A publicly traded leader in premium jet charter services, has entered into a definitive agreement to acquire the aviation business of Jet.AI Inc. (NASDAQ: JTAI), an innovative company at the intersection of private aviation and artificial intelligence. This acquisition marks a significant step in the strategic expansion of flyExclusive while allowing Jet.AI to sharpen its focus on AI-driven solutions for the aviation industry.
Strategic Rationale Behind the Acquisition
flyExclusive, ranked as the fifth-largest private aviation operator by hours flown, has long been a dominant force in the industry. The company’s vertically integrated operations provide a seamless private jet experience, offering on-demand charter, Jet Club memberships, and fractional ownership. The acquisition of Jet.AI’s aviation business aligns with flyExclusive’s expansion strategy, bolstering its fleet and capabilities while simultaneously supporting Jet.AI’s pivot into an AI-centric enterprise.
“The proposed transaction with Jet.AI underscores the value that flyExclusive’s vertically integrated aviation platform brings to the industry,” stated Jim Segrave, Founder and CEO of flyExclusive. “This deal strengthens our market position by increasing our fleet, enhancing liquidity, and positioning us for accelerated growth in 2025. With this acquisition, we gain additional high-performance aircraft to meet growing customer demand.”
Mike Winston, Founder and Executive Chairman of Jet.AI, echoed the sentiment, emphasizing the strategic alignment between the two companies. “This Business Combination with flyExclusive creates opportunities for our shareholders to benefit from continued expansion in both the private aviation and AI sectors. The common aircraft types we operate make this a natural fit, ensuring operational efficiency and synergy.”
Deal Structure and Financial Implications
The acquisition is structured as an all-stock transaction. Jet.AI will first spin off its charter aviation assets into a new entity (“SpinCo”), which flyExclusive will subsequently acquire. Key financial details include:
- Consideration: Jet.AI shareholders will receive shares of flyExclusive’s Class A common stock in proportion to the purchase price. This allocation will be determined based on a volume-weighted average price of flyExclusive’s stock over a 30-day trading period prior to the closing date.
- Purchase Price: The valuation will be based on Jet.AI’s Net Cash multiplied by an Applicable Premium Percentage, which will range from 115% to 120%. The Net Cash must be at least $12 million for the deal to proceed, factoring in cash deposits with Textron Aviation and other financial obligations.
- Funding Arrangements: To meet its financing requirements, Jet.AI has signed a $50 million non-binding term sheet with Hexstone Capital LP, structured on economic terms similar to its existing $16.5 million facility with Ionic Ventures LLC.
- Expected Closing Timeline: The transaction is slated to close in Q2 2025, subject to regulatory approvals, financing arrangements, and shareholder consent.
Enhancing Shareholder Value
This Business Combination is expected to generate significant benefits for both flyExclusive and Jet.AI stakeholders. flyExclusive will gain access to additional growth capital and a broader shareholder base, strengthening its liquidity position. Simultaneously, Jet.AI will achieve its vision of becoming a pure-play AI solutions provider, unencumbered by aviation operations.
By streamlining operations, flyExclusive can focus on expanding its fleet, optimizing its service offerings, and capturing a greater share of the growing demand for private aviation. The additional aircraft will allow the company to increase charter availability, enhance customer experience, and maintain its position as a premier provider of private jet travel.
For Jet.AI, this divestiture will enable the company to double down on its AI-powered platforms, including:
- CharterGPT App: A B2C solution leveraging natural language processing and machine learning to enhance private jet booking.
- Ava AI: An intelligent, agentic booking system improving operational efficiency and customer engagement.
- Jet.AI Operator Platform: A suite of B2B software tools designed for FAA Part 135 charter providers, helping them maximize revenue and reduce environmental impact.
Industry Implications and Future Outlook
The private aviation industry is experiencing a period of rapid transformation, driven by increasing demand for flexible travel options and advancements in AI and automation. This acquisition positions flyExclusive at the forefront of these changes, allowing it to leverage AI-driven solutions to enhance customer experiences, optimize flight operations, and improve fleet management.
Furthermore, Jet.AI’s pivot toward AI development reflects a broader trend in the aviation industry, where technology is playing an increasingly critical role in streamlining operations, enhancing safety, and improving customer interactions. The divestiture allows Jet.AI to focus on developing cutting-edge AI tools that can revolutionize private aviation, commercial airlines, and other sectors requiring advanced logistics and predictive analytics.
Closing Process and Regulatory Considerations
As part of the transaction, flyExclusive and Jet.AI will file necessary documents with the SEC, including a registration statement on Form S-4, which will feature a proxy statement/prospectus. This document will outline key details of the Business Combination and will be distributed to Jet.AI shareholders for review prior to the vote on the transaction.
Jet.AI shareholders and other interested parties will be able to access these materials via the SEC’s website or through direct requests to Jet.AI’s investor relations department. The companies encourage shareholders to review all materials carefully before making voting decisions, as the transaction represents a pivotal moment in the future of both flyExclusive and Jet.AI.
The acquisition of Jet.AI’s aviation business by flyExclusive represents a win-win scenario for both companies. For flyExclusive, the deal strengthens its fleet, operational capabilities, and market position, ensuring continued growth in the premium private jet sector. For Jet.AI, the divestiture allows for an undistracted focus on developing AI solutions that will drive innovation across the aviation industry.
As the transaction progresses toward completion in 2025, stakeholders from both companies can look forward to enhanced value creation, operational synergies, and a future where AI and private aviation seamlessly integrate to redefine the industry. For more information, visit www.flyexclusive.com or www.jet.ai.