Wheels Up bets on Phenom jets
Wheels Up placed its first new jet order buying six Phenom 300Es due in the second half of 2027.
Wheels Up is very different to when George Mattson joined as CEO three years ago. This week it placed its first new jet order – buying six Phenom 300Es due in the second half of 2027. It no longer directly operates any King Airs.
“We are continuing to be opportunistic about how we buy airplanes. There’s a big, deep secondary market for Phenoms and Challengers. It’s part of why we focused on those platforms to begin with,” Mattson told CJI.
The company also announced its financial results for the third quarter of 2026. Wheels Up is running down its legacy King Air programme and replacing it with its Signature jet programme that gives access to Challenger and Phenoms (that was only announced a year ago).
This meant that Wheels Up’s private jet flight revenue fell 7% year-over-year to $143.9m for the quarter. But behind this Signature revenue grew 120% during the quarter, while legacy revenue fell 60%.
“The third quarter was noteworthy because it was the first quarter that Signature revenue crossed the 50% threshold,” Mattson said. It now has more than 1,500 Signature members – more than a 1,000 of these were legacy programme members.
The Signature jet programme has a much better margin so third-quarter adjusted contribution margin hit 16.4%, a 370-basis-point improvement on the same quarter last year.
“We’re only halfway through the [revenue] mix shift, because we’re at 51:49 [for Signature and Legacy respectively]. As that goes to 100/0, if we did nothing else but allow that to happen, margins expand. Then you layer some growth on top of that, and you start to get this commercial flywheel of organic top-line growth and margin expansion,” said Mattson. “That’s what we’ve been driving toward, and we’re where we expected to be on that journey.”
The company posted its second consecutive quarter of positive gross profit: $15.2m in the third quarter, a $16.5m swing from $1.3m gross loss in the same quarter last year.
“We’re continuing to get operationally more efficient. We’re driving higher utility. This is all part of the same narrative. You saw a 31% improvement in utility on our fleet, and there’s lots of room to continue to grow there as well,” Mattson said of the improvement in gross profit.
“Brand days went from 25 to 61 in the quarter. It used to be that one out of four days was a brand day with no cancels. Now it’s two out of three days. We went from one out of four to two out of three in one year. These are huge,” Mattson said, pointing to the company’s gains in reliability.
“We did all that while we were transitioning the fleet, while we were scaling down the old fleet and scaling up the new fleets, when we went from five aircraft types to seven to two. What we’re seeing now is even more opportunity to continue to drive performance,” he added.
The adjusted EBIDTA loss for the quarter came in at $13.2m, a 44% improvement on last year.
Mattson said: “We are on track for what we have been driving towards. We are where we expected to be on that journey and it is not a one quarter or a one-year journey.”
Major investor Delta Air Lines clearly agrees. As well as continuing to integrate systems the airline provided another $100m in debt to Wheels Up this week.
Hard work rewarded for services
Bombardier’s aftermarket team is working hard, writes Fayaz Hussain. Third-quarter results show services revenue rose by $111m to $701m, lifting total revenue to $2.37bn despite deliveries slipping by one aircraft.
Manufacturing and other revenue fell to $1.67bn but this was partly offset by higher prices. The company delivered 33 aircraft.
Adjusted EBITDA rose 7% to $382m, lifting the margin 70 basis points to 16.1%. Adjusted EBIT margin rose 150 basis points to 11.3%, which Bombardier attributed to higher contributions from services and lower R&D expense.
Bombardier saw strong order intake, with its backlog reaching $22.2bn at the end of the quarter and a unit book-to-bill ratio of 1.7 times
