Wheels Up Experience Inc. Reports Third Quarter 2024 Results

Wheels Up Experience Inc., a leading provider of on-demand private aviation in the U.S., has released its financial results for the third quarter ending September 30, 2024. The company has been focusing on stabilizing its financial performance through various strategic initiatives, including fleet modernization and operational efficiency improvements.

Financial Highlights

For the third quarter of 2024, Wheels Up reported:

• Revenue of $194 million, consistent with the first and second quarters of 2024 but down year-over-year due to the sale of non-core businesses and a focus on profitable flying.
• Adjusted Contribution Margin reached 14.8%, the highest since becoming a public company, showing a year-over-year increase of 380 basis points and a sequential increase of 700 basis points.
• Net loss improved to $58 million, a significant improvement of $87 million year-over-year and $39 million sequentially.
• Adjusted EBITDA loss was $20 million, an improvement of $17 million sequentially but slightly worse year-over-year due to lower revenues.
• Net cash used in operating activities improved to an outflow of $15 million, a 94% improvement compared to $250 million last year.

Business and Operational Highlights

Wheels Up has been actively working on several initiatives to enhance its operational performance:

• Announced a fleet modernization strategy, replacing its existing jet fleet with Embraer’s Phenom 300 series and Bombardier’s Challenger 300 series aircraft.
• Plans to acquire the GrandView Aviation fleet of 17 Phenom 300 and 300E aircraft, positioning Wheels Up as the largest on-demand charter operator of Phenom 300 series aircraft globally.
• Agreed to sell all 13 owned Citation X aircraft, with plans to lease a portion of the sold aircraft and amend existing leases to ease the transition to the Challenger 300 series.
• Secured a $332 million commitment from Bank of America for a new senior secured revolving credit facility, with credit support from Delta Air Lines.

Strategic Initiatives and Corporate Developments

Wheels Up has undertaken several strategic initiatives to strengthen its financial position and operational capabilities:

• The new credit facility is expected to enhance access to capital and bolster liquidity, facilitating the fleet modernization plan and business scaling.
• Anticipated funding from the new facility will be used to acquire the GrandView Aviation fleet, refinance existing aircraft debt, and provide a funding source for future aircraft acquisitions.
• Signed a letter of intent to equip the new Phenom and Challenger aircraft with Gogo’s Galileo HDX satellite-based WiFi, offering high bandwidth and low latency.

Management's Perspective

CEO George Mattson commented, "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. We expect our next phase of financial and operational improvement to be driven by the positive impact of our fleet transition."

Interim CFO Eric Cabezas added, "This quarter’s Adjusted Contribution Margin was the highest in our history as a public company. We have made significant progress in reducing our operating cash burn and expect to achieve positive Adjusted EBITDA for the full year 2025, positioning the company for future profitability and long-term success."

Future Outlook

Wheels Up anticipates that the closing of the new revolving credit facility will enhance its access to capital and bolster its liquidity position. The company expects to expedite the modernization of its fleet and scale its business, aiming for positive Adjusted EBITDA for the full year 2025.

SEC Filing: Wheels Up Experience Inc. [ UP ] - 8-K - Nov. 07, 2024