Wheels Up to continue taking new customers

By Doug Gollan, October 12, 2021

While NetJets, Sentient and Jet Linx have halted accepting new customers amid record demand, Wheels Up is confident it has the ability to accommodate growth

Wheels Up has no plans to halt selling new memberships. That’s as record demand has led several other leading jet card and membership providers to pull back.

We’re highly confident we can add members and service existing customers

-Kenny Dichter, Chairman and CEO of Wheels Up

Speaking during the National Business Aviation Association annual conference here in Las Vegas, Wheels Up chairman and CEO Kenny Dichter told press conference attendees, “We’re carefully watching the market, but we’re highly confident we can add members and service existing customers.”

Competitors halt new customer sales

A variety of brokers and operators, including key players NetJets, Sentient Jet, Executive Jet Management, Jet Linx, and most recently Priester Aviation, have stopped taking new jet card customers or halted sales entirely. Broker Air Partner recently imposed over 30 blackout days for its fixed rates during the upcoming holidays.

The various moves come as more private flyers seek shelter from spiking on-demand charter prices. They are turning to fixed or capped rate jet cards offering guaranteed availability.

Wheels Up is in a dead heat for second place on our list of the 30 largest operators. The rankings are based on combined fractional and charter flight hours. This list, based on Argus Traqpak data, doesn’t consider off-fleet bookings.

At the same time, the industry has been battling a variety of issues causing delays, cancelations, and other service snafus.

Dichter says Wheels Up is in a unique position to meet demand with three sources of aircraft. It has about 180 airplanes it owns or leases, around 165 under management, and over 1,000 it charters through third-party operators.

Wheels Up’s newly appointed president Vinayak Hegde says technology is giving it the ability to accurately predict demand not only days but weeks ahead. That enables the company to then to buyout aircraft from other operators for days and weeks at a time through its Guaranteed Rate Programs.

Dichter told the media for charter operators, “We want to be the buyer of first resort.”

A rush to fixed-rate jet cards

Several small and middle-sized brokers say inventory is being snapped up by Wheels Up and other major players like NetJets and Sentient Jet. The big players are seeking to ensure they have the capacity to fly their customers when they call.

At the same time, the limited availability of aircraft for on-demand charter has meant spiking prices. A recent Private Jet Card Comparisons analysis of one-way flights found jet card pricing beating the spot market in 25 of 30 scenarios.

That in turn has meant private flyers who typically book private flights on a one-off basis have been flocking to guaranteed availability, fixed-rate programs as a hedge.

Buying up charter capacity

During its second-quarter conference call Dichter told analysts for its off-fleet flying, GRPs had risen to over one-third of capacity. That’s up from close to zero at the beginning of the year.

Dichter also told analysts, “We have made the strategic decision to invest in the growth of our business while some industry participants are pulling back. This gives us even more conviction and confidence to pull forward.”

While Dichter declined to discuss details, Wheels Up may have an advantage over other fixed or capped rate programs via program structure, in addition to its sourcing

Until 2018, Wheels Up only had a limited fixed-rate program. It expanded its light program nationally and added super mid, and large cabin programs in 2019. It also introduced a seemingly complicated grid of terms and conditions.

Call-outs for guaranteed availability vary not only by category, but the region of the country and how much you deposit. It’s the same with daily minimums. The number of peak days and days with guaranteed availability also varies by deposit amount.

Most national programs offer the same terms and conditions no matter where you are flying or how much you deposit. Generally, the big difference based on how much you deposit is the hourly rate.

By not having standard terms, Wheels Up conceivably is somewhat more sheltered than competitors.

Wheels Up’s app

On a separate note, a variety of enhancements to the Wheels Up app are coming – both consumer-facing and behind-the-scenes.

Amazon veteran Hegde who joined the company in May says the moves will improve the experience and increase buying.

He points to discounted East Coast to Western U.S. discount rates as an example. He says it currently it takes three clicks to find them. Soon you will be able to access them with one click.

Hegde, who helped launch Amazon Prime tells Private Jet Card Comparisons by simply aligning offers on pages where customers had the intent and wanted the benefits being offered, the online behemoth was able to generate conversions without expensive advertising.

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