Wheels Up Announces Fleet Modernization Strategy and Associated Transactions
Wheels Up Experience Inc. (NYSE: UP) has announced a major fleet modernization strategy, involving several key transactions:
1. Acquisition of GrandView Aviation's entire fleet of 17 Phenom 300 and 300E aircraft for $105 million.
2. Agreement to sell its owned fleet of Citation X aircraft and lease them back temporarily.
3. Plans to introduce Bombardier Challenger 300 and 350 aircraft to its fleet.
4. Partnership with Gogo Business Aviation to equip new aircraft with Gogo Galileo HDX satellite-based WiFi.
5. Secured a $332 million revolving credit facility from Bank of America, with credit support from Delta Air Lines.
These moves aim to lower the average fleet age by 10 years, improve operational performance, and enhance customer experience. The transition is expected to be completed within three years, subject to market conditions.
Wheels Up Experience Inc. (NYSE: UP) ha annunciato una strategia di modernizzazione della flotta, che prevede diverse transazioni chiave:
1. Acquisizione dell'intera flotta di 17 aerei Phenom 300 e 300E di GrandView Aviation per 105 milioni di dollari.
2. Accordo per vendere la sua flotta di aerei Citation X e affittarli temporaneamente.
3. Piani per introdurre aerei Bombardier Challenger 300 e 350 nella sua flotta.
4. Partenariato con Gogo Business Aviation per dotare i nuovi aerei di WiFi satellitare Gogo Galileo HDX.
5. Garantita una linea di credito rotativa di 332 milioni di dollari da Bank of America, con supporto creditizio di Delta Air Lines.
Queste iniziative mirano a ridurre l'età media della flotta di 10 anni, migliorare le performance operative e arricchire l'esperienza del cliente. Il passaggio dovrebbe essere completato entro tre anni, soggetto alle condizioni di mercato.
Wheels Up Experience Inc. (NYSE: UP) ha anunciado una importante estrategia de modernización de su flota, que implica varias transacciones clave:
1. Adquisición de toda la flota de 17 aviones Phenom 300 y 300E de GrandView Aviation por 105 millones de dólares.
2. Acuerdo para vender su flota de aviones Citation X y arrendarlos temporalmente.
3. Planes para introducir aviones Bombardier Challenger 300 y 350 en su flota.
4. Asociación con Gogo Business Aviation para equipar los nuevos aviones con WiFi satelital Gogo Galileo HDX.
5. Asegurada una línea de crédito rotativa de 332 millones de dólares con Bank of America, con apoyo crediticio de Delta Air Lines.
Estos movimientos tienen como objetivo reducir la edad promedio de la flota en 10 años, mejorar el rendimiento operativo y enriquecer la experiencia del cliente. Se espera que la transición se complete en tres años, sujeta a las condiciones del mercado.
카카오 뱅크(코드: UP)는 주요 플릿 현대화 전략을 발표했습니다. 주요 거래는 다음과 같습니다:
1. GrandView Aviation의 Phenom 300 및 300E 항공기 17대 전체를 1억 5천만 달러에 인수합니다.
2. 소유 항공기 Citation X를 판매하고 임대하는 계약입니다.
3. Bombardier Challenger 300 및 350 항공기를 플릿에 추가할 계획입니다.
4. Gogo Business Aviation과의 파트너십을 통해 신규 항공기에 Gogo Galileo HDX 위성 기반 WiFi를 장착할 것입니다.
5. Delta Air Lines의 신용 지원을 받아 Bank of America에서 3억 3천 2백만 달러의 회전 신용 시설을 확보했습니다.
이러한 움직임은 평균 플릿 연령을 10년 낮추고 운영 성능을 개선하며 고객 경험을 향상시키기 위한 것입니다. 시장 상황에 따라 이 전환은 3년 이내에 완료될 예정입니다.
Wheels Up Experience Inc. (NYSE: UP) a annoncé une stratégie majeure de modernisation de sa flotte, impliquant plusieurs transactions clés :
1. Acquisition de l'ensemble de la flotte de 17 avions Phenom 300 et 300E de GrandView Aviation pour 105 millions de dollars.
2. Accord pour vendre sa flotte d'avions Citation X et les reprendre temporairement en location.
3. Plans d'introduction d'avions Bombardier Challenger 300 et 350 dans sa flotte.
4. Partenariat avec Gogo Business Aviation pour équiper les nouveaux avions de WiFi par satellite Gogo Galileo HDX.
5. Obtention d'une ligne de crédit renouvelable de 332 millions de dollars auprès de Bank of America, avec un soutien crédit de Delta Air Lines.
Ces actions visent à réduire l'âge moyen de la flotte de 10 ans, à améliorer la performance opérationnelle et à enrichir l'expérience client. La transition devrait être achevée dans les trois ans, sous réserve des conditions du marché.
Wheels Up Experience Inc. (NYSE: UP) hat eine umfangreiche Modernisierungsstrategie für die Flotte angekündigt, die mehrere wichtige Transaktionen umfasst:
1. Erwerb der gesamten Flotte von 17 Phenom 300 und 300E Flugzeugen von GrandView Aviation für 105 Millionen Dollar.
2. Vereinbarung zum Verkauf der eigenen Flotte von Citation X Flugzeugen und vorübergehender Rückleasing.
3. Pläne zur Einführung von Bombardier Challenger 300 und 350 Flugzeugen in die Flotte.
4. Partnerschaft mit Gogo Business Aviation zur Ausstattung neuer Flugzeuge mit Gogo Galileo HDX satellitengestütztem WiFi.
5. Sicherung einer revolvierenden Kreditlinie in Höhe von 332 Millionen Dollar von der Bank of America, mit Kreditunterstützung von Delta Air Lines.
Diese Maßnahmen zielen darauf ab, das Durchschnittsalter der Flotte um 10 Jahre zu senken, die Betriebseffizienz zu verbessern und das Kundenerlebnis zu steigern. Der Übergang soll innerhalb von drei Jahren abgeschlossen sein, abhängig von den Marktbedingungen.
- Acquisition of 17 Phenom 300 and 300E aircraft for $105 million, modernizing the fleet
- Planned introduction of Bombardier Challenger 300 and 350 aircraft to the fleet
- Partnership with Gogo Business Aviation for advanced satellite-based WiFi
- Secured $332 million revolving credit facility from Bank of America
- Credit support from Delta Air Lines, enhancing access to capital
- Expected improvement in operational performance and efficiency
- Anticipated enhancement of customer experience
- Projected reduction in average fleet age by approximately 10 years
- Selling entire owned fleet of Citation X aircraft, potentially impacting short-term operations
- Transition period of approximately three years, subject to market conditions
- Significant capital expenditure required for fleet modernization
Insights
This fleet modernization strategy is a significant move for Wheels Up, with potentially far-reaching implications for the company's operational efficiency and financial performance. The
The transition to Phenom 300 and Challenger 300 series aircraft, coupled with the sale of the Citation X fleet, represents a strategic shift towards more fuel-efficient and popular models. This could enhance Wheels Up's competitive position in the private aviation market. The
The partnership with Gogo for advanced in-flight connectivity could be a differentiator in the market, potentially justifying premium pricing. However, investors should closely monitor the execution risks associated with this large-scale fleet transition, including potential disruptions to service and the financial impact of aircraft disposals and acquisitions.
Wheels Up's fleet modernization strategy is a bold move that aligns with industry trends towards more efficient and technologically advanced aircraft. The Phenom 300 and Challenger 300 series are highly regarded in the private aviation sector for their performance and passenger comfort. This transition could significantly enhance Wheels Up's operational capabilities and customer appeal.
The acquisition of GrandView's Phenom fleet and the planned introduction of Challenger aircraft demonstrate a clear focus on fleet standardization. This approach typically leads to reduced maintenance complexity, lower training costs and improved dispatch reliability. The expected 10-year reduction in average fleet age is substantial and should translate to better fuel efficiency and lower operating costs.
The partnership with Gogo for satellite-based WiFi is particularly noteworthy. High-speed, reliable connectivity is increasingly becoming a must-have for business travelers and being an early adopter of Gogo's LEO satellite system could give Wheels Up a competitive edge. However, the success of this strategy will depend on smooth execution of the fleet transition and effective integration of new technologies without disrupting existing operations.
Wheels Up to transition its current jet fleets to Phenom 300 Series and Challenger 300 Series aircraft
Entered into agreement to acquire GrandView Aviation's entire fleet of 17 Phenom 300 and Phenom 300E aircraft
Entered into agreement to sell entire owned fleet of super mid Citation X aircraft and lease for a limited period in preparation for transition to Challenger fleet
New fleet to be outfitted with best-in-class Gogo Galileo HDX satellite-based WiFi
Committed financing to be provided by Bank of America, with credit support from Delta Air Lines
Once complete, the transition of Wheels Up's jet aircraft to the highly reliable Phenom 300 series and Challenger 300 series models is expected to lower the average aircraft age of its fleet by approximately 10 years – a fleet transition with wide-reaching operational implications, including expected improvement in operational performance, operational efficiency and, in turn, an enhanced customer experience.
The company intends to continue to operate in support of its customers a fleet of King Air aircraft within its existing service areas.
"Fleet modernization is the next critical step in the journey of Wheels Up. We believe our flexible, accessible offerings across programmatic membership and global charter, enhanced through our one-of-a-kind strategic partnership with Delta Air Lines, already deliver the most customer-centric global aviation solutions available in the market today" said George Mattson, CEO of Wheels Up. "We believe our fleet modernization strategy and the enabling transactions we are announcing today will allow us to deliver those solutions with a best-in-class aircraft fleet, with an elevated customer experience to match."
Wheels Up to Acquire GrandView Aviation's Phenom Fleet
Wheels Up has entered into a binding agreement to acquire the entire Phenom fleet of GrandView Aviation, a subsidiary of Global Medical Response. The agreement provides for the acquisition of their entire fleet of 17 Embraer Phenom 300 and Phenom 300E aircraft and certain related maintenance assets to support the fleet, at a purchase price of
Wheels Up and GrandView also expect to enter into a short-term Transition Services Agreement at closing, under which GrandView will operate the Embraer Phenom aircraft on Wheels Up's behalf while the aircraft are transitioned to the company's Wheels Up Private Jets FAA operating certificate.
The company anticipates that the GrandView acquisition will close as promptly as practicable this quarter and expects thereafter to immediately introduce the Phenom fleet into its programmatic membership and charter offerings.
Wheels Up intends to grow its fleet of Phenom series aircraft by opportunistically acquiring or leasing additional aircraft in the secondary market and expects to complete the fleet transition and retire its existing fleet of light and mid-sized jet aircraft within approximately three years, subject to business and market conditions.
Wheels Up to Introduce Bombardier Challenger Aircraft
In the super mid category, Wheels Up intends to opportunistically acquire a fleet of pre-owned Challenger 300 and Challenger 350 aircraft via the secondary market through a combination of outright purchases and long-term leasing.
In preparation for this transition, Wheels Up has agreed to sell all 13 of its currently owned Citation X aircraft to an unrelated third party. The company expects to lease a portion of those sold aircraft and amend the lease terms for other Citation X aircraft that are currently leased from that same buyer. This agreement also provides the ability to replace leased aircraft with Challenger aircraft in the future.
The Bombardier Challenger 300 Series aircraft are expected to be introduced into Wheels Up's fleet beginning next year, with availability on both an as-requested charter basis and on specified routes for members. A full introduction into Wheels Up's programmatic offering across guaranteed service areas is expected by the end of 2025.
Consistent with the timing of the Phenom transition plan, and subject to business and market conditions, Wheels Up expects to complete the transition to the Challenger platform within approximately three years.
An Enhanced Customer Experience with Gogo
As a key strategic step in enhancing the customer experience, Wheels Up has entered into a letter of intent with Gogo Business Aviation to equip the Phenom and Challenger aircraft Wheels Up expects to acquire with the enhanced capabilities and superior performance of Gogo Galileo HDX satellite-based WiFi. Gogo's low earth orbit (LEO) satellite system is expected to deliver high bandwidth, low latency, global coverage and be capable of live streaming and voice telephony.
"We believe that providing best-in-class connectivity while in the air is a core element of the customer promise and the customer experience", said George Mattson, Wheels Up CEO. "We anticipate that we will be one of the first and only domestic fleets of private aviation aircraft equipped with this level of capability and, like our partner Delta in the commercial aviation space, want to provide the highest level of connectivity and performance that available technology delivers."
As part of the agreement, Gogo has committed to complete certification for the Gogo Galileo HDX system and plans to have HDX certification on the Challenger and Phenom platforms by the middle of 2025, with transition for Wheels Up's updated fleet planned to begin immediately thereafter.
Committed Financing to be Provided by Bank of America with Credit Support from Delta Air Lines
Wheels Up has entered into a commitment letter with Bank of America for a new, five-year, up to
Wheels Up expects to utilize the revolving facility to fund several actions, including the GrandView acquisition; the redemption of all outstanding equipment notes on the company's owned aircraft; and general corporate purposes. The financing is also expected to deliver up to
Delta Air Lines is expected to provide credit support for the new financing, enhancing Wheels Up's access to capital and on more attractive terms than would otherwise be available.
"In the year since we've invested in Wheels Up, their operational performance, financial progress and the successful revamp of their customer offering have validated our decision to embark on this one-of-a-kind strategic partnership," said Ed Bastian, CEO of Delta Air Lines. "Underpinned by those key improvements and further fueled by the forthcoming execution of this modernized fleet strategy, we feel more confident than ever that Wheels Up is on the right track to be a global leader in private aviation, as we work together to build an unrivaled partnership spanning across commercial and private travel."
Future Fleet Enhancements
Wheels Up is also in discussions with Bombardier, Embraer and other third-party providers on additional elements of its product offering and customer experience, including standardized livery and interiors. Updates are expected in the coming months.
Concurrently with this announcement, the company is filing a current report on Form 8-K with the SEC related to the GrandView acquisition and commitment for the revolving facility.
About Wheels Up
Wheels Up is a leading provider of on-demand private aviation in the
Wheels Up is guided by the mission to deliver a premium solution for every customer journey. With the Wheels Up mobile app and website, members and customers have the digital convenience to search, book and fly.
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 Experience Inc. (the "Company", "Wheels Up", "our", "us" or "we"). These forward-looking statements include, but are not limited to, statements regarding: (i) the acquisition of 17 Embraer Phenom 300 and Phenom 300E aircraft and certain related maintenance assets to support the fleet, and existing customer program from GrandView Aviation LLC (the "GrandView Acquisition"), and any expected benefits or impacts to the Company as a result of the GrandView Acquisition or operation of the assets acquired as part of the GrandView Acquisition after closing, including the Company's ability to consummate the closing of such acquisition on the schedule that it currently anticipates; (ii) the commitment letter entered into between Wheels Up and Bank of America, N.A. and the up to
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SOURCE Wheels Up
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