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.
