Delta Air Lines joins travel and tourism investment firm Certares Management and deep value and turnaround investment firm Knighthead Capital Management in a non-binding agreement to co-lead a $500 million facility.

The lenders will receive newly issued Wheels Up common stock resulting in them owning approximately 95% of the equity of the company on a fully diluted basis. This new funding is expected to provide the company the stability to execute on its strategic vision over the long term. (Update: This funding deal closed on 20th September.)

Wheels Up has grown rapidly, since being founded in 2013, to become the largest Part 135 charter operator. But it has faced financial issues. This new funding is meant “to accelerate the company’s business transformation.” Just a few days ago Delta provided short term funding to Wheels Up and private aviation operator Airshare agreed to purchase Wheels Up's aircraft management business.

“The partnership will create new opportunities for Wheels Up to drive strategic, operational and financial improvements for its customers in the months and years ahead,” said Delta CEO Ed Bastian. “Delta’s unmatched expertise in premium travel, customer loyalty, corporate sales, operational reliability and aircraft maintenance, combined with Certares’ and Knighthead’s experience and global reach, are expected to speed Wheels Up on its path to profitability.

“I would like to extend my sincere gratitude to Kenny Dichter, the visionary founder behind Wheels Up, for building the Wheels Up brand into a powerhouse in private aviation. We have great appreciation for his steadfast devotion to the members, customers and employees and his role in elevating the private aviation experience which will undoubtedly guide the industry’s path forward. We’re grateful he will continue as Wheels Up’s strategic advisor,” Bastian said.

Greg O’Hara, founder and Senior Managing Director at Certares, said: “This strategic partnership with Wheels Up is a natural extension of our focus and experience in travel, tourism and hospitality. This transaction extends upon our longtime partnership with Delta across many of our portfolio companies. We’re looking forward to joining Delta, Knighthead and others in driving the company’s ongoing transformation as it elevates private aviation as an industry leader.”

Tom Wagner, Knighthead’s co-founder, said: “We are delighted to be joining the Wheels Up team alongside Delta, Certares and other strategic partners. The agreement in principle announced today brings not just capital, but Knighthead’s extensive expertise, experience and resources to drive the next phase of Wheels Up’s business transformation as a leading provider of on-demand private aviation. We look forward to the journey ahead with our partners.”

Under this agreement, Delta will provide Wheels Up with $150 million in term loans and a $100 million liquidity facility. An additional $150 million term loan will be provided by Certares and Knighthead, with a further $100 million from other investors. The transaction is subject to completing definitive documentation, as well as customary closing conditions and other approvals.

Delta already has two directors on the board at Wheels Up and Delta Chief Financial Officer Dan Janki will join the board as Chairman.

Wheels Up, which offers membership-based and on-demand private jet services, is part of Delta’s portfolio of premium partners. The relationship dates to 2020, when Delta Private Jets combined with Wheels Up. Delta provides Wheels Up members with an array of benefits, including access to Delta flights, the opportunity to earn Delta SkyMiles and the ability to earn toward Medallion Status through spend on Wheels Up flights.

Editorial Update: On 20th September 2023, Wheels Up announced that it has closed the $500m investment by Delta Air Lines, Certares Management LLC, Knighthead Capital Management LLC and Cox Enterprises. And, as noted above, the lenders will own 95% of the company's outstanding equity as of the closing of the credit facility, on a fully diluted basis. Also in September, Wheels Up announced George Mattson as its new Chief Executive Officer.