Wheels Up is a new airline co-founded by Bill Allard who stands in front of a new Beechcraft 350i King Air turbojet with just 30 hours of flight.
John Tlumacki | The Boston Globe | Getty Images
Private aircraft company Wheels Up reported a 68% increase in first-quarter sales and a 56% increase in active members as growing prosperity and pandemic fears continue to drive demand for private flying.
The company, which is expected to merge with the blank check company Aspirational Consumer Lifestyle Corp. set to close and go public this summer, saw first-quarter revenue increase to $ 261.7 million, from $ 156.1 million a year ago. Losses also narrowed, posting a net loss of $ 32.2 million in the quarter, compared to a loss of $ 44.5 million a year ago. Adjusted EBIDTA loss of $ 8.7 million was lower than $ 17.1 million last year.
The company now has nearly 10,000 members, up from 6,300 a year ago.
“We got off to a strong start this year, with record sales driven by more flying thanks to our significant membership growth and contributions from recent acquisitions,” said founder and CEO Kenny Dichter. “Our customers fly longer distances and in all fleet categories.”
Private jet travel has recovered much faster than commercial airlines as the wealthy flocked to private jets to avoid the health risks of airports and commercial flights. Rising stock markets and IPOs have also created massive amounts of new wealth and new customers who can now afford to fly privately.
According to Argus Traqpak, North American private airline flights in March surpassed the same month in 2019.
VistaJet, another leading private jet company, said its membership has grown by 29% in the past year. Many of the North American routes are almost back to pre-pandemic or even forward levels. Traffic to California was up 57% in the first two months of 2021 compared to last year, while flights to Hawaii were up 81%.
The big question for Wheels Up and its investors is when it can turn a profit and whether its growth and earnings will be attractive to shareholders in the longer term. The company, like many private jet companies, is burdened by the high costs of private jets and maintenance, in addition to pilot and infrastructure costs.
Wheels Up says its goal is to become the “Airbnb of the sky,” using technology and its large fleet to make it easier and cheaper for travelers to book flights or charters through an app.
“We are committed to accelerating investments in next-generation operations and technology to help us efficiently manage demand in the future,” said Eric Jacobs, the company’s CFO.
Private jet experts say Wheels Up and other private jet companies should see demand for private jet travel grow in the coming months.
“It appears to be 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 pilots on jet cards and subscriptions.
While most of the demand for private jets has come from vacationers in the past year, Gollan said he sees strong demand for business travel, with many business travelers looking to buy 75 to 300 hours of flight time.
“If you combine this with new fliers and people getting vaccinated and going back on the road as things go on, you’ve got a perfect storm on the demand side,” Gollan said.