Wheels Up private flight club good for Wichita
Published on -7/31/2014, 12:42 PM
By Molly McMillin
The Wichita Eagle
(MCT) Editor's Note: This story has been updated to correct information about the number of members the company has, as well as the number of King Air planes in its fleet.
Wheels Up -- a membership-based flight club for private aviation passengers -- has grown quickly since it started as a PowerPoint presentation one year ago.
That growth has been good for Wichita, Textron Aviation CEO Scott Ernest said.
Today, Wheels Up represents 20 percent of the manufacturer's King Air business.
"It's a very important customer to Wichita," Ernest said. "The more (Wheels Up) sells, the better it is for the King Air line, that's for sure."
Wheels Up celebrates the first anniversary of its launch Friday.
It now employs 60 people and has signed up 550 members.
By the end of this year, founder and CEO Kenny Dichter expects membership to total 1,200.
The former founder of MarquisJet forecasts Wheels Up, which is based in New York City, will have more than 2,500 members by the end of 2015.
"We're ... ahead of expectations," he said. "We're more bullish about the business today than we were a year ago, the day we announced it."
He's not surprised by the fast growth.
"What we set out to do, we're doing," he said. "I'm excited about what Wheels Up in Wichita can do."
And that's add Wichita-built airplanes to its fleet.
A year ago, Wheels Up ordered 105 King Air 350is from Beechcraft Corp., in what was the largest general aviation propeller-driven airplane order in history, Beechcraft said at the time.
That included a firm order for 35 King Airs with options for 70 more.
So far, Wheels Up has taken delivery of 18 King Airs with nine more to be delivered by the end of 2014.
"We're already in discussions about how we want to exercise that option," Dichter said.
It's also taken delivery of the first four of 10 factory refurbished pre-owned Excel and XLS business jets it has ordered.
Wheels Up plans to buy 10 to 15 more in 2015, Dichter said. The plan has not been firmed up.
"The Excels is an unbelievable plane," he said. "It's working great."
The planes are outfitted with a Wheels Up blue-and-white paint scheme and the word "Up" on the tail. They have customized interiors that include Wi-Fi connectivity.
Wheels Up is contemplating additional Citation models.
"We are continuing to seriously look at how the CJ4, the Citation Sovereign and the Citation X fits into our Wheels Up plan," Dichter said.
Ernest expects Wheels Up to order other Citation models as it expands.
"As (Dichter) sees more demand from East to West coast, that will drive the need for the X and the Sovereign to fulfill that flight leg," Ernest said.
That growth would be good for Textron Aviation and Wichita.
"We want him to be successful," Ernest said.
In the meantime, "we want to make sure we're taking care of the operational availability of the planes and give him the opportunity to have a multiple product line," he said. "The King Air is going wonderful. We couldn't be happier with how things are moving along here."
Ernest said Dichter and his team are working hard to grow Wheels Up.
"He's out there trying to look at all the different verticals that he can go after," he said. "He has a good lead generation team that really gets out there. That works extremely well for the market that he's trying to capture."
The biggest challenge has been managing all the growth, Dichter said.
"It's been a whirlwind and a nonstop year," he said. "The great news is we've been able to manage through it. The mission is to increase the number of people participating in private aviation, Dichter said.
Many members are former first-class and business class passengers of commercial airlines.
Members pay an initiation fee, an annual membership fee and an hourly rate for the use of an airplane.
Fliers pay $3,950 an hour for King Air 350i time, for example, Dichter has said. That's much less than the cost of a jet.
"CEOs like us," he said. "CFOs love us."
Dichter said he is bullish on the general aviation industry as well.
"I think that the industry is really approaching the tipping point, meaning I think it's going to tip over," he said. "I see a five- to 10-year very, very positive run for Wichita."
For one, the number of flight hours is approaching 2007 and 2008 levels. And the Dow Jones Industrial Average has risen to about 17,000.
"The Dow floats all boats and it lifts all airplanes," Dichter said.
With the recession and down economy, the replacement cycle for business aircraft has been delayed -- and delayed again.
Now, they're talking to the manufacturers and looking more seriously at replacing older aircraft, he said.
Dichter said he's excited about what he and Textron Aviation can do together.
"I'm excited about the prospects," he said. "I'm excited to come to work, and I'm really excited to what 2015 and '16 can bring to Wheels Up and Textron Aviation and the people of Wichita."
The partnership has been good, Dichter said.
"We feel a big responsibility to Wichita," he said. "We feel what Wichita does is magical. They start with raw materials and they come out with airplanes. It's great for us to be part of that magic show."
(c)2014 The Wichita Eagle