Wheels Up detailed a major revamp to its fleet strategy on October 22, 2024. The company will transition its current jet fleets to Embraer's Phenom 300 series and Bombardier's Challenger 300 series aircraft. This would render down its current fleet of four aircraft types down to two.
The “on-demand” private charter company entered into an agreement to acquire GrandView Aviation's entire fleet of 17 Phenom 300 and Phenom 300E aircraft, as well as certain maintenance related assets, at a purchase price of $105 million. It also agreed to sell its entire owned fleet of super mid Citation X aircraft and lease for a limited period as it prepares its transition to the Challenger fleet.
“Fleet modernization is the next critical step in the journey of Wheels Up,” said Wheels Up CEO George Mattson. “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.”
The company entered into a commitment letter with Bank of America for a new five-year $332 million senior secured revolving credit facility, with Delta Air Lines expected to provide credit support for the financing.
“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,” commented Delta Air Lines CEO Ed Bastian. He added that Delta is “more confident than ever” with Wheels Up's strategy and position in private aviation.
The revolving facility is expected to close concurrently with the closing of its GrandView Phenom 300 series fleet acquisition in the fourth quarter.
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.
“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,” the company read in a statement.
The Challenger 300 series aircraft are expected to be introduced into Wheels Up's fleet in the first quarter of next year.