Wheels Up reports $107m loss driven by premium fleet purchases
After the period end, Delta extended its $100m revolving credit facility commitment by two years to September 2028.
Wheels Up reported a second-quarter net loss of $107m, wider than the $82m loss in the same period last year, as transformation costs from its fleet overhaul weighed on results.
On the flip side, the company’s premium Signature membership programme doubled year-to-date and operational metrics hit record highs.
“Wheels Up made meaningful progress this quarter, completing our fleet modernisation, reaching record levels of operational reliability, strengthening our Delta partnership, and building momentum with our Signature Membership,” said George Mattson, Wheels Up CEO.
Revenue was broadly flat year-on-year at $182m, with growth in the Signature programme offsetting planned reductions from discontinued legacy programmes. Total gross bookings declined 8% to $242m, primarily reflecting lower US charter volume during what the company described as a transitory period of sales force reorganisation.
Private jet flight revenue held flat at $158m has higher pricing on the premium fleet compensated for the retirement of legacy aircraft.
“With the legacy fleet transition behind us and technology investments like BrokerOS expected to drive growth in our charter business, we enter the second half of the year with increasing confidence in our ability to execute against our plan and create long-term value for shareholders,” Mattson added.
The GAAP net loss widened due to a $13m non-cash impairment charge related to legacy fleet retirement and a combined $13m increase in interest expense and aircraft rent from fleet investment and borrowings.
On an adjusted basis, the picture was slightly more encouraging as adjusted EBITDAR loss improved 27% year-on-year to $20m, and adjusted contribution margin edged up slightly to 12.4% from 12.2%.
The headline commercial story was the Signature membership programme, which surpassed 1,200 members in the quarter, with premium memberships now representing more than half of the active membership base. Corporate flight revenue grew 8% year-on-year, driven by the Delta partnership.
Fleet modernisation was completed in April, approximately 18 months ahead of schedule, following more than $300m in investment. The controlled fleet now comprises more than 40 Phenom and Challenger aircraft, with demand for the premium fleet more than doubling year-on-year.
Wheels Up plans to grow the fleet to more than 50 aircraft by year-end.
Operational performance reached record levels. The completion rate hit 99.4%, up nearly two percentage points year-on-year, while on-time performance improved 6.5 points to 86.8%. Delays of three or more hours fell 50% compared to a year ago. Through the end of July, the company recorded 119 days with a perfect completion rate and no cancellations, surpassing its full-year goal.
Live flight legs fell 28% year-on-year to 8,649, reflecting the smaller premium fleet versus the legacy operation but private jet gross bookings per live flight leg rose 27% to $22,048.
Wheels Up also signed on as the launch customer for Surf Air Mobility’s Enterprise BrokerOS platform, powered by Palantir, which it expects to improve charter booking efficiency and conversion rates. The first phase of implementation is targeted for completion by year-end.
On the balance sheet, the company closed a new $100m term loan from its lead investor group and a $68m aircraft financing facility from AIP Capital during the quarter.
After the period end, Delta extended its $100m revolving credit facility commitment by two years to September 2028.
