Wheels Up, the private jet membership and charter operator, has acquired a fleet of 17 Embraer Phenom 300 aircraft from Grand View Aviation. The company, which reported its third quarter results last month, dramatically restructured its memberships, eliminated the aircraft management and aircraft brokerage business, and has refocused on the core business. Delta Air Lines is a key investor in the company and their CEO Ed Bastian rescued the company.
“After seven consecutive quarters of revenue contraction leading into 2024, the intentional improvements we have made to our business over the last year have stabilized our top line, expanded margins to record levels, and positioned us for growth,” said George Mattson, CEO. “We expect our next phase of financial and operational improvement to be driven by the positive impact of our fleet transition, both immediately and over the next several years.”
Fleet Plans
As a part of that strategy, the company announced its intent to acquire GrandView Aviation’s fleet of 17 Embraer Phenom 300 aircraft. The company is also planning to transition from the Cessna Citation X to the Bombardier Challenger 300/350 series for its mainline fleet, and has begun the process to divest, and lease back, a portion of its 13 owned Citation X aircraft. That transition is expected to increase revenues as the company focuses on its new membership plans and aircraft availability.
Earlier this week, Wheels Up announced that it had closed the transaction with GrandView and has added the 17 Phenom 300 aircraft to its fleet. In addition, the company announced a new $332 million revolving credit facility with Bank of America to provide access to capital at more favorable terms than existing arrangements.
“Our fleet transition starts today with the strategic acquisition of GrandView’s Phenom fleet and the immediate introduction of the Phenom fleet into our programmatic member as well as charter offerings as we head into the peak holiday travel season,” said Mattson.
The Bottom Line
The company, that appeared to be headed for bankruptcy not that long ago, now appears to be successfully executing a turnaround, focused on its core business and innovative programs. While that turnaround is not complete, co-marketing with Delta Air Lines to corporate customers appears to be successful. With revenues now stable as the focus has shifted to the core business and new membership plans, the company is looking to return to growth in 2025.
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