In a significant move within the private aviation sector, Delta Air Lines, Certares Management LLC, and Knighthead Capital Management LLC have joined forces with Wheels Up Experience Inc, a leading provider of on-demand private aviation, to accelerate the company’s business transformation.
This partnership is set to catalyze Wheels Up’s business transformation as it pursues an ambitious expansion strategy in the premium private aviation domain.
Wheels Up had previously unveiled its intentions to elevate and diversify its product offerings, with a key focus on delivering high-end private aviation services in a financially sustainable manner.
The financial support extended by these strategic partners is poised to provide the necessary impetus to drive Wheels Up’s transformative vision over the long term.
Funding Structure and Commitment
The partnership entails a preliminary non-binding agreement for the provision of a substantial $500 million facility to Wheels Up. This facility encompasses a $400 million term loan and an additional $100 million liquidity facility, collectively facilitated by Delta Air Lines, Certares, and Knighthead Capital Management.
The collaboration is strategically designed to amalgamate the distinct strengths of each partner. Delta’s extensive experience is in delivering premium airline services.
Certares has a focus on travel and tourism, and Knighthead Capital Management’s expertise in restructuring and transformation will synergistically contribute to the realization of Wheels Up’s ambitious transformation plan.
This announcement also heralds notable changes in Wheels Up’s leadership structure. Dan Janki, the Chief Financial Officer of Delta, is slated to assume the role of Chairman of the Board, succeeding Ravi Thakran, who will transition from Executive Chairman to a Director position.
As an integral part of this collaboration, Wheels Up is set to issue Class A common stock to the participating new money lenders.
This issuance will confer ownership of approximately 95% of the company to these lenders upon completion. This move adheres to the Financial Distress Exception framework outlined by the New York Stock Exchange.
Completion and Approval Process
It’s important to note that the successful execution of this transaction is contingent upon the finalization of comprehensive documentation, adherence to customary closing conditions, and securing necessary regulatory approvals.
This partnership not only marks a transformative journey for Wheels Up but also builds upon the existing affiliation between Wheels Up and Delta, which traces its origins back to 2020 when Delta Private Jets merged with Wheels Up.
This alliance has consistently granted Wheels Up members access to Delta flights, opportunities to earn Delta SkyMiles, and the potential for benefits toward Delta’s coveted Medallion Status.
The collaborative venture between Delta Air Lines, Certares Management LLC, Knighthead Capital Management LLC, and Wheels Up holds the promise of positioning Wheels Up as a dominant force in on-demand private aviation services.
The merging of industry acumen, resources, and commitment showcased by these partners underscores a shared goal to elevate the private charter aviation experience, steering Wheels Up toward enhanced profitability and prominence.
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