Charles Alcock is managing editor of the AIN Media Group, having rejoined the company in 2019. He has been an aviation journalist since 1986, and previously worked for AIN from 1990 to 2017, most recently as editor-in-chief. His main focus is on covering new aviation technology and business models, as well as international news.
Having been raised in the London area, Alcock studied at the University of Manchester in the UK and earned an honors degree in Politics and Modern History. He speaks English and French, and some German.

Managing Editor

Bombardier manufactures a variety of business aircraft models, provides engineering, and aircraft maintenance services.

Charles Alcock

Wheels Up continued to rebuild its balance sheet in the third quarter, announcing a further reduction in net losses to $58 million that represents a 40% improvement from&nbsp;<a href="https://www.ainonline.com/aviation-news/business-aviation/2024-08-08/wheels-cuts-losses-and-smoothes-operations-2q">the second quarter</a>. In a presentation to investors on Thursday, the private flight provider said revenues for the period ending on September 30 had remained stable compared to the previous two quarters at $194 million, indicating a positive direction of travel after seven consecutive quarters of revenue contraction leading into 2024.
According to CEO George Mattson, the company’s decision last month to <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-10-22/wheels-refreshes-jet-fleet-new-credit-facility">modernize and streamline its fleet</a> around two jet models—the Embraer Phenom 300 and Bombardier Challenger 300/350—will support further improvements in financial and operational performance as Wheels Up strives to get its numbers in the black. In the short-term, the investment in the new fleet seems likely to work against efforts to completely eliminate losses in the fourth quarter because the company told investors it will take until 2025 to achieve positive EBITDA performance en route to “future profitability.”
The group’s third-quarter EBITDA loss stood at $20 million. Net cash outflow during the third quarter was $15 million, compared with $250 million in the same period last year. "Stabilizing margins while growing revenues isn't easy, but we are poised for revenue growth in 2025," Mattson told AIN.
Managing debt and liquidity is part of that challenge, and during the recent NBAA-BACE show Wheels Up also announced a refinancing of existing debt with a new <a href="https://www.ainonline.com/aviation-news/business-aviation/2024-10-22/wheels-refreshes-jet-fleet-new-credit-facility">$332 million credit facility</a> from Bank of America, backed by its main shareholder, Delta Air Lines. Once closed, this will add $115 million in cash to the balance sheet to fund the planned additions to the fleet, including 17 Phenom aircraft currently operated by <a href="https://www.ainonline.com/aviation-news/business-aviation/2020-12-01/grandview-looks-new-year-more-jets-bases">GrandView Aviation</a> for $105 million.
As part of the three-year fleet transition, Wheels Up will sell all 13 of its Cessna Citation Xs, leasing back some of these from the new owner. It is looking to purchase or lease preowned Challenger 300s and 350s in the secondary market and is investing in Gogo’s Galileo HDX satellite-based Wi-Fi for all aircraft.
Rationalizing the fleet around two main types of aircraft is expected to yield significant savings in costs such as flight crew training and maintenance. The current fleet includes six different models, including King Air turboprops that will be retained.
<h2>Phenoms and Challengers Prove Popular</h2>
According to Mattson, the selection of the Phenom and Challenger has been popular with members and customers. "We spent months studying the market and these are the most popular, best-selling types in their respective categories," he explained. "This matters also because, to execute the plan, we need a big installed base and availability in the secondary market."
Highlighting another measure of its recovery since the company’s severe <a href="https://www.ainonline.com/aviation-news/business-aviation/2023-11-09/wheels-trims-revenues-and-losses-3q">financial troubles in late 2023</a>, Wheels Up’s new leadership team pointed to a third-quarter adjusted contribution margin—the measure of revenues covering fixed costs—of 14.8%. The company said this was the highest margin since it became a public company in July 2021, and showed a sustained improvement on the 7.8% recorded in the second quarter, and just 1% in the first quarter.
According to Wheels Up, it has turned the corner on the extremely challenging business conditions that prompted Delta to intervene through a management shakeup last year. “The intentional improvements we have made to our business over the last year have stabilized our top line, expanded margins to record levels, and positioned us for growth,” said the company in its latest earnings statement.
Mattson said that the partnership with Delta is making a big impact in boosting sales to corporate travel customers. He told AIN&nbsp;that Wheels Up is working with the airline to look at improved first- and last-mile solutions for travelers.
"[Private aviation] market conditions are stable now, and the U.S. economy is generally strong," he reflected. "We've stabilized our business and we're growing a profitable charter business that is now just about as large as our membership business through aviation solutions that are now globally available through [charter flight brokering division] Air Partner International."

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In this article

Phenom 300/300E

Challenger 300/350/3500

Wheels Up

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