Wheels Up: Hot For King Airs
Having proven the idea of subscription-based on-demand charter, Wheels Up continues to expand the Textron King Air fleet on which the service is based, according to CEO Kenny Dichter. At NBAA-BACE on Monday, Dichter said the company has 78 King Air 350i aircraft, most of which have been purchased new. The fleet also has Citation XLS bizjets for customers who prefer them. Business is so good that Wheels Up recently secured $117 million in venture capital funding and plans to purchase more 350s in 2018.
Wheels Up launched in 2013 with a unique business model that has would-be charter customers buy a yearly subscription that entitles them to a certain number of on-demand hours each year, billed at $4295 per occupied hour for the King Airs. Usage varies by type of client, but Dichter says many clients spend between $90,000 and $100,000 a year for on-demand flight services, or about the cost of owning and operating a single-engine turboprop for a year. Wheels Up currently has about 4000 members and Richter believes that will increase to 10,000 by 2020. He says the company may go public in 12 to 18 months if growth continues.
From its inception, Wheels Up envisioned bringing affordable on-demand transportation to customers who wouldn't consider owning their own aircraft or even chartering. "You're seeing a lot of growth in the bottom of the pyramid. We look at the world the way Uber does," Richter says. He argues that individuals and executives who buy as few as two or three walk-up $1000 tickets on airlines can afford a Wheels Up subscription. "We're more Netflix than NetJets," he says in describing the Wheels Up appeal. As the company expands, it sees as much as $1 billion in business marketing available jet capacity owned by other companies to its growing list of subscribers.