A sale-leaseback deal for three Challenger 300s and seven Phenom 300s will bring $105 million to Wheels Up which will be tapped for expansion.
Wheels Up has entered into a sale-leaseback transaction with an institutional capital provider for a portion of its newly acquired Phenom and Challenger fleets.
The Delta Air Lines-backed flight provider said the move supports its fleet modernization strategy.
The sale-leaseback agreement covers three Challenger 300s and seven Phenom 300s.
Proceeds are expected to be used to repay approximately $65 million of the outstanding debt under its revolving equipment notes facility.
Approximately $40 million in cash net proceeds will be added to the company’s balance sheet.
The cash proceeds and incremental borrowing capacity unlocked by the transaction are expected to support more aircraft acquisitions.
An SEC filing identified UMB Bank NA, “not in its individual capacity but solely as owner trustee.”
Per the filing:
‘The company expects that the transactions will close on or before December 31, 2025. Subject to the terms and conditions of the APA, the aggregate sale price for the leased aircraft is expected to be approximately $104.7 million. Upon closing, the company expects the sales will result in the funding of up to approximately $39.4 million of cash net proceeds, after related debt repayments, to the company’s balance sheet, which are expected to be used for the planned acquisition of additional Bombardier Challenger 300 series and Embraer Phenom 300 series aircraft. In addition, the anticipated debt principal repayments of approximately $65.0 million in the aggregate under the company’s Revolving Equipment Notes Facility upon closing of the sales would become available to be reborrowed in the future to finance such aircraft acquisitions, subject to certain terms and conditions. The APA contains representations, warranties and covenants by WUP LLC and buyer, as well as closing conditions, that are customary for transactions of this type, which were made solely for the benefit of the parties thereto.’
Wheels Up said it will continue to operate the aircraft normally under the long-term lease.
The private jets have or will be painted, branded, and refurbished to Wheels Up specifications.
HDX satellite WiFi, consistent with previously announced plans, will be installed.
Wheels Up said it has acquired or entered into definitive agreements for 10 additional Challenger and Phenom aircraft in the fourth quarter.
CEO George Mattson says, “The actions we are announcing today reflect disciplined, intentional execution of our transformation strategy.”
Mattson adds, “The sale-leaseback agreement further validates our strategy via the partnership of a sophisticated financial institution, balances our mix of owned and leased aircraft, and supports recent and future sustainable growth by providing additional capacity to continue executing our fleet plan in 2026.”
Separately, its first Phenom 300, equipped with the Gogo Galileo HDX satellite WiFi system, has officially entered service.
Plans call for a fleet-wide upgrade to next-generation Gogo Galileo connectivity.
Gogo Galileo HDX delivers enhanced performance.
It uses high bandwidth, low latency, global coverage, and support for live streaming and voice telephony.
Mattson said, “Both corporate and leisure private aviation travelers expect high speed, seamless connectivity wherever they fly.”
He continued, “Following FAA approval of the HDX system on the Phenom, we are delighted that Wheels Up’s first Galileo HDX-equipped aircraft has entered service.”
The first HDX-equipped Challenger aircraft is expected in early 2026.
Last week, Wheels Up received a non-compliance notice from the New York Stock Exchange.
The notice came after its stock traded below one dollar for 30 consecutive trading days.
It is the second time this year that has happened.
Wheels Up said it could execute a reverse stock split to correct the deficiency.
The notice did not impact any of its financial agreements, it said.
UP begins the day at 64 cents.
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