With seven analysts now following a publicly traded Wheels Up, management will be answering questions during its Q3 earnings call. The date, set earlier today, is Nov. 10.
It should provide an interesting glimpse into what is arguably an overheated market. Record demand has flight hours soaring.
However, Covid-related supply chain and labor issues impacting the broader economy are also hitting private aviation. Wheels Up is trying to counter some of that by offering its pilots equity.
The result of spiking demand has been that some membership and jet card providers have stopped taking new clients. They are unsure they can effectively fly the ones who have already bought into their programs.
While there are still around 40 providers selling fixed or capped rate jet cards and memberships with guaranteed availability – Wheels Up included, several companies have rolled out restrictions on existing members.
Restrictions include blackout days, caps on how many flights they will book on specific days, and much broader peak day acceleration and delay clauses.
Typically providers could accelerate or delay peak departures by plus or minus three hours. One provider recently extended it to the day before or after.
There are also longer lead times to book and higher prices.
However, there is still a rush by consumers to fixed-and-capped rate jet cards as dynamic pricing rises with the market.
So far, Wheels Up hasn’t made any changes.
It may be helped because it didn’t have a national program beyond its King Air fleet until 2019. Its light jet fixed-rate program was as available and just East of the Mississippi.
The current program includes everything from the King Airs to large-cabin jets. It is a matrix where lead time to book – call-outs – daily minimums, and days with guaranteed availability – vary by both how much members deposit – and where they are flying.
There are different terms for the Western U.S.
Members who deposit in the hundreds of thousands of dollars gain better terms and perks – such as deicing costs comped – than those who just sign-up for pay-as-you-go or make small deposits.
That said, in the last call, Wheels Up chairman and CEO Kenny Dichter noted the company was going to spend more to keep customers in the fold.
A survey by Private Jet Card Comparisons published in The Jet Card Report 2021 found 20% of private flyers had issues in recent months. Those that had service letdowns gave their providers negative rankings by an 8-to-1 mark.
Delays are impacting all private aviation providers. Dichter also said he would try to incent managed aircraft owners to make them available for charter more of the time.
Several Wheels Up customers tell us they’ve been enjoying upgrades recently. That may be a result of these initiatives – or just a byproduct of being one of the biggest players.
What’s happened will be on display in the Q3 financials – and surely be fodder for analyst questions.
In the Q2 call, Dichter said that nearly one-third of off-fleet flying was via guaranteed revenue programs. The GRPs entail chartering aircraft for days, weeks, and months from other operators instead of flight-by-fight.
At the beginning of the year, Wheels Up’s GRPs were negligible.
That will also be interesting to watch. Potentially, that third-party capacity is flight time other providers would also like to buy. Is Wheels Up gaining market share? That’s clearly the goal.
Since the last call, Wheels Up has been bulking up its tech quotient. Chief marketplace officer Vinayak Hegde was elevated to president and it made more tech C-suite hires.
Currently, five analysts have Wheels Up listed as a buy with two holds. Price targets range from $10 to $20.
Wheels Up closed the day at $7.18, up from its 52-week low of $6.43 but down from its high of $15.
