Delta Air Lines, Certares, Knighthead, and Cox Finalize Investment in Wheels Up

Delta Air Lines, Certares, Knighthead, and Cox Finalize Investment in Wheels Up

Wheels Up Experience (NYSE: UP) has officially closed its previously announced investment deal, which saw participation from Delta Air Lines, Certares Management LLC, Knighthead Capital Management LLC, and Cox Enterprises. This strategic investment aims to bolster the financial stability and growth prospects of Wheels Up, a leading provider of on-demand private aviation in the U.S.

The investment structure amalgamates Delta's premium airline experience with Certares' focus on travel and tourism and Knighthead's expertise in turnaround and restructuring. A significant deal component is a $500 million credit facility extended to Wheels Up. The funds for this facility have been contributed by Delta, CK Wheels LLC (co-managed by affiliates of Certares and Knighthead), and Cox Enterprises. This announcement comes on the heels of the recent appointment of George Mattson as the new CEO of Wheels Up.

Based on the investment, George Mattson stated, "This investment is a testament to our strategy for financial stability, future profitability, and long-term growth. We are excited to deepen our partnership with Delta and other investors to enhance the travel experience, bridging the gap between private and premium commercial travel."

Dan Janki, Wheels Up Chairman and Delta’s Chief Financial Officer, emphasized the importance of the partnership, noting, "Wheels Up is a vital part of Delta’s premium partner portfolio. This investment and the new leadership set Wheels Up on a trajectory for future success."

The credit facility comprises a $350 million term loan funded at closing and a $100 million revolving credit facility from Delta. A new lender is expected to provide an additional $50 million term loan post-closing, subject to Delta, Certares, Knighthead, and Cox approval.

In connection with the credit facility's closing, the lenders will receive newly issued Wheels Up common stock, initially representing 80% of the company's outstanding equity. Following an amendment to its certificate of incorporation, Wheels Up will issue additional shares, ensuring the lenders own 95% of the company's outstanding equity.

Furthermore, Wheels Up announced a restructuring of its Board of Directors. Delta Air Lines will appoint four directors, Certares and Knighthead will each appoint two, and Cox will appoint one. Additionally, one company executive will join the Board, and two independent directors from the previous Board are expected to remain.

About Wheels Up:
Wheels Up is a premier provider of on-demand private aviation in the U.S. and one of the world's largest private aviation companies. With a mission to connect private flyers to aircraft and each other, Wheels Up offers a comprehensive range of aviation solutions, from membership programs to charter services. The company also boasts a strategic partnership with Delta Air Lines, providing unique commercial travel benefits.