In advance of its public listing on the New York Stock Exchange, the company presented analysts its lofty ambitions to revolutionize private jet access
Wheels Up founder Kenny Dichter believes the addressable market for private aviation can grow from its current $31 billion to $80 billion by 2025. It plans to be a key driver. Here’s how…
A detailed overview of each presentation during Wheels Up’s Analyst Day
“So if you’re tired of the same old story…turn some pages.” – REO Speedwagon
Ready or not, Kenny Dichter and Wheels Up plan to change the face of private jet access. It’s a big leap from marketing ploys like selling memberships through Costco. Beyond stump speeches at industry conferences, there will be the harsh spotlight from being a publicly traded company. If he’s successful, the lifelong entrepreneur will find his name alongside aviation innovators such as Pan Am founder Juan Trippe, former American Airlines chairman Robert Crandall, who ignited revenue management and frequent flyer programs, and inventor of fractional private jet ownership, Richard Santulli. The latter created NetJets, the world’s largest private jet operator, and gave Dichter his entree into the industry. In fact, Dichter might fly higher than all of them. Success would make Dichter the Jeff Bezos of private jets.
In a two-hour presentation to financial analysts Friday morning, the founder and CEO of Wheels Up, along with his leadership team, discussed various milestones, projected growth, and insights on where it’s coming from. More than that, they unveiled a dramatic vision for a private aviation marketplace they say could more than double the addressable market by 2025, democratizing the segment down to low single-digit millionaires. It will certainly be key in their plan to grow revenues from $695 million last year to over $2.1 billion by 2025.
And yes, you can argue that Amazon, Uber, Netflix, and Airbnb each faced far less daunting obstacles in unlocking supply via their marketplaces. It’s easier to ship books or position a Toyota Camry than move a HondaJet to El Paso for a charter customer on a day’s notice.
There will be easier access for consumers driven by proprietary technology. There will be international expansion and revenue from selling rentals on superyachts, villas, and a Wheels Up credit card. Yet, the core belief is by making it easier and creating lower price points during low demand periods, many more people and businesses will fly the private skies.
There are many elements to its vision. Wheels Up plans to take private aviation into new and diverse markets, not typically targeted by the industry. It also wants to grow the market of flight-sharing and by-the-seat flights, two segments that have yet to prove themselves. There will be a more efficient use of aircraft already out there, an ongoing industry goal. Of course, floating fleets are not new. Then there’s another question. How many private aircraft owners and small operators are truly thirsty for more charter business? We’re about to find out.
We must be intellectually honest about our track record as an industry, which is almost nonexistent as it relates to consumer diversity and inclusion…Within diverse segments lies a very large base of potential customers…
In the presentation (reviewed below), CTO Dan Crowe noted Wheels Up is building APIs allowing “distribution partners” to white label its budding marketplace as their private flight booking engine. If that includes mega-online travel agencies such as Expedia or Travelocity, it will extend the industry’s reach exponentially. We’re not sure. There was no question and answer period.
A natural parallel would be looking back to American Airlines with its Sabre booking system or United Airlines with Apollo. In addition to selling flights for their owners, they allowed the long-tail of smaller airlines to sell digitally through travel agents. Those global distribution systems drove industry load factors from under 60% in the late 1970s to around 90%. They also helped make airline travel much more accessible in the decades following industry deregulation.
When it comes to private jets, solving integrity issues of supply-side data will be key. To that end, Daniel Tharp, the chief platform officer, teased, “As we roll out (new technology) in the coming months, fleet operators will be able to publish their high-fidelity fleet availability in realtime making (the Wheels Up platform) the first hi-fi instantly searchable clearinghouse for private aviation aircraft supply.” What’s out there right now is mainly nothing more than query forms misrepresented in grandiose press releases.
Below are highlights from the morning organized by presenter.
Kenny Dichter, founder and CEO of Wheels Up
Wheels Up’s Board of Directors
The Private Aviation Pyramid
Private Aviation Is A Fragmented Market With Underutilized Assets
The History Of Wheels Up
Wheels Up Revenue Growth Projections and Investors
Greg Greeley, chairman of Wheels Up Markeplace
Before joining Wheels Up, Greg Greeley “was 18 years on Jeff Bezos’s hip at Amazon. He developed the Prime program with Jeff, then he went to work at Airbnb for (CEO Brian) Chesky (as) president of Airbnb Homes, which is 98%, 99% of the Airbnb business,” Dichter said in his introduction.
The truly great marketplaces end up introducing goods and services that the community didn’t realize existed and then started to really embrace
Private Aviation Is Primed For Disruption
Lee Applbaum, Chief Marketing Officer
Lee Applbaum is an alum of Coke, Target, Radio Shack and helped create Patron’s multi-billion dollar valuation before joining Wheels Up last year.
Wheels Up ambassadors are all paying members, and many are investors…
Francesca Molinari, Chief People Officer
Before joining Wheels Up in January as Wheels Up’s first chief people officer, Francesca Molinari held leadership positions at eBay, Adobe, and GE Capital.
Wheels Up Focus On Diversity And Inclusion
Jason Horowitz, Chief Business Officer
Horowitz joined Wheels Up in 2013, first as general counsel then as COO before moving to his current role.
Wheels Up’s Dynamic Pricing And Capped Hourly Rates
Expanding Private Aviation’s Addressable Market
Thomas Bergeson, Chief Operating Officer
Lt. General Thomas Bergeson joined Wheels Up last September after a 35-year career in the Air Force. His final assignment was as Deputy Commander of U.S. Central Command. He was responsible for all U.S. and coalition military operations in the Middle East, Southwest, and Central Asia countries.
While this is simple to say, this could be really challenging in practice due to the very dynamic nature of private aviation and the many variables that must be taken into consideration
Private Aviation Is Complicated
Wheels Up’s Fleet
In-House Maintenance Improves Dispatch
Floating Private Jet Fleets Vs. Home-Based Private Jets
Dan Crowe, Chief Technology Officer
Dan Crowe joined Wheels Up five years ago as CTO. Prior to that he held similar positions at Weight Watchers and AutoTrader.
This is real technology. It’s not a data collection form disguised as a booking app. We price and book flights in real-time, and we have booked many thousands of flights digitally.
Matching Private Jet Supply And Demand
Wheels Up’s Proprietary Technology
Daniel Tharp, Chief Platform Officer
Tharp founded Avianis and joined Wheels Up when it bought the company for $14.4 million in cash and 2,011,495 in common interests in September 2019.
As we roll out this technology in the coming months, fleet operators will be able to publish their high-fidelity fleet availability in realtime making this the first hi-fi instantly searchable clearinghouse for private aviation aircraft supply
Avianis Flight Management System
A Global Search Engine For Private Jets
Eric Jacobs, Chief Financial Officer
Before joining Wheels Up in 2018, Eric Jacobs was CFO at Dealertrack, a publicly traded technology company that led analog to the digital transformation of retail automotive. While at Dealertrack, the company grew annual revenue from approximately $250 million to over $1 billion before selling to Cox Automotive.
Wheels Up’s Evolving Business Model
Wheels Up Fleet Mix
Wheels Up Financials
Kenny Dichter’s Excellent Adventure
Dichter concluded the presentation by saying, “Democratization of private aviation is what we’re here to do, powered by a next-generation technology, Avianis, and we want to bring this to millions of consumers from a market today that only serves hundreds of thousands.” It’s a lofty goal worthy of admiration in an industry more complex than selling books and bedrooms.