Surf Air Mobility Inc reported a 98% controllable completion factor and 88% on-time arrivals for the second quarter of fiscal year 2026. The airline operator also disclosed that Mokulele revenue grew approximately 7% year-over-year during the same period, signaling operational stability amid its ongoing transformation.

Operational efficiency gains

The company highlighted significant efficiency improvements driven by its SurfOS platform. Key metrics recorded year-to-date in 2026 include:

• 6% reduction in direct operating cost per block hour
• 9% reduction in fuel burn per block hour
• 9% reduction in pilot cost per block hour
• 15% improvement in labor productivity per block hour

These gains support the company's strategy to build on the positive Adjusted EBITDA achieved by its airline operations in full year 2025. Surf Air Mobility has deployed SurfOS flight management, crew reserve, and fuel optimization modules across its operations to sustain these efficiencies.

Strategic contracts and expansion

A significant development for the company is the securing of a four-year Essential Air Service contract from the U.S. Department of Transportation. This agreement ensures continued service to Lanaʻi and represents $19.4 million in subsidies, excluding passenger fare revenue. The contract doubles the term of the prior award and provides contracted revenue through August 2030.

Additionally, the company completed an electric aircraft demonstration program in Hawaiʻi with BETA Technologies. Supported by Hawaiian Airlines, BETA's ALIA CTOL aircraft flew 64 demonstration flights across four islands to evaluate operational and infrastructure requirements. Surf Air Mobility also became the first Part 135 passenger operator to join the FAA-sponsored Center for Advanced Aviation Technologies Consortium.

Future priorities

Looking ahead to the fourth quarter of 2026 and into 2027, the company plans to grow profitability for its Hawaiʻi and mainland networks as it begins the Expansion Phase of its Transformation Plan. Key initiatives include:

1. Completing the digitization of crew scheduling, payroll, dispatch, and maintenance operations on SurfOS.
2. Positioning Hawaiʻi as a launch market for electric aviation using insights from the BETA program.
3. Refreshing Mokulele and Southern Airways brands with upgrades to lounges, aircraft, and customer service.
4. Relaunching scheduled service between Kona and Kahului, reconnecting Hawaiʻi Island and Maui for the first time since 2023.

What the numbers show

The juxtaposition of a 7% revenue increase with substantial cost reductions suggests a widening margin trajectory. While specific EBITDA figures for Q2FY26 are not provided, the 6% drop in direct operating costs combined with revenue growth indicates that operational leverage is being realized. Furthermore, the secured $19.4 million subsidy contract provides a fixed revenue floor through 2030, reducing volatility for the Lanaʻi route while the broader network pursues profitability.

Surf Air Mobility Inc. shares traded higher by more than 14% on Tuesday following the announcement of a definitive agreement with Clipper Aviation for OperatorOS.

The partnership marks the fourth commercial OperatorOS agreement secured by Surf Air Mobility. The deal contributes directly to the company's strategic objective of having five operators live on the platform by the end of 2026. Clipper currently operates four aircraft, and the integration aims to streamline operations for Part 135 air charter operators.

Revenue Model and Technology Stack

Under the terms of the agreement, Surf Air Mobility will earn a percentage of revenue for all Clipper Aviation flights managed through the OperatorOS software. This performance-based model aligns the company's earnings with the operational volume of its partner. Additionally, the company stated it expects to earn a per-seat fee under the agreement.

OperatorOS is powered by Palantir Technologies and utilizes Surf Air Mobility's proprietary SurfOS flight operations software. The AI-enabled platform is designed to streamline aircraft and crew scheduling, provide actionable operational insights, improve visibility, and reduce manual processes through a single solution.

Strategic Milestones

The signing of this contract represents a significant step in Surf Air Mobility's expansion within the aviation technology sector. Key details of the agreement include:

• Contract Type: Definitive agreement for OperatorOS implementation.
• Partner: Clipper Aviation, a Part 135 operator with four aircraft.
• Commercial Status: Fourth commercial OperatorOS agreement to date.
• Target Goal: Five operators live on the platform by end of 2026.
• Revenue Structure: Percentage of revenue from managed flights plus per-seat fees.

Barrett Brown, president of SurfOS at Surf Air Mobility, said adding Clipper strengthens the platform’s ability to connect aircraft supply with broker demand, as each additional aircraft expands inventory available to the company’s broker network.

Recent Customer Wins

This deal follows a similar agreement signed last month with Air Fuga, which became the third customer for the OperatorOS platform in less than two weeks. Under that collaboration, Surf Air Mobility also receives a percentage of revenue from flights managed through OperatorOS. The company noted that these collaborations provide access to Palantir’s engineering resources, which are expected to shorten product-development timelines and support expansion into new markets.

Market Performance and Outlook

Surf Air Mobility shares were up 14.78% at $1.02 at the time of publication on Tuesday. Analysts have set an average price forecast of $3 for the stock, which carries a Buy rating consensus. Recent analyst actions include:

The next major catalyst for the stock is the estimated earnings report on November 11. Analysts forecast an EPS loss of 14 cents, improving from a loss of 64 cents year-over-year. Revenue is estimated at $34.92 million, up from $29.17 million YoY.