Even with a short-term capital boost from 20 percent equity partner Delta Air Lines, private-flight provider Wheels Up announced today (July 9) that there is “substantial doubt” over its ability to continue to operate. According to a Reuters report, Wheels Up Experience has postponed its second-quarter earnings call, scheduled for this morning.
Besides the announcement of Delta’s cash infusion, Wheels Up, which previously announced plans to sell off non-core business units, also announced today it has agreed to sell its aircraft management assets to charter/management firm Airshare. According to online information source Private Jet Card Comparisons, Wheels Up’s overall charter/management/fractional portfolio was the third largest in the country after Netjets and Flexjet. Airshare ranked ninth, according to Private Jet Card Comparisons. The deal (terms not disclosed) is expected to close in the third quarter of this year.
As recently as May, Delta Air Lines CEO Ed Bastian said of the airline’s connection with Wheels Up, “The relationship is strong. I think [founder and now board member] Kenny [Dichter] has done a masterful job over the last decade building a high-quality brand, great experience, (with) a lot of new members, and for us to be able to add that to our stack is the premium opportunity within the Delta experience, well no one has ever been able to do that before, and we have been attempting to pull that off.”
According to the Reuters report, in today’s premarket trading, Wheels Up shares were up 8.3 percent at $2.60.
That’s what happens when you don’t charge enough to cover operating expenses! You eventually go broke. Lots of other recent examples of this out there.
That’s what happens when you try to grow too fast and want to rub elbows with Celebs like Kenny did.
Just throw cash at it…………..that’s the motto when you have people in charge who have no clue on running an aviation business.
How to make a small fortune in aviation…. start with someone else’s large fortune.
Or at the very least use someone else’s money to fund the business. The company I work for now is a management company that is actually profitable, with reasonable pay and schedule. The management are persons who came from other aviation companies who were not so good to work for, so they know what it takes to keep people happy and turnover at a minimum. We charge a premium for our services and our customer service ratings reflect that, and the company has a waiting list of potential clients. Fortunately the management has been careful not to grow the airplane list too fast, keeping growth manageable. I intend to eventually retire from this company, something I could not say about other outfits I have worked for.
Disappointing to hear – but not surprising. Seems many start-up founders that go to IPO make sure they fully fund their bank/retirement/heir accounts before the invstors hear about any financial concerns. Possibly legal – but sure seems unethical.
While a lot of people in aviation know what a great plane a King Air is a lot of folks outside of aviation see those propellers and wish they had booked a jet. That’s certainly not Wheels Up’s only problem but I think it’s a tough one to overcome. I’d rather ride on a King Air than a light jet but I don’t think the traveling public feels that way.
What a load of unadulterated gibberish.
“Delta Air Lines CEO Ed Bastian” is clearly qualified as a world-class wordsmith, but his statement is meaningless.
I mean, “C’mon, Man”…..