In 2017, Wheels Up continued its prolific fundraising. In 2018 it’s expanding its reach with a Citation X fleet. Now it confirms an IPO may be on the way.
Kenny Dichter, the founder and CEO of Wheels Up, has carved a preeminent spot for himself in the world of business aviation. In 2001 he approached then NetJets Chairman and CEO Richard Santulli with the idea he would buy shares in aircraft from the Warren Buffett owned fractional aircraft operator and then resell them in 25-hour chunks as jet cards. At the time, there was just a handful of players in that young jet card segment. Fractional shares start at 50 hours, so the idea was that Marquis Jet Partners would act as an entry point funneling customers to NetJets as their private flying increased. It did, but it also opened up a new market – affluent individuals and companies that didn’t want to commit to the then five-year contracts that fractional ownership entailed or didn’t anticipate needing 50 hours. It was easy. When you went through your 25 hours, you would call up and buy 25 more hours. There were no monthly management fees. When you flew, you paid.
Jet cards are the easy way to charter private aircraft. With programs starting at five hours and ranging to over 100 hours, a jet card is as close as you can get to Uber for private jets
After the Great Recession, individuals and companies were less interested in committing to either buy new planes or the three to five years fractional ownership entails. Some companies wanted to keep their private travel habits off their financial statements while in other cases as business picked up they needed some additional lift but didn’t want to add another aircraft to their fleet. Like cars in a driveway, for families, one isn’t enough, and many jet card program allow multiple same time usage. Problem solved!
If you aren’t sure you will need 25 hours over the next two years these programs, which start at five hours and $15,000, are an alternative to on-demand private jet charter
Jet cards are the hot spot of private aviation bridging the gap between on-demand charter and fractional or full aircraft ownership. Jet cards make flying easy with one call or some taps on your smartphone to arrange your flight. Many programs have guaranteed availability with one-way fixed rates so you know what you will be paying ahead of the time. You also don’t have to pay for positioning flights. Lead time to make a reservation can be as little as eight hours and unlike charter, you may be able to cancel within hours of your flight with no penalty.
Goodbye free empty legs and shared flights. JetSmarter 2.0 is a very different but potentially appealing proposition. Will there be a jet card in its future?
JetSmarter’s CEO and founder Sergey Petrossov might debate using the word evolution and certainly feels criticism, including from this reporter, has been unfair. Whether or not the appraisals have been correct is probably one of those YMMV type things. Either way, what’s clear to me is that JetSmarter today and even more so a year from now will be very different than when it took flight in 2013. Back then, you paid a membership fee and then indulged in free seats on shuttles that JetSmarter scheduled. There were also free empty legs where you got the entire plane for as many friends as it could fit. For aspiring private travelers, it was like being a kid in an all you can eat candy store.
Following re-launching and expanding its jet cards, the operator and broker is also planning to add new private jets in 2018
XOJET is planning to add “three or four aircraft” to its fleet of 41 Challenger 300s and Citations Xs, according to an interview in Aviation International News.