He is optimistic that the company will have as many as 1,000 clients by the end of 2014—and Dichter says those are just the customers with close contact with Wheels Up executives. The business plan calls for that number to grow to 10,000-plus over the next four to six years. Wheels Up’s business plan forecasts that clients will fly roughly 20-30 hr. a year, with the King Air accounting for between 30-40% of that business, he says.
While that sounds ambitious, Dichter and his team have experience as founders of Marquis Jet in 2001. They helped pioneer the jet membership card concept that has since been adopted by numerous companies, from brokers to charter and fractional operators, worldwide.
The Marquis Jet card had generated $4 billion in business by the time the founders, including Dichter, sold it to NetJets.
After selling Marquis Jet, Dichter became global vice chairman of NetJets for about a year, but in 2011 stepped down, remaining as an ambassador for the fractional ownership provider. During his affiliation with NetJets, he worked with Beechcraft CEO Bill Boisture, who had a stint as president of NetJets.
“I always had my eye on the King Air,” Dichter says, adding that after Beechcraft began to emerge from Chapter 11 bankruptcy protection as a stronger company, he began to reengage with Boisture, along with Shawn Vick, executive vice president of sales and marketing, who held senior roles with several business aircraft airframers along with Landmark Aviation.
While the King Air has not been the primary aircraft incorporated in other fractional fleets, Dichter says it is “a natural fit” for its plans for regional services. “It’s like putting peanut butter and jelly together,” he says, citing its payload, comfort and other capabilities. Vick notes that it provides the same amenities as business jets, but can reach more airstrips and has much better operating costs.
The King Air also has had strong residual values, that have held up much better than those of business jets. This is a key factor in obtaining financing for the fleet, Dichter says. The financing program is led in part by the investment bank Jeffries, which is experienced in such transactions. But Dichter also has a number of equity partners lined up in the venture.
As for the King Air, the Wheels Up model will be equipped with new interiors, Wi-Fi connectivity and the van lavatory vanity, which is an option for the 350i model. Vick notes that Beechcraft already has obtained the supplemental type certification for the Wi-Fi installation.
For Beechcraft, the order is a significant step forward for a company working to reestablish itself after emerging from bankruptcy protection. Vick says this is particularly important for the workforce who endured the bankruptcy process.