Wheels Up cuts EBITDA, net loss as revenue drops to $792 million

Wheels Up closed out its first full year under the stewardship of Delta Air Lines and former Delta board member George Mattson, who took the reins as CEO in October 2023.

This morning, the company released its fourth quarter and full-year 2024 financials. (The full 198-page SEC filing with Wheels Up’s full-year financials is linked at the end.)

It also announced a new CFO to replace Todd Smith.

Customers who want to see their private aviation provider succeed and detractors who continue to bash it will likely be able to analyze its financials and find fodder to support their opinions.

Wheels Up 2024 FY Financials

Detractors won’t have to look far.

Full-year revenue was down 37% from $1,253,317 to $792,104.

Net Loss decreased from $487.4 million but was still $339.6 million.

Adjusted EBITDA loss was down too.

It decreased to $117.9 million full-year from $145.9 million.

Year-over-year Q4 revenue declined from $246 million to $205 million.

Mattson attributes that drop to members trying to fly down deposits after it flirted with bankruptcy in 2023 before Delta led a $500 million rescue package.

Financial Progress

So what’s good to hear?

Mattson says the proverbial light at the end of the tunnel is, in part, a sequential gain from $194 million in Q3 2024 revenues.

It marked Wheels Up’s first quarter-to-quarter revenue gain since Q2 2022 when revenues increased to $426 million from $325 million.

“The fourth quarter was the first quarter of sequential revenue growth for Wheels Up in over two years, and I think a really important sign that we’ve stabilized the top line, and we’re starting to turn the picture in the other direction if you will,” Mattson told Private Jet Card Comparisons in an interview last night under embargo.

Mattson added, “In addition to quarter-over-quarter sequential revenue growth, we also had quarter-over-quarter and year-over-year growth in (Total) Gross Bookings.”

Private Jet Gross Bookings is the gross value of its charter brokerage business pinned to Air Partner.

GAAP accounts only include net revenues based on the margin—the retail value of the charter booking Wheels Up sold less the cost to fly the trip it pays to the operator.

Total Gross Bookings increased year-over-year in Q4 by 9% to $314 million.

Private Jet Gross Bookings—the gross third-party charter revenue fell 13% to $212 million.

Another point of progress from Wheels Up executives is the continued increase in Adjusted Contribution Margin – from 1% in Q4 of 2023 and Q1 of 2024 to 8% in Q2, 15% in Q3, and over 19% in Q4.

“Growing contribution margin by 18 percentage points on flat revenue is a pretty significant accomplishment, in our opinion,” Mattson says.

Wheels Up FY, Q4 2024 Financial Results

Source:  Wheels Up

Wheels Up may – or may not have – made good on its prediction of hitting positive Adjusted EBITDA by the end of 2024, again, depending on your half-empty, half-full perspective.

Adjusted EBITDA loss narrowed to $11.3 million from $19.9 million in Q3, $37.4 million in Q2, and $49.2 million in Q1 of 2024.

Mattson says, “December was our best month ever. We don’t disclose monthly results but were essentially breakeven in December.”

Wheels Up had $216.4 million of cash and cash equivalents and $30 million of restricted cash at year-end.

Of its $87.5 million net loss in Q4, $23 million was one-time charges.

Wheels Up operations

Mattson reeled off a string of other positive numbers, including boosting live hours per aircraft by 35% to 42 hours per month, all with its legacy fleet.

“By continuing to drive improved utility, we believe we can expand margins and deliver better returns on invested capital,” Mattson says.

He adds that by the end of 2025, 40% of its fleet will be Phenom 300s, Challenger 300s, and 350s.

READ: Wheels Up closes $332 million financing, GrandView acquisition

Wheels Up retired 50 owned and leased legacy jets and King Air 350 aircraft in 2024.

Early indications, he says, are the new types of improving reliability.

That’s a good thing.

While Flight Completion was steady at 98%, on-time performance dropped two points to 80% quarter-to-quarter and seven points year-over-year.

If Wheels Up’s future is pinned to newer aircraft and less reliance on guaranteed rate flying, Mattson says, “We continue to think there’s a role and a place for a programmatic membership offering.”

In May 2023, Wheels Up retreated from guaranteeing capped rates nationwide to cut losses.

Mattson adds, “[I]n the past (guaranteed rates were) our sole go-to-market strategy. We have a multifaceted go-to-market strategy…back to the fundamental premise of what we’re doing here. We want to meet the customer where they’re at with what they need.”

Wheels Up Block Sales by Quarter (2021-24 by Quarter)

Source:  Wheels Up

Wheels Up’s Delta Connection

The cornerstone of meeting new customers is, of course, the Delta connection.

This week, Wheels Up is relocating its New York sales office.

Executive offices moved last year to Atlanta, where Delta has its global headquarters.

Wheels Up’s new New York sales office is in the same building as Delta’s.

Delta CEO Ed Bastian has been stumping for Wheels Up, including talking to the private jet company’s members and making sales calls to the CEOs of the airline’s corporate accounts.

Last year, at the Masters, Bastian told members, “We’re just getting started.”

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

After testing a program in which Wheels Up targeted Delta One passengers flying to Naples, Italy, last summer to book ad hoc charter flights to other places in Europe, that program is now being expanded to include Delta flights to Athens, Barcelona, Nice, and Rome.

This time, after the booking is complete, Delta customers will receive a prompt and offer to book onward private jet flights.

Regarding tapping Delta’s corporate accounts, Mattson says, “The Delta Corporate Joint Sales Initiative is going very well.”

He adds, “We’re continuing to build momentum. We are continuing every month to bring in some significant customer wins on an accelerating basis.”

Mattson notes, “Corporate accounts were the largest component of our block sales and the fastest-growing segment of our block sales in Q4.”

READ: A brief history of Airlines and Private Jet partnerships

In terms of looking forward, Wheels Up sold $190 million in prepaid blocks in Q4 2024 (table above).

That’s jet card funds for future flights.

It was the best quarter of the year, up sequentially from $147 million, $145 million, and $114 million.

That said, if you want to look on the half-empty side, the jet card sales were down year-over-year from $207 million in Q4 2024.

Deferred Revenue—prepaid jet card funds yet to be used—was $749.4 million.

Wheels Up Active Members (2020-2024 by Quarter)

Source:  Wheels Up

One number that continues to drop is active members – down sequentially for the past nine quarters.

At the end of 2024, Wheels Up had 5,369 active members, down from 12,668 in Q3 2022.

Nevertheless, Wheels Up ended 2024 as North America’s fourth-largest charter/fractional operator.

Verkamp appointed CFO

Separately, Wheels Up announced John Verkamp as the new chief financial officer, effective March 31.

Verkamp comes from GE and GE Vernova.

His most recent role was CFO of GE Gas Power Global Services.

The new executive replaces Todd Smith, who departed for CVS last September.

Smith was interim CEO after founder Kenny Dichter’s departure and Mattson’s appointment.

Smith, too, was a GE veteran.

Eric Cabezas will continue to serve as the Interim Chief Financial Officer Verkamp starts.

He will continue as the Company’s Senior Vice President of Finance, a role he has held since February 2019.

Cabezas also served as Interim CFO when Smith moved to Interim CEO.

DOWNLOAD: Wheels Up 2024 Full-Year Financial Results