Wheels Up lost almost 50 cents for every dollar of revenue during the second quarter of 2023, according to its late Form 10-Q filed on Monday with the U.S. Securities and Exchange Commission. For the three-month period, the company posted revenues of $335 million and a net loss of $161 million. Cash-on-hand, which stood at $583 million at the end of 2022, had receded to just $152 million on June 30, putting Wheels Up precariously close to violating its financing covenants on $259 million in 12 percent interest aircraft loans secured last October.
Acting CEO Todd Smith said he was “extremely encouraged by this quarter’s performance,” citing improvements in on-time performance and reliability and “significant cost reductions and process improvements.” But one week after the company issued a going concern warning, announced the sale of its aircraft management business to Airshare, and obtained a $15 million, 10 percent interest, six-month note from 20 percent shareholder Delta Air Lines, Smith admitted, “We still have more work to do.”
Wheels Up’s latest report also shows that it lost 1,000 active members from the year-ago period, down to 11,639 from 12,776, a drop of eight percent. For the first six months of 2023, the company posted a net loss of $261.5 million, up from a loss of $181.8 million from the same period a year ago, while revenues declined by nine percent to $686.9 million. It lost $555 million in 2022.
For the second quarter, active users decreased by four percent, live flight legs decreased by 16 percent, and revenue decreased by 21 percent from the same period last year. The company said these results indicated that its focus “on profitable flying” was working. Earlier this year, Wheels Up said it would retool to concentrate on operating in high-density and profitable membership areas such as east of the Mississippi River and in the Southwest.
Smith said Wheels Up is “continuing to engage with strategic and financial partners around the path forward and look forward to sharing more information in the days ahead.”