Delta Air Lines and two other investors have provided a $500 million lifeline to Wheels Up, which will give them a 95 percent stake in the private aviation company, Delta and Wheels Up announced Tuesday. The move comes a day after Wheels Up reported its second-quarter earnings, which were postponed from last week and showed a decline in revenue and users.
Delta also provided a cash infusion at the time of Wheels Up's earnings postponement on Aug. 9, when the company noted that there was "substantial doubt" it could continue absent additional near-term funding. It also noted at that time it was "actively involved in discussions around strategic business partnerships for the company." Delta and Wheels Up have been partners since 2020, when Delta Private Jets merged with Wheels Up.
The other two investors are Certares, a travel and tourism investment firm, and Knighthead, a "turnaround investment firm."
The $500 million is comprised of a $400 million term loan, of which Delta will provide $150 million, and a $100 million liquidity facility, also from Delta, according to a company statement.
The funds will be used to execute the plan Wheels Up announced in May—when founder Kenny Dichter stepped down from his CEO role—to "scale and evolve its product offerings" and provide "the stability to execute on its strategic vision over the long term."
"The partnership will create new opportunities for Wheels Up to drive strategic, operational and financial improvements for its customers in the months and years ahead," said Delta CEO Ed Bastian in a statement.
In addition, Delta CFO Dan Janki will join the Wheels Up board of directors as chairman.
RELATED: Delta Props Up Wheels Up with Cash Infusion