“Inside every old person is a young person wondering what happened. ”
Marquis Jet Founder Launches Flight Club
Kenny Dichter, founder of jet-card innovator Marquis Jet, is re-entering the private aviation market with the launch of Wheels Up. The company, whose customers will pay an annual membership fee, is set to place a $788 million order for 105 Beechcraft King Air 350i twin turboprops. In a CNBC interview today, Dichter indicated that he has invested an eight-figure sum in the business; additional startup funds are coming from debt financing by the investment-banking firm of Jefferies LLC.
According to Dichter, the first nine aircraft will be in place before the end of 2013, with the rest arriving between 2014 and 2018. The King Air, he said, is an ideal choice, providing superior storage and range/payload compared with other aircraft.
In his CNBC interview, Dichter indicated that his plan was to “broaden the base even further” by offering a lower cost-of-entry to private jet travel than he did with Marquis. He indicated that members would pay an initial fee of $15,750 and would then incur annual dues of less than $10,000 as well as hourly flight charges. He told BJT sister publication AIN that he anticipates members will each spend a total of $100,000 to $125,000 per year, and that annual revenues could reach $1 billion to $2 billion within seven years.
The company—which has just opened an 8,500-square-foot New York City headquarters—plans to deliver its services through an advanced IT infrastructure connecting with mobile devices. Dichter said the venture is developing applications that will allow members to book and share flights and manage accounts online.
Wheels Up intends to spread its fleet across seven or eight “regional clusters” in the U.S. Dichter told AIN that he is in advanced discussions with several closed-fleet jet operators with a view to a partnership that would allow its members to fly on larger, longer-range aircraft. He added that Wheels Up members will have access to Wheels Down, a concierge service that will offer special programs around major sporting events, intimate concerts with top performers, culinary experiences with top chefs and meet-and-greet opportunities with entertainers, politicians and business luminaries.
Dichter formed Marquis Jet in 2001 when he and his team made a deal to remarket small packages of hours with Berkshire Hathaway’s NetJets fractional-ownership program. In 2010, NetJets acquired Marquis Jet, which at the time had grown to include approximately 4,000 active cardholders.
“Twelve years on [from the launch of Marquis Jet] there is an ever-growing base of prospective customers who want the benefits of closed-fleet flying through an understandable and flexible product,” concluded Dichter. “Wheels Up will seize this opportunity.”