Summary
- Wheels Up saw lower revenue and a net loss in the first quarter of 2024.
- The company exited aircraft management and sales, resulting in a 44% revenue decrease.
- Wheels Up experienced slowing demand for charters and a decrease in active users and members.
On Thursday, May 9, Wheels Up, a private aircraft charter company based out of New York City, New York, posted its financial results for the first quarter of 2024. Overall, the charter company saw a decrease in revenue compared to the first quarter of last year. However, the company also saw an improvement in overall profit, although it still realized a net loss.
First quarter results
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A big focus for Wheels Up over the last year was its goal to exit the aircraft management business. The company also decided to leave the aircraft sales business as well, mostly due to struggling to find consistent profits in both markets. Because of this, the charter company recorded a total revenue of $155 million in the first quarter. Compared to last year, this was a slight decrease, as Wheels Up recorded a total revenue of $197 million in the first quarter of 2023. The first quarter of 2024 had a 44% year-over-year decrease in revenue.
Photo: Wheels Up
The company also saw a net loss in the first quarter this year. Its total net loss was recorded at about $97 million for the first quarter. This, however, was a slight improvement from last year, improving year over year by $3.5 million. Another recorded measure was adjusted EBITDA. Wheels Up recorded a loss of $49.2 million in this measure.
The Chief Executive Officer of Wheels Up, George Mattson, spoke about the first quarter financial results. Mattson stated,
“Wheels Up has made great strides to improve our operations and consistently deliver exceptional service and an experience worth repeating for our customers. Our strong operational performance provides the foundation for driving to profitable growth. I am pleased with the market interest in the accessibility and flexibility of our offerings, and we are seeing accelerating commercial momentum throughout our strategic partnership with Delta Air Lines.”
Slowing demand for charters
A big reason for the lower revenue, in addition to exiting two large market segments, was a decrease in overall charter demand throughout the first quarter. The Chief Financial Officer of Wheels Up, Todd Smith, spoke about the decreased demand. He stated that Wheels Up saw a decrease in demand in January and February. However, the company also saw an uptick in demand in March that has carried into the second quarter of 2024.
Photo: Wheels Up
However, year-over-year, Wheels Up saw a decrease in overall users and members. The company saw its active members even out at about 9,155 total members in the first quarter. This was a 25% decrease from last year. This was most likely due to ongoing efforts by Wheels Up to regionalize its membership programs.
Wheels Up also saw its overall users decrease from 2023. It recorded approximately 10,218 total users in the first quarter of this year. This was a 23% decrease compared to the first quarter of last year. The decrease in overall members most likely contributed to this decrease. Additionally, as previously mentioned, demand was slightly down in the first quarter, which most likely contributed to the fewer users year-over-year.