Delta, New Investors Keep Wheels Up Flying; Here’s Why And What’s Next

15.08.2023 - 16:15 / forbes.com / Ed Bastian / Delta Ceo / Greg Ohara

A little more than three years and a global pandemic after becoming the largest shareholder in Wheels Up, Delta Air Lines and its highly regarded CEO Ed Bastian will now be tasked with turning around the fortunes of the nation’s third-largest private jet flight provider.

A non-binding agreement announced this morning by Delta includes funds contributed by the airline and CK Opportunities Fund, I LP, which is co-managed by affiliates of Certares (owner of Internova, a major group of luxury and corporate travel agencies) and Knighthead. The facility would be comprised of a $400 million term loan and a $100 million liquidity facility from Delta, totaling $500 million to Wheels Up. In exchange. The lenders will receive newly issued Wheels Up Class A common stock resulting in owning approximately 95% of the pro forma equity of the company on a fully diluted basis.

“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, adding, “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.”

In prepared remarks, Bastian continued, “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.”

(Dichter stepped down in May as Chairman and CEO but remains on the Board.)

Greg O’Hara, founder and Senior Managing Director at Certares, commented, “This strategic partnership with Wheels Up is a natural extension of our focus and experience in travel, tourism and hospitality. It is also a natural extension of 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.”

The new funding prevents a possible bankruptcy and shutdown. It comes at a time Wheels Up was close to running out of money, according to multiple sources. Last week, Delta loaned the private aviation company $15 million. The private jet company’s delayed Q2 financials, filed last night, showed cash had dropped from $586 million at the end of 2022 to $363