Private jet company Wheels Up reported a 68% jump in first-quarter revenue and 56% increase in active members, as growing wealth creation and pandemic fears continue to drive demand for flying private.
The company, which is expected to close its merger with the blank-check firm Aspirational Consumer Lifestyle Corp. and become public this summer, saw revenue climb to $261.7 million in the first quarter compared with $156.1 million a year ago. Its losses also narrowed, reporting a net loss of $32.2 million in the quarter, down from a loss of $44.5 million a year ago. Its adjusted EBIDTA loss of $8.7 million was down from $17.1 million last year.
The company now has nearly 10,000 members, up from 6,300 a year ago.
“We started this year strong, with record revenue driven by increased flying from our significant membership growth, and contributions from recent acquisitions,” said Founder and CEO Kenny Dichter. “Our customers are flying longer distances and across all fleet categories.”
Private jet travel has recovered far more quickly than commercial airlines, as the wealthy flocked to private planes to avoid the health risks of airports and commercial flights. Rising stock markets and IPOs have also created massive amounts of new wealth and new customers who can now afford to fly private.
North American private-aviation flights in March topped the same month in 2019, according to Argus Traqpak.
VistaJet, another leading private jet company, said its membership has grown 29% over the past year. Many of its North American routes are nearly back to pre-pandemic levels or even ahead. Its traffic to California was up 57% in the first two months of 2021 compared with last year, while flights to Hawaii are up 81%.
The big question for Wheels Up and its investors is when it can turn a profit and whether its growth and earnings will be attractive to shareholders over the longer term. The company, like many private jet companies, is burdened by the high costs of private jets and maintenance, along with pilot and infrastructure costs.
Wheels Up says its goal is to become the “Airbnb of the sky,” using technology and its large fleet to make it easier and less expensive for travelers to book flights or charters over an app.
“We are committed to accelerating investments in operations and next-generation technology to help us efficiently manage demand in the future,” said Eric Jacobs, the company’s CFO.
Private jet experts say Wheels Up and other private jet companies should see demand for private jet travel continue to grow in the months ahead.
“It looks to be a very strong bull market for folks selling private aviation,” said Doug Gollan, founder and editor-in-chief of Private Jet Card Comparisons, which advises private jet fliers on jet cards and subscriptions.
While most of the private jet demand over the past year has been from leisure travelers, Gollan said he’s seeing strong demand for business travel, with many business travelers looking to buy 75 hours to 300 hours of flight time.
“When you combine this with new flyers and folks getting vaccinated who are traveling again as things open up, you have a perfect storm on the demand side,” Gollan said.