Delta leads consortium with $500M stake in Wheels Up to secure 95% ownership

Delta Airlines and a consortium of partners have signaled they will make a $500 million investment in private jet company, Wheels Up.

Alongside Delta, the travel and tourism investment firm Certares and turnaround investment firm Knighthead, will partner up to accelerate Wheels Up’s business transformation.

On August 9, 2023, Wheels Up announced that the company was “actively involved in discussions around strategic business partnerships for the company”.

At the time, the struggling firm also confirmed it had secured a short-term capital infusion for $15 million from Delta, its largest shareholder.

On August 15, 2023, Delta and CK Opportunities Fund, which is co-managed by affiliates of Certares and Knighthead, confirmed it was willing to go much further through a $400 million term loan and a $100 million liquidity facility to Wheels Up.

In turn the lenders receive newly issued Wheels Up Class A common stock resulting in the consortium owning approximately 95% of the pro forma equity of the company on a fully diluted basis.

The expanded partnership with Wheels Up would include deep travel expertise and resources to drive strategic, operational and customer service improvements.

“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.”

Bastian added: “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.”

Under the non-binding agreement in principle, Delta will provide Wheels Up with $150 million in new money term loans and a $100 million liquidity facility.

An additional $150 million term loan will be provided under the facility by CK Opportunities.

Furthermore, to date other investors have agreed in principle to join Delta and CK Opportunities to provide $50 million in term loans under the facility.