Delta-led consortium finalize investment in private jet firm Wheels Up

Wheels Up
wiltshirespotter / Creative Commons

A consortium of investors led by Delta Air Lines has finalized an agreement with Wheels Up to provide a $500 million credit facility.   

Alongside Delta, the travel and tourism investment firm Certares, turnaround investment firm Knighthead and Cox Enterprises, are also involved in financing the private jet firm.  

The announcement follows last week’s selection of George Mattson as Wheels Up’s new CEO. 

On August 9, 2023, Wheels Up announced that the company was “actively involved in discussions around strategic business partnerships for the company”.    

At the time, the struggling firm also confirmed it had secured a short-term capital infusion for $15 million from Delta, its largest shareholder. 

“This investment represents both an important source of capital for Wheels Up to support our strategy for financial stability, future profitability and long-term growth on behalf of our members and customers, as well as a vote of confidence in our path forward from a group of investors with deep experience in the premium travel space,” Mattson said. “We look forward to working closely with Delta and our other investors to deliver best-in-class operating performance and an exceptional customer experience which, as we deepen our commercial partnership, will also enable us to provide a one-of-a-kind seamless connection between private and premium commercial travel.” 

The credit facility is comprised of a $350 million term loan funded at closing from Delta, CK Wheels, and Cox and a $100 million revolving credit facility from Delta.  

The terms of the credit agreement permit a new lender to provide a $50 million term loan after the closing date, as approved by Delta, Certares, Knighthead and Cox, and it is anticipated this additional funding will close in the near term. 

In connection with the closing of the credit facility, the lenders will initially receive newly issued Wheels Up common stock representing 80% of the company’s outstanding equity as of the closing of the credit facility, on a fully diluted basis.   

After approval by Wheels Up’s stockholders of an amendment to its certificate of incorporation, the company will issue to the lenders additional new shares such that the lenders will own 95% of the company’s outstanding equity as of the closing of the credit facility, on a fully diluted basis. 

“Wheels Up is an integral part of Delta’s portfolio of premium partners, and this deep relationship offers a significant opportunity to deliver compelling benefits to our customers that are unique in the travel space,” said Dan Janki, Wheels Up chairman and Delta’s chief financial officer. “This investment and new leadership puts Wheels Up on a strong path to future success.” 

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