Wheels Up is targeting further improvements in operating margins in 2025 as it steps up the renewal of its business aircraft fleet. In fourth-quarter results announced on Tuesday, the private flight provider highlighted its highest-ever adjusted contribution margin of 19.3% on a $39.6 million contribution, while driving its adjusted EBITDA loss down to $11.3 million on $204.8 million revenues, which have increased sequentially for the first time in the past seven quarters.

However, the fourth quarter also saw net loss widen by 8% year over year to $87.5 million as revenues dipped from the $246 million a year earlier.

Even so, the fourth-quarter performance capped an improving year for Wheels Up, which reported full-year revenues for 2024 of $792.1 million and adjusted contribution of $85.7 million at a 10.8% margin, and net loss of $339 million. Revenues were far higher in 2023, at just under $1.25 billion, but with losses of $487 million, which has prompted the public company to focus on rationalizing its business model.

According to CEO George Mattson, the net profits that Wheels Up has been striving for since efforts to rebuild the business were rebooted with a new management team in 2023 are now within its grasp. In December, the company achieved breakeven as the first of the 17 Embraer Phenom 300s acquired from GrandView entered commercial service. The company has also added some Challenger 300s to its fleet.

In the (seasonally quieter) first quarter of this year, Wheels Up has been tactically withdrawing these aircraft from service to refresh them with its corporate livery. The company expects this transition to be complete by early 2027 and that it will progressively benefit from the greater efficiency of the younger aircraft with their lower maintenance costs. During 2024, it shed 50 older jets and King Air twin turboprops while adding 18 new aircraft.

Significant numbers of pilots previously employed by GrandView Aviation have transferred to Wheels Up, and the company has been retraining existing flight crew on the new aircraft. Mattson said the pilot recruitment market for business aviation is now more stable than in recent years.

Fleet Utilization Continues To Climb

“The revenues have now stabilized, and our margin contribution has increased from just 0 or 1% to 19.3%,” Mattson told AIN. “We did this by flying the same amount of demand on 25% fewer aircraft as we retired both owned and leased aircraft, and we drove asset utilization up by 33% as we flew more passenger hours for revenue each month.”

These leaner operations, combined with high demand and somewhat predictable challenges around weather, saw the on-time performance of the Wheels Up fleet decline slightly to 80%. However, it maintained its completion rate—the percentage of scheduled flights operated and completed, excluding customer-initiated cancellations—at 98%.

As it seeks to expand its customer base for both the membership and charter offerings, Wheels Up is stepping up efforts to harvest its connections with majority shareholder Delta Air Lines and its Air Partner charter booking division. For instance, Delta One premium travelers booking international flights through the carrier’s app will be sent a message proposing a charter booking to get them closer to their final destination.

“We’re trying to meet [prospective new] customers where they are, and that means being more agnostic about how they want to travel,” Mattson said. “For instance, younger customers may not want to be tied down or tethered by a membership program. This is hybrid travel, and we’re trying to educate travelers that there are different ways to access solutions, whether these involve commercial or private flights.”

In a generally bullish U.S. market and with a refreshed fleet, Wheels Up is eyeing opportunities both to attract complete newcomers to private aviation and to compete directly with rival private flight providers. “These could include more corporate and high-net-worth individuals that we haven’t historically accessed,” said Mattson. “It feels that we’re pivoting from playing defense to offense.”

On March 31, John Verkamp will join Wheels Up as its new CFO. He previously held this position at GE Vernova’s Gas Power Global Services unit.

"After several quarters of consistent improvements, we ended 2024 in a much stronger financial position than we began," Mattson commented. "The fourth quarter was our lowest adjusted EBITDA loss since going public, with the month of December achieving near breakeven performance. This was also our first quarter of sequential revenue growth in nearly two years, thanks in part to record margins and further enhancements to operational efficiency."