Wheels Up fleet: 73 Wichita-made planes, only 927 to go

In a little more than three years, Kenny Dichter’s company has bought a lot of Wichita-built planes.

Seventy-three of them, to be exact, with a value of about $400 million.

And if Dichter has his way, Wheels Up will buy more. A lot more.

“The picture that I see in my brain has 1,000 airplanes in it,” said Dichter, Wheels Up founder and CEO. “We’re only 73 airplanes in.”

Dichter, 48, is an important customer for Textron Aviation, whose roughly 9,000 employees’ jobs depend on the company selling and maintaining Beechcraft and Cessna airplanes – which account for Wheels Up’s entire fleet.

“Kenny … has done a great job supporting aviation in the Wichita community,” Textron Aviation president and CEO Scott Ernest said.

Wheels Up’s timing of those purchases has been arguably as important as the purchases themselves. They came after the 2008 financial crisis that froze credit for aircraft purchases and resulted in a long recession that led to the layoff of thousands of Wichita-area aviation workers.

Even today, the business aircraft market hasn’t fully rebounded.

Wheels Up is a New York-based private aviation membership company. It sells corporate and individual memberships for flights on its King Air 350i turboprops and Citation Excel/XLS business jets.

It currently has 53 King Air 350i and 15 pre-owned Excel/XLS jets. By comparison, Textron Aviation delivered 63 King Air 350i’s and 19 XLS+ jets in 2016.

“Textron Aviation has Hawker, Beechcraft and Cessna,” said Dichter, who comes to Wichita four to six times a year. “Those are, in my view, the three strongest brands in all of aviation.

“Textron Aviation has everything that Wheels Up needs.”

Memberships start at a one-time initiation fee of $17,500 and annual dues of $8,500. Members also pay an hourly rate for their flights.

The company has about 4,000 members, and Dichter said the goal is to reach 10,000 by the end of 2020.

Second time around

Wheels Up is Dichter’s second aviation-related start-up business.

His first was Marquis Jet in 2001, which offered a “jet card” with prepaid flight hours on private jets to customers. It was bought by Warren Buffett’s Berkshire Hathaway, the parent company of fractional ownership company NetJets, in 2010.

Dichter “developed the bug” for private aviation in 1998 after he and a partner sold an earlier start-up, Alphabet City Records, for $4.3 million to the former SFX Entertainment. A University of Wisconsin sociology undergraduate, Dichter flew several times on private jets with SFX executives during that period.

“It occurred to me there needed to be a better way for individuals to fly privately without owning the asset (airplane), and we came up with the Starbucks card of private aviation,” he said.

With Marquis Jet, Dichter said, the company had a market of about 250,000 people and businesses that could afford to buy its jet card.

With Wheels Up, that market potential is about 1.25 million people and businesses, he said.

If it all sounds like a lot of bluster, it isn’t, said David Adelman, who has known Dichter for more than a decade.

“What I’ve seen Kenny do for the last 3 1/2 years, I’ve seen him have a way of almost willing things to happen,” Adelman said. “He’s really about synthesizing what he sees and putting that into action.”

Adelman was a Marquis Jet customer and led a group of Philadelphia-based investors who poured more than $30 million into Wheels Up.

“I love Kenny,” Adelman said. “I thought whatever his next business is, count me in.”

People skills

Besides “great vision,” Dichter also has “a great gut for people,” Adelman said, whether that’s customers, suppliers, vendors or the people who work alongside him at Wheels Up.

Dichter’s people skills were evident at a recent Aero Club luncheon in Wichita. Instead of sitting down to eat like the 135 people who came to hear him speak, Dichter spent the 30 minutes leading up to his speech stopping at every table in the room to introduce himself.

Dichter “is superb at building relationships,” said Ernest, who put in a rare appearance at Aero Club to hear Dichter speak.

“You could put him back in that room, and he’ll remember everybody’s name,” Adelman said. “There’s just a lot of comfort that people have with him.”

If Dichter has a weakness, Adelman said, it’s that “he’s too kind, too giving, going overboard doing the right thing, the best thing. Kenny’s just a high-integrity person.”

As a company, Dichter and Wheels Up have been “exceptionally generous” supporters of the Boys & Girls Clubs of South Central Kansas.

“We were invited to be a part of it by Scott Ernest three years ago, and it’s something we’re going to be a part of forever,” Dichter said. “We donated some Wheels Up experiences, some trips to The Masters (golf tournament) that we auctioned off.”

It also has acquired signed jerseys from some of its “celebrity ambassadors” for the organization to auction, he said. Wheels Up’s celebrity ambassadors include Serena Williams, Tom Brady, Rickie Fowler and Wayne Gretzky.

“It’s part of the Wheels Up culture to give back, and being part of the Boys & Girls Club effort every year is a way for us to give back directly to Wichita,” he said.

Russ Meyer, Cessna chairman emeritus and a long-time supporter and fundraiser for the Boys & Girls Clubs, said the Wheels Up trips to The Masters were “one of the most popular” auction items at the organization’s last gala, which raised nearly $1.5 million.

“We could not possibly be more grateful to Kenny,” Meyer said. “He’s done an amazing job with Wheels Up.

“He’s a very, very good person, and he’s been a phenomenal partner for us at both Cessna and the Boys & Girls Clubs.”

Going public, global

Looking out 10 years, Dichter sees a Wheels Up fleet of 500 King Airs in North America and “100 Excels and maybe 100 (Cessna Citation) X’s.”

And unlike his previous ventures, Dichter doesn’t see himself reaching a point where he sells Wheels Up or takes it public and goes off to start another new business.

“We’re looking at the public markets, but I don’t view the public markets as an exit,” Dichter said, adding that Wheels Up is exploring an initial public offering in the next year to 18 months. “I view that as the right platform to grow the business, to make the business a global business.

“I want to be a part of Wheels Up for a long time.”

Adelman thinks Dichter is in Wheels Up for the long term.

“The difference here is that he’s really building this for the long haul,” he said. “This will be a very sustainable company for a long time, and it would be hard for me to see him do other things.”

Dichter also sees Textron Aviation continuing to be the mainstay of Wheels Up’s fleet.

“I think we’re just getting started with Textron … that’s how I feel about the relationship.”

This story was originally published April 22, 2017 at 4:29 PM with the headline "Wheels Up fleet: 73 Wichita-made planes, only 927 to go."