Page 67 - INC Magazine-November 2018

Meet Wheels Up, one of Inc.’s Private Titans—the nation’s
most dynamic non-public businesses. No, it’s not Uber for
jets. But the rapidly growing company is lowering the price of
entry into the world of private aviation.

Gaining Altitudeaining Altitude
G

heels Up founder
and CEO Kenny
Dichter calls his
company the
W Netflix of aviation.
That would be accurate—if Netflix were
built for the 1 percent. An initial $17,500
individual subscription gets you a year of
access to private planes essentially on
demand, which explains the company’s
client list of star athletes (Tom Brady) and
musicians (Ciara), as well as execs like
Hain Celestial CEO Irwin Simon. “Obvi-
ously,” Dichter says, “it’s wildly impor-
tant to these folks that they get from A to
B in a very, very efficient way.”
For years, the fractional jet ownership
model—pioneered by NetJets in 1987—has WINgINg IT
Wheels Up founder Kenny
prevailed. But that requires hundreds of Dichter figured correctly launched another private-aviation startup,
thousands of dollars in upfront costs for that the private-flying Marquis Jet, in 2001. He sold that company to
the customer. Companies like Wheels Up market is broader than Warren Buffett’s Berkshire Hathaway in 2010 and,
fractional ownership.
are trying to expand the private-aviation a week after his two-year noncompete agreement
market by lowering the barriers to entry. expired, founded Wheels Up. Within a year, the
Scheduling a flight is as simple as opening an app and company had a fleet of 20 planes. That number is now close
punching in your desired itinerary. The startup’s eight- to 100. “It’s very difficult to compete without scale,” he says.
passenger King Air 350i and Citation Excel planes—which The company finds itself in an expanding market. The
offer amenities like Wi-Fi and, yes, complimentary snacks U.S. charter-flight industry grew to $23 billion in 2018,
and booze—can take off and land at 5,000 airports through- according to market researcher IbisWorld—up from about
out the United States, as opposed to the 500 that support $18 billion five years ago. Competitors like JetSmarter,
commercial flights. V2 Jets, and XOJet have launched in the past dozen years.
The first-year membership fee ($29,500 for a corporate Others, though, like BlackJet and Beacon, have quickly
account) decreases by about half for subsequent years, folded, unable to gather enough demand to stay aloft.
but you’ll pay upwards of $4,000 for each hour of flight Wheels Up tries to separate itself with a benefits pro-
time. Clearly, it’s not for everyone—yet with about 5,000 gram that includes discounts with partners that might
customers, the company will exceed $400 million in appeal to this new jet set: chauffeur services, yacht com-
annual revenue in 2018. panies, Italian leather luggage makers. Wealthy alumni can
Wheels Up sees an increasingly rich, so to speak, source buy seats on shuttles to their alma maters’ football games
of customers in the front of commercial airlines. “Better or to events like the Super Bowl and the Masters. Some
than 30 percent of our new members come from commer- customers use it to make quick turnarounds on business
cial first class or commercial business class. They haven’t trips—or to grab dinner or see a show in another city.
been in private aviation before,” Dichter says. “Considering Dichter, who is eyeing an IPO next year, won’t democra-
that 10 million people fly first class or business class in a tize private aviation, but he can certainly expand access:
given year, we really like our addressable market.” “We believe we can make this a much bigger space moving courtesy company
Dichter, who is also a co-founder of Tequila Avión, forward.” —KEVIN J. ryAN

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