Delta, Certares and Knighthead accelerate Wheels Up business transformation with expanded strategic partnership
- Expanded partnership to accelerate Wheels Up's business transformation
- Capital infusion to provide stability for Wheels Up's strategic vision
- Combined expertise to drive strategic, operational, and financial improvements
- None.
- No. 1 premium airline joins travel and tourism investment firm Certares and deep value and turnaround investment firm Knighthead in a non-binding agreement in principle to co-lead a
facility$500 million - The lenders will receive newly issued Wheels Up Class A common stock resulting in the lenders owning approximately
95% of the pro forma equity of the company on a fully diluted basis - Expanded partnership with Wheels Up would include deep travel expertise and resources to drive strategic, operational and customer service improvements
Earlier this year, Wheels Up announced plans to scale and evolve its product offerings to deliver world-class private aviation service profitably. Funding provided by Delta, certain affiliates of Certares and Knighthead, and other partners is expected to provide the company the stability to execute on its strategic vision over the long term.
The partnership would combine the experience of Delta, the No. 1 premium airline and a longstanding Wheels Up partner, with the travel and tourism focus of Certares and turnaround and restructuring experience of Knighthead to boost Wheels Up as it evolves and elevates its customer experience, reliability and financial performance. It includes a non-binding agreement in principle for a
"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," said Delta CEO Ed Bastian. "Delta's unmatched expertise in premium travel, customer loyalty, corporate sales, operational reliability and aircraft maintenance, combined with Certares' and Knighthead's experience and global reach, are expected to speed Wheels Up on its path to profitability.
"I would like to extend my sincere gratitude to Kenny Dichter, the visionary founder behind Wheels Up, for building the Wheels Up brand into a powerhouse in private aviation. We have great appreciation for his steadfast devotion to the members, customers and employees and his role in elevating the private aviation experience which will undoubtedly guide the industry's path forward. We're grateful he will continue as Wheels Up's strategic advisor," Bastian said.
Greg O'Hara, founder and Senior Managing Director at Certares, said: "This strategic partnership with Wheels Up is a natural extension of our focus and experience in travel, tourism and hospitality. This transaction extends upon our longtime partnership with Delta across many of our portfolio companies. We're looking forward to joining Delta, Knighthead and others in driving the company's ongoing transformation as it elevates private aviation as an industry leader."
Tom Wagner, Knighthead's co-founder, said: "We are delighted to be joining the Wheels Up team alongside Delta, Certares and other strategic partners. The agreement in principle announced today brings not just capital, but Knighthead's extensive expertise, experience and resources to drive the next phase of Wheels Up's business transformation as a leading provider of on-demand private aviation. We look forward to the journey ahead with our partners."
"Wheels Up sincerely appreciates the unwavering support of so many of our members and customers," said Todd Smith, Interim Chief Executive Officer and Chief Financial Officer of Wheels Up. "Over the past few months, we have been intensely focused on taking clear steps to improve our product offering and our operational delivery. Those actions are already showing results and we look forward to continuing and accelerating that progress with the support of our new partners. Our continued close work with the Delta team will enable us to further integrate our digital experiences, member benefits and our operations. We are extremely grateful for Delta's support and look forward to welcoming our new partners, including Certares and Knighthead, to the Wheels Up family and leveraging their expertise to further enhance our services and member experiences."
Wheels Up also today announced that Delta Chief Financial Officer Dan Janki will join the Board of Directors as Chairman. Ravi Thakran will transition back to Director from his role as Executive Chairman.
"I am pleased to officially welcome Dan as the Chairman of the Wheels Up Board of Directors," Thakran said. "I've been honored to lead the company through this transition and generate global interest in Wheels Up as the premier experience in private aviation. With today's announcements, Wheels Up should be in a far stronger position to leverage its considerable assets in service of our members and continue to be an innovative leader in aviation."
Under the non-binding agreement in principle announced today, Delta will provide Wheels Up with
In connection with the transaction, Wheels Up will issue Class A common stock to the participating new money lenders such that they are expected to own approximately
The transaction is subject to completing definitive documentation, as well as customary closing conditions and other approvals.
Wheels Up, which offers membership-based and on-demand private jet services, is a meaningful part of Delta's broad portfolio of premium partners. The relationship dates to 2020, when Delta Private Jets combined with Wheels Up. Delta provides Wheels Up members with an array of benefits, including access to Delta flights, the opportunity to earn Delta SkyMiles and the ability to earn toward Medallion Status through spend on Wheels Up flights.
About Delta Air Lines
Through the warmth and service of the Delta Air Lines (NYSE: DAL) people and the power of innovation, Delta never stops looking for ways to make every trip feel tailored to every customer. More than 90,000 Delta people lead the way in delivering a world-class customer experience on over 4,000 daily flights to more than 280 destinations on six continents, connecting people to places and to each other.
Delta expects to serve nearly 200 million customers this year safely, reliably and with industry-leading customer service innovation – recognized as
Headquartered in
As the leading global airline, Delta's mission to connect the world creates opportunities, fosters understanding and expands horizons by connecting people and communities to each other and to their own potential. Powered by innovative and strategic partnerships with Aeromexico, Air France-KLM, China Eastern, Korean Air, LATAM, Virgin Atlantic and WestJet, Delta brings more choice and competition to customers worldwide.
Delta is America's most-awarded airline thanks to the dedication, passion and professionalism of its people. It has been recognized by Cirium for operational excellence, as the top
About Certares
Established in 2012, Certares is a global investment firm focused exclusively on the travel and hospitality industries, leveraging deep sector experience, proprietary transactions and hands-on partnership with management teams to drive growth. With approximately
About Knighthead
Knighthead Capital Management, LLC was co-founded in 2008 by Ara Cohen and Tom Wagner and currently has approximately
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in the
Wheels Up is guided by the mission to connect private flyers to aircraft, and one another, through an open platform that seamlessly enables life's most important experiences. Powered by a global private aviation marketplace connecting its base of approximately 12,000 members and customers to a network of approximately 1,500 safety-vetted and verified private aircraft, Wheels Up is widening the aperture of private travel for millions of consumers globally. With the Wheels Up mobile app and website, members and customers have the digital convenience to search, book and fly.
Delta Air Lines Forward Looking Statements
Statements made in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments or strategies for the future in connection with our proposed strategic investment in Wheels Up Experience described in this press release, should be considered "forward-looking statements" under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees or promised outcomes and should not be construed as such. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections, goals, aspirations, commitments and strategies reflected in or suggested by the forward-looking statements. Information concerning risks and uncertainties that could cause differences between Delta's actual results and forward-looking statements is contained in Delta's Securities and Exchange Commission filings, including Delta's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2022. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of the date of this press release, and which we undertake no obligation to update except to the extent required by law.
Wheels Up Experience Inc. Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of the control of Wheels Up. These forward-looking statements include, but are not limited to, statements regarding: (i) Wheels Up's ability to continue as a going concern absent receipt of the funding from the transactions described in this press release; (ii) the terms of, the ability to sign and close, and the impact of, any potential investments, financings (including the financing discussed in this press release), restructurings or other strategic transactions involving Wheels Up or its subsidiaries or affiliates, including the ability to realize anticipated benefits relating to any such transactions and any potential impacts on the trading prices and trading market for Wheels Up's Class A common stock, par value
Securities Disclaimer
The issuance, offer and/or sale of any securities described herein has not been registered under any federal or state securities laws and may not be offered or sold in
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SOURCE Delta Air Lines
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