Wheels Up is a new airline, co-founded by Bill Allard, which is facing a new Beechcraft 350i King Air turbojet plane with only 30 hours of flight time.
John Tlumacki | The Boston Globe | Getty Images
Private jet company Wheels Up saw sales jump 68% and active members up 56% in the first quarter as growing wealth creation and fear of pandemics continue to fuel demand for private flights.
The company, which is expected to merge with blank check company Aspirational Consumer Lifestyle Corp. and will go public this summer, revenue increased to $ 261.7 million in the first quarter from $ 156.1 million a year earlier. Losses also decreased, posting a net loss of $ 32.2 million for the quarter, compared to $ 44.5 million a year earlier. Adjusted EBIDTA loss of $ 8.7 million decreased from $ 17.1 million a year ago.
The company now has nearly 10,000 members, up from 6,300 a year ago.
“We got off to a strong start this year. The record revenue was driven by increased flight numbers due to our significant membership growth and contributions from recent acquisitions,” said founder and CEO Kenny Dichter. “Our customers fly longer routes and across all fleet categories.”
Private jet travel has recovered much faster than commercial airlines as the rich flocked to private planes to avoid the health risks of airports and commercial flights. Rising stock markets and IPOs have also created enormous amounts of new wealth and new customers who can now afford to fly privately.
According to Argus Traqpak, North American private aviation flights in March 2019 were above the same month in 2019.
VistaJet, another leading private jet company, announced that its membership increased 29% over the past year. Many of its North American routes are almost back to pre-pandemic levels, or even ahead of them. Traffic to California increased 57% year over year in the first two months of 2021, while flights to Hawaii increased 81%.
The big question for Wheels Up and its investors is when it can make a profit and whether its growth and bottom line will be attractive to shareholders over the long term. Like many private jet companies, the company is burdened by the high costs of private jets and maintenance, as well as the costs of pilot and infrastructure.
Wheels Up says its goal is to become the “Airbnb of Heaven” by leveraging technology and its large fleet to make it easier and cheaper for travelers to book flights or charter through an app.
“We are committed to accelerating investments in next generation operations and technology so that we can efficiently manage demand going forward,” said Eric Jacobs, CFO of the company.
Private jet experts say Wheels Up and other private jet companies should continue to see increasing demand for private jet travel in the coming months.
“It seems like a very strong bull market for people selling private aviation,” said Doug Gollan, founder and editor-in-chief of Private Jet Card Comparisons, which advises private jet flyers on jet cards and subscriptions.
While most of the demand for private jets last year came from vacationers, Gollan sees strong demand for business travel. Many business travelers want to buy 75 to 300 flight hours.
“When you combine that with new flyers and vaccinated people who travel again when things open up, you have a perfect storm on the demand side,” said Gollan.