As part of its continuing acquisition spree, Wheels Up has acquired operator Mountain Aviation. Adding 59 total aircraft to its fleet. This latest acquisition follows on a pattern of buying large, well established management and jet charter operator companies.
Mountain Aviation has the industry's largest fleet of Citation X super-mid size aircraft. It just added the 26th Citation X to its private jet fleet in December, making it the largest Citation X operator in the world. The company says it has plans to further expand the Citation X fleet in 2021.
Mountain Aviation's team of approximately 300 employees will continue to operate out of its current locations in Broomfield, CO and its additional locations in Colorado, Teterboro, NJ, Anchorage, AK and Thermal, CA.
The total purchase price, for this acquisition was $40.2 million, consisting of $30.2 million in Wheels Up common interests and $10.0 million in cash. In addition, there is a potential incremental cash earn-out of up to $15.0 million.
In mid-2019 Wheels Up acquired TMC, the largest wholesale-focused light jet operator in the U.S. TMC operates an owned and leased fleet of Hawker 400XP light jets in North America.
Wheels Up acquired Delta Private Jets at the end of 2019, making Delta Airlines the largest shareholder in Wheels Up. Delta Private Jets manages more than 70 light, mid-size, super-midsize, large and long-range jets and offers charter flights and jet cards.
In early 2020 Wheels Up acquired Gama Aviation Signature, a leading private aviation services company that provides aircraft management, private jet charter, and ancillary support for its managed aircraft. Gama Aviation Signature has been the exclusive operator of the Wheels Up fleet of King Air 350i, Citation Excel/XLS and Citation X aircraft since Wheels Up launched in 2013.
Fitting It All Together
The acquisition accelerates Wheels Up's platform to better serve increasing flight demand from its growing membership and charter marketplace. At the time of the Delta acquisition Wheels Up said it had about 6,000 members and now, a year later, talks of having 10,000 members and customers.
When Wheels Up launched back in 2013, the main focus was its own fleet of King Air 350 turboprops. It subsequently added its own Citation Excel/XLS midsize jets, and then opened a Charter Marketplace to provide access to charter flight options on both the company’s own fleet of aircraft and a selection of safety-vetted and verified aircraft.
Mountain Aviation's wholesale charter operations and Super Mid fleet are a perfect complement to Wheels Up's previous acquisition of Travel Management Company, which operates the industry's largest wholesale floating fleet of light jets.
The addition of Mountain Aviation's full Part 145 maintenance capabilities housed across seven hangar facilities will accelerate the build out of Wheels Up's in-house maintenance function and capability, adding expected efficiencies across the Wheels Up operations. In addition, Wheels Up will offer comprehensive managed aircraft services to Mountain Aviation's existing managed customers as part of the Wheels Up Aircraft Management platform. Wheels Up will also broaden its customer base by servicing recently awarded and a growing government defense contract business and expanding the Wheels Up provision of services to medical transportation customers. Mountain Aviation's legacy technology will migrate onto Wheels Up's cloud-based Avianis technology platform, creating greater efficiencies and offering more automation and streamlined services for Wheels Up Members and Customers.
"We've come to know and greatly respect Mountain Aviation's talented team over the past few years and are excited to welcome them officially to our Wheels Up family," said Kenny Dichter, Wheels Up Founder and Chief Executive Officer. "We are aligned on culture, forward vision, and business goals. This acquisition further strengthens the Wheels Up suite of products and services that we offer to our Members and Customers and enhances our unique total aviation solution positioning."
"This is an exciting day for all of us at Mountain Aviation," said Gregg Fahrenbruch, Mountain Aviation, CEO. We are proud of what we've built and thrilled to join Kenny and the Wheels Up team to continue to expand and grow. It's remarkable to see how Wheels Up, with their vision to democratize, digitize, and disrupt, is transforming the industry." Gregg Fahrenbruch will take on the new title of Senior Vice President, Operations Strategy and will continue to run the Mountain Aviation business together with the Mountain Aviation leadership team.
Overall Wheels Up now offers a total private aviation solution which includes on-demand charter flights, membership programs, corporate solutions, aircraft management, whole aircraft sales, and commercial travel benefits through a strategic partnership with Delta Air Lines.