Targeting EBITDA profits in 2024, Wheels Up is cutting $30 million in employee costs, excluding pilots, frontline maintenance, and other customer-facing roles.
In an email sent this afternoon to employees and a follow-up 8-k filing, Wheels Up said it will cut annual employee expenses by $30 million.
The cuts are part of its previously announced plan to be EBITDA-profitable by 2024.
Full-year 2022 revenues are expected to fall between $1.55-$1.58 billion.
The employee letter came from Wheels Up Chairman and CEO Kenny Dichter.
According to its 8-k filing, “The plan is intended to streamline the company’s organization and reduce headcount in areas of the business that do not directly impact the company’s operations or its customers’ experience. Excluded from these actions were key operationally focused employee groups such as pilots, maintenance, and operations-support personnel.”
Wheels Up “will incur approximately $14 million in total pre-tax charges in connection with the plan, approximately $7 million of which were incurred to date and in connection with the Q4 Actions, and approximately $7 million of which are expected to be substantially incurred by the end of the first quarter of 2023,” according to the 8-k.
Charges primarily relate to severance payments, employee benefits, and share-based compensation.
Wheels Up expects that approximately $8 million to $9 million of total pre-tax charges under the plan will be in the form of one-time cash expenditures, approximately $2 million of which were incurred to date and in connection with the Q4 actions.
The remainder will be incurred in the future.
No details were provided on how many employees will be affected. The company, including subsidiaries, has around 2,800 employees worldwide.
He also said there are no changes to membership agreements as part of the announcement.
Wheels Up is the third-largest operator in the U.S. based on charter and fractional flight hours. As of its Q3 results, it had 12,688 active members.
Wheels Up will announce its Q4 results on March 9.