The Wheels Up IPO has investors talking. Afterall, Wheels Up stock could be the first of its kind of the market. And that means this could be the opportunity of a lifetime.
But is Wheels Up a good investment opportunity? Here’s what we know…
Wheels Up IPO: The Company
CEO Kenny Dichter founded Wheels Up in 2013. Wheels Up is a private aviation company headquartered in New York. Using a membership model, Wheels Up has an app to connect users with private flights. It has a fleet of owned, managed and third-party planes. The goal is to provide for a niche market and create personalized experiences.
Wheels Up has about 11,000 active users. In 2020, it flew over 150,000 passengers and had more than 1,500 aircrafts in its fleet. Wheels Up is the second largest private aviation company after acquisitions of Delta Private Jets, Travel Management Company and Gama Aviation Signature.
The Wheels Up IPO has people excited because it would be the first private aviation company to go public. And until another company does the same, it’ll be the only private aviation stock available to the public. But why is Wheels Up stock coming now?
The Private Aviation Market
The world continues to push through the coronavirus pandemic. People saw the effects of quarantine on the economy and businesses, particularly those such as AMC. But airlines took one of the biggest hits as quarantines and travel restrictions prevented people from traveling. Today, passengers still wear a face mask when flying. Some flights are starting to require proof of a negative test or a vaccine. So, although the industry is starting to bounce back, it took a hard hit.
As a result, more people are turning towards private flying. It limits exposure, from fewer passengers to less time in the airport. In fact, Dichter said, “2020 was the beginning for a big democratization for us. We saw so many new people who had never flown private before actually pick up and either join Wheels Up or come on to the platform and fly.”
Additionally, Wheels Up breaks down its addressable markets as followed:
- Current Private Aviation Market: $31 billion
- Current Democratized Total Addressable Market (TAM): $51 billion
- 2025 Democratized TAM: $80 billion
The company also claims about 21% of U.S. individuals have a net worth of over $1 million and there are over 9,500 U.S. companies with more than $20 million in revenue. These groups make up Wheels Up’s market for personal and business experiences. For more detailed information, check out the Wheels Up Investor Presentation.
Wheels Up hopes its continued company and industry growth will help create demand for Wheels Up stock. But the Wheels Up IPO isn’t a traditional one.
Wheels Up Stock: SPAC Aspirational Consumer Lifestyle
Wheels Up is going public via SPAC IPO. A SPAC is a special purpose acquisition company, or blank-check company. It has no business operations. Instead, the company goes public to raise funds. Those funds are then put in a trust until the company makes an acquisition. However, most SPACs have two years to do that. In this case, Wheels Up is the acquiree and Aspirational Consumer Lifestyle Corp. (NYSE: ASPL) is the acquirer.
Ravi Thakran, Chairman and CEO of Aspirational, commented:
“When we founded Aspirational, Wheels Up was exactly the kind of company we wanted to partner with. Kenny and his world-class team have created a truly iconic brand built upon years of exceptional, personalized customer experiences. They are a clear leader and innovator in the space and we look forward to working together to introduce Wheels Up to the global stage. We see many opportunities to leverage our experience and relationships to partner with other aspirational and luxury brands and to expand to international markets.”
“We are excited about crossing this milestone and our new partnership with Aspirational. We believe this will allow us to actualize our founding goal of democratizing private aviation, through our unique membership model, suite of products and benefits, and by bringing the shared economy to private aviation through our Wheels Up app. We are looking forward to joining forces with the Aspirational team as we continue to accelerate our global growth and expansion.”
So, for those interested in Wheels Up stock, let’s look at the details.
Wheels Up SPAC IPO Details
The Wheels Up IPO values the company at $2.1 billion. Aspirational will deliver $240 million of cash held in its offering trust. The deal is further supported by a $550 million PIPE, pricing shares at $10. Investors include T. Rowe Price, Fidelity, Durable Capital and Third Point. Overall, Wheels Up expects up to $790 million from the deal.
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After the transaction, Wheels Up stock is expected to trade on the NYSE under the ticker symbol UP. According to the press release, investors can expect the Wheels Up IPO date to be in the second quarter of 2021.