to low single digits as a whole?
Seth
Yeah, I mean, I would say overall in the unallocated corporate expense, we got it flat to down. You should see the same thing in passenger flat to down. Overall, I think if you were to look, you know, we call it our adjusted SG&A, which is just kind of all the SG&A items added together. Same thing there. You blend it together and it's probably flat to down for the year.
Rob
Yeah, I mean, every day we're learning how to do more with less. And that just, you know, as we get into new businesses, you know, the SG&A sometimes going to start a little heavy to make sure that you have a good product. But every single day, you know, as we get more mature in a specific business and know and have a better knowledge of what we're doing, you know, it just that, you
spk02
know, kind of job one and it's working so far.
Bill Peterson
OK, thanks a lot, gentlemen, for sharing the insights. Thank
Operator
you. Thank you. And I'm showing no further phone questions at this time.
Matthew
Great. We will now take a few questions, investor questions from the SAEQ&A platform. The first question is about the biggest challenges to transition to eVTOL from traditional aircraft. Rob, why don't you take that one? OK.
Rob
I think that, you know, the timelines for eVTOL manufacturers or we call EVA, electro vertical aircraft, have consistently been delayed. I think that, you know, both Joby and Archer have announced really strong programs in the Middle East, which I think will be a very good forum to show that these aircraft are actually viable. But that's where I would expect to see them first in the world and then kind of coming to the US probably in the 26th range, maybe called second half, potentially 27, but I will still kind of put a number out there in terms of year, kind of, you know, second half 26. But again, they're closer to this than we are. And in terms of adoption, all these manufacturers in order to be profitable need to get to automotive scale. They will need someone of our scale, which is, you know, we are the largest air transporter kind of people for, you know, for commuting or transportation, just basically not counting tourism or B2B for oilfield services and such. So we believe that they're going to be in a situation where they're going to want to sell to our operators. We are not going to be buying them. They will be asset light. And we're expecting them to offer very strong financing packages for our operators. So the transition, I think, will be fairly simple. We already have deals in place with Beta. Beta, as you may know, also just announced their first successful public transitioning of their aircraft. We have deals in place with other manufacturers as well. And we expect that to continue. And so one of the great opportunities that we have here is that not only do we have the entire ecosystem kind of from passenger technology to the cockpit, have all this captive infrastructure. We recently announced that we're going to be having terminals in Terminal 1, 2 and Nise behind the tarmac security to get people straight to their planes and bypassing airport security. The strength of our airport business here in New York, our leisure market, there's no one bigger that can accommodate these aircraft. And we have all the parts that they need in order to make sure that these things are flying, flying safely and taking a lot of passengers.
Matthew
Great. The next question is on TOPS. Will, can you provide just an update on TOPS?
Seth
Yeah, overall, we're getting great customer feedback. And that's really our number one focus right now. We're not going to be providing a quarter to quarter update on new customer acquisition. But we've got a great pipeline. We do expect to onboard several incremental new customers throughout the balance of the year. It's not going to be a huge contributor for the fiscal year 2024, as we've talked about previously. But we think it sets us up in a really advantaged position strategically, moving us up the value chain with organ transportation and enabling us to have an open door to expand in some of those other critical cargo markets and ground transportation markets for our customers like specimen transfers, eventually being able to help out with things like kidneys. So we really think it's an important plank of the strategy. And we're happy with the results so far.
Matthew
Thank you. The next question is about the strategic value in NORA, the medical competitor. Will, can you address that?
Seth
Sure. You know, we think it's a fantastic business. We're always evaluating all growth opportunities, both organic and inorganic. NORA's built a great company. We're particularly impressed with their ground business. It's inspired us to offer some of those same services to the customers that we have across the country. And we think we're already seeing the benefits of that. And this particular case seems like it went for a great multiple. And, you know, we've determined that our best path forward for growth was to continue the organic strategy, but it's a great business and we're impressed by what they've built. And I think it's a good company. I think let
Rob
me just go a little deeper on that just to make it clear to the people on the call. NORA was sold, I guess about how long ago? I think probably in the past year, it is something that we did evaluate and we were always thinking about build versus buy. And, you know, frankly, I think this is one where we felt more comfortable continuing to build this, our business, which turned out to be a good outcome for us if you take, especially looking at our recent performance. And frankly, when after passing on this opportunity, when it's sold to private equity for kind of 14 to 15 times forward multiples, which is what I believe it's sold for, that's obviously not something that is not confirmed. That makes me feel very comfortable with the kind of value we've created on our own medical side.
Matthew
Great. Well, that was the last question we're going to take from the platform.
Rob
Rob, do you have any closing remarks? I just want to thank everybody on the BLADE team for really putting together a terrific building towards a terrific quarter. Obviously, the performance on the medical side speaks for itself. This is historically a slow quarter for Passenger, and I think we're really in strong shape on Passenger as we come into the high season here. And we look forward to answering any questions. You can obviously email us at investors at blade.com if you have any further questions. And we look forward to working with you guys in the future and continuing to perform. Thanks for your time.
Operator
This concludes today's conference call. Thank you for participating and you may now disconnect.
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