Bizav Approaching ‘Heyday,’ Wheels Up Chief Says
Business aviation is poised to enjoy the best of times post-COVID-19, as the sector welcomes unprecedented numbers of new customers seeking the safety and convenience that private air travel offers, says Kenny Dichter, founder and CEO of Wheels Up.
Ditcher spoke July 29 during a webinar hosted by Aviation Week (AW).
In conversation with Fred George, the AW group’s chief aircraft evaluation editor, Dichter described how the pandemic has brought changes to the sector that owners and operators will welcome.
“We saw the whole addressable market shift before our eyes,” he said. “If there [were] 100,000 people and businesses that are the private-aviation addressable market [pre-COVID], in the last 120-150 days that has swelled, and I think the whole industry is going to benefit. There’s 2-300,000 people now that are looking at private aviation not as a luxury anymore, but as a necessity.”
Wheels Up has seen these changes firsthand. The company is adding new customers at “double plus” per-month rates seen before the crisis, and is “now running at pre-COVID levels,” Dichter added.
“It’s different demand,” he said. “It’s not the business flying that we were used to seeing, because businesses are still mandating that people work from home. Separately, vacation [travel] as we know it is not happening. What we’re seeing are families relocating, moving around. The good news is that when business and leisure as we know it come back in, I think you’re going to see a heyday in the private space.”
Dichter launched Wheels Up in 2013, within days of a two-year noncompete clause expiring following his sale of Marquis Jet to Berkshire Hathaway. He says the firm is already “by every way that people count, the largest [Part] 135 [organization] in the world,” with just fewer than 300 airplanes, between 800 and 900 pilots, and membership that is expected to top 10,000 by year’s end. But the changes being wrought to the sector following the pandemic mean these figures remain small compared to Dichter’s ambitions for the firm.
“I see our membership model as in inning one or two,” he said. “If we have 10,000 [now], then there’s no question we should have 50,000 or 100,000 people in our membership tier. And then I think about the marketplace, which is people who can download our app and use us to connect to the right airplane, the right operator, the right mission, the right pricing. We should have a million people that download the app. I think that, in a world that’s three to five years out, we should have a couple of hundred thousand people in a given year putting revenue on our system.”
Turning private aviation into a mass market is not just Dichter’s rallying cry. “It should be as easy to order a safety-vetted and verified airplane on your iPhone as an Uber or a Domino’s pizza,” he told George. It has been his goal from the outset. Wheels Up focused on the King Air platform because he saw it as “the flying SUV”—a versatile aircraft capable of carrying out large numbers of short-haul flights at low cost. Through acquisitions—Wheels Up bought TMC in 2019 and existing Part 135 operating partner Gama Aviation Signature in March this year—the company has expanded not just in size but in capability.
“The King Air was a category unto itself,” he said. “The next natural class for us to be in was a small mid, which is the [Cessna Citation] XLS. And then the Citation X was the perfect super-mid for us. With the TMC acquisition we picked up 26 [Beechcraft] 400 XPs. That gave us a King Air, light, mid, and super-mid.”
Dichter is still planning to take his company public. Consolidating recent expansion—which includes the acquisition of Delta Private Jet and software developer Avianis Systems—should enable the ambition to be realized by the end of 2022.
“I think we’re probably a year, 15 months out,” he said. “We want to get Delta, Gama, TMC and Avianis integrated. Ultimately, why can’t we be the Uber or the Airbnb of the space? We already have the brand, we have the authenticity, we have the tradition and we have the safety.”