Wheels Up, the air charter membership firm with a core fleet of King Air 350 turboprops, says corporate executives and millennials have one thing in common.
“They don’t want to own assets if they don’t have to,” said Ken Dichter, Wheels Up founder and CEO.
The six-year-old firm has more than 5,000 members who pay $8,500 a year for access to a fleet of 73 King Airs, 15 Cessna Citation Excels, and 6 Citation Xs. The company expects to grow rapidly to 10,000 members, many of whom fly as little as 10 to 15 hours per year—and that relatively small amount of usage is just fine with Wheels Up.
The company says 1 million Americans are potential customers for its service, which Dichter says is focused on expanding “the bottom of the aviation pyramid.”
“While the OEMs are going bigger and bigger, we’re going the other way,” he said.
The eight-seat King Air 350 costs about half as much to operate as a similar-sized jet, company officials said, and the vast majority of its trips are 2.5 hours or less—so a faster, thirstier airplane doesn’t make economic sense.
Wheels Up also has no plans to operate single-engine aircraft.
In addition to using its own fleet, Wheels Up is increasingly acting as a broker for air charter customers. The firm has agreements with 11 charter companies with 85 mostly jet aircraft that Wheels Up uses for “supplemental lift.”
Dichter said the air charter industry is in the midst of a period of consolidation, and Wheels Up intends to expand through partnerships and acquisitions. It also wants to launch an initial public stock offering in the next 12 to 18 months.
In the meantime, Wheels Up is seeking to raise its public profile and build its brand by advertising on TV during college football games and other sporting events.
Wheels Up also has hired key executives from the automotive and financial industries, which have been transformed by digital marketing. By making air charter flights as easy to book as Uber or Air BNB, Wheels Up says it can dramatically expand the air charter industry.
“We can revolutionize this space,” Dichter said. “The bottom of the pyramid is the widest part, and we can greatly expand the number of participants in that play in the space.”