Shares of Wheels Up, the leading jet-chartering service, faced a significant setback as the company expressed doubts about its ability to continue operations, despite recent financial support from shareholder Delta Air Lines. The stock plummeted over 28% in morning trading, bringing its year-to-date decline to approximately 83%.
The company’s quarterly earnings release was postponed earlier today due to “active discussions regarding strategic business partnerships.” Alongside this announcement, Wheels Up revealed that Delta had provided a short-term capital infusion. Additionally, the company disclosed that it has entered into a non-binding letter of intent to sell its aircraft-management business to Airshare.
However, in a subsequent filing with the Securities and Exchange Commission, Wheels Up acknowledged that its efforts to secure additional funding may not be sufficient. In fact, there are considerable concerns about the company’s ability to sustain itself as a going concern in the long run.
During the pandemic, private flying experienced a surge in demand as health concerns prompted travelers to seek the safety and convenience of private jets. Nevertheless, industry executives have warned of a potential slowdown in demand as travel patterns gradually normalize.
Despite these challenges, Wheels Up remains committed to navigating the uncertain future ahead.
