Wheels Up Expands Fleet, Secures $330M Credit Facility
Wheels Up (WUP), based in Teterboro, New Jersey, has announced an ambitious fleet modernization strategy aimed at enhancing its service offerings in the private aviation sector. The initiative involves transitioning from its current fleet, which includes Citation Excel, Citation Jet 3, Citation X, and Hawker 400XPs, to a more advanced lineup featuring Phenom 300, Phenom 300E, Challenger 300, and Challenger 350 models. This strategic move is bolstered by a significant Asset Purchase Agreement with GrandView Aviation for its fleet of Embraer Executive Jets, funded by a senior secured revolving credit facility exceeding $330 million, supported by Delta Air Lines, reported ch-aviation.com.
As part of this fleet upgrade, Wheels Up will acquire GrandView’s fleet of 17 Phenom 300 and Phenom 300E jets, each averaging just seven years old, alongside associated maintenance assets and customer programs, for a total of $105 million. GrandView Aviation, a subsidiary of Global Medical Response, will temporarily manage the jets under a transition services agreement, using combined crews until the aircraft are fully integrated into Wheels Up’s operating certificate. This acquisition is set to phase out Wheels Up’s older Citation Excel, Citation Jet 3, and Hawker 400XP jets, reflecting the company’s commitment to enhancing operational efficiency and customer experience.
In the super mid-size jet category, Wheels Up plans to begin acquiring pre-owned Challenger 300 and 350 models starting in early 2025. To facilitate this acquisition strategy, the company will divest its 13 owned Citation X jets to an unrelated third party while maintaining some under lease-back agreements and negotiating new terms for others. This comprehensive transition across both aircraft categories is expected to be completed within three years, effectively reducing the average age of Wheels Up’s fleet by approximately 10 years, while still operating its Beech King Air twin turboprops.
To finance this fleet renewal, Wheels Up has secured a $332 million senior secured revolving credit facility from Bank of America NA, supported by Delta Air Lines. This funding will not only cover the acquisition of GrandView’s Phenom 300 and Phenom 300E jets but will also allow Wheels Up to redeem existing equipment notes and meet general corporate needs. This facility is anticipated to boost Wheels Up’s cash reserves by up to $115 million while providing additional borrowing capacity for future acquisitions of Phenom 300, Phenom 300E, Challenger 300, and Challenger 350 jets. Following a series of transactions in 2023, Delta Air Lines has joined a lending group that collectively holds 95% of Wheels Up’s outstanding equity, with Delta owning a 38% equity interest in the company.
According to the latest data from the FAA, Wheels Up currently operates 103 aircraft under its Part 135 certificate, which includes a diverse mix of jets such as one Beechjet 400A, nine Citation Excels, seventeen Citation Xs, seven Citation XLS, and numerous Hawker and King Air models. Additionally, Wheels Up offers passenger air carrier services through Greeley Air Charter (FTH), which operates a fleet of 32 aircraft.
Wheels Up provides membership-based access to a wide array of aircraft for private travel, specializing in on-demand private jet charters, corporate travel solutions, and managed fleet operations. The strategic partnership with Delta Air Lines enhances the travel benefits available to Wheels Up members, further solidifying its position as a leader in the private aviation sector.
Related news: https://airguide.info/category/air-travel-business/business-aviation/
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com