Will Wheels Up Survive?

F

flyingpotato

Well-Known Member
Announces +300 million credit line with BoFA and Delta.

Buying Phenom 300 and CL300/350s to replace current fleet.

Stock has never recovered from its $110 pandemic era high. Now bouncing around $2.00.

Revenue in continuous y/y decline. Lost 21 per cent of its customers in 2023.

Cut west coast MRO/MX facilities to focus more on East cost ops (higher exposure to hurricane and winter seasons).

Recent multiple departures of high level execs. Narrowly avoided bankruptcy in 2023 after Delta injected more credit to the company.

SA Analyst: "Wheels Up hasn't yet delivered a silver arrow that allows us to claim the company has successfully executed a turnaround."

Ed Bastian, CEO of Delta Air Lines: "In the year since we've invested in Wheels Up, their operational performance, financial progress and the successful revamp of their customer offering have validated our decision to embark on this one-of-a-kind strategic partnership".

"We feel more confident than ever that Wheels Up is on the right track to be a global leader in private aviation."

But can the company really turn around? And is Delta simply making a big bet that could blow up spectacularly?
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ATLANTA, Oct. 22, 2024 /PRNewswire

Wheels Up to acquire the entire Phenom fleet of GrandView Aviation, a subsidiary of Global Medical Response. The agreement provides for the acquisition of their entire fleet of 17 Embraer Phenom 300 and Phenom 300E aircraft and certain related maintenance assets to support the fleet, at a purchase price of $105 million.

Wheels Up expects to assume GrandView's existing customer programs and retain most of the existing pilot group, integrating them into the existing Wheels Up pilot workforce.

The company intends to continue to operate in support of its customers a fleet of King Air aircraft.

GrandView will operate the Embraer Phenom aircraft on Wheels Up's behalf while the aircraft are transitioned to the company's Wheels Up Private Jets FAA operating certificate.

Wheels Up intends to grow its fleet of Phenom series by acquiring or leasing additional aircraft in the secondary market.

Will retire its existing fleet of light and mid-sized jet aircraft within approximately three years.

Wheels Up to acquire a fleet of pre-owned Challenger 300 and Challenger 350 aircraft via the secondary market through a combination of outright purchases and long-term leasing.

Will sell all 13 of its currently owned Citation X aircraft.

The Bombardier Challenger 300 Series aircraft are expected to enter Wheels Up's fleet beginning next year.

Wheels Up expects to complete the transition to the Challenger platform within three years.

Financing to be Provided by Bank of America with Credit Support from Delta Air Lines for a new, five-year, up to $332 million senior secured revolving credit facility.

The financing is also expected to deliver up to $115 million of additional cash to the balance sheet of Wheels Up with which Wheels Up expects to acquire additional Phenom and Challenger aircraft in the future.

Delta Air Lines is expected to provide credit support for the new financing, enhancing Wheels Up's access to capital and on more attractive terms than would otherwise be available.
 
I have no idea if their overall business plan makes sense, but there are a couple thoughts that come to mind reading that article.

To me, it sounds like pretty good fleet changes. Get rid of the mish-mash of Jets (including the high operating cost/semi-poor dispatch rate of the Citation X). Concentrate on three fleet types, all solid performers in their distinct mission profiles The King Air 300/350 and Challenger 300/350 are both solid performers with proven track records. While I don’t have any direct experience with the Phenom 300, I’ve heard good things about it overall.

Reorganization often involves reductions in operations which are reflected in the financials, so I’m not surprised to see those numbers.

All that said, it’s the nuts and bolts operational decisions, and marketing and sales plans that will tell the tale for them.
 
Not to mention the Phenoms are ok as long as the runway is dry, and long, and you didn’t have any icing on the way in.

I keed I keed. But only a little. You have to know, and live or die by the aircraft’s limitations. If you try and push it you’re going to regret it.
 
Wardogg said:
Not to mention the Phenoms are ok as long as the runway is dry, and long, and you didn’t have any icing on the way in.

I keed I keed. But only a little. You have to know, and live or die by the aircraft’s limitations. If you try and push it you’re going to regret it.
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Which means having a robust ops unit that can apply those restrictions properly and with creativity! Lots of airports, including some surprisingly major ones, are a no go depending on runway surface conditions. OEM knows what the issues are: one being supplying exceedingly unrealistic braking performance profiles to operators, thus turning them into unwitting test pilots. Until the braking issue is corrected one airplane at a time, customers will feel the impact and they must be flexible with airport choices and timing (which sort of defeats the purpose of flying private). It’s a bit of a gamble with the Phenoms considering they also don’t have APUs. Not an issue if they’re getting the Es.
 
KLB said:
Finding Challenger 300 and 350's are in high demand on the market. So building a fleet of them can be tough.
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Add to that competitors are ahead of the line for new large orders from OEMs, and these same competitors are incentivized to starve the secondary market of aircraft which WU intends to rely upon for their main business strategy.
 
flyingpotato said:
Which means having a robust ops unit that can apply those restrictions properly and with creativity! Lots of airports, including some surprisingly major ones, are a no go depending on runway surface conditions. OEM knows what the issues are: one being supplying exceedingly unrealistic braking performance profiles to operators, thus turning them into unwitting test pilots. Until the braking issue is corrected one airplane at a time, customers will feel the impact and they must be flexible with airport choices and timing (which sort of defeats the purpose of flying private). It’s a bit of a gamble with the Phenoms considering they also don’t have APUs. Not an issue if they’re getting the Es.
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Even worse for a 135 operator. As a 91 guy I can use unfactored distances. With a little bit of experience and a smidge of fudge factor I’ve kept myself on the runways so far.
 
flyingpotato said:
Cut west coast MRO/MX facilities to focus more on East cost ops (higher exposure to hurricane and winter seasons).
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I've always been West Coast based and for a while I was mobile and traveled to darn near any airport big enough to operate an airplane equipped with TFE-731s (that's what I used to do) and I've never seen a Wheels Up MRO/MX facility. I've certainly seen the airplanes, the distinctive blue tail with whatever their logo is recognizable. The only folks I've ever seen working on their planes were mobile contract MX from companies like GAMA. There's nothing wrong with that I guess, I eventually dipped my toe into those waters at one point when the company I worked for (one of the two leading TFE-731 MROs at that time) decided they might make more money off of my A/P if I'd provide more assistance to our customers regarding the rest of their airplane. And that's how I became an RII (required inspection item) inspector on XOJets Citation Xs without even knowing how to start the APU, I left shortly after I witnessed this negligence. Cutting West Coast MRO/MX facilities means nothing, there are no assets other than a telephone to ask for help. I should give some context, the mobile work that I was doing, anything from routine inspections, troubleshooting or engine changes was based on 731s and there were two companies that Honeywell used as customer service, one was Dallas Airmotive and the other was Standard Aero, and between the two companies we'd supply anything engine related the customer needed as long as their engine program bills weren't delinquent. A 731 might be installed on anything from a dilapidated LR35 or Falcon 10 to a pristine Falcon 900 and I've shown up to both and had to explain I can't touch it until you pay your bills. One of my best friends was doing the exact same job as I was for the other company and when we'd get together I'd always say "Look out, it's the Jets V the Sharks!" And much fun would be had. Wheels Up has no MX facility I've ever seen and I've been all over the Southern West Coast.
 
knot4u said:
I've always been West Coast based and for a while I was mobile and traveled to darn near any airport big enough to operate an airplane equipped with TFE-731s (that's what I used to do) and I've never seen a Wheels Up MRO/MX facility. I've certainly seen the airplanes, the distinctive blue tail with whatever their logo is recognizable. The only folks I've ever seen working on their planes were mobile contract MX from companies like GAMA. There's nothing wrong with that I guess, I eventually dipped my toe into those waters at one point when the company I worked for (one of the two leading TFE-731 MROs at that time) decided they might make more money off of my A/P if I'd provide more assistance to our customers regarding the rest of their airplane. And that's how I became an RII (required inspection item) inspector on XOJets Citation Xs without even knowing how to start the APU, I left shortly after I witnessed this negligence. Cutting West Coast MRO/MX facilities means nothing, there are no assets other than a telephone to ask for help. I should give some context, the mobile work that I was doing, anything from routine inspections, troubleshooting or engine changes was based on 731s and there were two companies that Honeywell used as customer service, one was Dallas Airmotive and the other was Standard Aero, and between the two companies we'd supply anything engine related the customer needed as long as their engine program bills weren't delinquent. A 731 might be installed on anything from a dilapidated LR35 or Falcon 10 to a pristine Falcon 900 and I've shown up to both and had to explain I can't touch it until you pay your bills. One of my best friends was doing the exact same job as I was for the other company and when we'd get together I'd always say "Look out, it's the Jets V the Sharks!" And much fun would be had. Wheels Up has no MX facility I've ever seen and I've been all over the Southern West Coast.
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That's because Wheelsup bought Gama.
 
knot4u said:
I've always been West Coast based and for a while I was mobile and traveled to darn near any airport big enough to operate an airplane equipped with TFE-731s (that's what I used to do) and I've never seen a Wheels Up MRO/MX facility. I've certainly seen the airplanes, the distinctive blue tail with whatever their logo is recognizable. The only folks I've ever seen working on their planes were mobile contract MX from companies like GAMA. There's nothing wrong with that I guess, I eventually dipped my toe into those waters at one point when the company I worked for (one of the two leading TFE-731 MROs at that time) decided they might make more money off of my A/P if I'd provide more assistance to our customers regarding the rest of their airplane. And that's how I became an RII (required inspection item) inspector on XOJets Citation Xs without even knowing how to start the APU, I left shortly after I witnessed this negligence. Cutting West Coast MRO/MX facilities means nothing, there are no assets other than a telephone to ask for help. I should give some context, the mobile work that I was doing, anything from routine inspections, troubleshooting or engine changes was based on 731s and there were two companies that Honeywell used as customer service, one was Dallas Airmotive and the other was Standard Aero, and between the two companies we'd supply anything engine related the customer needed as long as their engine program bills weren't delinquent. A 731 might be installed on anything from a dilapidated LR35 or Falcon 10 to a pristine Falcon 900 and I've shown up to both and had to explain I can't touch it until you pay your bills. One of my best friends was doing the exact same job as I was for the other company and when we'd get together I'd always say "Look out, it's the Jets V the Sharks!" And much fun would be had. Wheels Up has no MX facility I've ever seen and I've been all over the Southern West Coast.
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www.ainonline.com

Wheels Up Consolidates Maintenance Facilities | AIN

Wheels Up has announced that it is opening a new maintenance facility at Palm Beach International Airport while ceasing operations at several other locations.
www.ainonline.com www.ainonline.com
 
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