SPAC Called Wheels Up Lets Investors Bet on Private Flying

(Bloomberg) -- Wheels Up, which sells flights on private jets, is set to become the first operator of business aircraft to trade publicly, enabling investors to bet on an industry showing signs of a rebound from the coronavirus pandemic.

An agreement to merge with a special purpose acquisition company called Aspirational Consumer Lifestyle Corp. is expected to close in the second quarter, Wheels Up said in a statement Monday. The transaction valued Wheels Up at $2.1 billion and provides the company with as much as $790 million in gross proceeds as it pursues its goal of “democratizing” private aviation.

“If it's as easy to order up a plane from Wheels Up as it is to order an Uber or book an Airbnb, that's really what the strategic forward vision for the business is,” Kenny Dichter, who founded the company in 2013, said in an interview.

The deal offers shareholders exposure to an industry that is recovering more quickly than commercial flying from the plunge in travel demand caused by Covid-19. Business-jet operations in the U.S. fell only 13% in December from a year earlier, paring a decline of as much as 75% in April. Domestic passenger totals at U.S. airlines have been down 65% in recent months except for an uptick during the holidays.

Aspirational climbed 5.3% to $11.09 at 1:40 p.m. in New York.

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Currently, investors only have options to buy shares in private-jet makers, such as Bombardier Inc., and Dassault Aviation SA. Even then, the investment is often watered down by other holdings. Textron Inc., which produces Cessna aircraft, also makes military vehicles and golf carts. Gulfstream jets are manufactured by General Dynamics Corp., which also makes nuclear submarines, among other things.

Warren Buffett invested directly in luxury flying years ago with Berkshire Hathaway Inc.'s purchase of NetJets, which provides private flights through partial ownership stakes in business planes. Dichter founded one of the first fractional-ownership card programs, Marquis Jet, which NetJets bought in 2010.

Aspirational was founded by former executives of luxury goods sellers, including LVMH Moet Hennessy Louis Vitton SE and has about $240 million of cash from an initial public offering in September. The Wheels Up combination will raise $550 million from selling shares, with commitments from investors including T. Rowe Price, Fidelity and Franklin Advisors, according to the statement.

A Delta Air Lines Inc. spokesman said the carrier would remain a shareholder in Wheels Up, which owns 170 aircraft, manages another 160 and has access to more than 1,200 planes. Delta took an undisclosed stake when it sold its private-jet charter business to Wheels Up last year.

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