Why Delta is backing an Atlanta private jet company

Delta CEO Ed Bastian said during a town-hall meeting at Wheels Up’s offices on Thursday that he wants to make private aviation “an easy-to-purchase item” through Delta’s app.

He said he’d like to eventually allow customers on Delta’s app to book a Wheels Up flight.

Kelly Yamanouchi

Kelly Yamanouchi

“It’s really powerful. That doesn’t exist,” Bastian said. “I always believed there was a segment of the market that was untapped at the high end of our premium stack,” such as travelers who book Delta One business class suites to Europe.

So Bastian said he’s looking to make private aviation “the next rung up in our ladder at the top end.”

Delta has a program for its corporate clients to get access to Wheels Up. But it’s yet to be seen how long it will be before seamless booking of private jet flights through Delta’s app could be possible.

Stabilizing the business

Wheels Up, as it exists today, was formed in 2019 when Delta spun off its Delta Private Jets subsidiary into a merger with Wheels Up.

Delta took on an equity stake in Wheels Up, which amounted to about 24% of the company by December 2020. Its stake is now nearly 38%.

Wheels Up ran into severe financial struggles and challenges, losing hundreds of millions of dollars and losing customers.

“When Wheels Up started to get in trouble a couple years ago, it had our customers in there, and so it had our brand attached to it,” Bastian said. Customers had an option to transfer their Wheels Up funds to Delta, so “if Wheels Up wasn’t there to fulfill the customer obligations, it was going to fall back on me anyway,” he said.

“So I had more than just a strategic (interest), I had a financial interest to make certain that we could fulfill the obligations we were making,” Bastian said. That’s when Delta decided to co-lead the half-billion dollar funding round for Wheels Up, along with travel investment firm Certares, turnaround investment firm Knighthead and Cox Enterprises, which owns The Atlanta Journal-Constitution.

Mattson, who joined Wheels Up a year ago, has led a restructuring of the business, stabilizing revenue after seven quarters of decline and striking deals to modernize its fleet.

“It’s an early milestone,” he said. “I almost feel like we’ve just gotten ourselves set up to be in the starting gate.”

Last month, Wheels Up announced a deal to acquire Embraer Phenom 300 aircraft and plans to buy used Bombardier Challenger 300 jets, which Mattson sees as foundational to improve the company’s operational and financial performance. These aircraft are preferred by customers and more reliable than the array of aircraft Wheels Up currently owns, and will simplify the fleet, according to Mattson.

At the same time it announced a new $332 million round of financing from Bank of America, with credit support from Delta for access to more capital on more attractive terms than it would have otherwise.

To be sure, the company is still losing money, and has seen a decline in active users. On Thursday, Wheels Up posted $194 million in revenue with a net loss of $58 million. The loss was narrower than the $145 million loss the company reported a year ago. Mattson aims to post a profit for the full year of 2025, measured as earnings before interest, taxes, depreciation and amortization.

NATRICE MILLER

NATRICE MILLER

While third quarter revenue was roughly on par with second quarter revenue of $196 million, it was still down 39% year-over-year. The company attributes that to a narrower focus on profitable customers, pulling out of areas where it wasn’t making money in the middle of the country and exiting its money-losing business of managing private jets for others.

Wheels Up is sharpening its focus on its profitable charter business and population-dense regions of the country where it believes it can make money.

“We had a very challenging period of time in this company last year,” Mattson said. “We have worked very, very hard over the last four quarters … to begin the recovery from that, to begin a different journey.”

Delta’s big bet

Bastian sees potential for long-term benefits for his airline. That includes access to a private jet network when high-value customers get caught up in flight cancellations, as occurred during the July CrowdStrike outage when Delta was trying to get important clients to the Olympics in Paris along with operating its regular flights.

Wheels Up “helped us during CrowdStrike,” Bastian said. “There is tremendous value that Wheels Up provides back to Delta.”

NATRICE MILLER

NATRICE MILLER

“For our customers to be able to go back and forth, some private, some commercial, and have different options available to them, it just makes our customer ecosystem stronger and brings new customers into Delta as well,” he said.

Bastian has been sending managers and executives from Delta’s headquarters near Hartsfield-Jackson International Airport over to Wheels Up’s offices and operations center near DeKalb-Peachtree Airport to help with the business and learn more in the process.

“I’ve looked at this as a little bit of a Skunk Works for us,” Bastian said, referring to Lockheed Martin’s secretive division that focuses on futuristic developments. “It’s small. You can get your arms around it. You kind of see the whole thing going on.”

“It helps our leaders, our people, learn and grow and develop,” Bastian said. “My intent is to rotate people through here to get a year or two experience.”

When they return to the airline, Bastian said: “I‘m expecting things back — not just financial returns back, but actually looking for ideas and thoughts and innovation coming back” to Delta.