UP - Wheels Up Experience: Can We Trust This Turnaround Plan?
2024-05-28 23:58:12 ET
Summary
- Wheels Up has struggled with slowing demand and a loss of billions in market cap over the past few years.
- The company has brought on new management, a new consortium of investors led by Delta, and a plan to sell more prepaid blocks to corporate customers.
- Still, revenue is currently declining double-digits while contribution margins are also declining.
- The company trades at a small $2 billion market cap, a fraction of its former worth, and a reflection of the market's lack of confidence.
- Wheels Up remains a "show me" story: I'm neutral and staying on the sidelines for now.
2024 has proven to be a tough year for turnaround stories, especially for small and mid-cap companies. This is true especially of Wheels Up ( UP ), the private aviation company that was among the first (alongside NetJets) to take the subscription/membership model to something previously thought to be the bastion of the uber-rich: private jet travel....
Wheels Up Experience: Can We Trust This Turnaround Plan?