Wheels Up announced this morning that it has closed a deal to acquire Elkhart, Indiana-based Travel Management Company (TMC), a significant fleet operator of owned and leased light jets serving the on-demand charter market. The deal will increase the current Wheels Up fleet to 119 owned and leased aircraft. Terms of the deal were not disclosed.
For Wheels Up founder Kenny Dichter, who helped popularize jet cards by launching Marquis Jet Partners in 2001 before selling it to NetJets in 2010, the move comes after he announced in January he had hired Goldman Sachs and Bank of America to provide advice on strategic options.
Travel Management Company, TMC, or TMC Jets owns and operates a uniform fleet of 26 Hawker 400XPs, which primarily service wholesale charter customers for their on-demand and jet card private charter clients east of the Mississippi. It currently holds ARG/US Platinum, Wyvern Wingman, and IS-BAO safety ratings.
The deal comes in the frothy M&A waters of business aviation. Last year VistaJet parent Vista Global acquired XOJET and currently is working to close its purchase of JetSmarter. Last September Directional Aviation, owner of Flexjet and Sentient Jet bought PrivateFly, a tech-driven charter.
In making the announcement Dichter said, “This acquisition is a foundational piece in our continued brand evolution and mission to provide our members with a total private aviation solution, and we are thrilled to be welcoming TMC into the Wheels Up family.”
He added, “TMC and their light jet fleet are a perfect complement to our anchor partner, Gama Aviation, and their pilots, who will continue to operate the aircraft in our Wheels Up fleet and provide our members with the same high level of safety and service that they do today.”
Phil Dodyk, CEO of TMC, said, “The team at TMC is world-class, and we’re proud of the reputation we’ve earned for being one of the safest and most reliable operators in private aviation. By joining Kenny and the Wheels Up team, we’re excited to become part of such a renowned brand and a larger company that is deep with talented leadership, which shares our collective vision of building an industry leader.”
Dichter said TMC will operate as an independent subsidiary of Wheels Up and continue to provide the same service to their existing wholesale channel partners, a point he emphasized in speaking to Private Jet Card Comparisons.
Asked if there are more transactions in the pipeline, Dichter said, “It’s safe to say we’re in the deal-making mode.” He added, “Wheels Up wants to be a total provider of global private aviation solutions.”
In February, Wheels Up made news with the launch of its Wheels Up Connect Membership, which at $2,500 per year offered the ability to crowdsource flights with its individual and corporate members via a private members’ only area of its website.
It also added an off-fleet light jet fixed-rate program for members bridging the gap between its fleet of King Air 350is and midsize Citation Excel/XLSs.
According to its website, TMC’s Hawker 400XPs are all WiFi equipped and can accommodate up to seven passengers. The average manufacturing date is 2009. Data from Conklin & de Decker shows the type has a range 1,519 nautical miles with four passengers and 1,180 nautical miles fully loaded.
The deal creates several potential benefits for Wheels Up members. First, it could bring guaranteed availability in the light jet offering. If and when Wheels Up comes out with a fixed rate program for its Citation Xs, it would then mean owned fleet programs for super midsize, midsize, light jet and turboprops providing one of the most diverse offerings in the market.
TMC was launched in 2006, and at one point there was common ownership with XOJET via TPG Capital with former XOJET CEO Bradley Stewart overseeing both entities. By having an owned and leased fleet – as opposed to aircraft under management for owners – it provides extra flexibility for Wheels Up.
When Dichter announced in January he had hired outside advisors, some in the industry believed the company might be a target for Amazon, Uber, Google or some other tech entity that wanted a turnkey way to jump into the private aviation space.
In the future business aviation growth is expected to be powered by providers offering shorter and lower cost solutions with the evolution of eVTOL technology. JetSuite, which counts JetBlue and Qatar Airways as investors, is the launch customer for Zunum Aero’s hybrid electric jets that are expected to enter service as early 2022.
Dichter has long sought to democratize private aviation travel, and picking up 26 light jets potentially provides opportunities for Wheels Up Connect members more interested in sharing flights than booking full aircraft charters.
Current Wheels Up hourly pricing, excluding 7.5% Federal Excise Tax, is $4,695 on King Air 350i $7,695 per hour on Citation Excel/XLS; and $5,795 per hour on light jets. On its fleet lead time for reservations is 24 hours, and deicing is included.
