Air T Seeks Capital to Fuel Commercial Engine Expansion and Strategic Growth

2026-02-13 companies

Denver, Saturday, 14 February 2026.
Air T leverages preferred securities to fund commercial engine expansion, a strategic move following its recent high-profile acquisition of Australia’s Rex Regional Airlines to drive long-term value.

Strategic Capital Mobilization

On February 13, 2026, Air T, Inc. (NASDAQ: AIRT) formally announced its intention to raise additional capital by leveraging its Alpha Income Preferred Securities (NASDAQ: AIRTP) [1][2]. The Minneapolis-based holding company plans to utilize an at-the-market (ATM) facility and privately negotiated placements to execute this initiative [1]. This capital raising effort is structured under the Securities and Exchange Commission’s “baby shelf” provisions, a regulatory framework designed for issuers with a public float under $75 million that limits the volume of securities sold within a 12-month period [1][2]. The move comes shortly after the company set the distribution rate for these preferred securities at $0.50 per share, representing an 8.0% annual rate, on February 5, 2026 [2].

Targeting Commercial Aviation Growth

The proceeds from this offering are explicitly earmarked to fund expansion within the company’s Commercial Aircraft Engine and Parts segment and to support an existing investee [1][2]. This infusion of capital appears timely, as the segment has faced recent headwinds. For the fiscal third quarter ended December 31, 2025, the Commercial Aircraft, Engines and Parts segment reported revenues of $18.8 million, a decrease of $13.9 million compared to the prior year [3]. Over the nine-month period ended December 31, 2025, revenue for this segment declined by $30.2 million [6]. By securing flexible capital, Air T aims to reinvest in high-performing businesses through the purchase of commercial aircraft and engine parts inventory [6].

Integrating the Rex Acquisition

This financial maneuvering follows a significant expansion of Air T’s operational footprint. On December 18, 2025, the company finalized the acquisition of substantially all assets and operations of Regional Express (Rex), an Australian regional airline previously under voluntary administration [3][6]. As part of this transaction, Air T invested AUD $50 million in cash to fund necessary engine overhauls [3]. The strategic plan for this new asset involves increasing the active fleet of Saab 340 aircraft servicing regional Australia from approximately 30 to between 44 and 45 over the next two years [3]. This acquisition has already begun to impact the company’s financials, with the Regional Airline segment contributing $5.2 million in revenue during just thirteen days of operations following the closing [3].

Financial Performance and Outlook

In its third-quarter report released on February 13, 2026, Air T reported consolidated revenues of $71.1 million, a 9% decrease from the same quarter in the prior year [3]. The company posted an operating loss of $3.8 million for the quarter, a sharp contrast to the operating income of $1.4 million recorded in the prior year’s comparable period [5]. Despite these quarterly challenges, the company’s longer-term metrics show resilience. For the nine months ended December 31, 2025, Air T achieved adjusted EBITDA of $9.5 million, an increase from $8.6 million in the prior year [6]. CFO Tracy Kennedy noted that the flexibility provided by the trust preferred security and ATM program allows the company to “move quickly on initiatives we believe will drive meaningful long-term value for shareholders” while remaining mindful of dilution [1].

Sources

Corporate Finance Capital Raise