Just off a new round of private equity financing, private aviation membership company Wheels Up is prepared to add more Wichita-built planes to its fleet.
The privately held company received a new round of funding totaling $117.5 million from Fidelity Management, funds and accounts advised by T. Rowe Price, NEA and new, but unidentified institutional investors, said founder and chief executive Kenny Dichter at a news conference at the National Business Aviation Association convention. The private equity financing comes after a $90 million aircraft financing facility from private equity firm KKR.
“They’re basically funding our next year’s worth of King Airs,” Dichter said of KKR’s financing facility.
With the new funding, Wheels Up has an estimated value of more than $1 billion.
The company offers individual and corporate memberships that give members access to Wheels Up planes with 24 hours notice, using web and smartphone applications.
Wheels Up has 65 Beechcraft King Air 350i turboprops and 15 Cessna Citation Excel/XLS business jets. It has a commitment to buy 105 King Airs from an order announced in 2013.
The company could also add a new aircraft model to its fleet, the Cessna Citation X midsize business jet, beginning as early as the first quarter of 2018. Dichter said he sees Wheels Up initially adding between eight and 10 Citation Xs.
Those Citation Xs likely will be pre-owned aircraft that would be purchased from Textron Aviation.
With the additional funding, Wheels Up also plans to accelerate its membership growth through new sales and marketing efforts and an eventual expansion into Western Europe.
Wheels Up has 4,000 members, and Dichter said the goal is to increase that to 10,000 by 2020. Individual members pay a $17,500 initiation fee and an hourly aircraft usage fee. After the first year, the annual membership is $8,500.
The company has a membership retention rate of more than 85 percent, officials said at the news conference.