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Fri, Aug 04, 2023

Wheels Up Program Strongly Criticized

Embattled Charter/Fractional Concern Impugned

An aviation industry insider has alleged federal regulators will presently undertake investigations of Wheels Up’s senior leadership for purpose of determining whether subject individuals perpetrated fraud in taking the company public.

“Wheels Up is over,” the individual asserted, adding: “Civil action will commence as class action attorneys smell blood in the water.”

According to the thirty-year aviation manager, Wheel’s Up’s original business plan was predicated upon the assumption that King Air 350 series aircraft could dominate the two-hour flight segment market.

“Turns out private flyers, especially women, don't trust turboprops or aren’t willing to save a few bucks stepping down from a jet,” the insider set forth.

The contention went on to posit Wheel’s Up’s struggles to gain traction in the highly-competitive air-charter/fractional ownership market compelled the company to pivot and commence adding Citation 560XLS and Citation Xs to its program.  

Fund raising, building a polished image, and media spin, became more important than building a sound business, the allegation continued. As debt approached $1-billion with no end to losses in sight, Wheels Up’s management sought to unload debt by organizing a public offering of stock in the embattled company.

To foster interest in the stock, Wheels Up executives, in particular company founder and then CEO Kenny Dichter,  crafted the perception that the enterprise was too big to fail. Ergo, on 14 June 2021, Wheels Up’s listing on the New York Stock Exchange (NYSE) saw nearly the entirety of the company’s debt off-loaded to share-holders—so stated the industry insider.

“How did this go on for so long?” the insider challenged before professing: “Endorsements; Wheels Up gave away millions in free or discounted memberships in exchange for endorsements: professional athletes, actors, newscasters … it’s even rumored Jim Cramer of CNBC received a free or deeply-discounted membership to say he felt Wheels Up was a buy during a Lightning Round in September 2021.”  

The allegations against Wheels Up concluded: If you're looking to jump onboard a class action lawsuit, you'll soon not need to look far. Once the smoke clears and they're long gone, how will Wheels Up be remembered? [as] A Ponzi scheme, wrapped up in a marketing company, run by a pitch-man.”

FMI: www.wheelsup.com


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