After bringing turboprops mainstream by championing the King Air 350i, Wheels Up is now filling out its product offerings
There are probably few privately held companies that get as much airtime on the business cable networks as Kenny Dichter and Wheels Up, his entry second entry into the world of jet cards. His debut in 2001 was an exclusive agreement with NetJets to sell jet cards onto its fractionally owned fleet. Instead of having to buy at least 50 hours per year with a five-year commitment, Marquis Jet Partners offered the opportunity to buy in 25 hours at a time.
It foreshadowed the post Great Recession explosion of the jet card segment driven by the appétit of both leisure and business customers to have many of the same benefits of full and fractional ownership without the long-term commitment. In 2010, after Marquis Jet was purchased by NetJets, the entrepreneurial Dichter left the space engaging in several other ventures before returning in 2013 to launch Wheels Up.
Wheels Up Overview
Wheels Up owns but doesn’t operate its fleet. In a
King Air King
In essence, it gives him the ability to control the quality of his product offering. The fleet is currently totals about 100 aircraft, about 75% King Air 350is, about 20 Citation Excel/XLS midsize jets and about a half dozen super midsize Citation X aircraft.
They are easy to spot by their distinctive two-tone blue cheat lines and a large white on blue UP near the top of the tail. In choosing the King Air 350i, Dichter has helped popularize turboprops in the jet card space. There are now more than a dozen providers that offer fixed-rate turboprop programs.
A master marketer, Dichter positioned the Kings as the private aviation version of a jeep, and in many ways he was right. Seating eight with a fully enclosed lav and Wifi, Dichter made the case that with 80% of domestic private flights running less than two hours of flight time, the slower turboprops were in fact not much that slower than jets.
On climb out and descent, jets throttle back their speed and when flying in congested airspace along the east and west coasts, air traffic control flows often dictate the speed you can fly anyway.
A Game Day airplane
Dichter also identified that the King Airs could get into smaller airports not accessible to jets. And with a payload of eight passengers, flying full, from a price perspective he was really competing with super midsize aircraft. In other words, he had a great airplane for those alumni trips to watch college football on fall Saturdays. After all, many universities are in small towns where you have to connect via hubs to get there. Going to watch your favorite team previously meant leaving Friday and not getting home until Sunday night. Wheels Up meant you could leave in the morning and be back at whatever time the babysitter had to go home.
Two-time Triple Crown winner
To get the word out he created a high profile sponsorship with ESPN’s GameDay, including bringing it its featured guest each week, including a live airport shot of the arrival. Other high profile partnerships include six time Super Bowl champion quarterback Tom Brady and sponsorships of the past two Triple Crown winners American Pharoah and Justify.
The big news earlier this year is two new programs – an off-fleet light jet program and a new membership level that enables joiners to share flights with existing members as well as access the on-demand charter. Coming later this year will be a fixed rate program for the Citation Xs and expansion of the light jet program nationwide from its current service area east of the Mississippi.
The Jet Cards
Wheels Up is a pay as you go program. There are now three levels:
– Wheels Up Corporate is $29,500 in the first year and $14,500 in following years
– Wheels Up Core (formerly Individual/Family) membership is $17,500 and then $8,500 per year
– Wheels Up Connect is $2,950 and then $2,500
The two main levels (Corporate and Core) get guaranteed availability and fixed one-way pricing on the King Air $($4,695 per hour plus 7.5% FET) or the Citation Excel/XLS ($7,695 per hour plus 7.5% FET). Light jets are $5,795 plus FET and must meet the same safety standards as the Wheels Up fleet.
There is no surcharge on peak days although availability is not guaranteed. You then have the option of reducing peak days by making a deposit of between $50,000 and $400,000. With the light jet program there is no guaranteed availability.
Lead-time for reservations is 24 hours on-fleet and 72 hours for the light jets, with 120 hour call-out across the board on peak days. A cancellation window of just 12 hours makes Wheels Up attractive for businesses and those of you who change plans at the last minute.
Daily and segment minimums of 60 minutes including 12 minutes of taxi time again speak to Wheels Up focus on shorter flying, although once it offers a fixed rate program for the Citation X it will have a coast-to-coast aircraft.
In the meantime the light jet fixed rate program fills a gap for fliers in the 1.5 to 3 hour range who were traveling alone or perhaps as a party of two, three or four and felt that the Excel/XLS was more aircraft than they needed.
Gama Aviation, which operates the Wheels Up, fleet checks off all the boxes earning the highest level accolades from IS-BAO (Stage 3), Argus (Platinum) and Wyvern (Wingman). Pilots are required to have at least 2,500 hours and each pilot must
an FAA Airline Transport Pilot license (the highest available). Each pilot must receive simulator-based flight training twice yearly, and both pilots must be captain qualified and type rated in the aircraft. All aircraft are always flown by two pilots, so particularly for turboprops, there is a very strong story.
Wheels Up Selling Points
– High-quality King Air 350i program
– High safety ratings for both its fleet and high off-fleet sourcing standards
– Standardized cabin configurations
– 60-minute minimums, including taxi time
– Competitive pricing for 7-8 passengers on sub 90 and 120-minute flights on the King Air 350i
– Ability to choose the aircraft that you want without interchange fees
– Guaranteed Wifi on-fleet
– 12-hour cancellation time
– Pay as you go
– Robust program of value added lifestyle partnerships and hospitality at major events such as the Super Bowl and Masters
Wheels Up Shortcomings
– No nonstop transcontinental fixed rate program until it sets pricing for the Citation X
– Light jet program is currently only east of the Mississippi and doesn’t feature guaranteed availability
– No escrow account for deposits
– Outside of specific King Air missions Wheels Up sits in the higher tier of providers from a pricing standpoint. Of course, that’s balanced by the positives, including safety standards.
Wheels Up sweet spot remains those of you who are looking for a high-quality turboprop program. With some 5,000 members, Dichter proved there was market demand. The next step will be to see if it can move forward and fill out its light jet and super-midsize offerings. In the meantime, it also announced it is looking at strategic alternatives, and while that might mean acquisitions, some in the industry believe that it could end up being acquired by the likes of Amazon or Uber, both of whom have expressed an interest in the space.