Wheels Up is going public via a SPAC. It’s provides a rare look into the world of private jet companies, which are either privately held or subsidiaries of large publicly traded companies, with limited public data.
SEC filings and presentations posted by SPAC partner Aspirational Consumer Lifestyle Corp. on its website show the popular private jet company plans to continue its fast growth. That includes international expansion, entering into luxury lodging, yachts, and even credit cards and financial services. It teases the possibility that a Wheels Up co-branded credit card might be in the offing. It also appears that non-members will eventually book private flights via its app.
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Live flight legs for Wheels Up increased from 33,333 in 2018 to 44,579 last year, are expected to grow to 54,704 this year and 105,045 by 2025.
In terms of meat and potatoes, the various filings show Wheels Up’s revenue grew from $332 million in 2018, more than doubling to $690 million last year (see Wheel Up Total Revenue by Year below). It also underscores the powerful impact of COVID-19 on private jet companies. Its annualized run-rate for the second half of 2020 was $802 million.
For the bottom line, Wheels Up expects a $29 million loss this year, down from $53 million last year. It projects to get into the black with an EBITDA of $8 million in 2022, growing profits to $201 million by 2025.
|Year||Total Revenue |
|2018 – Actual||$ 332||($ 14)|
|2019 – Actual||$ 385||($ 21)|
|2020 – Estimated||$ 690||($ 53)|
|2021 – Estimated||$ 912||($ 29)|
|2022 – Estimated||$ 1,140||$ 8|
|2023 – Estimated||$ 1,407||$ 58|
|2024 – Estimated||$ 1,735||$ 120|
|2025 – Estimated||$ 2,137||$ 201|
Below are more highlights from the Aspirational’s filings and postings.
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There are 170 leased and owned aircraft and 160 managed aircraft under operational control.
Europe, Middle East, Asia Pacific, and South America
Its Avianis flight management platform is apparently what SABRE was to American Airlines. In addition to a dynamic pricing engine, it offers “highly granular” inventory management. While increasing industrywide fleet utilization has long been an objective, Avianis gives Wheels Up a “high fidelity” understanding of what’s bookable by integrating aircraft-specific data and crew availability. It also promises to make booking a flight more efficient. The traditional analog process has over 20 touchpoints.
There are over 100 ambassadors. Its most notable advocates bring over 100 million followers on social media.
It’s no secret the company has been beefing up its C-suite readying for the transition to being publicly traded.
Q: What is Aspirational Consumer Lifestyle Corp. (“Aspirational”)?
A. Aspirational is a Special Purpose Acquisition Company (SPAC) formed for the purpose of acquiring a business in the aspirational lifestyle space.
Q: Why is Wheels Up combining with Aspirational?
A. Wheels Up will be combining with Aspirational to provide capital for Wheels Up to accelerate marketplace growth and adoption, invest in adjacent lifestyle and consumer services to complement the platform, and drive global expansion. Wheels Up is also combining with Aspirational to enable Wheels Up to become a public company. Following the close of the transaction, Wheels Up will be listed on the New York Stock Exchange.
Q: When will the business combination with Aspirational close?
A. We expect to close the business combination with Aspirational in Q2 2021.
Q: What is Aspirational’s ticker today?
A. The ticker for Aspirational’s Class A ordinary shares is NYSE: ASPL.
Q: What will the ticker be after the business combination closes?
A. After the transaction closes, the ticker for the Class A common stock of the combined company will be NYSE: UP.
Q: What will be the name of the company after the business combination?
A. Following the close of the transaction, the Company’s legal name will be Wheels Up Experience Inc. It will continue to do business as Wheels Up.
Q: What was the implied enterprise value of Wheels Up when it announced the business combination with Aspirational?
A. The implied enterprise value of Wheels Up at the time of the transaction announcement was approximately $2.1 billion.
Q: What was the implied post-combination equity value of Wheels Up when it announced the business combination with Aspirational?
A. The implied post-combination equity value of Wheels Up at the time of the transaction announcement, based on a price of $10.00 per share immediately following the closing of the transaction, was approximately $2.7 billion.
Q: At what stock price will the transaction be consummated?
A. The business combination was valued based on a price of $10.00 per share. Aspirational’s Class A ordinary shares are currently listed on the NYSE. Still, the price of such shares at the time of the transaction’s closing will not impact the aggregate merger consideration payable to Wheels Up equity holders.
Q: Will Wheels Up raise additional capital in the merger?
A. Yes, Aspirational and Wheels Up are expected to raise $550 million in a fully committed private placement (“PIPE”) at $10.00 per share from institutional investors including T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point, Luxor Capital, and Monashee, among others. The PIPE is subject to customary closing conditions, including the completion of the business combination. In addition to the net proceeds of the amount raised in the PIPE, Wheels Up will retain up to $240 million of cash from Aspirational’s trust account following the transaction, net of any redemptions. Aspirational raised the cash in the trust account in connection with its initial public offering in September 2020.
Q: If I purchase an Aspirational Class A ordinary share, how many shares of Wheels Up will I receive at the close of the transaction?
A. Each Aspirational Class A ordinary share (NYSE: ASPL) will automatically represent one share of Wheels Up (NYSE: UP) at the close of the business combination.
Q: Who will be the management team of Wheels Up post combination?
A. The current Wheels Up management team will continue to run the business post combination.
Q: How will Aspirational be involved with the business post-close?
A. Aspirational’s Chairman and Chief Executive Officer, Ravi Thakran, former Group Chairman of LVMH South and Southeast Asia, and Australia / New Zealand and former Managing Partner of L Catterton Asia, will join the combined company’s Board of Directors upon completion of the transaction. An Aspirational board observer will also be approved, to be determined by Ravi Thakran and Kenny Dichter.
Q: There are three different types of Aspirational securities traded on NYSE. If I want to own Wheels Up common stock eventually, which Aspirational shares should I buy?
A. Aspirational currently has three types of securities outstanding. Common shares trade under ASPL. Warrants trade under ASPL WS. Units (each consisting of one common share and one-third of one warrant) trade under ASPL.U. Both the warrants and common shares will remain outstanding following the completion of the transaction. The ticker of the common shares will change to UP, and the ticker of the warrants will change to UP WS. At the closing, each unit that has not been previously separated will automatically separate into its components and convert into one share of combined company common stock and one-third of one combined company warrant.
Q: If I have 1,000 Aspirational warrants, will I have the right to buy 1,000 shares of UP stock at $11.50?
A. Yes. The warrants that trade under the ticker ASPL WS will remain outstanding following the transaction and trade under a new ticker, UP WS. Each warrant has a 5 year exercise period beginning on the date that is the later of September 25, 2021, or 30 days after the closing date of the transaction, and is exercisable into one share at an $11.50 exercise price.
Q: If I own 1,000 Aspirational units, how many shares of UP after the closing do I have a right to buy?
A. Each unit consists of one share of common stock and one-third of one warrant. After the business combination’s closing, you would own 1,000 shares of UP common stock and 333 UP WS warrants. These warrants would have the same terms as described in the question above.
Q: What percentage ownership in Wheels Up will the SPAC shares in Aspirational receive?
A. Assuming no redemptions, public Aspirational shareholders will own approximately 9%, and the Aspirational sponsor will own approximately 2% of the combined company.
Q: How do I buy shares in Wheels Up’s IPO?
A. Wheels Up plans to become a public company through the business combination with Aspirational rather than an IPO. As noted above, holders of ASPL shares will own shares in Wheels Up following the closing of the business combination.