The founder of celebrated private jet firm Wheels Up has stepped down as CEO as the company posts financial losses.
Kenny Dichter, who started the private jet charter business in 2013, will make way for Chief Financial Officer Todd Smith as interim CEO.
Additionally, it was announced on May 9,2023, that board member Ravi Thakran will become executive chairman, while Dichter will continue to serve on the board of directors.
When Ditcher launched the startup, it was applauded for its innovative membership model and it sealed lucrative relationships with stars such as NFL quarterback, Tom Brady.
In 2021, Wheels Up became the first publicly traded private aviation company listing on the New York Stock Exchange.
On May 9, 2023, Wheels Up also posted its first quarter financials showing a $101 million loss, an increase from $12 million at the same point in 2022.
CNBC reported that Wheels Up has been speaking with advisors and legal experts about possible capital raises or a restructuring but a spokesperson for the firm told AeroTime, “We are not considering bankruptcy”.
“While we realize our recently announced changes may create some short-term pressure, we have conviction that the long-term outcome is strong for our business. We want to emphasize that our first-quarter cash position reflects certain business realities – the first quarter is typically our slowest for block sales, and our block/cash position typically improves throughout the year,” the Wheels Up spokesperson said.
They continued: “Moreover, we believe our new program changes are not only attractive to members, but will improve our competitive positioning and contribute to accelerated block sales, an important source of cash. We also appreciate there’s a near-term reality in terms of cash position. Beyond the adoption of the program changes and their benefits for our members, we are looking at divestitures of non-core assets and other cash-generating opportunities, and we also have the capacity to take on additional debt.
They added: “We expect these actions to support our transition to the full implementation and benefits of these new programs.”
Thakran thanked Ditcher for his “vision and work”, and establishing the “leading on-demand charter operator in the United States” with more than “$1.5 billion in revenue and more than 12,000 loyal members.”