{"id":15946,"date":"2024-07-30T10:23:17","date_gmt":"2024-07-30T07:23:17","guid":{"rendered":"https:\/\/aviation-news.info\/?p=15946"},"modified":"2024-07-30T10:23:17","modified_gmt":"2024-07-30T07:23:17","slug":"analyst-delta-must-fix-wheels-up-investment-and-fast","status":"publish","type":"post","link":"https:\/\/aviation-news.info\/?p=15946","title":{"rendered":"Analyst: Delta Must Fix Wheels Up Investment, and Fast"},"content":{"rendered":"<p>\u201cDelta Air Lines must fix its unprofitable Wheels Up investment\u2014quickly,\u201d according to business aviation analyst Brian Foley of Brian Foley Associates. He noted that the urgency is now greater since the airline reported a 29% year-over-year (YOY) profit decline in the second quarter while Wheels Up, which will report its second-quarter results next Thursday, continues to bleed red ink.<\/p>\n<p>\u201cWheels Up, purchased by Delta and a consortium of investors a year ago, had a $97 million loss in the first quarter, about on par with its loss during the same period in 2023,\u201d Foley said. \u201cWheels Up never made money even before Delta\u2019s rescue, and since its founding has racked up a $1.86 billion accumulated deficit.\u201d<\/p>\n<p>Earlier this year, Delta installed one of its board members as CEO of Wheels Up, in addition to adding former Delta chairman of operations and \u201can assortment of other [Delta] v-p\u2019s mostly with operations backgrounds\u201d to the executive ranks to turn around the private aviation charter operator, he said. Still, Wheels Up YOY revenues in the first quarter fell 44%, active members and revenue legs both dipped 25%, and cash on hand was reduced by nearly a third to $180 million, which Foley believes that, at current burn rates, could run out in the second half.<\/p>\n<p>\u201cRecent tweaks to improve the financials have included reducing primary flight coverage areas and fleet size, closing maintenance facilities, and most recently furloughing 11% of its pilots,\u201d Foley explained. He also said the King Airs that make up a majority of Wheels Up\u2019s fleet were not \u201cdesigned with high-frequency airline-type operations in mind. As such, scheduled maintenance events are frequent and time-consuming.\u201d<\/p>\n<p>Another market challenge has been lower demand for charter flights in the U.S. due to \u201cinflation and uncertainty,\u201d he added.<\/p>\n<p>\u201cWhile Delta\u2019s perseverance has been admirable and there are likely more sources of outside capital [for Wheels Up] if needed, without near-term meaningful financial improvement other avenues inevitably must be explored,\u201d Foley concluded,\u00a0implying bankruptcy might be one of those options.<\/p>\n<p>source: <a href=\"https:\/\/www.ainonline.com\/aviation-news\/business-aviation\/2024-07-29\/analyst-delta-must-fix-wheels-investment-and-fast\">https:\/\/www.ainonline.com\/aviation-news\/business-aviation\/2024-07-29\/analyst-delta-must-fix-wheels-investment-and-fast<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cDelta Air Lines must fix its unprofitable Wheels Up investment\u2014quickly,\u201d according to business aviation analyst Brian Foley of Brian Foley Associates. He noted that the urgency is now greater since the airline reported a 29% year-over-year (YOY) profit decline in the second quarter while Wheels Up, which will report its second-quarter results next Thursday, continues &hellip;<\/p>\n","protected":false},"author":1,"featured_media":15948,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpscppro_dont_share_socialmedia":null,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"default","_twitter_share_type":"default","_linkedin_share_type":"default","_pinterest_share_type":"default","_linkedin_share_type_page":"","_instagram_share_type":"default","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":null,"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[96,102],"tags":[],"class_list":["post-15946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aviation-world","category-featured-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Analyst: Delta Must Fix Wheels Up Investment, and Fast - aviation news<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aviation-news.info\/?p=15946\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analyst: Delta Must Fix Wheels Up Investment, and Fast\" \/>\n<meta property=\"og:description\" content=\"\u201cDelta Air Lines must fix its unprofitable Wheels Up investment\u2014quickly,\u201d according to business aviation analyst Brian Foley of Brian Foley Associates. 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