Wheels Up, one of the largest providers of on-demand private aviation in the U.S., has undergone a huge restructuring over the last year. This has included a new management team, new funding and ownership led by Delta Air Lines, a refocus on charter and membership and the opening of a new operations center. The recent year end financials reflected some of this refocus and house cleaning.

New Management Team

George Mattson came in as the new CEO of Wheels Up last year. He has been a longstanding member of Delta Air Lines Board of Directors and also Chairman of the second-largest operator of seaplanes.

Dave Holtz joined Wheels Up in March 2022 as Chairman of Operations, following a 42-year career at Delta Air Lines, including ten years running the Operations and Customer Center (OCC). In his newly announced role as Chief Operating Officer, Dave is setting the course for the company's operational improvement journey.

More recent changes have further added to the operations team, showing that this is a big area of focus. The changes include:

Rob Hamilton, SVP Operations, brings more than 25 years of part 135 operations management experience to the company, previously serving as Fleet General Manager and has been instrumental in Wheels Up's improved service metrics over the past year. With his new responsibilities he will lead the company's Member Operations Center (MOC) team overseeing Flight Control, Mission Planning, Member Services and Enterprise Operations Management.

Pat Busscher, SVP Maintenance, joined Wheels Up in September 2023 following a 39-year career in maintenance and operations at Delta, including 10 years running maintenance control at Delta. Since joining the team late last year, Pat has applied his experience in maintenance control and operational expertise to accelerate the development of Wheels Up's capabilities.

Patrick Burns, SVP Flight Operations, joined the company in February 2024 after a 25-year career at Delta Air Lines, where he had been serving as VP of Flight Operations and System Chief Pilot, leading their 17,000+ pilot group.

Todd Wesoloskie, VP Flight Operations, brings over 35 years of aviation experience in a variety of roles, including as an aircraft mechanic, flight engineer and pilot. Todd has led Wheels Up's pilot recruiting for the past five years and will work closely with Patrick Burns on flight operations.

Al Mann, VP Safety, Security and Compliance, will continue to lead the company's in-house safety team driving its safety culture, and brings over 30 years of experience to this critical position.

New Capital

Wheels Up also recently added an incremental $40 million of investor capital from Kore Capital and Whitebox Advisors, bringing the company's total secured new capital to $490 million. These new investors join Delta Air Lines, Certares Management LLC, Knighthead Capital Management LLC and Cox Enterprises, providing an additional term loan facility in the amount of $40 million under the existing credit agreement. Upon the closing of this new investment, the credit facility consists of the term loan in the amount of $390 million and the revolving credit facility in the amount of $100 million.

In connection with closing the additional term loan, Wheels Up completed the second issuance of shares of common stock to the lenders on November 15, 2023, such that the lenders now hold shares equal to approximately 95% of the company's outstanding equity on a fully diluted basis as of September 15, 2023.

Restructuring and Refocusing

Wheels Up has also spent the last year restructuring and refocusing on its core business of providing on-demand private aviation. This comes after doing a plethora of acquisitions and deals over the preceding years.

In 2023 it sold the aircraft management business to Airshare and also licensed its Avianis fleet management system to Portside, effectively taking Wheels Up out of the commercial software development business. Then just a few months ago the aircraft brokerage and advisory team at Wheels Up became an independent company called 5x5 Trading, which has an exclusive agreement to provide acquisition and disposition services to Wheels Up. All these unwinding deals leave Wheels Up a much leaner and more focused company.

New HQ and Operations Center in Atlanta

In 2023 Wheels Up opened its new Member Operations Center (MOC), in Atlanta, Georgia. The MOC is where employees schedule, manage, and track Wheels Up flights across the country. New CEO George Mattson was already based in Atlanta which is also home to lead investor Delta Air Lines, so it comes as no surprise when the company announced it is also moving its headquarters to the city this year. In addition the sales teams at Wheels Up and Delta are jointly offering a revised Business membership, which takes advantage of both private and commercial flights, and further reinforces this strong link to Delta Air Lines.

Financials

All of this restructuring is reflected in the latest financial results for 2023. The company revenue for all of 2023 was $1,253m but the bottom line loss was $487m. Large parts of this loss were due to the house cleaning above with $170m of restructuring and writing off earlier acquisitions, $30m for opening the MOC and $11m in consolidating the operating certificates from all the earlier acquisitions.

The number of active members - in the Connect, Core, and Business membership accounts - at the end of the year was 9,947. While the total active users – members and non-members – was 10,744. Both saw drops of over 20% from the prior year numbers.