Private jet operator Wheels Up warns of 'substantial doubt' over its survival despite cash from Delta
Private jet operator scrapped its earnings call while seeking lifeline
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Wheels Up founder and CEO Kenny Dichter discusses the industry-wide pilot shortage and the company's path to profitability on ‘The Claman Countdown.’
Private aviation company Wheels Up says it is in danger of going belly-up and has received a temporary lifeline from investor Delta Air Lines as the once-aspiring "Uber of the sky" fights for survival.
The private jet operator warned in a Securities and Exchange Commission filing that if it is not able to secure new strategic investments and raise the capital it needs, "there is substantial doubt about its ability to continue" operating.
Delta Air Lines planes at John F. Kennedy International Airport in Queens, N.Y., July 2, 2022. (REUTERS/Andrew Kelly/File Photo / Reuters Photos)
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DAL | DELTA AIR LINES INC. | 63.82 | +0.20 | +0.31% |
Delta Air Lines, Inc.
Delta, Wheels Up's largest shareholder owning 20.67% of the company, confirmed Wednesday it has provided its "valued Delta partner" with a short-term cash injection but did not reveal the amount of the promissory note.
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Wheels Up had originally scheduled an earnings call for Wednesday but announced that morning it would be postponed for another date.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UP | WHEELS UP EXPERIENCE INC | 2.50 | -0.11 | -4.21% |
Wheels Up Experience, Inc.
In a media release, the company said it had also signed a non-binding letter of intent with another private jet operator, Airshare, to acquire Wheels Up's aircraft management business.
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Wheels Up launched in 2013 with the aim of making private air travel possible for people by making it more affordable by leasing jets by the hour. It became the first private aviation company to trade on the New York Stock Exchange in 2021.
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Private jet traffic, which soared on demand from wealthy travelers during the pandemic, is now softening even as pre-owned planes sell more gradually.
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Wheels Up has already taken a slew of restructuring measures this year, including job cuts and management changes.
Reuters contributed to this report.