Wheels Up sets Q4 earnings release

Will Wheels Up hit positive Adjusted EBITDA in Q4 of 2024?

Since mid-2023, Wheels Up has been targeting positive Adjusted EBITDA by the end of last year.

In its Q3 2024 earnings call, executives also forecast positive Adjusted EBITDA for all of 2025.

Today, Wheels Up announced it would release financial results for Q4 and full year 2024 on March 11, 2025.

It will mark the first full year of results under George Mattson as CEO.

Mattson was a long-time Goldman Sachs executive and then a tenured board director at Delta Air Lines.

Mattson became Wheels Up’s second non-interim CEO, replacing founder Kenny Dichter in September 2023.

CFO Todd Smith served as interim CEO after Dichter stepped in May 2023 amid bankruptcy reports.

Surviving The Storm

Under Todd Smith (who left last year to take a CFO role at CVS), Wheels Up retreated from its nationwide primary service area in 2023, which guarantees capped hourly rates.

The reduced PSA was designed to cut losses.

The concept was to eliminate longer non-revenue generating repositioning flights to large Midwest and Pacific Northwest swaths.

Wheels Up would focus its guaranteed rate programs on the denser populations of the Eastern U.S., California, Arizona, Nevada, Colorado, and busy mountain resorts.

READ: You’re fired! Are you an unprofitable private jet flyer?

Wheels Up also wanted to improve service by reducing recovery time to get members a replacement aircraft when there was a mechanical.

While Wheels Up would still serve those customers, it would not provide the capped hourly rates that jet card flyers generally want, which is a core reason why flyers pay hundreds of thousands of dollars in advance for future flights.

Wheels Up would also rely more on its charter brokerage team at Air Partner to handle out-of-program on-demand bookings.

Another key was that Wheels Up would not lose money when flying guaranteed member flights off-fleet.

In June 2023, Smith told a business aviation conference, “More importantly, a year ago, we often found ourselves, because of the shortage of availability within our own fleet, going out into the spot market and having to charter a plane that was above the rate we were charging our members.”

He said, “Now we see that third-party flying at a profitable margin relative to a year ago, where it was not. That has improved for us as a result of the supply-demand balance that has returned to the market.”

Smith later noted as Covid office and school shutdowns ebbed, members returned to more traditional flight patterns.

That meant insufficient capacity was on Thursdays, Fridays, and Sundays, while pilots and airplanes sat idle on Tuesdays and Wednesdays.

Of course, a key to future success has been touted as a stronger relationship with Delta Air Lines, which led the $500 million investment package in August 2023.

READ: A brief history of Airlines and Private Jet partnerships

Early Results

In terms of service, our annual subscriber survey conducted July through September showed that many of the changes initiated under Dichter and current COO Dave Holtz and memorialized under Mattson seem to be paying off.

That includes opening a centralized operations center in Atlanta in 2023.

Holtz says a large part of the operational issues were caused by trying to operate and merge six newly acquired operators during Covid restrictions and pilot shortages, each with their own operations centers and systems, and all as membership surged to record levels.

What impacted competitors impacted Wheels Up six-fold.

According to our subscriber survey, the percentage of Wheels Up members who rate the service as Excellent/Very Good rebounded to 72.3% in 2024, a nearly 50% improvement year over year.

If you include Average ratings, Wheels Up stood at 87.7%

That aligns with the overall industry, which scored 73.3% in Excellent/Very Good ratings and 86.5% if you add in Average rankings.

Wheels Up scored 76.5% Excellent/Very Good ratings and 86.3% Average in 2021 before experiencing turbulence.

We also saw Flight Delays/Changes/Cancellations as a reason to leave Wheels Up, dropping from 48.4% in 2023 to 24.2% last year.

In terms of transparency, one of Mattson’s first moves was to publish on-time and flight completion numbers, challenging competitors to follow suit.

However, like its competitors (64.5% overall), Increased Prices (57.6%) is now the top reason current Wheels Up members are considering an exit, up from 27.4% in 2023.

Wheels Up ended its long-flight capped rate discounts last year, although it is often a price leader.

This morning, we found Van Nuys to Teterboro Airport for multiple dates in March on a super-midsize jet all-in for $30,461.42.

On other dates, the price was around $50,000.

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Wheels Up Q3 FinancialSummary

Wheels Up cut its Q3 2024 net loss to $57.7 million from $144.8 million, while Adjusted EBITDA loss ticked up from $18.5 million to $19.9 million despite revenue declining from $320.1 million to $193.9 million.

Through the first nine months, revenue fell from $981.6 million last year to $587.3 million.

Net loss declined to $252.1 million from $406.3 million for the first three quarters.

Adjusted EBITA loss was essentially flat, down slightly from $107.7 million to $106.6 million.

Wheels Up executives pointed to a sequential drop in Adjusted EBITDA loss, down from negative $37 million in Q2 and a negative $49 million result in Q1.

“After seven consecutive quarters of revenue contraction leading into 2024, the intentional improvements we have made to our business over the last year have stabilized our top line, expanded margins to record levels, and positioned us for growth,” said CEO George Mattson on the earnings call back on Nov. 7, 2024.

READ: Private jet provider financial stability – what you said

What’s Next for Wheels Up?

Besides financial results, on-time performance and flight completion data should be updated.

The completion percentage slipped slightly to 98% in Q3 2024. On-time performance also dipped to 82%, below its target of 85%.

There could also be updates on its fleet revamp after the GrandView acquisition.

Wheels Up said it is moving to the Phenom 300 platform to satisfy the light jet-midsize jet market.

It is then replacing its mainly Citation X super-midsize fleet with stand-up cabin Challenger 300 and 350s.

Both the Phenoms and Challengers are considered premium offerings.

After selling its aircraft management operators to Airshare, Wheels Up saw on-fleet flight hours drop 24.7% last year.

That was still good enough to remain the fourth-largest charter/fractional operator in the U.S.

Also, how is the Delta connection doing?

In their Q3 2024 call, executives said Delta accounts represented the highest mix of overall block sales in September.

How are block sales – prepaid jet card fund sales doing?

In Q3, Wheels Up sold $147 million in block sales, nearly doubling its year-over-year total.

It also went up sequentially from $145 million in Q2.

In Q4 of 2023, after Delta stepped in to back Wheels Up, jet card fund sales surged to $207 million, which will be the number to measure against.

Where is the current membership count?

Wheels Up reported 6,669 active members at the end of Q3 2024.

That continued a steady decline since its peak of 12,668 in Q3 of 2022.

One person who has remained bullish on Wheels Up despite the ups and downs is Delta CEO Ed Bastian.

At Delta’s most recent Investor Day conference, he told analysts who cover the airline, “In the next couple of years, I think you’re going to see (Wheels Up) grow meaningfully, and I think you’re going to see a lot of value that we’re creating, not just for our business, but potentially as owners.”

READ: Q&A with Delta CEO Ed Bastian, Wheels Up CEO George Mattson