Wheels Up revenue grows 68% amid strong demand for private jet travel
Wheels Up is a new air travel company co-founded by Bill Allard that stands in front of a new Beechcraft 350i King Air turbojet plane with just 30 hours of work.
John Tlumacki | The Boston Globe | Getty Images
Private jet company Wheels Up reported a 68% increase in first quarter revenue and a 56% increase in active membership, as growing wealth creation and pandemic fears continue to fuel demand for private flights.
The company, which should close its merger with the blank check company Aspirational Consumer Lifestyle Corp. and went public this summer, revenue climbed to $ 261.7 million in the first quarter, from $ 156.1 million a year ago. Its losses also narrowed, as it reported a net loss of $ 32.2 million in the quarter, down from a loss of $ 44.5 million a year ago. His adjusted EBIDTA loss of $ 8.7 million was down from $ 17.1 million last year.
The company now has nearly 10,000 members, up from 6,300 a year ago.
“We have started this year strong, with record revenues driven by an increase in the number of flights thanks to significant growth in our workforce and contributions from recent acquisitions,” said Founder and CEO Kenny Dichter. “Our customers fly longer distances and in all categories of the fleet.”
Private jet travel has recovered much faster than commercial airlines, as the wealthy flock to private jets to avoid the health risks of airports and commercial flights. Rising stock markets and IPOs have also created huge amounts of new wealth and new clients who can now afford to steal privately.
North American private aviation flights in March exceeded the same month in 2019, according to Argus Traqpak.
VistaJet, another leading private jet company, said its workforce has grown 29% in the past year. Many of its North American routes are almost back to pre-pandemic or even early levels. Its traffic to California increased 57% in the first two months of 2021 compared to last year, while flights to Hawaii increased 81%.
The big question for Wheels Up and its investors is when it can turn a profit and if its growth and profits will be attractive to shareholders in the long run. The company, like many private jet companies, is burdened by the high costs of private jets and maintenance, as well as the costs of pilots and infrastructure.
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 manage demand effectively in the future,” said Eric Jacobs, chief financial officer of the company.
Private jet experts say Wheels Up and other private jet companies are expected to see demand for private jet travel continue to grow in the coming months.
“It looks like this is a very strong bull market for private aviation sellers,” said Doug Gollan, founder and editor of Private Jet Card Comparisons, which advises private jet aviators on cards and subscriptions.
While most of the demand for private jets over the past year has come from leisure travelers, Gollan said he sees strong demand for business travel, with many business travelers looking to purchase. from 75 to 300 flight hours.
“When you combine that with new flyers and people getting vaccinated and traveling again as things open up, you have a perfect storm on the demand side,” Gollan said.