Speaking on Dow Jones Marketwatch, Wheels Up’s Kenny Dichter says he thinks “when business travel and traditional vacation come back online, you may see 125%, 150% sort of demand levels.”
The Wheels Up CEO and founder told host Ellie Ismalidou that the rebound was coming after a deep dive during the initial lockdowns last year. “In early March, when the country and the world shut down, demand for private aviation, although we’ve kept all of our pilots and our airplanes in place to deliver, it contracted by 75%, 80%. And that contraction lasted all of March, all of April, into early May.”
The rebound, however, was non-traditional. “When we began to see demand come back,” Dichter told Yahoo, continuing, “By the summertime, we were seeing 70%, 80% of normalized demand happening. What was interesting about it, it was all people moving around (between their homes). There wasn’t any traditional vacation travel or business travel.”
By the fourth quarter, he said demand was on par with 2019, and now it seems the sky’s the limit. “What we’re seeing today is things are coming back as private aviation is as busy, demand is as robust as it’s ever been.”
Dichter also noted a common misperception is that private aviation users only fly privately. He said, while Wheels Up members often use the airlines to fly to Europe, Asia, and even coast-to-coast, the sweet spot for “democratization” is short-haul flights.
“When you think about it by the seat, If you’re flying from New York City to Nantucket and you think about eight people on a King Air 350i, you’re talking about $700, $800 per seat, depending upon when and where. That’s affordable for many people,” he noted.
After snapping up four of the 10 largest charter operators in the U.S. and digital platform Avianis, plus launching aircraft management and whole aircraft sales unit to go along with his guaranteed availability charter membership and entry-level Connect membership, focused on jet-sharing, Wheels Up is now “the everything store of private aviation.”
He says the next frontier is applying technology. “Nobody’s ever put together a digital marketplace where you’re going to have real-time assets and real-time availability. I think about companies like Booking.com or HotelTonight, which really have become incredible efficiency tools for the operators. And when you have a software like that, that you can– think about OpenTable, that you can give to the restaurants to allow people to see when a table is available for reservation. We’re just doing that for private aviation. It’s about a two-sided marketplace connecting millions of people and tens of thousands of aircraft in real-time.”
Wheels Up plans be publicly traded via a SPAC, possibly as early as this month.