Private aviation provider Wheels Up has been making some major changes recently. Founder and CEO Kenny Dichter has stepped down, from the CEO role. Other new management has been brought in, and the company has made changes to the member programs including the service areas.
New Regional Service Areas
The company is creating two primary service areas – one East of the Mississippi River and one focused in the Western region of the country, with this new structure going into effect at the end of June.
In the East region members have guaranteed availability and capped hourly rates for flights on the King Air 350i, light jet, midsize jet, and super-mid jets. Flights on large-cabin aircraft will be as-available and dynamically priced.
In the West region flights are available with capped hourly rates on the light jet, midsize jet, and super-mid jets. The King Air 350i is not available for booking in this region. Flights on Large-cabin aircraft will be as available and dynamically priced.
The two areas are shown on the map below. Wheels Up will continue to provide flight services to all regions in the United States, and in the “extended service area” covering the rest of the country, flights will be dynamically priced across all aircraft categories.
Wheels Up says the two areas, East and West, account for 80% of customer flight revenue. By concentrating on these two areas there will be fewer repositioning legs and the company says it will be able to lower prices - which it has subsequently done. It also says that it will be lowering minimum flight times.
As the company transitions to these new areas it notes it will continue to honor the current membership agreements that offer capped rates across the country.
Enhanced Delta Air Lines Relationship
Wheels Up has had a long-term relationship with Delta Air Lines, dating back to the acquisition of Delta Private Jets by Wheels up in 2019. Delta’s business customers will now receive volume-based preferential rates on Wheels Up charters and memberships. Delta will continue to provide Wheels Up customers unique access and exclusive benefits such as earning SkyMiles®, SkyBonus® points and Medallion Status. The company says “this multi-million dollar two-year program reflects confidence that the expanded partnership will enable unmatched travel experiences on private and commercial travel for our mutual customers.”
Management Changes
Kenny Dichter founded Wheels Up in 2013, took it public in 2021 and grew it into the largest charter operator in North America. He will continue to be a member of the Board of Directors. He had previously created the Marquis Jet fractional jet card in 2001, which was subsequently acquired by NetJets in 2010.
The company also announced current Board member Ravi Thakran - former Group Chairman, Asia for LVMH and former Chairman and Founding Partner, L Catterton Asia - will serve as Executive Chairman, and that Chief Financial Officer Todd Smith has been named interim CEO, reporting to Thakran. Wheels Up has retained a leading executive search firm to identify a permanent CEO.
"I'd like to thank our founder Kenny Dichter for his vision and work to make Wheels Up what it is today – the leading on-demand charter operator in the United States with more than $1.5 billion in revenue, more than 12,000 loyal members and customers and an iconic brand. I look forward to building on this foundation as we embark on the next phase for the company and its stakeholders," said Thakran.
Todd Smith, CFO and Interim CEO, joined Wheels up in 2022 from General Electric where he served in a number of senior, global finance roles over his 25-year career.
Over the last few weeks the company has also announced David Godsman will join as Wheels Up's first Chief Digital Officer to lead the company's digital transformation and technology initiatives. In addition, Kristen Lauria will join as the company's new Chief Customer and Marketing Officer to focus on Wheels Up's member value proposition and customer acquisition.
Q1 Results
Today, Wheels up announced its Q1 results for 2023, which showed revenue of $352m, up 8% from the same period in 2022.
But all the changes above are aimed at lowering the net loss which came in at $100m for the quarter.