Delta, Others Invest $500M in Wheels Up Bailout

Short-term capital infusion is expected to help cash-strapped, on-demand private aviation firm avoid bankruptcy.

Jack Daleo

Tuesday, August 15, 2023 at 01:18 PM ET

Verified

Wheels Up will avoid bankruptcy after being bailed out by Delta Air Lines and other investors. [Courtesy: Wheels Up]

Key Takeaways:

Wheels Up, an on-demand private aviation company, is being bailed out from impending bankruptcy by a $500 million capital infusion from Delta Air Lines, Knighthead Capital Management, and Certares Management.
The deal grants Delta and other investors 95% ownership of Wheels Up, with Delta providing a significant portion of the funding and taking over key leadership roles to drive strategic and financial improvements.
Wheels Up faced severe financial distress due to widening net losses, rapidly dwindling cash reserves, and an unsustainable business model characterized by high operating costs and policies like capped hourly rates.
Delta aims to leverage its expertise to integrate Wheels Up into its premium travel services, overhaul its membership programs and operations, and restore profitability and customer confidence, preventing a potential crisis for the broader private aviation industry.

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On-demand private aviation company Wheels Up is expected to be bailed out by Delta Air Lines and other investors.

Per a press release viewed by FLYING, the New York City-based company, which last week sought and received $15 million in emergency funding from the airline, will cede 95 percent ownership in exchange for a $500 million capital infusion from Delta, Knighthead Capital Management, Certares Management, and others.