Delta Air Lines’ recent investment in private aviation company Wheels Up is expected to provide the much-needed capital for the company’s financial stability and profitable growth. The $500 million investment, which includes funds from Delta Air Lines, Certares Management, Knighthead Capital, and Cox Enterprises, will give Wheels Up a stable platform for sustainable growth. The investment structure includes credit facilities and a term loan, aimed at improving operating performance and creating a seamless connection between private and premium commercial travel.
The investment structure brings together the expertise of Delta Air Lines, Certares Management, and Knighthead Capital, each contributing their unique knowledge and experience in the travel and aviation industries. The credit facility, totaling $500 million, will be provided by Delta and CK Wheels, an investment firm co-managed by Certares, Knighthead, and Cox affiliates. Wheels Up CEO George Mattson expressed his gratitude for the investment, stating that it represents a vote of confidence in the company’s strategy and future growth.
The credit facility includes a $100 million revolving credit facility from Delta Air Lines and a $350 million term loan funded by Delta, CK Wheels, and Cox. There is also the possibility of an additional $50 million term loan from a new lender. The closing of the credit facility will result in the lenders receiving newly issued Wheels Up common stock, giving them a majority ownership of the company.
In addition to the investment, Wheels Up has announced the new structure of its Board of Directors, which will include nine directors appointed by the investing parties. Four directors will come from Delta Air Lines, two from Certares, two from Knighthead, and one from Cox. Wheels Up executive and two existing board members will also be part of the new board.
Wheels Up Chairman and Delta’s Chief Financial Officer Dan Janki expressed his excitement about the investment and new leadership structure, stating that Wheels Up is an integral part of Delta’s portfolio of premium partners. He believes that the deep relationship between the two companies presents a significant opportunity to deliver unique benefits to customers.
This investment and the new leadership structure are expected to put Wheels Up on a strong path to success. The company recently appointed George Mattson as its new CEO, who brings extensive experience in the aviation industry. Mattson expressed his enthusiasm about leading the Wheels Up team, with the support of Delta and the other new investors.
Overall, Delta’s investment in Wheels Up is seen as a positive move for both companies. It not only provides Wheels Up with the necessary capital for financial stability and growth but also strengthens the relationship between Delta and Wheels Up, creating opportunities for future collaboration and improved customer experiences.