Wheels Up announced on Monday that it would receive net proceeds of $259 million by mortgaging its primary aircraft. “We created a track,” said CEO Kenny Dichter AIN. “We will invest in our members, our operations and our technology.”
Wheels Up (Stand 2061) was simultaneously supported by record and rapidly increasing revenues. In context, the company also posted significant losses, which amounted to more than $180 million for the first half of this year, and a stock that has lost nearly 90% of its value since its IPO. in July 2021.
Dichter said AIN this portion of the proceeds from the new capital raised will be used to build a new 34,000 square foot Member Operations Center (MOC) in Atlanta that will employ 350 people and be fully operational by summer 2023. The new MOC will be managed by Dave Holtz, president of operations, who joined the company earlier this year after more than 40 years with Delta Air Lines. Currently, the MOC is located in Columbus, Ohio.
Categorized as an enhanced equipment trust certificate loan structure, the financing will have a seven-year maturity and a 12% coupon rate.
The new funding and MOC are just the latest developments in the rapidly changing Wheels Up landscape. Over the past five years, Wheels Up has made significant acquisitions and combinations. On June 3, 2019, Wheels Up acquired the Elkhart, Indiana-based travel management company and company-owned and leased fleet of 26 Hawker 400XPs; in December 2019, it merged with Delta Private Jets, acquiring its fleet of 70 managed aircraft in a deal that would ultimately see Delta as the owner of 112 million Wheels Up shares, making it the largest institutional investor of the society; on March 2, 2020, it acquired Gama Aviation, the fleet operator of King Airs and Citations from Wheels Up; and in November 2021 it acquired Mountain Aviation, including its Citation X fleet.
Year-to-date, Wheels Up has acquired Scottsdale-based Alante Air and its fleet of 12 Cessna Citation CJs for $15.5 million; UK-based Air Partner, a global company that provides “private jet, group and cargo charter and aviation safety and security solutions to industry, commerce, governments and to individuals, through civilian and military organizations” for $109 million; and invested $10 million in Tropic Ocean Airways, a Florida-based company that operates a fleet of float-equipped Cessna Caravans.
Holtz is just one of many high profile new faces in the company’s executive suite. They include chief financial officer Todd Smith, who joined Wheels Up in June from GE; Rob Cords, hired as executive vice president of fleet operations in July; Stevens Sante-Rose, who was named director of human resources in January; and Vinayak Hegde, who joined the company as Market Director in May 2021 after stints at Amazon and Airbnb and was promoted to President of Wheels Up in October 2021.
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