Can he strike it right again?
He's back. Kenny Dichter, the ultimate Badger and business aviation booster, has returned to the tarmac. And he's promising to “revolutionize aviation around the world.” Don't be too quick to dismiss that prediction. He's done it before.
By way of background, Dichter (see photo) is a serial entrepreneur, beginning in his days as an undergraduate at the University of Wisconsin, Madison. An unabashed enthusiast for his college's sports teams, he began selling silk-screened Badger T-shirts to fellow students with such success that he became part owner of Bucky's, a specialty clothing and gift store on campus.
In 1995, at 29, Dichter co-founded a company that produced in-arena music and videos for sports fans and team-related CDs. They sold that business three years later to SFX Entertainment, a large concert promoter. While flying cross-country trips in business jets on SFX matters, Dichter had a kind of epiphany. Suddenly viewing the aircraft for themselves and their potential, he said, “This is the right business! This is the drug.”
It was the summer of 2000. In researching business aircraft activity, he concluded that consistently excellent service provided by top-notch crews and aircraft, without a continuing commitment, would attract a lot of customers, particularly the young and wealthy, who couldn't or wouldn't pay for a one-eighth share in a fractional aircraft. He'd sell those people 25-hr. blocks of travel time through “jet cards.”
The business model clear, he convinced a skeptical Richard Santulli to let his Marquis Jet customers use NetJets aircraft and crews. Santulli agreed—on the condition that Marquis buy enough jets to accommodate its clientele.
Marquis began operation in 2001 and by 2010, the year it was assimilated by NetJets, Dichter and his team had sold $4 billion worth of cards and $1 billion in fractional shares.
In August, he announced his return to business aviation in a big way—purchasing up to 105 King Air 350i turboprops that, with servicing, have a potential value of $1.4 billion. The aircraft will comprise the initial core fleet of Wheels Up, a travel membership program. Under the new business model, members pay a $15,750 initiation fee then $7,250 annually, plus $3,950 per occupied hour.
Wheels Up describes its role as agent for members, rather than as an operator. It plans to name the air carrier that will have operational control of the aircraft in the near future. The first Wheels Up King Air is expected to begin service in October. The first several will operate out of the northeastern U.S. but the service will expand to other areas as the fleet increases. Beyond that, the new entity plans to team with other operators with their own respective fleets for use by Wheels Up members.
Dichter projects a membership base of 10,000-15,000 individuals and companies. By averaging 20-30 flight hours annually, they should generate $1-2 billion in revenue. “We're democratizing private-jet travel,” he says.
In addition, on Sept. 6 it was announced that Wheels Up has agreed to act as the sales agent for 12Global aircraft that VistaJet will be stationing in the U.S. Those aircraft will be operated by Jet Aviation.
Ever the fan, Dichter has created a companion service called Wheels Down, “an experiential lifestyle concierge service” that arranges special programs for members around major sporting events, intimate concerts and opportunities to meet entertainment, political and business luminaries. He's already set up a four-day bash centered on Super Bowl XLVIII set for Feb. 2, 2014, outside New York City.