Wheels Up has raised $259m through mortgaging its owned aircraft, the proceeds of which will be used to add “financial flexibility” to the business.
The company’s subsidiary, Wheels Up Partners applied equipment notes worth $270m through an Enhanced Equipment Trust Certificates (EETC) loan structure. The EETC provides approximately $259m of net proceeds for Wheels Up.
The equipment notes are secured by a primary lien on several of the fleet and have a maturity of up to seven years.
“These proceeds give us additional financial flexibility to invest in our business as we pursue our goal for positive adjusted EBITDA in 2024,” said Todd Smith, chief financial officer, Wheels Up. “We believe we are in a strong competitive position to use the technology we’re deploying and our improving operational capability to provide an unparalleled customer experience in private aviation.”
Following the announcement, the company’s share price climbed 13%, according to The Motley Fool. Wheels Up became the first private aviation company to go public in July last year, listing on the New York Stock Exchange after being taken on by the special purpose acquisition company (SPAC) Aspirational Consumer Lifestyle Corp.
When Wheels Up announced its strong second quarter sales growth back in August, it pledged to become profitable by 2024 or sooner. Wheels Up’s third quarter results are expected to be announced on November 9th.
Last week, the founder of Directional Aviation, Kenn Ricci, announced his plans to take fractional company Flexjet public through the Horizon Acquisition Corporation II SPAC. The sale is expected to close in the second quarter of 2023.
