Wheels Up third quarter revenues up but earnings down

Wheels Up has reported record revenues for the third quarter (Q3). The firm posted a 55% increase year-over-year (YoY) to $302m, whilst its membership grew 45% YoY to 11,375. Despite the revenues, Wheels Up’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) decreased $15.9m YoY to $23.9m.

Kenny Dichter, Wheels Up chairman & CEO, said: “Our supply constraints are no different than what many companies are facing today and reinforces the need for the technology-enabled marketplace platform that we are building. In the meantime, however, it’s imperative that we continue our investments to deliver the best experience possible for every customer.”

Flight legs at Wheels Up increased by 52% YoY to 19,714. Revenue per live flight leg increased 2% YoY to $11,076 as a result of a higher mix of larger cabin flying and partially offset by a seasonal decrease in average flight stage length.

Revenue increased 55% YoY, whilst net income decreased by $80m. This reduction was due to several factors, according to the firm, including the impact of $51.6m of CARES Act grant funding and a decrease in adjusted contribution margin caused by supply constraints and increased operating costs.

The firm also made numerous senior appointments during Q3 2021, including the appointment of Vinayak Hegde to president at the beginning of October. Wheels Up also hired Gene McKenna as chief product officer; Srikanth Satya as chief technology officer; and Julia Zhang as senior vice president of Pricing and Revenue Management.

Eric Jacobs, Wheels Up, chief financial officer, said: “We are steadfastly committed to serving and investing in our growing base of loyal customers, even as the state of the industry has brought unique and unprecedented challenges. We are managing through these challenges and the near-term impact they are having on our margins and believe we can significantly increase margins in the long-term.”