Wheels up

Wheels Up: A Leader in On-Demand Private Aviation

Founded in 2013 by Kenny Dichter, Wheels Up is a top provider of private aviation services, offering customers the ability to book flights on demand through a mobile app. The company operates on a membership and charter model, making private air travel more accessible. In August 2023, Delta Air Lines acquired a 95% stake in Wheels Up, a move that stabilized the company financially and furthered its growth into one of the largest global private aviation providers.

Business Model and Services

Wheels Up offers multiple membership tiers, granting access to a fleet of over 1,500 aircraft, including models like the Beechcraft King Air 350i and Cessna Citation. Members can take advantage of flexible flight options such as shared flights and discounted empty-leg bookings, bringing more value to private travel. The company also rewards frequent users with flight credits and perks linked to Delta’s SkyMiles program, enhancing customer benefits and loyalty.

Fleet and Operations

Wheels Up operates a fleet composed of owned, managed, and third-party aircraft, allowing for tailored solutions to meet various travel needs. The company focuses on underserved, non-hub markets that traditional airlines often neglect, providing convenient options for travelers. Beyond passenger flights, Wheels Up also offers cargo transport and aircraft management services, broadening its operational scope.

Recent Developments

Since its acquisition by Delta Air Lines, Wheels Up has refined its services to enhance customer experience and streamline operations. The company remains committed to safety and service excellence through its network of globally vetted charter operators. Delta’s involvement also brings unique commercial travel benefits to Wheels Up members, further solidifying its competitive edge in the private aviation industry.

Delta Air Lines CEO Ed Bastian has consistently expressed strong support for Wheels Up, emphasizing its strategic importance within Delta’s premium service offerings. In November 2024, Bastian referred to Wheels Up as the “next step on our premium ladder,” highlighting the value it adds to Delta’s portfolio.

During a November 2024 interview, Bastian discussed the collaborative efforts between Delta and Wheels Up, underscoring the mutual benefits of their partnership. Furthermore, in December 2024, Delta projected that Wheels Up would “grow meaningfully,” indicating confidence in its future performance and integration within Delta’s services.

These statements reflect Bastian’s commitment to enhancing Delta’s premium offerings through a strong partnership with Wheels Up.

Wheels Up Experience Inc. (NYSE: UP) has experienced notable fluctuations in its stock price over the past three years.

The Stock $UP

Revenue and Profitability

In the third quarter of 2024, Wheels Up reported revenue of $193.90 million, marking a 39.65% decrease compared to the same period in 2023. The company also reported a net loss of $28.49 million for the quarter. 

Balance Sheet and Cash Flow

As of September 30, 2024, Wheels Up’s balance sheet reflected total assets of $1.25 billion, with total liabilities amounting to $1.02 billion. The company’s cash and cash equivalents stood at $363 million, down from $586 million at the end of 2023, indicating a significant decrease in liquidity. 

Debt and Capital Structure

The company’s total debt to equity ratio is 345.90, indicating a high level of leverage. The long-term debt to equity ratio stands at 297.78, suggesting that a substantial portion of the company’s capital structure is financed through long-term debt. 

Recent Developments

In August 2023, Delta Air Lines acquired a 95% stake in Wheels Up for $500 million, aiming to stabilize the company’s financial position. Despite this infusion, Wheels Up reported a working capital deficit of $720.8 million as of August 14, 2023, raising concerns about its ability to continue operations without further financial restructuring. 

Wheels Up Experience Inc. is facing significant financial challenges, including declining revenues, ongoing net losses, and high leverage. The substantial investment by Delta Air Lines provides some support, but the company’s future performance will depend on its ability to improve profitability, manage debt effectively, and adapt to market conditions.

Past 3 Years:
The stock reached an all-time high closing price of $11.55 on July 14, 2021.

Past Year:
Over the last 52 weeks, the stock has seen a high of $4.59 and a low of $1.52.

Past 6 Months:
In the past six months, the stock has traded between $1.52 and $1.72, indicating relative stability within this range.

These trends reflect the company’s financial challenges and strategic changes, including Delta Air Lines’ acquisition of a 95% stake in August 2023.

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