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Delta Led Consortium Announces Deal to Take 95% Control of Wheels Up for $500 Million


Delta Led Consortium Announces Deal to Take 95% Control of Wheels Up for $500 Million

Delta Air Lines along with investment firms Certares and Knighthead have announced a tentative deal to acquire over 95% of Wheels Up for $500 million. The deal provides Wheels Up with a $400 million term loan plus a $100 million "liquidity facility" from Delta. 

The plan will have Todd Smith remain as Wheels Up interim CEO. Delta chief financial officer Dan Janki will replace Ravi Thakran as Wheels Up chairman. 

“The partnership will create new opportunities for Wheels Up to drive strategic, operational, and financial improvements for its customers in the months and years ahead” and “speed Wheels Up on its path to profitability," said Delta CEO Ed Bastian.

Wheels Up had released a troubling second quarter 2023 financial report before the news of the deal came to light. The company posted losses of $161 million on $335 million in revenue. Wheels Up had posted nearly $1 billion in losses over the previous nine quarters, ($555 million last year alone). This was mostly due to rapid expansion that included making multiple acquisitions.

Wheels Up 2022 3rd Quarter Results Are In, Teams Up with AirMed

A Wheels Up King Air 350i (image: Wheels Up)

Smith began implementing reforms upon becoming Wheels Up interim CEO, including:

"Member program changes launched in June focus flying in regions where Wheels Up has a significant network density. Company expects those programs to comprise over 50% of flying by the end of the year and drive continued improvement in Adjusted Contribution margin next year"

The company has noted it will take more time for the reforms to take full effect.

Since 2013, Wheels Up had made growth and acquisitions the main focus over profitability. This included the largest purchase ever of King Air: $1.4 billion for up to 105 King Air 350i. The renewed focus on profitability only occurred recently with a goal of achieving it by 2024.

Author: Scott Cooper (King Air Nation Communications Specialist)

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