In a statement Wheels Up, a Private jet company, reported a whopping 68% jump in its first quarter revenues as well as a 56% bump in its active members, as a result of consumers opting to fly private due to pandemic fears.
Wheels Up, which is scheduled to close its merger with the blank-check company Aspirational Consumer Lifestyle Corp, is set to become a publicly listed company this summer. It saw its revenues surge to $261.7 million in the first quarter compared, up from $156.1 million from a year ago.
It reported a narrowing of its losses to a net loss of $32.2 million during the same quarter, down from $44.5 million from a year ago. It also reported an EBIDTA loss of $8.7 million, down from $17.1 million from the previous year.
The company now boasts of nearly 10,000 memberships, up from 6,300 from a year ago.
“We started this year strong, with record revenue driven by increased flying from our significant membership growth, and contributions from recent acquisitions,” said founder and CEO Kenny Dichter. “Our customers are flying longer distances and across all fleet categories.”
Incidentally, the private jet travel industry has recovered far more quickly than commercial airlines, with the wealthy flocking to flying in private planes in order to avoid the health risks of crowded airports and COVID-19. A strong stock market and a wave of successful IPOS have created massive amounts of new wealth and new customers who can now afford to fly private.
Wheels Up is not the only company reporting stellaw first quarter earnings in this sector. VistaJet, a leading private jet company also reported a 29% jump in its membership, compared to the previous year. The bulk of its North American routes are nearly back to pre-pandemic levels and at times even ahead. Its traffic to California was up 57% in the first two months of this year, compared with the previous year, while flights to Hawaii surged by 81%.
The question for these companies from investors is that, over the longer term, will they be able to churn out profits while maintaining its growth. Like many of its peers, private jet companies are burdened by the high costs of jets, maintenance and infrastructure costs, and the costs of hiring pilots and crew.
“The goal is to become the ‘Airbnb of the sky,’ using technology and its large fleet to make it easier and less expensive for travelers to book flights or charters over an app,” said Wheels Up CFO Eric Jacobs. “We are committed to accelerating investments in operations and next-generation technology to help us efficiently manage demand in the future”.
According to experts from the private jet industry, the sector should see demand for private jet travel continue to grow in the months ahead.
“It looks to be a very strong bull market for folks selling private aviation,” said Doug Gollan, founder and editor-in-chief of Private Jet Card Comparisons, which advises private jet fliers on jet cards and subscriptions.
“While most of the private jet demand over the past year has been from leisure travelers, there is a strong demand for business travel, with many business travelers looking to buy 75 hours to 300 hours of flight time,” said Gollan while adding, “When you combine this with new flyers and folks getting vaccinated who are traveling again as things open up, you have a perfect storm on the demand side”.