PYMNTS-MonitorEdge-May-2024

Report: Surf Air to Go Public Via Direct Listing

Private plane operator Surf Air Mobility is reportedly preparing to go public.

The Los Angeles-area company’s filing for a direct listing could come as soon as next week, with trading beginning this summer, Bloomberg News reported Friday (May 26), citing sources with knowledge of the plans. 

As Bloomberg notes, companies that go public via direct listing typically don’t raise new funds, with existing investors usually able to sell shares on the opening day of trading, without the restrictions required during an initial public offering IPO. These listings can also save on banking fees and let companies avoid time doing investor roadshows.

PYMNTS has reached out to Surf Air for comment but has not yet received a reply. A source told Bloomberg the company had more than $100 million in revenue and 500,000 customers last year.

According to the report, Surf Air had last year confidentially submitted a draft with U.S. regulators following a failed blank-check merger that would have taken it public at a $1.42 billion valuation. 

Blank check mergers — also known as special purpose acquisition company (SPAC) listings — were at one time the “it” way for companies to go public, as noted here recently.

But now, the trend has “become a well-documented bust, where two years ago the number of SPAC listings topped 600 overall; that tally has now become anemic, especially in commerce and FinTech.”

At the end of 2022, as PYMNTS has reported, depending on the sector, listings for SPACs were in the single digits. The once popular way of coming to market — at least during the pandemic — has turned into a relic of another age.

The Surf Air listing comes at a time when consumers are reluctant to spend on air travel, as recent PYMNTS research has found, with 58% of consumers saying they were unlikely to purchase travel last year, including 9% who had done so in 2022. 

“This dimming outlook on travel is coming as a blow to the airline industry, which has so far maintained optimism toward 2023 despite this past season’s air travel chaos,” PYMNTS wrote in April. “Betting on the same post-pandemic wave propelling travel in 2022, ticket prices have been climbing as much as 40% year over year.”

PYMNTS-MonitorEdge-May-2024