Airshare closes acquisition of Wheels Up management business

Kansas City-based Airshare adds 90 private jets to its fleet as Wheels Up affirms it will continue as an operator.

By Doug Gollan, October 2, 2023

Airshare has set the stage for national expansion following its acquisition of Wheels Up’s private jet management arm. At the same time, Wheels Up is refuting rumors it intends to move from an operator to a broker model.

The deal, announced in early August, closed Saturday night, according to executives of both companies.

Through June, Airshare ranked as the 11th-largest private jet operator in the U.S. based on fractional and charter flight hours. Wheels Up was fourth, according to data from Argus TraqPak.

The deal brings about 90 managed aircraft into the Airshare fold, with about one-third on a Part 135 certificate and the remainder under Part 91.

Part 135 rules allow the aircraft to be offered for charter in addition to their owners’ use.

Airshare already had 34 managed aircraft in addition to its fractional fleet.

Its existing fractional fleet features eight Challenger 350/3500s, 12 Phenom 300s, and a pair of Phenom 100s exiting the fleet.

About 300 personnel will move from Wheels Up to Airshare as part of the deal.

No significant facilities are coming over.

However, Airshare CEO John Owen says the company will look for clusters of managed aircraft where it would make sense.

What’s next for Airshare?

After expanding its fractional primary service area to Florida earlier this year, Owen tells Private Jet Card Comparisons the national scope of the managed aircraft it acquired gives it a platform to continue its growth.

What’s not changing is any new jet card or charter programs.

Owen says in addition to Airshare’s current jet card and fractional offerings on the Phenom 300 and Challengers, there are no plans to add new membership programs to support charter on the newly acquired managed aircraft.

Airshare expects to meet the charter revenue needs of aircraft owners via retail and wholesale demand it already has.

However, Owen doesn’t discount more M&A activity.

“It’s just like everything else. We are extremely diligent and picky. We feel we’ve built a great set of offerings and don’t want growth for growth’s sake,” Owen said during an interview.

Asked if there were any plans to follow Wheels Up, Blade, Surf Air, Jet Token, SetJet, FlyExclusive, and Volato with an IPO, Owen told us, “Zero.”

Owen says there is no additional agreement as part of the sale to use the newly acquired managed fleet for Wheels Up members.

Airshare is already one of Wheels Up’s vetted third-party operators

Wheels Up affirms operator plans

After the deal, Wheels Up will still have a formidable presence.

According to recent SEC filings, it has 215 owned and leased aircraft, including 75 King Air 350s.

There are also 52 super midsize jets, primarily Citation Xs, 61 light jets, mainly Citation CJ3s and Hawker 400XPs, and 25 midsize jets.

Following the new $500 million led Delta Air Lines investment, Smith also denied rumors that Wheels Up plans to get out of the business of operating aircraft as it looks to reach profitability.

Speculation was Delta would change Wheels Up to a pure broker model.

However, as part of this weekend’s transaction, some of its owned and leased aircraft will be operated temporarily under the certificate Airshare is acquiring until they can be moved back to Wheels Up-owned certificates.

Smith tells Private Jet Card Comparisons, “Wheels Up is not selling its owned aircraft fleet (called 1P) to Airshare. Similar to operations prior to Wheels Up acquiring its operating certificates, some of the 1P aircraft will continue to be operated by Circadian Aviation (the operating certificate Airshare is acquiring) on a temporary basis. Wheels Up Partners LLC will continue to own those aircraft, subject to any strategic aircraft sales as we continue to pursue our fleet optimization strategy.”

He added, “The 1P aircraft will be moved off of the Circadian Aviation certificate over the next few months (and back to a Wheel Up-owned operating certificate).”

Circadian Aviation is the renamed Gama Aviation Signature certificate that Wheels Up acquired in March 2020.

Before it acquired TMC Jets in 2019, Wheels Up did not operate the 80-plus aircraft it owned and leased.

Instead, Gama Aviation Signature was the third-party operator of that fleet, with Wheels Up functioning as a sales and marketing company.

Last week, Wheels Up affirmed it continues to honor the pre-May 9, 2023 agreements of members for flying in the pre-June 26, 2023, reduced primary service area where guaranteed capped hourly rates apply.

Those impacted members continue to fly in the legacy PSA under the terms they signed up for during their rate lock, or their pre-May 9th funds expire, whichever comes first.

Both companies declined to disclose financial terms, although the total price is understood to be under $25 million.

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