Private aviation membership and on-demand charter operator Wheels Up (Booth 2061) arrives at NBAA-BACE as the top U.S. charter company by flight hours, having logged 82,478 hours in the first half of the year, according to Argus. The New York-based access provider also this year bought Arizona-based Part 135 operator Alante Air Charter; completed its acquisition of UK charter broker Air Partner; and reported record revenue in the second quarter. This growth follows 2021 which included the company’s July debut as a publicly traded company on the New York Stock Exchange.
According to the Argus TraqPak Mid-Year Business Aviation Report, Wheels Up’s 80,000-plus flight hour total was more than double the 39,410 hours flown by Jet Aviation, which came in second place. Wheels Up founder and CEO Kenny Dichter wants the company’s total to grow, and capital from its successful listing through a transaction with special purpose acquisition company (SPAC) Aspirational Consumer Lifestyle gives it the resources.
“If we have an opportunity to become 10 or 20 or 50 times bigger than we are today in the future, that's really what our investors are looking for,” Dichter said late last year.
An acquisition spree that began well before the listing has driven the company's expansion. The latest is its February purchase of light jet lifter Alante Air Charter in Scottsdale, whose fleet includes a dozen Citation CJ3/3+s and CJ4s, along with 39 pilots. (Previous purchases include Delta Private Jets, Travel Management Company, Gama Aviation Signature, and Mountain Aviation.)
In April, its Air Partner acquisition (valued at $109 million) closed, providing Wheels Up with its first international foothold, and the company is “already seeing the benefits of having a global footprint,” said Dichter. Air Partner provides private, group, and freight charter, as well as aviation safety and security solutions.
Financially, in the second quarter of this year, Wheels Up revenue increased 49 percent year-over-year (YoY) to $425.5 million, the company reported, with prepaid block sales up 187 percent YoY. Active memberships grew 20 percent to 12,667, and flight revenue per live flight leg was $13,088, a 16 percent YoY gain, excluding Air Partner.
But reflecting the costs of expansion, supply constraints including pilot shortages, and other factors, YoY net loss in the quarter swelled from $29 million to $92.8 million, a 320 percent increase, a loss Dichter said shareholders are willing to bear in the short term, and that the company is now addressing to achieve its plan for positive adjusted EBITDA in 2024.
Among its initiatives: the company’s fleet is now managed through a proprietary UP FMS platform supporting a transition to fully automated aircraft and crew scheduling and improved operations management. Meanwhile, progress continues on certificate consolidation, enhancing the operations of its acquired fleets, and its customer service. Wheels up also noted it has exceeded pilot hiring targets while making progress on its training and investing in maintenance hiring and capabilities.
To further help address crew staffing shortfalls of its own and across the industry, in July Wheels Up announced a partnership with Delta Air Lines—Wheels Up’s majority investor—to offer pilots that Delta is developing through its Propel college path program with crew opportunities at Wheels Up providing loggable flight hours.
The company has also added to its portfolio of member services and sustainability initiatives this year by partnering with Hertz to offer clients access to a variety of high-end electric vehicles, including Tesla and Polestar electric models in North America. Available at more than 100 general aviation airports at launch this summer, plans call for access at more than 500 airports soon. Discounts for Hertz Prestige and Dream Car Collection vehicles and on-tarmac delivery and pickup service are included.