The Chamblee, Georgia-based fractional charter jet operator had widespread employee layoffs after entering into an aircraft management services agreement with competitor flyExclusive (NYSE: FLYX) on September 3.

Thursday’s class action was filed by law firm Kwall Barack Nadeau PLLC and attorney Arthur Schofield in the U.S. District Court for the Middle District of Florida. In their complaint, prosecutors state Volato employed approximately 260. At least 233 of these employees were laid off August 30 after receiving an email notifying them of their termination.

The WARN Act mandates employers with over 100 employees provide a 60-day notice in advance of plant closings or mass layoffs. The complaint alleges that because these employees were let go as part of a plant shutdown or mass layoff, they were entitled to receive such written notice.

On its website, Kwall Barack Nadeau states that Volato’s actions have left the terminated employees without the compensation and benefits they were entitled to, creating financial distress for many. The plaintiffs seek to secure compensation for unpaid wages, accrued holiday pay, accrued vacation pay, accrued sick leave pay, and other benefits lost due to Volato’s failure to provide notice.

“This case is about holding Volato accountable for the harm it has caused its employees,” said Ryan Barack, lead counsel for the plaintiffs, in a statement on the law firm’s website. “Employers are required by law to provide notice before significant layoffs, and Volato’s failure to comply with the WARN Act has had a devastating impact on its workforce.”

Volato’s poor quarterly financials earlier this summer were reminiscent of issues that faced Jet It, another fractional charter jet operator that failed a year prior due in part to supply chain issues that rocked the industry in 2021 and 2022.

Volato did not immediately respond to FLYING’s request for comment.

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In a SEC filing on Tuesday morning, the AMS includes an option for Volato to merge into a wholly owned subsidiary of flyExclusive. This option expires one year from the date of the agreement and allows an option for flyExclusive to purchase Volato during that time.

This comes as Private Jet Card Comparisons reports widespread layoffs at Volato. A source familiar with the situation at Volato confirmed such layoffs and provided FLYING with a letter of termination they received from the company.

• READ MORE: Volato to Drop 5 Leased Jets, Furlough Pilots

“In light of market conditions this year, Volato has been actively seeking ways to improve its operating costs and increase efficiencies,” the letter stated. “As part of that, Volato has been undergoing talks with several private aviation companies and has recently signed a letter of intent (LOI) with flyExclusive. The LOI outlines an immediate move to combine certain operations through cooperative agreements. This strategic move is expected to strengthen our position in the market and provide new opportunities for growth. However, as we transition through this period, it has become necessary to adjust our workforce to better align with our current and future operational needs.”

The letter further stated that the step was part of Volato’s strategy to improve operational efficiency and reduce costs as the company anticipates the delivery of new aircraft and the successful completion of its merger with flyExclusive.

Terms of the AMS

Tuesday’s agreement will see flyExclusive manage flight operations, sales, and expenses of Volato’s fleet, which consists of 13 fully fractionalized aircraft, eight leased aircraft, and four managed aircraft. The goal under the AMS is to transfer aircraft to the flyExclusive certificate, which will occur over the coming months in coordination with the FAA.

“As a fully integrated operator, flyExclusive is well positioned to offer synergistic value to Volato’s clients and deliver enhanced value for our overall growing customer base,” said Jim Segrave, founder and CEO of flyExclusive, in a news release from the company. “Over the years, we’ve made strategic investments to remove industry bottlenecks and grow and maintain a leading, consistent customer experience. We’re proud to welcome Volato’s customers and look forward to offering them access to our growing fleet of light, midsize and super-midsize jets.”

In addition to managing Volato’s retail and wholesale business, flyExclusive will execute flights for Volato’s customer base of approximately 184 fractional customers and 265 block customers until they are moved over to FLYX agreements. 

The release states that this agreement will significantly increase the FLYX direct-to-customer facing business in the United States. FlyExclusive expects approximately $75 million in revenues from Volato—excluding aircraft sales—to transfer to FLYX. FlyExclusive states in the release that it is confident these flights can be executed with minimal additional overhead. 

The AMS will also provide flyExclusive with access to Volato’s technology through a software license agreement.

“FlyExclusive is a proven operator with a robust platform and unwavering focus on the customer experience,” said Volato CEO Matt Liotta in the release. “This agreement provides mutual benefit to both of our companies and, most importantly, our customers benefit by increased flight and service options with the reliable and high-quality service they have come to expect from best-in-class operators.”

Volato did not immediately respond to FLYING’s request for comment.

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The NJASAP represents NetJets’ 3,430 pilots and recently signed a new contract with the world’s largest private jet operator. 

In a news release published on Monday, the NJASAP alleged the two pilots were terminated because of their role in negotiating the five-year agreement, which was overwhelmingly ratified in April. The union also said the termination decision was “unlawful, unjust and in retaliation for the $1.6B in improvements the pilots negotiated during midterm bargaining that concluded earlier this year.”

NetJets said it had no comment on the matter. 

The terminated pilots included the NJASAP vice president and strategy group chairman. According to the union, they were both captains with 23 and 18 years at the company, respectively. The two pilots had “unblemished professional records,” NJASAP president Captain Pedro Leroux said in the release. 

“Choosing to terminate two high-ranking union leaders is not simply another hurdle to resetting the landscape, but a move reflective of a strategy that is not sustainable in the long term,” Leroux said.

This move is the latest in an ongoing back-and-forth between NetJets and its pilots union. In June, the company sued the NJASAP for defamation over safety and pilot training claims. 

The post High-Ranking NetJets Pilots Union Leaders Handed ‘Unprecedented’ Termination appeared first on FLYING Magazine.

Bravo, according to Signature, is a free hospitality program catering to specialized needs of the smaller jet operators. Perks include “significant jet-A fuel discounts,” according to the company.

“We have worked closely with small and medium-sized operators to craft a program that’s designed for their unique set of needs,” Derek DeCross, chief commercial officer of Signature Aviation, said in a statement. “With no membership fees and no contractual commitments, Bravo by Signature delivers better pricing, recognition, member support, and partner benefits, and we will continue to collaborate closely with our Bravo member community to refine the program to meet their evolving needs.”

According to Signature, the program was in development for the past year and piloted by 800 small and medium-sized jet-A operators.

The company said participants in Bravo will be provided with significant jet-A fuel discounts and benefits, backed by Signature’s best price commitment, ensuring access to the top available non-negotiated rates at Signature’s U.S.-based private aviation terminals.

Membership also includes Gold Status benefits in the Signature Status program and access to dedicated email support. Pilots in the Bravo program are also eligible to earn points through membership in Signature’s Tailwins program.
Signature has more than 200 locations in 27 countries on five continents.

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A Form 10-Q—a quarterly financial report submitted to the Securities and Exchange Commission— filed by Volato on August 14 showed the company spiraling into the red, recording a net loss of $34.3 million for the six months ending June 30. The same form stated Volato has a negative working capital of $18.2 million and an accumulated deficit of $98 million as of June 30. Net cash used in operating activities for the six months was $7.4 million.

“These above matters raise substantial doubt about the company’s ability to continue as a going concern,” the form stated. “During the next [12] months, the company intends to fund its operations through a combination of issuing debt and equity as well as the sale of aircraft at a premium to cost.”

Additionally, the form stated that management believes that its current cash position will allow Volato to continue as a going concern and to fund its operations for at least one year from the date the financials were made available.

The filing also stated that on June 18 Volato received a notice from the New York Stock Exchange (NYSE) advising the company that it is not in compliance with NYSE American continued listing standards, requiring it to have stockholders’ equity of at least $2 million if it has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years.

Section 1003(a)(ii) of the Company Guide also requires a company to have stockholders’ equity of at least $4 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years.

Volato stated in the form that the company has submitted a plan to the NYSE American LLC on July 18, outlining actions the company will take to regain compliance by December 18, 2025.

“The notice does not affect [Volato’s] ongoing business operations or its reporting requirements with the United States Securities and Exchange Commission,” the form stated.

‘Rightsizing’

In a company letter from Volato CEO Matt Liotta obtained by FLYING, Liotta explained the decision to “rightsize” the company’s fleet and crew by removing five leased planes and furloughing some of its pilots.

“This is not a decision we take lightly, and it is the first time we have taken such a step,” Liotta stated in the letter. “However, I want to emphasize that this decision is based on our need to align with both the timing of new HondaJet deliveries, in which we have full confidence, and the pace of demand growth.”

In that statement, Liotta referenced Volato’s 2023 purchase of 25 HondaJets from Honda Aircraft company. These jets were slated to be delivered by 2025, but Liotta said delayed deliveries of the new aircraft and lower than expected sales have put financial pressure on Volato.

He also said demand for Volato’s services, while up, aren’t as high as anticipated.

“This situation requires us to make some difficult but necessary adjustments,” Liotta said.

He went on to say that Volato had been working closely with Honda to increase the availability and utilization of Volato’s fleet.

“…We’ve made substantial progress that allows us to fly individual planes more efficiently, meaning we can meet our flight hour needs with fewer planes,” Liotta said. “This not only strengthens our financial position but also benefits our fractional customers by delivering more revenue share to them—a true win-win.”

After attempts to renegotiate Volato’s more expensive plane leases, Liotta said that the company was unable to reach acceptable terms and decided to end those leases. By flying more hours per plane, he said the company aims to enhance its profitability and attract more interest in its fractional ownership program.

“This decision is about managing our business wisely and positioning Volato for long-term success,” Liotta said. “By rightsizing our fleet and crew now, we’re setting ourselves up to navigate these challenges effectively and prepare for future growth. Thank you for your continued dedication and resilience. We will get through this together and come out stronger on the other side.”

Volato lost over $17 million last quarter and currently has $5.8 million in cash. Volato did not immediately respond to FLYING’s request for comment.

Jet It Déjà Vu

Readers may recall FLYING parent company Firecrown owner and CEO Craig Fuller’s article last summer detailing the demise of Jet It, another fractional ownership charter jet operator. 

“Jet It generated revenue through several major sources— fractional-owner hourly fees; monthly maintenance fees; up-front selling of aircraft fractional positions; and off-network charter flights,” Fuller, who was also a Jet It fractional owner, wrote in the article analyzing its business model.

The flaws in this model emerged when Jet It—-contractually obligated to guarantee fractional owners aircraft availability within 72 hours advance notice—was required to go into the charter market and purchase aircraft time at the charter market’s clearing rate. Fuller stated that these rates were often five times the rate that the fractional owner was paying Jet It for the same service.

Additionally, a key driver of Jet It’s cash flow was in selling fractional aircraft positions—especially during the start of the pandemic.

“In the early days of COVID, as interest around personal aviation exploded, so did cash flow opportunities for Jet It,”  Fuller wrote. “In fact, it is likely that the company relied too heavily on this source of cash to fund its operations.”

Fuller wrote that in 2021, and 2022 supply chain issues started to impact Honda Aircraft Company, and Jet It could not source as many airplanes to sell to members. This caused cash flow from new fractional sales to dry up, severely impacting Jet It’s business model.

Jet It closed down on May 24, 2023.

The post Volato to Drop 5 Leased Jets, Furlough Pilots appeared first on FLYING Magazine.

In a response letter to CrowdStrike attorney Michael Carlinsky, Delta attorney David Boies states that the software company has no basis to suggest the airline was responsible for the faulty software that crashed systems around the world.

“When the disaster occurred, dedicated Delta employees across the company worked tirelessly to recover from the damage CrowdStrike had caused,” Boies states in the letter. “Their efforts were hindered by CrowdStrike’s failure to promptly provide an automatic solution or the information needed to facilitate those efforts.”

• READ MORE: GA, Private Aviation Dodge Worst of Cyber Outage Impact

Among several points addressed by Boies in his letter, he notably asserts that CrowdStrike showed no sense of urgency for the damage it caused, and the cybersecurity company’s offers to assist Delta were too late. Boies states that CrowdStrike’s offers of assistance during the first 65 hours of the outage simply referred Delta to CrowdStrike’s publicly available remediation website, which instructed Delta to manually reboot every affected machine.

“While CrowdStrike eventually offered a supposed automated solution on Sunday, July 21 at 5:27 pm ET, it introduced a second bug that prevented many machines from recovering without additional intervention,” Boies states.

As for CrowdStrike CEO George Kurtz’s offer to support Delta CEO Ed Bastian, Boies said that Kurtz offered this assistance on the evening of July 22, and it was unhelpful and untimely.

“When made—almost four days after the CrowdStrike disaster began—Delta had already restored its critical systems and most other machines,” Boies said. “Many of the remaining machines were located in secure airport areas requiring government-mandated access clearance. By that time Delta’s confidence in CrowdStrike was naturally shaken.”

• READ MORE: CrowdStrike Disputes Negligence Claims in Letter to Delta Attorney

Additionally, Boies addressed claims that Delta’s IT technology was not up to par for handling the disaster.

“Delta rejects CrowdStrike’s misplaced attempt to shift responsibility for its failures to Delta’s ‘IT decisions and response to the outage,’” Boies states. “First, those ‘decisions and response’ had nothing to do with the cause of the outage. Moreover, for the last several years, including prior to and following its recovery from the Faulty Update, Delta’s operational reliability and customer service has led the airline industry. Delta has achieved its industry-leading reliability and service due, in part, to investing billions of dollars in information technology.”

Boies ends the letter demanding CrowdStrike “accept real responsibility for its actions” and compensate the airline for damaging its business, reputation, and goodwill.

Delta Details Financial Impact

The letter comes after Delta detailed its previously reported $500M loss in revenue due to IT outages in an 8-K form published on Thursday.

The report states that the incident caused around 7,000 flight cancellations over the course of five days, leading to $380 million in customer refunds, $170 million in expense reimbursements and crew-related costs, and $50 million in estimated fuel expenses. This has impacted the airline’s projected year-over-year September quarter 2024 capacity growth by approximately 1.5 points.

“An operational disruption of this length and magnitude is unacceptable, and our customers and employees deserve better. Since the incident, our people have returned the operation to an industry-leading position that is consistent with the level of performance our customers expect from Delta,” said Bastian in a statement included in the 8-K form.

Bastian doubled down on previous litigation threats, stating in the form that Delta is pursuing legal claims against CrowdStrike and Microsoft to recover at least $500 million in damages caused by the outage.

Both CrowdStrike and Microsoft have denied Delta’s allegations of negligence for the software update that caused airline disruptions nationwide on July 19. Both companies also claimed that Delta had refused free assistance from their IT teams to help with the airline’s ongoing issues throughout the week of the outage.

Class Action Lawsuit

The U.S. Department of Transportation warned airlines were legally obligated to provide passengers cash refunds shortly after July’s IT outages. Law firms Sauder Schelkopf and Webb, Klase & Lemond filed a class action lawsuit this week on behalf of Delta passengers whose flights were canceled due to the outages.

The complaint alleges that nearly every airline had managed to recover and resume normal operations by the end of the week, except for Delta, which continued to cancel flights.

“On Monday, July 22, it was reported that Delta canceled more than 1,250 flights. These cancellations accounted for nearly 70 percent of all flights within, to, or from the United States that had been canceled on Monday,” Sauder Schelkopf’s website states. “No other U.S. airline had canceled one-tenth as many flights.”

Additionally, the class action lawsuit alleges that Delta failed to give some affected passengers automatic refunds for canceled flights and oftentimes conditioned its offer of partial reimbursements to passengers on a waiver releasing Delta of all legal claims passengers have against Delta.

Editor’s Note: This article first appeared on AirlineGeeks.com.

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“Restoring trust starts with meeting our commitments, whether that’s building high-quality, safe commercial aircraft, delivering on defense and space products that allow our customers to meet their mission, or servicing our products to keep our customers running 24/7,” Ortberg’s message said. “It also means meeting our commitments to each other and working collaboratively across Boeing to meet our goals. People’s lives depend on what we do every day, and we must keep that top of mind with every decision we make.”

Boeing’s reputation took a tumble in the wake of the 2018 and 2019 737 Max crashes that were attributed to a design flaw, resulting in a 20-month FAA grounding of the aircraft and the January 2024 loss of a door plug during an Alaska Airlines flight.

The latter has been the topic of two days of hearings before the National Transportation Safety Board. NTSB Chair Jennifer Homendy noted that the agency still needs to determine how the jet (Alaska Airlines Flight 1282) left the Boeing factory in Renton, Washington, missing four crucial bolts that held the door in place.

• READ MORE: NTSB Hears Testimony of Boeing Retaliation for Workers’ Mistakes

Ortberg will be based in Seattle, stating that it is important to be close to the place where the bulk of Boeing’s aircraft are made. William Boeing, the founder of the company, chose the Puget Sound because the first airplanes were made of spruce, and the area was rife with spruce forests. When aircraft manufacturing turned to metal, Boeing adapted, creating Washington factories in Everett, Renton and Seattle.

In 2001 when Boeing moved its headquarters to Chicago, and later Virginia, many industry experts suggested the aerospace giant’s focus had shifted from turning out quality products to increasing profit, even if it meant cutting corners. They also predicted that having the headquarters so far from the main factories would result in a degradation of product quality.

Ortberg announced he would be spending his first day on the job on the factory floor in Renton, “talking with employees and learning about challenges we need to overcome, while also reviewing our safety and quality plans.”

Ortberg, who brings more than 30 years of experience to his new role, vowed to be transparent with Boeing employees.

• READ MORE: Boeing Names New CEO to Lead Through ‘Consequential Period’

“Soon I’ll be visiting many of our sites and I look forward to meeting with teammates around the world,” his message to employees said. “In speaking with our customers and industry partners leading up to [Thursday], I can tell you that, without exception, everyone wants us to succeed.”

In addition to winning back the trust of the air traveling public, Ortberg will be faced with improving Boeing’s financial situation. The 737 Max crashes and door plug accident have sent the company’s stock prices into a nosedive.

The post First Day at the Office for New Boeing CEO appeared first on FLYING Magazine.

The massive July 19 computer outage at Delta disrupted the airline’s crew-tracking system for nearly a week, preventing the company from locating pilots and flight attendants to operate flights. As a result, Delta had to cancel some 30 percent of its flights.

• READ MORE: GA, Private Aviation Dodge Worst of Cyber Outage Impact

Speaking to CNBC on Wednesday, Bastian said the carrier is prepared to pursue legal action.

“We have no choice,” Bastian said. “We’re not looking to wipe them out, but we’re looking to make certain that we get compensated, however they decide to, for what they cost us—half a billion dollars in five days.”

Bastian said Delta’s recovery was significantly hampered due to its heavy reliance on CrowdStrike and Microsoft for cybersecurity. The airline had to manually reset 40,000 servers to restore operations.

CNBC reported that Delta has engaged prominent New York City-based law firm Boies Schiller Flexner to seek damages from CrowdStrike and Microsoft.

Editor’s Note: This article first appeared on AVweb.

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The aviation industry data intelligence company reported that in week 30—July 22-28—bizjet activity in France was up 17 percent compared to the same time last year. Europe has seen a 4 percent increase overall. Paris saw a 58 percent jump in bizjet arrivals compared to last year. 

“As predicted, the Olympics venues have attracted business jet arrivals from all over the world as dignitaries, heads of corporations, and celebrities flocked to the opening ceremony and sporting events,” said WingX managing director Richard Koe in the announcement. “The Olympics appear to be very popular with U.S. visitors, many coming via the UK. The Olympics bounce is helping the market recover from a relatively weak H124, with year-to-date trends now flat compared to last year.”

• READ MORE: Canada’s Olympic Soccer Team Busted After Spying on Rivals With Drone 

Paris Le Bourget recorded 713 bizjet arrivals last week, up 53 percent over last year. New York saw a 200 percent increase in bizjet flights to Paris airports year over year. Vista Jet and NetJets lead flights from the United States to France, WingX found. 

On July 26, the day of the Olympics opening ceremony, 382 bizjet arrivals were recorded into French airports.

North America 

Florida, California, and Texas had the most bizjet departures in the U.S. Florida and California were each up 2 percent over last year, and Texas was up 1 percent. 

Bizjet departures were on par in week 30 compared to the same period last year in North America, with most activity originating in the U.S. 

Europe 

The United Kingdom saw a 10 percent increase in bizjet flights. 

Activity lags behind in popular European summer destinations. Bizjets to Mykonos, Greece, have fallen compared to five years ago, only ahead of 2020. Olbia, Italy, has been busier than any July in the last five years, while Ibiza and Mallorca, Spain, are behind the last three years.

Rest of World 

Bizjet activity declined outside of North America and Europe. Activity fell 16 percent in the Middle East in week 30 compared to last year, with notable declines in Abu Dhabi, Dubai, United Arab Emirates, and Riyadh, Saudi Arabia. 

Africa saw a 23 percent drop in bizjet activity, with declines in South Africa cities Johannesburg and Cape Town, and Lagos, Nigeria. 

The post WingX: Olympics Lead to Record Bizjet Arrivals in Paris appeared first on FLYING Magazine.

According to Boeing, Ortberg will begin in the position on August 8. He replaces Dave Calhoun, who earlier this year announced he was retiring. Calhoun had served as president and CEO since January 2020 and been on the Boeing board of directors since 2009.

Ortberg, 64, comes to the position with more than 35 years of experience in the aerospace industry. He recently served as president and CEO of Rockwell Collins, a position he held since 2013.

Ortberg was instrumental in the company’s integration with United Technologies and RTX. He holds a bachelor’s degree in mechanical engineering from the University of Iowa, has held numerous leadership positions in the aerospace industry, and is the former chair of the Aerospace Industries Association (AIA) board of governors.

• READ MORE: FAA Head Vows Increase in Boeing Oversight

“The board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing, and Kelly has the right skills and experience to lead Boeing in its next chapter,” said Steven Mollenkopf, chair of the board. “Kelly is an experienced leader who is deeply respected in the aerospace industry, with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies. We look forward to working with him as he leads Boeing through this consequential period in its long history.”

The board also thanked Calhoun for his services, noting the past few years have been challenging for Boeing, beginning with the two 737 Max crashes in 2018 and 2019, respectively, resulting in the deaths of 346 people. The FAA ordered the grounding of the aircraft while the accidents were investigated. Boeing’s manufacturing and certification processes were called into question.

• READ MORE: Boeing Presents Quality Control Improvement Plan to FAA

The aerospace company announced it had worked through the issues and made changes to its manufacturing procedures to mitigate them. Then in January a 737 Max 9 operated by Alaska Airlines lost a door plug shortly after takeoff from Portland, Oregon, resulting in rapid decompression and minor injuries.

Next week the National Transportation Safety Board (NTSB) is scheduled to conduct an investigative hearing on the door plug loss.

In the meantime, the families of those killed in the crashes are campaigning for Boeing to face criminal prosecution and the U.S. Department of Justice to fine the company $24 billion, alleging criminal negligence and violating the 2021 agreement that allowed the company to previously avoid criminal charges.

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