Wheels Up Stock
So it looks like Delta owns themselves a private jet firm now!
According to Forbes, the rescue package from Delta Airlines & a private equity shop will consist of the following:
“A non-binding agreement announced this morning by Delta includes funds contributed by the airline and CK Opportunities Fund, I LP, which is co-managed by affiliates of Certares (owner of Internova, a major group of luxury and corporate travel agencies) and Knighthead. The facility would be comprised of a $400 million term loan and a $100 million liquidity facility from Delta, totaling $500 million to Wheels Up. In exchange. The lenders will receive newly issued Wheels Up Class A common stock resulting in owning approximately 95% of the pro forma equity of the company on a fully diluted basis.”–Delta, New Investors Keep Wheels Up Flying; Here’s Why And What’s Next (forbes.com)
Wheels Up is a private aviation company that was founded in 2013 by Kenny Dichter. Here’s a brief history and some key milestones:
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- Foundation (2013). Kenny Dichter, who had previously co-founded Marquis Jet and later sold it to NetJets, started Wheels Up with the vision of democratizing private air travel. The company aimed to provide greater access to private aviation without the need to buy an entire aircraft.
- Aircraft Acquisition (2013-onwards). Initially, Wheels Up relied on a fleet of Beechcraft King Air 350i turboprops and later added Cessna Citation Excel/XLS jets. These aircraft became chosen for their reliability and performance.
- Membership Model. Wheels Up introduced a membership-based model where members pay an upfront fee and then subsequent hourly rates for flights. This model allowed for greater flexibility for members, enabling them to book flights with short notice.
- Partnerships and Collaborations. Over the years, Wheels Up engaged in various partnerships, including with sports teams, events, and other brands, to offer exclusive experiences to its members.
- Acquisitions and Expansion: As it grew, Wheels Up made several strategic acquisitions. These include the acquisition of Travel Management Company in 2019. Which expanded its light jet offerings, and the acquisition of Delta Private Jets from Delta Air Lines in 2020.
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- Going Public (2021). In early 2021, Wheels Up announced its plans to go public via a merger with a special purpose acquisition company (SPAC) named Aspirational Consumer Lifestyle Corp. The move was part of a broader trend in the market where many companies chose SPACs as an alternative route to going public.
- Digital Expansion. Wheels Up has also shown interest in expanding its digital capabilities. Their digital platform allows members and customers to book flights, engage in ride-sharing, and more.
- Covid-19 Impact. Like most of the aviation industry, Wheels Up faced challenges during the Covid-19 pandemic. However, as commercial aviation saw significant declines, there was a surge in interest in private aviation, which offered more control over travel environments. Wheels Up became positioned to cater to this increased demand.
- Community Involvement. Beyond its business activities, Wheels Up became involved in philanthropic efforts. Moreover, notably with the “Meals Up” initiative, which aimed to provide meals to those in need during challenging times.
Lastly, Wheels Up had established itself as a major player in the private aviation sector. Moreover, thanks to its innovative business models, strategic acquisitions, and focus on customer experience.
