Wheels Up revenue falls 24% in third quarter
Private aviation company Wheels Up announced its third quarter financial results on Wednesday, reporting a 24% year-over-year (YoY) decline in revenue to $320m, down from $420m in the same period last year.
The company’s key operating metrics saw a significant deterioration as active members, users, number of live flight legs and flight revenue per leg all witnessed a decline. According to the earnings release, Wheels Up’s active members as of September 30th decreased 15%YoY to 10,775, owing to the regionalization of member programs and a focus on more profitable flying.
Active users during the quarter also decreased 10%YoY to 11,988, while live flight legs decreased 21%YoY to 16,581. The company said the decline in live flight legs was attributable to “a slowdown in the industry and efforts to focus on profitable flying.” Revenue per flight leg inched down by 3%YoY to $12,945.
On the bottom line, the company posted a net loss of $144m during the quarter from $149m during the same period last year.
In the third quarter, the company spent around $250m to support operations. However, Wheels Up said that it has ample liquidity to support operations including $245m in cash, $100m in undrawn rollover and expected loan of $50m.
Wheels Up has been hit hard by financial woes and has been looking to raise new capital and divest some of its unprofitable business lines. It company recently secured a $450m capital infusion backed by Delta Air Lines, Certares Management, Knighthead Capital Management, and Cox Enterprises.
“The strategic investment from Delta Air Lines, along with our new partners, demonstrates their confidence in our operational and commercial plan to deliver a compelling and differentiated experience for our customers,” said George Mattson, CEO, Wheels Up.
Meanwhile, the company is in discussions with potential investors on the announced $50m term loan.
The company also introduced a new program called “Up for Business,” which offers a tailored private aviation solution for small and medium-sized enterprises (SMEs), jointly sold through Wheels Up and Delta sales organizations.
In October, the company divested its aircraft management business to Airshare.
Wheels Up’s financial performance in the third quarter was impacted by a number of factors, including the regionalization of member programs, a focus on more profitable flying, and a slowdown in the industry.