Dichter launches Wheels Up with $788 million record Beechcraft order
Shawn Vick says it is a great contract for both Wheels Up and for Beechcraft.
Kenny Dichter, who founded the Marquis Jet jetcard, has launched Wheels Up, a new member’s club for the private aviation community.
“This is an exciting part in the democratisation of business aviation. The market for turboprops is as large of bigger than for jets and Wheels Up is a revolutionary new business for the industry,” said Dichter.
Beechcraft Corporation will also provide all maintenance for the aircraft in a contract worth up to $600 million.
“The contract is a great one for Wheels Up and for Beechcraft,” said Sean Vick, “and it is not just about aircraft they also get access to a globally recognised service and support network 24 hours a day, seven days a week.”
The first nine aircraft deliveries will be made in the fourth quarter of this year with 35 King Airs expected to be delivered by mid-2015. Beechcraft does not need to increase production because of this order. Wheel Up has also negotiated options for 70 more aircraft.
Wheels Up will start operations in the northeast of the US servicing customers around New York. Although King Airs can land at a large number of airports, Dichter says that they expect the majority of flights to be from major cities like New York to Boston, Montreal or Washington DC. He believes that most flights will be under 700 nautical miles. The plan is then to set up in the southeast and the southwest – servicing Los Angeles, Las Vegas and San Francisco.
The joining fee for Wheels Up will be $15,750 and this also includes the first year’s membership. Dichter is hoping to sign up 15,000 members and expects them to fly for between 25 hours and 30 hours each year (similar to the Marquis 25 hour jet card he sold for NetJets).
Members will then pay an hourly rate which Dichter says will be at least 30% to 40% cheaper than for a comparable jet aircraft. He is also talking with five jet operators for when Wheels Up members want to charter jet aircraft.
Dichter is personally finding equity for Wheels Up with Jeffries arranging the debt.
Membership also includes Wheels Down, a lifestyle concierge service, where members will be able to attend sporting and social events.
Historic aircraft orders
|Buyer||Seller||Aircraft||Firm orders||Options||Date||Date||Firm order value (with options)|
|NetJets||Bombardier||Challenger 300||75||125||Jun 2012||Total: $3 bn ($9.6 bn)|
Bombardier: $2.6 bnCessna: $372 m
|VistaJet||Bombardier||Global 5000||25||40||Nov 2011||$3.1 bn ($7.8 bn)|
|NetJets||Bombardier||Global 5000/Global 6000||30||Mar 2011||$2.8 bn ($6.7 bn)|
|Global 7000 and Global 8000||20|