Wheels Up Reported 2Q2024 Earnings: Net Loss Improved While YOY Revenues Decreased, Leadership Focused on Fleet Modernization
Lower 2Q revenues were attributed to Wheels Up exiting the aircraft management and sales businesses, and CEO George Mattson emphasized a focus on fleet modernization going forward.
(Atlanta, Georgia) Private jet charter company Wheels Up (NYSE: UP) reported its second quarter financial results today, for the period ending on June 30, 2024; shares of UP ended the day down 10.27% at $1.66.
Photo of a Delta airliner and Wheels Up aircraft side-by-side courtesy of AIN.
This quarter marked the third full quarter since Delta Airlines (NYSE: DAL), Certares Management, Knighthood Capital Management and Cox Enterprises closed on a strategic ~ $500 million investment in Wheels Up (on September 20, 2023) in exchange for a 95% ownership stake, thereby helping the company to avoid bankruptcy.
According to today’s press release, Wheels Up’s 2Q2024 revenue decreased to $196 million, driven by the divestiture of non-core assets and a focus on more-profitable flying. According to AIN, the 41% decrease in yoy revenues was mainly due to the sale of Wheels Up’s aircraft sales and management businesses to Airshare, which Wheels Up CFO Todd Smith said had generated more than $200 million in revenues but did not contribute to Wheels Up’s profitability.
“Over the past year, we’ve taken vital steps towards realizing our vision of building Wheels Up into a true innovator in private aviation," said Wheels Up’s Chief Executive Officer George Mattson. "Our work this quarter further solidified our position at the forefront of delivering integrated global aviation solutions that seamlessly combine the previously separate ecosystems of private and commercial travel. We made great strides towards the structural changes that are necessary to build a sustainable business model. We continued to invest in operations to ensure we have a highperforming, reliable product. We enhanced our product portfolio to offer unparalleled value across our programmatic member and global charter offerings alike, and we continued to build on the one-of-a-kind strategic partnership with Delta Air Lines.”
Per AIN, overall revenues for 1H2024 were $393.4 million, a decline of 43% from the $686.9 million recorded in 1H2023.
Wheels Up’s 2Q2024 net loss improved yoy to $97 million (a $63.6 million from one year prior), its adjusted contribution margin increased yoy to 7.8% and adjusted EBITDA improved to a loss of $37.4 million vs. a loss of $40.3 million in 2Q2023.
Wheels Up CEO George Mattson told Aviation Week that the company is focused on fleet modernization and intends to share more information about its plans later in 2024, and that in the meantime, the company has been investing in its operations to improve reliability and performance.
Per AIN, Wheels Up’s owned and leased fleet currently includes 164 aircraft, including 56 King Airs, 40 Citation Xs, 31 Hawker 400XPs, 18 Citation Excels, 18 Citation CJ3s, and one Gulfstream IV-SP.
Per AIN, Wheels Up’s actions planned for later this year are anticipated to place a higher emphasis on jets than turboprop aircraft.
In 2Q2024, Wheels Up’s active members decreased by 29% to 8,268 compared to the same period last year – Wheels Up attributed the decline to the restructuring of its member programs and a focus on profitable flying. In 4Q2022, Wheels Up’s active members stood at an all-time high of 12,661.
Wheels Up’s prepaid block sales of $145 million in 2Q represented a 27% increase from 1Q2024 and a 50% YOY increase, according to AIN.
In March, Wheels Up introduced a new reported metric, Flight Transaction Value (FTV), along with its 4Q2023 earnings report. Flight Transaction Value is comprised of Flight Revenue, Charter FTV and Other Charter FTV.
In 2Q2024, Total Charter FTV rose to $161.65 million, up from $138.87 million one year prior.
Specifically, Wheels Up defines Charter FTV as the sum of total gross spend by members and customers on all private, on-demand charter flights that are at at market-based rates, rather than Programmatic Flights; the FTV value excludes customer gross spend attributable to all group charter flights with 15 or more passengers and cargo flight services.
Charter FTV is used in order to measure the size of Wheels Up’s private charter business relative to the overall industry, according to Wheels Up’s March 8 press release.
Other Charter FTV is defined as the sum of total gross spend by customers on all group charter flights with 15 or more passengers and cargo flight services, and is used to measure the size of Wheels Up’s group charter and cargo charter businesses relative to the overall industry, per Wheels Up.
