Wheels Up (WUP, Teterboro) had expressed "substantial doubt" about its ability to continue operations should it not obtain additional funding in the near term, even though it has received a temporary lifeline in the form of a promissory note from minority shareholder Delta Air Lines (DL, Atlanta Hartsfield Jackson), while Airshare (XSR, Kansas City Downtown) intends to acquire its non-core aircraft management business.
In a filing to the US Securities and Exchange Commission (SEC), Wheels Up Experience Inc. stated: "The potential investments and/or capital raise described above are subject to market and other conditions that are not within the company's control. Absent the ability of the company to obtain this additional funding in the near term, the company has concluded that there is substantial doubt about its ability to continue as a going concern for any meaningful period of time after the filing of this Form 12b-25." The private jet charter company had initially scheduled an earnings call for August 9 but announced that morning it would be postponed to another date.
Asked for comment, a spokeswoman for Wheels Up shared the following emailed statement with ch-aviation: "As previously disclosed, Wheels Up is evaluating strategic options to transform our business in close coordination with our financial stakeholders, industry participants, and advisors. Our priority remains continuing to deliver an extraordinary experience for members, and doing that safely, reliably and on time."
In a brief statement earlier, Wheels Up Experience Inc. said it was "actively involved in discussions around strategic business partnerships for the company" and announced that Delta Air Lines had provided a short-term capital infusion to the company.
In addition, the company said it had entered into a non-binding letter of intent with business/charter specialist Airshare to acquire Wheels Up's non-core aircraft management business.
In its SEC filing, Wheels Up Experience Inc. explained why it could not file its financial statements for the quarter ending June 30, 2023, by the prescribed due date. "The company is working with a number of advisors and industry participants around securing new strategic investments, raising capital, and executing previously disclosed strategic divestitures. On August 8, 2023, the company entered into a short-term capital infusion in the form of a secured promissory note with Delta Air Lines, Inc. These efforts have involved significant resources and have been a priority for management, thereby diverting significant management time and internal resources from the company's processes to review and complete its financial statements and related disclosures in a manner that would permit a timely filing," it said.
Wheels Up provides ad-hoc charters in the US and is one of the largest private aviation companies in the world. Delta became shareholder in 2020 when it sold Delta Private Jets to Wheels Up and, in turn, gained a 20% stake in Wheels Up. The deal resulted in an owned and managed fleet of nearly 200 aircraft, ranging from the Beech (twin turboprop) King Air 350s to large-cabin jets.
