Delta Air Lines has significantly increased its financial stake in Wheels Up, injecting $500 million in funding to assume a 95 percent ownership of the charter and fractional ownership firm. Wheels Up, positioned as the third-largest player in the private aviation sector, trailing NetJets and Flexjet, has encountered financial challenges recently. In a Form 10-Q submission to the U.S. Securities and Exchange Commission (SEC) on August 14, the company revealed a working capital deficit of $720.8 million and reported recurring losses for the first two quarters of the year.
The arrangement with Delta involves a non-binding agreement, as detailed by Private Jet Card Comparisons, which outlines a $400 million term loan and a $100 million liquidity facility provided by Delta, resulting in a total investment of $500 million into Wheels Up.
Delta had divested its Delta Private Jets division to Wheels Up in 2020, maintaining a 20 percent stake in the company. However, this new accord significantly elevates Delta's role. As part of the partnership, Wheels Up members can leverage their deposit funds to purchase tickets for Delta flights. Moreover, customers of Wheels Up will accrue extra credits within Delta's SkyMiles frequent flyer program, establishing a bridge between the high-end traveler segment and Delta's customer base.
Delta's CEO, Ed Bastian, emphasized that this collaboration will not only lead to operational and financial enhancements for Wheels Up but also generate novel prospects for improving customer experience in the foreseeable future.
