Air T Revenue Jumps 129% to $146.9M, Swings to $16.2M Pre-Tax Loss

Air T, Inc. (NASDAQ: AIRT) reported second quarter fiscal 2027 results on 13 November 2026, posting revenue of $146.9 million for the quarter ended 30 September 2026, up $82.8 million or 129% year over year. The company swung to an operating loss of $11.8 million from prior-year operating income of $5.5 million, and a loss before income taxes of $16.2 million versus $7.2 million of pre-tax income a year earlier. Net loss per share was $7.48 against net income per share of $1.61. Adjusted EBITDA fell to $4.4 million from $7.9 million.

Context — Why Air T's Rex-Driven Revenue Surge Matters Now

The quarter reflects the first full three-month contribution from Regional Express Holdings Pty Ltd, the Australian regional carrier Air T acquired on 18 December 2025. That deal added $56.8 million of revenue in the period, meaning the legacy businesses generated roughly $90.1 million on their own. Without Rex, Air T's top line would still have grown, but at a far more modest pace than the headline 129% suggests.

The company operates as a portfolio of independent but interrelated aviation businesses. Its segments span regional airline operations, overnight air cargo, commercial aircraft and engine trading, ground support equipment, digital solutions, and aviation leasing and asset management. Chairman and CEO Nick Swenson described the quarter as an example of "widely variable operational dynamics across our businesses."

What triggered the swing to a pre-tax loss is concentrated in the newly acquired regional airline. Rex absorbed higher per-liter fuel prices, which the company said roughly doubled versus pre-war levels, and did not hedge fuel or Australian dollar exposure. Unscheduled engine removals and lower throughput from third-party maintenance shops also cut the number of aircraft available below plan.

That combination hit a segment that carries heavy fixed costs. Depreciation and amortization alone added back $9.4 million against the regional airline's $10.0 million operating loss, leaving an Adjusted EBITDA loss of $0.9 million on $56.8 million of revenue.

Meanwhile, several legacy units performed better. Crestone and GGS drew specific praise from Swenson, with Crestone cited as having particularly strong momentum. The divergence between a fast-growing but loss-making acquisition and a profitable core is the central tension in these numbers.

Data — What Air T's Segment Numbers Show

The consolidated picture worsened at the operating line even as revenue ballooned. Six-month figures show the same pattern: revenue growth alongside an operating loss of $24.6 million versus prior-year operating income of $6.4 million.

Metric	Q2 FY2027	Q2 FY2026	Change
Revenue	$146.9M	$64.1M	+$82.8M
Operating income (loss)	-$11.8M	$5.5M	-$17.3M
Pre-tax income (loss)	-$16.2M	$7.2M	-$23.4M
Adjusted EBITDA	$4.4M	$7.9M	-$3.5M
EPS	-$7.48	$1.61	-$9.09

Segment Adjusted EBITDA tells the story of offsetting moves. Overnight air cargo rose to $2.6 million from $1.8 million, helped by higher pricing on flight administrative fees and billable labor at Mountain Air Cargo. Ground support equipment climbed to $2.7 million from $1.7 million on deicing truck delivery timing. Digital solutions turned positive at $0.1 million.

Those gains were overwhelmed elsewhere. Commercial aircraft, engines and parts fell to $1.5 million from $6.9 million, largely because the prior-year quarter contained a $7.0 million gain on aircraft sales that did not recur. Aviation leasing and asset management contributed $1.3 million, dragged by a $3.3 million unfavorable earnout remeasurement.

The report gives no prior-year comparable for the regional airline or leasing segments. Ground support equipment backlog stood at $11.6 million versus $12.9 million a year earlier, and the equity method investment balance was $26.2 million versus $27.9 million.

Analysis — What Air T's Loss Means for Aviation Sector Exposure

The immediate read is that Air T's diversification both cushioned and obscured the quarter. Cargo, deicing equipment and digital analytics delivered improving profitability, while the Rex acquisition imported fuel-price and maintenance risk directly onto the income statement. Because Rex does not hedge fuel or currency, every move in jet fuel and the Australian dollar flows straight into segment results.

A counter-argument worth weighing: the $0.9 million Rex Adjusted EBITDA loss on $56.8 million of revenue is narrow, and management said it is mitigating costs through fare adjustments, capacity management and fuel levy arrangements with certain state governments. If engine availability normalizes, the segment could approach breakeven without further revenue growth. That is the bull case embedded in the numbers.

The bear case rests on depreciation. Rex carries a large fixed asset base, and the $9.4 million quarterly depreciation add-back means accounting losses will persist even near operational breakeven. Earnout remeasurements in the leasing segment add another source of earnings volatility tied to acquisition structures rather than operations.

Positioning is difficult to infer. Air T is a small-cap with a portfolio structure that resists clean sector comparison, and the report does not disclose share count, cash position or debt levels. Investors tracking regional aviation exposure through listed carriers or aircraft lessors will find limited read-across, since Rex's unhedged fuel posture is company-specific.

Outlook — What to Watch Next for Air T

Management's stated focus is supporting business leaders through risk management and growth management, with no formal guidance issued. The report gives no earnings date for the fiscal third quarter, so the next scheduled disclosure point is not specified.

Three operational variables matter most. First, whether Rex engine removals ease and third-party MRO throughput recovers, restoring aircraft availability. Second, the path of Australian fuel prices and the AUD/USD rate, which flow unhedged into segment results. Third, whether Crestone's cited momentum converts into sustained leasing and asset management fee revenue after the Arena integration.

Ground support equipment backlog at $11.6 million, down from $12.9 million, is the one forward-looking demand indicator the report provides. A rebuild in that figure would signal the deicing order timing that lifted this quarter is repeatable rather than a one-off shift.

Frequently Asked Questions

Why did Air T report a net loss when revenue rose 129%?

The revenue increase came almost entirely from adding Rex, a lower-margin regional airline with heavy depreciation. Meanwhile, the prior-year quarter included a $7.0 million aircraft sale gain that did not recur, and the current quarter absorbed a $3.3 million unfavorable earnout remeasurement. Those two items alone explain much of the swing from $7.2 million of pre-tax income to a $16.2 million pre-tax loss.

What does Air T's Adjusted EBITDA of $4.4 million tell investors?

Adjusted EBITDA strips out depreciation, impairment, earnout remeasurement, acquisition costs and share-based compensation, showing cash-like operating performance of $4.4 million. That is down from $7.9 million a year earlier, reflecting the loss of the aircraft sale gain and Rex's fuel-driven shortfall. The company notes this non-GAAP measure is not a substitute for operating income, the comparable GAAP figure.

How exposed is Air T to Australian fuel prices through Rex?

Rex does not hedge fuel prices or its Australian dollar exposure, purchasing fuel at prevailing market rates. The company said fuel costs roughly doubled versus pre-war levels, driven by higher per-liter prices rather than increased consumption. Management mitigates this through fare adjustments, capacity management and fuel levy arrangements with certain state governments, but the exposure remains direct and unhedged each quarter.

Bottom Line

Air T's 129% revenue jump masked a $16.2 million pre-tax loss driven by unhedged Rex fuel costs and lost one-time gains.

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