The founders of Marquis Jet have struck a potential $1.4 billion deal with Beechcraft to launch new “private membership” venture, Wheels Up, which will be anchored around a fleet of the Wichita-based company’s King Airs.

The agreement with Beechcraft—the largest of its kind for a fleet of business turboprops—includes firm orders for 35 King Air 350is, with options for up to 70 more. The deal also includes a comprehensive maintenance and services contract, covering both scheduled and unscheduled visits, as well as labor, parts and consumables.

The potential value for the firm orders alone is in excess of $500 million, with the aircraft accounting for a little more than half of that. Including options, the value of the aircraft is $788 million, while the maintenance services package is valued at $600 million

Delivery of the first nine aircraft will take place by year-end, with the remaining firm orders to be delivered at a rate of 1-1.5 per month, running through 2015. The options would then continue over the next few years.

Wheels Up founder and CEO Kenny Dichter is optimistic that those options will be necessary—and potentially expanded in the future, as membership in Wheels Up expands. Under the concept, Wheels Up will sell memberships at an entrance price of $15,750, with annual renewal fees of $7,250 per year. Flight time would be then charged at straight hourly rates without management or other service fees. With membership, customers will have access to the Wheels Up fleet of King Airs, as well as a range of other aircraft offerings that are expected to range from small aircraft such as Learjets on up to Gulfstreams or other large-cabin business jets. Wheels Up will wholly own its King Air fleet, Dichter says, but plans to form agreements with a set of operators to offer the jet services.

He notes that there is a handful of companies who operate large fleets of business jets, and most—if not all—of them have been in discussions with Wheels Up executives to launch that end of the business.

With the King Airs, Dichter is expecting to operate a regionalized private aviation business, covering approximately 600-700-nm territories. The first batch of King Airs will be based in the Northeast this year, but he expects to expand into the Southwest and Southeast by next year.

Beechcraft’s Wilmington, Del., center will provide services for the initial Northeast fleet.

The Wheels Up service is just one component of the plan. Dichter says the company also wants to establish a Wheels Down service that provides concierge services and “experiences” wrapped around special events, culinary trips, meet-and-greet opportunities and other benefits. “It’s not just about the ramp and tarmac,” he says. “Our service doesn’t stop there.” He noted this was a direction Marquis Jet was just starting to take when they sold the business to NetJets.

He is optimistic that the company will have as many as 1,000 clients by the end of 2014—and Dichter says those are just the customers with close contact with Wheels Up executives. The business plan calls for that number to grow to 10,000-plus over the next four to six years. Wheels Up’s business plan forecasts that clients will fly roughly 20-30 hr. a year, with the King Air accounting for between 30-40% of that business, he says.

While that sounds ambitious, Dichter and his team have experience as founders of Marquis Jet in 2001. They helped pioneer the jet membership card concept that has since been adopted by numerous companies, from brokers to charter and fractional operators, worldwide.

The Marquis Jet card had generated $4 billion in business by the time the founders, including Dichter, sold it to NetJets.

After selling Marquis Jet, Dichter became global vice chairman of NetJets for about a year, but in 2011 stepped down, remaining as an ambassador for the fractional ownership provider. During his affiliation with NetJets, he worked with Beechcraft CEO Bill Boisture, who had a stint as president of NetJets.

“I always had my eye on the King Air,” Dichter says, adding that after Beechcraft began to emerge from Chapter 11 bankruptcy protection as a stronger company, he began to reengage with Boisture, along with Shawn Vick, executive vice president of sales and marketing, who held senior roles with several business aircraft airframers along with Landmark Aviation.

While the King Air has not been the primary aircraft incorporated in other fractional fleets, Dichter says it is “a natural fit” for its plans for regional services. “It’s like putting peanut butter and jelly together,” he says, citing its payload, comfort and other capabilities. Vick notes that it provides the same amenities as business jets, but can reach more airstrips and has much better operating costs.

The King Air also has had strong residual values, that have held up much better than those of business jets. This is a key factor in obtaining financing for the fleet, Dichter says. The financing program is led in part by the investment bank Jeffries, which is experienced in such transactions. But Dichter also has a number of equity partners lined up in the venture.

As for the King Air, the Wheels Up model will be equipped with new interiors, Wi-Fi connectivity and the van lavatory vanity, which is an option for the 350i model. Vick notes that Beechcraft already has obtained the supplemental type certification for the Wi-Fi installation.

For Beechcraft, the order is a significant step forward for a company working to reestablish itself after emerging from bankruptcy protection. Vick says this is particularly important for the workforce who endured the bankruptcy process.

It also comes as Beechcraft’s second-quarter deliveries increased 75% compared to the June quarter in 2012, when the company was just entering bankruptcy protection, and deliveries are up 66% for the year, with 115 units shipped. “Beechcraft is progressing through 2013 in a strong position,” Boisture says. “While the global economic conditions remain difficult, the value proposition and versatility of our products continue to resonate with customers.”