Airshare Quadruples Fleet in Deal for Wheels Up Private Management Business

The private aviation services provider, which counts NFL star quarterback Patrick Mahomes as a customer, snapped up 90 aircraft and 300 personnel from its rival.

Airshare Bombardier Challenger 3500

An Airshare branded Bombardier Challenger 3500, which the company offers for its fractional ownership services. [Courtesy: Airshare]

The company providing fractional aircraft ownership services for customers such as Kansas City Chiefs quarterback Patrick Mahomes—a two-time NFL Most Valuable Player—Chiefs head coach Andy Reid, and retired professional golfer Tom Watson, a PGA Tour legend, just grew its fleet exponentially.

Over the weekend, Mahomes-endorsed Airshare closed a deal to acquire rival Wheels Up’s private aircraft management business. The move more than quadruples Airshare’s own managed fleet—comprising Cessna Citations, Bombardier Globals, Embraer Legacies and Praetors, and other models—with the addition of 90 airframes.

The transaction leaves Wheels Up with around 215 aircraft, including 75 Beechcraft King Airs, 61 light jets, and 52 super midsize jets capable of making transcontinental flights. According to Private Jet Card Comparisons, Wheels Up prior to the deal was the fourth-largest fractional and charter provider in the U.S. based on flight hours. Airshare ranked 11th.

In addition to the aircraft, the Overland Park, Kansas-based company will inherit 300 personnel from Wheels Up’s private management business. John Owen, CEO of Airshare, told FLYING the move will double or even triple the company’s headcount.

Billing itself as a private aviation services provider, Airshare offers third-party aircraft management in addition to fractional ownership, jet card, and charter services. Already, it manages King Air, Citation Excel, and Citation X models that make up the bulk of Wheels Up’s fleet, many of which were included in the transaction. The company also manages light and large-cabin jets such as the Embraer Phenom 300 and Bombardier Global 5000.

Owen sat down with FLYING to discuss more details of the deal.

Expanding Options

Airshare began exploring aircraft management in 2008 with the launch of its Executive Flight Services offering, which along with the firm’s fractional business was later rebranded under the Airshare umbrella. According to Owen, a deal such as the one with Wheels Up was a long time coming.

“We had been looking at acquisitions in the aircraft management space for really the last few years but hadn’t come across anything that made sense to go all the way through with,” Owen told FLYING. “We were approached by a representative with Wheels Up earlier this year and asked if we had any interest in pursuing their particular aircraft management business. So that's how it all started.”

Owen said Airshare considered a few smaller deals but landed on Wheels Up because it “instantly gives us a coast-to-coast footprint for aircraft management.” Coast-to-coast coverage has been on the firm’s radar for a while now, and the acquisition will support its plans to offer fractional and jet card services nationally. It added those services to the Florida market in May and will soon set its sights on the Northeast.

Of course, the quadrupling of its managed fleet will be of major benefit to Airshare. On the fractional side, it operates a total of 22 Embraer Phenoms and Bombardier Challengers. But the managed business covers aircraft from Phenoms and Challengers to Citations, Gulfstreams, Legacies, and Globals, several of which will be added through the transaction. The company will even get its hands on a few new models.

“With the acquisition of this particular aircraft management business, there's a lot of [the above aircraft].” Owen said. “There’ll also be some Dassaults and some other planes. So it's a lot of what we've dealt with in the past, but there's also some new types in there as well.”

Owen is particularly excited about the addition of Wheels Up support teams, which he views as a crucial piece of the puzzle. Not only will it more than double the company’s aircraft management staff, but it will allow Wheels Up customers to work with the same representatives they’re used to—as if the deal never happened.

“We are not just absorbing the aircraft… We are taking the aircraft, the aircraft management teams, the maintenance teams, and the various accounting and administrative staff teams all along with it,” said Owen. “So, those owners that were under the Wheels Up umbrella will see zero changes day one after the acquisition, because they'll be working with the exact same teams they have been the entire time.”

The Airshare CEO emphasized that the new managed aircraft will complement—rather than supplement—its fractional services. The two businesses are stand-alone, he said, since customers who bought into the fractional program did so with Phenoms and Challengers in mind, not the models covered by the management service.

Rarely—on 2 to 3 percent of trips, by Owen’s estimate—Airshare will “off-fleet” flights using primarily managed aircraft, providing a slight bonus to customers. But the real benefit, he said, is the potential for coastal expansion and the addition of support teams to assist both new and legacy clients.

The deal does not necessarily mean Airshare will place greater emphasis on aircraft management. Rather, the intent is to expand options for customers, many of whom jump back and forth between the firm’s services. For example, Owen estimated about half of Airshare’s managed aircraft are owned by previous fractional customers.

“I think the core of our business is private aviation services,” he said. “It isn't fractional, it isn't managed, it isn’t charter, and it isn’t jet cards. It's really…having a wide swath of private aviation services that fit your particular needs at a particular time.”

Looking ahead, Airshare is confident in the demand for its managed services. The company keeps an eye on pricing and utilization data and regularly consults with customers to assess the strengths and weaknesses of the private aviation sector. Owen pointed to a healthy lead time of two years for new aircraft as an indicator of a well-oiled supply chain.

The Airshare boss also hinted that the company could one day add electric vertical takeoff and landing (eVTOL) and other emerging aircraft types to its fleet. That won’t happen in the near future, but the novel designs are on the firm’s radar.

“It's definitely something that's intriguing that we're watching very closely,” Owen said. “We're just kind of trying to figure out who’s going to survive that space. What exactly is going to come out of that space? But I think it makes a lot of sense, and I think a lot of people can use it.”

Arrow Pointing Down for Wheels Up?

The deal for Wheels Up’s private management business was initially revealed in August, when it announced it was seeking emergency funding in the form of a bridge investment from Delta Air Lines.

Later that month, Delta, Knighthead Capital Management, and Certares Management—which owns luxury travel agency Internova Travel Group—invested $500 million in the company to keep it afloat. But the bailout came at the expense of a 95 percent stake in the firm, placing its ownership largely in Delta’s hands.

Coincidentally, Delta once owned Wheels Up’s management business in full. It sold its Private Jets unit to its new subsidiary in 2020, retaining ownership of one-fifth of the business.

Wheels Up last year became the largest Part 135 operator in the U.S., with more than 1,500 owned, leased, managed, and partner aircraft in service. But since going public in July 2021, the company has lost money each quarter and contended with cost cutting, layoffs, and reports of cash flow woes.

Those rumors reached a fever pitch in May, precipitating the resignation of founder and CEO Kenny Dichter. Former chief financial officer Todd Smith took his place as interim CEO before the firm announced George Mattson, a Delta board member, as the permanent successor.

Mattson will reportedly shelve Wheels Up’s vision of an Airbnb-type marketplace to focus on existing services. In June, the company transitioned to a slimmed-down, more populated, capped rate primary service area, part of an emphasis on cost cutting and streamlined operations. Moving forward, it will also integrate its sales and marketing activities more tightly with Delta.

According to Doug Gollan, editor-in-chief of Private Jet Card Comparisons, Wheels Up remains one of a handful of providers offering cut prices for continental flights that are $10,000 to $25,000 cheaper than the competition. The company’s King Airs also continue to be viewed as a cost-effective option for short flights.

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Jack is a staff writer covering advanced air mobility, including everything from drones to unmanned aircraft systems to space travel—and a whole lot more. He spent close to two years reporting on drone delivery for FreightWaves, covering the biggest news and developments in the space and connecting with industry executives and experts. Jack is also a basketball aficionado, a frequent traveler and a lover of all things logistics.

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