Summary Wheels Up achieved a first half revenue of $196 million, signaling a 40% improvement in net loss and also recorded an adjusted margin increase. Delta Air Lines' 95% stake in Wheels Up led to strategic changes, including the exit from unprofitable sectors, focusing on profitable flying. CEO George Mattson highlighted progress in building a sustainable business model and solidifying partnerships for innovative global aviation solutions.
On Thursday, August 8, Wheels Up announced its financial results for the second quarter of 2024. The company recorded a total revenue of $196 million during the quarter. It also improved on its recent net-losses and its operating margin.
Initially, Delta Air Lines and Delta Private Jet bought a share of 20% of the company. Second quarter results Wheels Up has recently struggled with becoming profitable, although since it was founded, the company has not achieved profitability. Recent struggles led to Delta Air Lines purchasing a 95% stake in the company last August.
Delta Air Lines hopes to turn the company around to becoming profitable. Recent executive and leadership changes have led to improvements within the company. The Chief Executive Officer (CEO) of Wheels Up, George Mattson, spoke about the recent changes.
He stated, "Over the past year, we’ve taken vital steps towards realizing our vision of building Wheels Up into a true innovator in private aviation. Our work this quarter further solidified our position at the forefront of delivering integrated global aviation solutions that seamlessly combine the previously separate ecosystems of private and commercial travel." Overall, Wheels Up achieved a first half revenue of $196 million, which was a 41% decrease from the second quarter of last year.
However, the company saw a 40% increase by achieving a net loss of $97 million. Additionally, the adjusted margin of Wheels Up increased to 7.8% year-over-year.
This shows a year-over-year improvement and signals that the company is making strides toward profitability. The lower revenue is attributed to Wheels Up exiting the aircraft management and aircraft sales businesses, which helped the company focus on profitable flying. Mattson stated, "We made great strides towards the structural changes that are necessary to build a sustainable business model.
We continued to invest in operations to ensure we have a high-performing, reliable product. We enhanced our product portfolio to offer unparalleled value across our programmatic member and global charter offerings alike, and we continued to build on the one-of-a-kind strategic partnership with Delta Air Lines." About Wheels Up Wheels Up was founded by Kenny Dichter in 2013.
The company furiously entered the private jet charter industry with the purchase of 105 Beechcraft King Airs. This transaction amounted to $1.4 billion.
Wheels Up saw immediate success with over 1,000 members in its first year of existence. The company continued to expand by using Cessna Citation jets as well as the Beechcraft King Airs. In the late 2000s, Wheels Up purchased a string of aviation-focused companies.
This includes Avianis, Gama Aviation Signature, Travel Management Company, Mountain Aviation, and Delta Private Jets. However, the company remained unprofitable, even as it grew to the second-largest private aircraft operator in the United States, trailing only NetJets. Because of this, Wheels up was facing mounting losses and potential bankruptcy.
This occurred only a few years since it was listed on the New York Stock Exchange (NYSE) as a special-purpose acquisition company. Delta Air Lines purchased a 95% stake in Wheels Up in late 2023. After some strategic changes, new Delta-appointed executives are looking to turn Wheels Up profitable.
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