November 15, 2024
Wheels Up filed to move its lawsuit against FlyExclusive from Federal to State Court in New York.
The lawsuit by Wheels Up against FlyExclusive could be moving from Federal Court to State Court in New York per filings made yesterday.
Wheels Up filed to have its lawsuit, filed on July 5, to be dismissed in Federal Court.
It then refiled a mirror lawsuit in the Supreme Court of the State of New York.
At the same time, FlyExclusive is questioning the timing of the move.
The litigation Wheels Up, filed in Federal Court, was voluntarily dismissed yesterday, one day prior to the deadline for FlyExclusive to file its response. While the timing of Wheels Up’s dismissal suggests Wheels Up did not want our response to be publicly filed tomorrow the litigation Wheels Up filed remains unjustified, and we are pleased it was dismissed
– Jim Segrave, CEO, FlyExclusive
In its previous filing, Wheels Up alleged, “Without any prior notice, on the eve of the Fourth of July holiday weekend, one of the busiest private flying weekends of the year, FlyExclusive wrongfully terminated the agreement and baselessly demanded hundreds of thousands of dollars to charter flights it was already contractually obligated to complete–despite the fact that FlyExclusive retained millions of dollars in deposits provided by Wheels Up under the agreement.”
At the time of its move to move the lawsuit to New York State Court, FlyExclusive had not filed its response to the litigation.
Wheels Up is the third-largest fractional/charter operator, and FlyExclusive ranks fifth.
FlyExclusive, which only launched a jet card in 2020, had been mainly focused on the wholesale market, while Wheels Up was membership-focused, with over 12,000 member clients.
As demand for private flights surged, Wheels Up contracted with FlyExclusive to dedicate aircraft in its fleet to serve Wheels Up customers via a GRP, or Guaranteed Revenue Program.
A spokesperson for Wheels Up declined to comment on the move.
FlyExclusive CEO Jim Segrave tells Private Jet Card Comparisons, “FlyExclusive terminated its agreement with Wheels Up because Wheels Up was in default. The litigation Wheels Up, filed in Federal Court, was voluntarily dismissed yesterday, one day prior to the deadline for FlyExclusive to file its response. While the timing of Wheels Up’s dismissal suggests Wheels Up did not want our response to be publicly filed tomorrow, the litigation Wheels Up filed remains unjustified, and we are pleased it was dismissed. FlyExclusive has been told Wheels Up intends to refile charges in NY State Court. FlyExclusive will vigorously defend itself against any potential future unjustified claims made by Wheels Up.”
The move comes as Wheels Up is trying to finalize a $500 million investment from Delta Air Lines and several partners announced Aug. 15.
It would give the group a 95% stake in the New York-based flight provider, which has been under financial pressure.
It also brings an interesting dynamic.
Segrave sold Segrave Aviation to Delta Air Lines in 2010 before leaving in 2013 and subsequently founding his Kinston, North Carolina-based flight provider.
Delta became a shareholder in Wheels Up in 2020 when it agreed to sell the company its Delta Private Jets unit.
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