Some 10 years after founding private flight provider Wheels Up, Kenny Dichter is stepping down as the financially challenged group’s CEO, the company announced early today. While Dichter will retain a seat on the board of directors, CFO Todd Smith is taking over as interim CEO and current board member Ravi Thakran is now executive chairman.
Last month, Wheels Up posted an overdue 2022 annual report through a 10-K filing with the Securities and Exchange Commission that showed a $555 million loss on revenues of $1.58 billion. The New York Stock Exchange-listed company is due to hold its next board meeting on May 31, with its shares trading at 49 cents at market close on Monday, having declined in value by around 94 percent since it went public via a merger with a special purpose acquisition company in July 2021.
Also on Tuesday, the company reported financial results for the first quarter of 2023. These saw revenues increase by $26 million year-over-year to reach $352 million, while its net loss increased by $12 million to $101 million and its adjusted EBITDA result stood at a loss of $49 million. During the first three months of this year, the number of active Wheels Up members declined by 1 percent to 12,285 and the flight legs decreased by 13 percent to 15,389.
“The changes we are making position Wheels Up to deliver attractive returns and profitability for shareholders and an amazing experience for members,” commented Smith, who joined Wheels Up in 2022 from General Electric, where he held several senior divisional CFO roles.
Thakran is a former group chairman for Asia with luxury goods brand LVMH and former chairman and founding partner of venture capital group L Catterton Asia. “I’d like to thank our founder, Kenny Dichter, for his vision and work to make Wheels Up what it is today—the leading on-demand charter operator in the U.S. with more than $1.5 billion in revenue, more than 12,000 loyal members and customers, and an iconic brand,” he said. “I look forward to building on this foundation as we embark on the next phase for the company and its stakeholders.”
In its April statement, Wheels Up announced plans for a reverse stock split to avoid delisting from the New York Stock Exchange. Under that plan, which is subject to approval by this month’s annual meeting of shareholders, investors would receive one share for every five to 10 shares currently held.
According to the recent 10-K filing, the company had more than $500 million in cash at the end of 2022. Wheels Up further said it is continuing to take remedial actions to alleviate service disruptions caused by supply-chain issues, the rapid onboarding of a string of recent strategic acquisitions, and the expansion of its membership base by more than 25 percent during the pandemic.
Before founding Wheels Up, Dichter helped to launch the Marquis Jet fractional jet card program in 2001. “As we continue our path to profitability, this is the right time to take on a new role where I will support Ravi and Todd and the business,” he said. “I am looking forward to supporting Wheels Up as a shareholder, member of the board, founder, and strong advocate for our brand and mission.”
This story was updated on Tuesday with information about Wheels Up's financial results for the first quarter of 2023.