A Wheels Up lawsuit alleging FlyExclusive wrongly terminated a contract to provide flights for its customers was dismissed without prejudice.
The 2023 lawsuit by Wheels Up against FlyExclusive is done, at least for the moment.
The lawsuit was dismissed without prejudice.
Being dismissed without prejudice means Wheels Up can refile the lawsuit.
In the ruling, the Supreme Court of the State of New York, County of New York, held that the court lacked jurisdiction.
The ruling noted that FlyExclusive was not formed in New York.
It is based in North Carolina.
It also noted the private jet flight provider doesn’t maintain an office there.
Wheels Up has since moved its corporate headquarters to Atlanta.
The original lawsuit was filed in July 2023.
The litigation matches the fourth- and fifth-largest U.S. private jet operators based on charter and fractional flight hours.
Wheels Up filed the lawsuit after FlyExclusive terminated an agreement to provide guaranteed flights for its members.
In its 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–even though FlyExclusive retained millions of dollars in deposits provided by Wheels Up under the agreement.’
According to FlyExclusive’s financial filings at the time, Wheels Up initially paid $37.5 million in deposits to secure access to the aircraft.
The agreement was to last through March 1, 2024, with an initial 18-month period followed by a 10-month drawdown period.
The deal was referred to as a guaranteed revenue program or GRP.
It came as demand, spurred by Covid, was spiking to record levels in 2021 and 2022.
As Wheels Up was buying operators, it still needed more capacity to handle the flights it had guaranteed to members.
At the same time, FlyExclusive had one of the industry’s largest fleets.
It was transitioning from a purely wholesale model, enabling it to dedicate a portion of its fleet to fly Wheels Up customers via the GRP.
The original lawsuit was filed in federal court.
However, in August 2023, Wheels Up successfully had the case moved to the New York State Court.
At the time, FlyExclusive CEO Jim Segrave told Private Jet Card Comparisons, “FlyExclusive terminated its agreement with Wheels Up because Wheels Up was in default.”
Spokespersons for both FlyExclusive and Wheels Up declined to comment.
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