Joby lists, Wheels Up’s first results
For years Wall Street has been a source of business jet customers, but now business aviation has truly arrived. Last week electric vertical aircraft builder Joby Aviation floated on the New York Stock Exchange. It raised over $1.1bn in cash to help it get its five-seater electric aircraft certificated in 2022 and delivered in 2023. Joby follows business aviation membership company Wheels Up (July 14th) and helicopter platform Blade (May 10th).
You may be sceptical of the hype surrounding electric vertical aircraft. But Joby Aviation is a credible company. It has been one of the leaders in the industry since 2009 and has already flown a full-scale prototype 150 miles on a single charge. Before it floated it already had serious strategic investors including Toyota. Commercial operations in 2023 are ambitious, but it is working closely with the FAA. Hyundai also has a very serious electric vertical aircraft project and is aiming for 2028. (With Toyota, Hyundai and GM also committed to the space, surely there must be an announcement from Honda – which already has an aircraft manufacturer – soon.)
Wheels Up issued its first quarterly results (for the three months ending on June 30th, 2021) last week. Everyone in business aviation knows how well Kenny Dichter can sell. But these skills were not needed on his first results call. Sales were up 113% year-over-year to $285.6m. Active Members grew 47% year-over-year to 10,515 in total and revenue flights increased 146% year-over-year to 18,234 in total.
These are without doubt impressive. But we are comparing the same periods of 2021 to the weird months 2020 when much of the US was in lockdown. As Dichter admits, no one expected to see business aviation demand rebound so strongly. The acquisition cost of each customer actually fell.
Dichter is confident that the company can keep growing despite restricted supply in the charter market. “This is the power of having an asset right fleet,” Dichter told Corporate Jet Investor. “Our first party fleet and managed fleet puts us in a strong position and our third-party platform fleet is also set up to service this demand.”
He also stresses that they are working hard not to disappoint customers. “We are focusing all our energies on making sure customers and members are getting a great experience,” he says. “This is the right time to invest in the market.”
Wheels Up made a loss of $29m for the quarter – $1.6m more than the year before. It is now forecasting sales of between $1.05bn and $1.1bn for the full year with a net loss of between $145m and $160m.
The company has used some of the cash from its floatation to pay of its aircraft debt. While it is focused on buying operators, Dichter is also not ruling out new aircraft orders. He is also looking forward to future calls.
“It was a great honour to do the first earnings call on behalf of our staff of more than 2,000 people,” says Dichter. “But we are in it for the long term. We are only a couple of innings in and playing a long game.”
Above: Wheels Up is “playing a long game”, according to its CEO Kenny Dichter.
Below: Business aviation is taking off on Wall Street.